EXHIBIT 10.36
Separation Agreement
SEPARATION AND GENERAL RELEASE AGREEMENT
THIS SEPARATION AND GENERAL RELEASE AGREEMENT (the "Agreement") is made
as of this 31st day of May, 2001, by and between Xxxxxx X. Xxxxxx ("Employee"),
and Standard Automotive Corporation ("SAC"), a Delaware Corporation.
WHEREAS, Employee was employed by SAC in the position of Chairman and in
various other executive capacities;
WHEREAS, Employee's employment with SAC and from all SAC related
positions will be terminated effective June 2, 2001, (the "Termination Date") in
connection with a restructuring;
WHEREAS, SAC is providing Employee with twelve (12) months of severance
compensation and other valuable considerations;
WHEREAS, SAC wishes to be protected from competition by Employee for an
eighteen (18) month period, on terms and conditions set forth herein; and
WHEREAS, Employee and SAC wish to settle and resolve all disputes and
all claims or potential claims and demands whatsoever that Employee may have
against SAC on the terms set forth herein, and for that reason have entered into
this Agreement;
NOW THEREFORE, for good and valuable consideration, Employee and SAC
hereby agree as follows:
1. Payment to Employee. In consideration for the covenants undertaken
and the release given herein by Employee, SAC agrees to pay Employee, subject to
the provisions in Paragraph 14, twelve (12) months salary, in the amount of Two
Hundred Seventy Thousand Dollars and No Cents ($270,000.00), less standard
income and payroll tax withholding and deductions, paid in accordance with SAC's
normal practices for payroll payments. SAC's obligation to make such payments
will cease if Employee does not sign this Agreement within the time period
provided below in Paragraph 6.
SAC agrees to pay the lease payment on employee's Land Rover Discovery
through lease expiration, but not beyond August 31, 2001. Employee is
responsible for all excess mileage and lease termination charges.
SAC will provide Employee with life insurance under the existing policy
for one year from the Termination Date. The parties agree that SAC paid life
insurance coverage will end May 31, 2002.
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Separation Agreement
2. Health Care Benefits and COBRA: In Further consideration of the
covenants undertaken and the release given herein by Employee, Employee will
continue to be enrolled for health care benefits for the twelve (12) Month
Period, subject to the provisions in Paragraph 14. At the end of this
period, SAC will provide Employee with a COBRA notice and election and Employee
can elect Cobra coverage for the period permitted by law at Employee's expense.
Employee acknowledges that SAC's obligation to continue Employee's health care
coverage during the twelve (12) Month Period following the termination date or
to provide COBRA coverage shall cease (1) once Employee is eligible for other
group health care coverage, (2) Employee fails to pay the required contribution
within the applicable time limits established by SAC, or (3) one or more of the
health care coverage programs are terminated, unless another program is
established as its replacement.
3. No Other Payments of Benefits. Except as provided above, Employee's
coverage under or participation in all other SAC benefit, compensation, and
insurance plans and programs shall terminate as of the Termination Date. The
parties recognize and agree that Employee is entitled to no other benefits,
compensation, payments, or insurance coverage of any kind or nature from SAC,
including, without limitation, salary, bonus, severance pay, incentive pay,
vacation pay, disability insurance, life insurance, pension, or any other
employee or fringe benefits of SAC except as expressly provided in this
Agreement. The parties further recognize and agree, however, that nothing in
this Paragraph or this Agreement affects Employee's entitlement to 401(k) and
pension contributions accruing on or before the Termination Date.
4. Employee's Cooperation. In consideration for the covenants undertaken
herein by SAC, Employee agrees to cooperate with SAC as reasonably requested to
assist in making a management transition.
