SEPARATION AGREEMENT AND MUTUAL RELEASE
The parties to this Separation and Mutual Release Agreement (Agreement) are
Omni Products, Inc. (OMNI), Creative Medical Development, Inc. (CMD)
(collectively, Employer or Company), and Xxxxxxx X. XxXxxxx (Employee).
RECITALS
X. Xxxxxxxx was employed by OMNI under an employment contract dated April
29, 1994 (Employment Agreement).
B. On April 20,1998, the Company notified Employee that he was relieved of
his duties as Chief Executive Officer, President and Treasurer of the Company.
However, Company has continued to pay Employee's regular salary pursuant to the
Employment Agreement.
C. Various disputes and controversies exist between Employee and Company
concerning their respective rights, liabilities and responsibilities arising
from the Employment Agreement and Employee's tenure as an officer and director
of the Company.
D. Each party denies, and continues to deny in every particular, each and
every claim, allegation or contention made by the other in connection with the
above-referenced disputes and controversies. However, Employee and Employer
desire to bring these matters to a conclusion and avoid incurring further costs
and expenses incident to their prosecution and defense. Employee and Employer
further desire to resolve any and all potential claims by each against the
other, known and unknown, which may have arisen before the execution of this
Agreement.
Therefore, in consideration of the mutual promises set forth below, the
parties agree as follows:
1 Employment Termination. Employee's employment with Employer is hereby
terminated effective April 30, 1998.
2 Payments. As consideration for this Agreement, Employee will receive ten
months' (beginning May 1, 1998 and ending February 28, 1999) base compensation,
payable in accordance with the Company's payroll practices and policies in
effect when payments are due. Employer will withhold taxes on these payments in
accordance with all applicable local, state and federal laws. In the event
Employee receives income in excess of $5,000 per month (gross amount) for his
services, whether as an employee, independent contractor, advisor, consultant,
partner, shareholder, LLC member, or sole proprietor, such income will be offset
against Company's payment obligations. Employee shall promptly report all such
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income to Employer and Employer shall have the right to review Employee's W-2s,
1099s, Federal and State Tax returns and other documentation reasonably
requested to audit said income. Employee shall repay Company for any overpayment
made by Company to Employee with interest at the rate of 18% per annum from the
date of payment to Employee to the date of repayment.
3 Group Insurance. Employee's coverage under Employer's group health and
life insurance plan shall be continued until February 28, 1999. Thereafter, if
eligible, Employee may continue full health insurance benefits for himself and
his immediate family as provided under COBRA regulations. Employee is
responsible for all payments under COBRA for continuation of health insurance
benefits.
4 Stock Options. Employee hereby relinquishes the right to options to
purchase 618,144 shares of common stock and 63,150 shares of series B preferred
stock which are substitute options to be issued pursuant to the merger of CMD
and OMNI. Employee shall execute such documentation as may be reasonably
required by Company's counsel to document termination or cancellation of those
option rights within five business days of presentation of the documentation to
Employee.
5 Stock Proxy. Employee shall, concurrent with the execution of this
agreement, grant to the directors of CMD, to be exercised by majority vote, an
Irrevocable Proxy to vote all shares which he may be entitled to vote for the
period from execution of the agreement through April 30, 2000.
6 Vacation Pay. In full settlement of all vacation pay claims, Employer
shall pay to Employee as additional vacation pay, the sum of $3,500 on execution
of this agreement.
7 Employee Pension and Retirement Plans. Employee shall be entitled to
Employee's rights under Employer's benefit plans as such plans, by their
provisions, apply upon Employee's termination.
8 Resignations. Employee shall, concurrent with execution of this
Agreement, sign and submit to the Company Chairman his resignation as an officer
and director of the Company effective April 30, 1998.
9 Corporate Opportunities. By 5:00 p.m. July 20, 1998, Employee shall
deliver to Company's corporate offices a detailed list, to the best of his
recollection and good faith, of all corporate opportunities (including, but not
limited to possible mergers, joint ventures or acquisitions, products, services,
businesses and personnel) of which he became aware and related contacts made
prior to the execution of this Agreement.
10 General Mutual Release. In consideration of the benefits provided in
this Agreement, Employer releases Employee, and Employee releases Employer, its
directors, officers, agents, employees, insurers, related corporations,
successors and assigns, from any and all liability, claims, damages or causes of
action, as further set forth herein.
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10.1 Employee's General Release. Employee hereby forever releases and
discharges Employer from any and all causes of action, judgments, liens,
indebtedness, damages, losses, claims, liabilities, and demands of every
kind and character in any manner attributable to the Employee's employment
by Employer and Employee's termination, as well as any other matter or
event occurring before the date of this Agreement, including but not
limited to any claim for reinstatement, reemployment, or additional
compensation in any form, and any claim, including but not limited to those
arising under the Rehabilitation Act of 1973, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Post Civil War Civil Rights
Act (42 U.S.C. 1981-88), the Equal Pay Act, the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, the Americans
with Disabilities Act, the Vietnam Era Veterans Readjustment Assistance
Act, the Fair Labor Standards Act, Executive Order 11246, as amended, and
the civil rights, employment, and labor laws of any state and any
regulation under such authorities relating to Employee's employment or
association with Employer or the termination of that employment and
association.
10.2 Employee's Release of Rights Under Older Workers' Benefit
Protection Act. In accordance with the Older Workers' Benefit Protection
Act (the "Act"), Employee represents and warrants that he has been informed
that he has up to 21 days to review this Agreement before signing it, and
that Employee may revoke all parts of this Agreement within seven days of
signing it by returning all consideration tendered to Employee and, except
for the resignations, which are irrevocable.