5. Comprehensive And General Release by Employee. Subject to SAC's
compliance with its obligation hereunder, in consideration for the covenants
undertaken herein by SAC, Employee hereby releases, discharges, and covenants
not to xxx SAC, its direct or indirect parents, subsidiaries, affiliates, and
related companies, and its and their past and present directors, officers,
employees, attorneys, representatives, members, insurers, agents, successors,
and assigns (individually and collectively the "SAC RELEASEES") from and with
respect to any and all actual or potential actions, claims, and demands
whatsoever, whether known or unknown, suspected or unsuspected, in law or
equity, which against the SAC Releasees or any of then Employee ever had, now
has, or hereafter can, shall, or may have for, upon, or by reason of any matter,
cause, or thing whatsoever from the beginning of the world to the date of this
Agreement, including without limitation any and all claims: (a) arising out of
or in any way relating to Employee's employment with SAC or his/her separation
from that employment; (b) arising out of or in any way relating to any
transactions, occurrences, acts, statements, disclosures, or omissions occurring
prior to the
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Separation Agreement
date of this Agreement; (c) arising out of or in any way relating to any claims
under common law; (d) arising out of or in any way relating to any claims under
any federal, state, or local statute, regulation, ordinance, or other law
prohibiting discrimination on the basis of age, sex, race, color, religion,
disability, or national origin, including Title VII of the civil Rights Act of
1964, as amended, the Age Discrimination in Employment Act of 1967, as amended,
and of the New York and New York City General Laws; or (e) for salary, bonuses,
commissions, severance pay, vacation pay, travel privileges, disability, life
insurance, medical insurance, or any other fringe benefit of or from SAC. IT IS
THE EXPRESS INTENT OF THE PARTIES THAT THE RELEASE PROVIDED HEREIN BY EMPLOYEE
BE A GENERAL, FULL, AND COMPREHENSIVE RELEASE, TO THE FULLEST EXTENT PERMITTED
BY LAW, AS TO EACH AND ALL THE SAC RELEASEES.
6. ADEA Waiver: Employee shall have a period of twenty-one (21) days to
reflect on this Agreement before executing it and an additional period of seven
(7) days after executing the Agreement to revoke it. The parties further
recognize and agree that this provision is intended to ensure an effective
waiver of any claims by Employee under the Federal Age Discrimination Act, as
amended by the Older Workers Benefit Protection Act of 1990. By his/her
signature below, Employee warrants and represents that he/she has been given
twenty one (21) days prior to his/her execution of this Agreement to reflect on
this Agreement and all material changes thereto, that in the event he/she
executes this Agreement before that full twenty one (21) days he/she does so
knowingly and voluntarily and with the intention of waiving any remaining time
in that twenty one (21) day reflection period, that he/she understands all of
the terms of this Agreement, that he/she has been encouraged to consult with an
attorney prior to executing this Agreement, and that he/she knowingly and
voluntarily enters into this Agree in all respects. The parties further agree
that Employee is not entitled to any payment or compensation of any kind of
nature whatsoever in the event that he/she revokes this Agreement or elects not
to enter into this Agreement. Employee further acknowledges that any payment or
compensation made prior to revocation must be returned in full to SAC. The
parties further intend and agree that this Agreement, if executed and not
revoked within seven (7) days after that execution, shall constitute an
effective waiver of any claim of any age discrimination claims and of any other
claim of whatever kind or nature by Employee against any of the RELEASEEES as
defined in this Agreement.
7. Length of Offer. Employee shall have 21 days from the day this
Agreement is delivered to Employee to consider whether to accept this separation
offer, and this Agreement is delivered to Employee to consider whether to accept
this separation offer, and this offer shall expire if SAC has not received
Employee's executed Agreement by the end of this period. This Agreement was
delivered to Employee on Thursday, May 31, 2001.
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Separation Agreement
8. Non-Disclosure of Confidential Information. Employee acknowledges
that SAC and its affiliates have exclusive proprietary rights to all of their
respective sales, financial, pricing, production, distribution, contractual, and
marketing information, and all products, formulas, designs, practices,
techniques, trade secrets, research, customer lists, computer programs and other
computer-related data, and technical requirements of customers, unless such
information is in the public domain (collectively "Confidential Information").
Employee agrees to sign all rights he/she might otherwise possess in any
Confidential Information to SAC. Employee further agrees that he/she will not at
any time in the future, directly or indirectly, use, communicate, disclose,
disseminate, publish, or otherwise put in the public domain or before any
private entity, and Confidential Information or any other information of a
secret, proprietary, confidential, or generally undisclosed nature relating to
SAC or its affiliates, or their programs, operations, and activities, unless
compelled by process of law, following the provision of prompt notice to SAC.
9. Return of Confidential Information. Employee acknowledges that all
documents, records, notebooks, notes memoranda, computer records or source
documentation, and other repositories of Confidential Information or any other
information of a secret, proprietary or confidential nature relating to SAC or
its affiliates or to any of their programs, operations, and activities made or
compiled by him/her at any time or made available to him/her prior to or during
the term of his/her employment with SAC, including any and all copies thereof,
are the property of SAC. Employee agrees to deliver and return all such
repositories of Confidential Information, and all copies thereof, to SAC within
ten (10) days after the Termination Date. If Employee discovers Confidential
Information that he/she in good faith overlooked and did not return during the
first ten (10) days after his/her Termination Date, SAC agrees to allow him/her
to deliver and return such newly discovered Confidential documents within ten
(10) days of discovery.
10. Non-Solicitation. In further consideration of the covenants
undertaken herein by SAC, Employee hereby agrees that for a period of eighteen
(18) months following the Termination date, he/she will not solicit, or cause
other persons to solicit, directly or indirectly, employees of SAC or its
affiliates to discontinue their employment relationship with SAC or its
affiliates, he/she will not interfere with the contractual relationships or
relationships under negotiation of SAC or its affiliates, he/she will not induce
or attempt to induce any clients of SAC or its affiliates to discontinue their
relationship with SAC or its affiliates, and he/she will not disparage SAC, its
affiliates, or its executives.
11. Non-Competition. Employee acknowledges that the services he/she has
provided to SAC are unique. Employee also acknowledges that his/her employment
and his/her position with SAC gave him/her access to confidential and highly
sensitive non-public trade secret information of substantial importance
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Separation Agreement
and value to SAC and its affiliates, including but not limited to trade secrets,
computer programs, marketing information, techniques, distribution, price
information, customer lists, and research and development data. In recognition
of these facts, and in further consideration of the covenants undertaken herein
and the payments to be made hereunder by SAC, Employee hereby agrees that for a
period of eighteen (18) months following the Termination Date, he/she will not,
directly or indirectly, without the prior written consent of SAC, be employed,
provide consultative service with or without pay, manage, join, participate in,
or be connected as a majority stockholder, partner, or otherwise with, any
business involving the truck body and trailer industry, shipping container
chassis industry, refuse body or refuse trailer industry, aerospace or aircraft
parts industries, precision manufactured components for the nuclear industry, or
environmental consulting businesses. Furthermore, employee agrees not to work
for any business or organization that competes directly or indirectly with any
of SAC's operating companies in existence on the termination date. SAC agrees
the employee may work for the "IPC LOI companies" as long as they do not compete
directly or indirectly with SAC during the eighteen (18) month non-compete
period following the Termination Date.
12. Notwithstanding anything to the contrary contained in the Agreement,
SAC acknowledges and agrees that Employee will not be deemed in breach of the
restrictions or obligations set forth in Paragraphs 8 through 11 by reason of
Employee's involvement, directly or indirectly, with Invatech and/or Industrial
Precision Corp. ("IPC"), as a shareholder, consultant, manager, officer,
director or in any other capacity with respect to said corporations. SAC further
acknowledges and agrees that any and all information in Employee's possession
concerning the IPC-LOI companies approved by SAC's Board of Directors shall in
no way be construed as "Confidential Information" for purposes of this
agreement.
13. Commitment Not To Apply: In consideration for the covenants
undertaken herein by SAC, Employee agrees that he/she will not now or at any
time in the future apply for employment or re-employment with SAC, any of its
direct or indirect subsidiaries, or any of its franchised dealers. SAC reserves
the right to waive this restriction, but any such waiver must be in writing and
signed by the President and Chief Executive Officer.
14. Equitable Relief. Employee acknowledges that irreparable harm would
result to SAC if the provisions of Paragraphs 8 through 11, or any of them, were
breached by Employee and that any remedy at law for such breach or breaches
would be inadequate. Accordingly, in the event of the breach or threatened
breach by Employee of any of Paragraphs 8 through 11 hereof, SAC shall be
entitled to injunctive relief in addition to any other remedies it may have
under the terms of this Agreement or under the law, including, without
limitation, recovery of attorneys fees and costs, to the extent allowed by law,
for enforcement of this Agreement.