10.3 Employer's Release. Employer hereby forever releases and
discharges Employee from any and all causes of action, judgments, liens,
indebtedness, damages, losses, claims, liabilities, and demands of every
kind and character, in any manner attributable to Employee's employment by
Employer or any other matter or event occurring before the date of this
Agreement, except for the obligations of Employee provided in sections 6
(subject to section 24 of this Agreement), 7 and 8 of the Employment
Agreement.
10.4 Release of Unknown Claims. Employee and Employer expressly agree
that this Agreement extends to all claims of every nature and kind, known
or unknown, suspected or unsuspected, vested or contingent, past, present,
or future, arising from or attributable to Employer or its officers,
directors, employees, or agents, whether acting within or beyond the scope
of their employment, or otherwise relating to Employee's employment by
Employer or performance of services for Employer occurring before the
execution of this Agreement,.
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11 No Re-Employment. Employee shall not seek employment or reemployment
with Employer at any time.
12 Return of Company Property. Employee shall on or before the effective
date of this Agreement, return to Employer all property belonging to Employer,
including, but not limited to keys, credit cards, telephone calling card, files,
records, computer access codes, computer hardware, computer programs,
instruction manuals, business plans, and other property and documents which
Employee prepared or received in connection with his employment with Employer.
13 Confidentiality. Employee acknowledges that in the course of his
employment with Employer, he obtained Proprietary Information (as defined in the
Employment Agreement) which is not generally known to third parties. Employee
recognizes and affirms his obligations concerning such Proprietary Information
as provided in section 7 of the Employment Agreement, notwithstanding the
termination of his employment.
14 Consent to Injunction. Employee agrees that his violation of section 12
or 13 shall constitute a breach of this Agreement, and that monetary damages
alone would not adequately compensate Employer for the harm suffered. Employee
agrees that Employer shall be entitled to injunctive relief to enjoin any breach
or threatened breach of section 12 or 13, in addition to any other available
remedies.
15 No Admission of Liability. It is understood and expressly agreed by
Employer and Employee that this is a compromise settlement of a disputed claim
and that the payment for consideration for this release shall not be deemed or
construed as an admission of any liability by either party.
16 Disparagement. Neither party shall make any malicious, disparaging or
false remarks about the other, or their respective officers, directors or
employees. The parties further agree to refrain from making any negative
statements regarding the other to any third parties or any statements which
could be construed as having or causing a diminishing effect on the other's
reputation, goodwill or business.
17 Attorney's Fees. In any action or proceeding brought to enforce this
Agreement or any of the its terms, the parties shall each bear their individual
expenses.
18 Governing Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Oregon.
19 Severability. The provisions of this Agreement are severable. If any
provision of this Agreement or its application is held invalid, the invalidity
shall not affect other obligations, provisions, or applications of this
Agreement which can be given effect without the invalid obligations, provisions,
or applications.
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20 Waiver. The failure of either party to demand strict performance of any
provision of this Agreement shall not constitute a waiver of any provision,
term, covenant, or condition of this Agreement or of the right to demand strict
performance in the future.
21 Section Headings. The section headings contained herein are for
reference purposes only and will not in any way affect the meaning or
interpretation of this Agreement.
22 Voluntary Execution. Employee acknowledges that he has had an
opportunity to consult with an attorney, he has read and understands the terms
and effect of this Release, and that he has signed it voluntarily.
23 Entire Agreement. Except for sections 6 (which shall be in affect
through February 28, 1999, and, subject to section 24 of this Agreement), 7, 8,
and 9 (excluding 9.6, 9.7, 9.8, 9.14, and 9.15) of the Employment Agreement,
which remain in full force and effect, this Agreement constitutes the entire
agreement between the parties and supersedes all prior or contemporaneous oral
or written understandings, statements, representations or promises with respect
to its subject matter. This Agreement was the subject of negotiation between the
parties and, therefore, the parties agree that the rule of construction
requiring that the agreement be construed against the drafter shall not apply to
the interpretation of this Agreement.
24 Payment Default. If Employer fails to pay any amount due under section 2
of this Agreement and such default continues for fourteen (14) days after
Employee gives written notice of such default, from and after the expiration of
the fourteen (14) days notice period, Employee shall be automatically relieved
of any further obligations under section 6 of the Employment Agreement.
25 Notice. All notices, requests or demands required or permitted to be
given hereunder shall be in writing, and shall be deemed effective (a) upon hand
delivery, if hand delivered; (b) one (1) Business Day after such are deposited
for delivery via Federal Express or other nationally recognized overnight
courier service; or (c) three (3) Business Days after such are deposited in the
United States mails, certified or registered mail, all with delivery charges
and/or postage prepaid, and addressed as shown below, or to such other address
as either party may, from time to time, designate in writing. Written notice may
be given by telecopy to the telecopier number shown below, or as either party
may designate, from time to time, in writing, provided that such notice shall
not be deemed effective unless it is confirmed within 24 hours by hand delivery,
courier delivery or mailing of a copy of such notice in accordance with the
requirements set forth above.
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If to Creditor: Xxxxxxx X. XxXxxxx
00000 Xxxxxxxx Xxxxxx
Xxxx Xxxxxx, XX 00000
If to Company: Chief Executive Officer
OMNI Products, Inc. &
Creative Medical Development, Inc.
000 XX Xxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
or to any other addresses as such party shall designate in a written notice to
the other parties hereto. All notices sent pursuant to the terms hereof shall be
deemed received (i) if sent by overnight courier service, on the next business
day following the day sent, or (ii) if sent by registered or certified mail on
the third business day following the day sent.
This Agreement is not effective until it is signed by all parties..
XXXXXXX X. XXXXXXX CREATIVE MEDICAL DEVELOPMENT, INC.
OMNI PRODUCTS, INC.
By: Xxxx Xxxx, Director
Date: Date:
By: Xxx Xxxxx, Director
Date:
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