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Separation Agreement
15. Repayment Upon Breach. Employee agrees that in the event a court of
law issues a final determination that employee has breached any of the
provisions of Paragraphs 8 through 11, SAC shall cease providing any of the
payments or continued benefits provided for in Paragraphs 1 and 2, and that
he/she will immediately repay to SAC the payments previously made by SAC
referred to in Paragraphs 1 and 2. Except as set forth in the proceeding
sentence SAC agrees it will not suspend payments or employee benefits required
under this agreement. Employee agrees that this amount, in total, will be due
and owing as set forth above and that, if not immediately paid in full to SAC
upon demand, any outstanding amount will incur 10% interest compounded annually,
until paid in full. The prevailing party shall further be entitled to recovery
of attorney's fees and costs, to the extent allowed by law, for enforcement of
this Agreement.
16. Confidentiality: Employee and SAC agree to keep all aspects of this
Agreement confidential. Notwithstanding the foregoing, Employee may disclose the
terms of this Agreement to the Internal Revenue Service, to his/her attorneys
and financial advisors, provided that such persons are advised of the
confidential nature of this Agreement and agree to maintain any information
provided to them regarding this Agreement in strict confidence.
17. No Admission: While this Agreement resolves all issues between
Employee and SAC relating to any alleged violation of any state, federal, or
local law, regulation, or ordinance, this Agreement does not constitute an
adjudication or finding on the merits and it is not, and shall not be construed
as, an admission by SAC of any violation of any policies, procedures, state,
federal, or local laws, regulations, or ordinances. Neither this Agreement nor
anything in this Agreement shall be construed to be admissible in any proceeding
as evidence of or an admission by either party of any violation of any policies,
procedures, state, federal, or local laws, regulations, or ordinances, or of any
wrongdoing by either party; provided, however, that this Agreement shall be
admissible only in any proceeding to enforce its terms:
18. Complete Agreement: This Agreement is an integrated document and
constitutes and contains the complete understanding and agreement of the parties
with respect to the subject matter addressed herein and supersedes and replaces
all prior negotiations and agreements of any kind or nature between Employee and
SAC, whether written or oral.
19. Severability: If any of the provisions, terms, or clauses of this
Agreement are held invalid, illegal, unenforceable, or ineffective, such
provisions, terms, and clauses shall be deemed severable such that all other
provisions, terms, and clauses of this Agreement shall remain valid and binding
upon the parties.
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Separation Agreement
20. Governing Law: This Agreement is deemed to have been executed and
delivered within the State of New York, and the rights and obligations of the
parties hereunder shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York without regard to principles of conflict
of laws.
21. Currency: It is agreed and understood by the parties hereto that all
payments referenced herein shall be made in U.S. dollars.
22. Counterparts: This Agreement may be executed in counterparts and
each counterpart when executed shall have the effect of a signed original.
Photographic copies of such signed counterparts may be sued in lieu of the
original for any purpose.
23. Certification: BY THEIR AUTHORIZED SIGNATURES BELOW, THE PARTIES TO
THIS AGREEMENT CERTIFY THAT THEY AGREE TO ALL OF THE TERMS OF THIS AGREEMENT,
THAT THEY HAVE HAD AN OPPORTUNITY TO DISCUSS THOSE TERMS WITH ATTORNEYS OR
ADVISORS OF THEIR OWN CHOOSING, AND THAT THEY HAVE SIGNED THIS AGREEMENT
VOLUNTARILY AND WITH FULL UNDERSTANDING OF ITS LEGAL CONSEQUENCES.
24. Requirement that SAC Board of Directors Approve this Agreement: SAC
and the Employee agree that a majority of SAC's Board of Directors must review
and approve this agreement for the agreement to be valid.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Agreement to be executed and delivered at New York, NY as of
the date first written above.
EMPLOYEE Standard Automotive Corporation
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. X'Xxxxxxx III
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