RESIGNATION AND CONSULTING AGREEMENT
This Resignation and Consulting Agreement (the "Agreement")
is made by and between XXXXXXXXXX LABORATORIES, INC., a Texas
corporation ("Xxxxxxxxxx"), and XXXX X. XXXXXXXXX ("Xxxxxxxxx") for
the purpose of documenting the terms of Xxxxxxxxx'x resignation as an
officer and employee of Xxxxxxxxxx and his engagement as a consultant
to Xxxxxxxxxx, all as set forth below:
1. Resignation. Effective May 31, 1998 (the "Resignation
Date"), (a) Xxxxxxxxx hereby voluntarily resigns from all positions
that he occupies as an employee and/or officer of Xxxxxxxxxx and any
of its subsidiary corporations, including but not limited to his
position as Vice President, Manufacturing and Operations, of
Xxxxxxxxxx; and (b) the letter agreement between Xxxxxxxxxx and
Xxxxxxxxx dated July 6, 1993 and signed by Xxxxxxxxx on July 6, 1993,
is hereby terminated in its entirety.
(a) Compensation and Benefits. Through the Resignation
Date, Xxxxxxxxxx shall pay Xxxxxxxxx his regular compensation at
the rate currently in effect, less all legal deductions, and all
benefits to which he is currently entitled under Xxxxxxxxxx s
existing employee benefit plans and policies. Xxxxxxxxxx shall
pay Xxxxxxxxx for any vacation time that is accrued and unused
as of the Resignation Date. Xxxxxxxxx acknowledges that he is
not and will not be entitled to receive anything under
Xxxxxxxxxx'x 1995 Management Compensation Plan.
(b) Reimbursement of Expenses. Xxxxxxxxxx shall reimburse
Xxxxxxxxx for all reasonable and properly reimbursable business
expenses incurred by him prior to the Resignation Date promptly
after Xxxxxxxxx timely submits a proper expense report and
supporting documentation to Xxxxxxxxxx.
(c) Stock Options. On the Resignation Date, Xxxxxxxxx
shall surrender to Xxxxxxxxxx all of the stock options
previously granted to him by Xxxxxxxxxx that are then
outstanding (the "Old Options"), subject to his receipt of the
New Options provided for in Section 4(d) of this Agreement.
(d) Authority. After the Resignation Date, (i) Xxxxxxxxx
will not be, and will not hold himself out as being, a director,
officer or employee of Xxxxxxxxxx or any of its subsidiary
corporations, and (ii) Xxxxxxxxx will not be obligated or
authorized, and will not hold himself out as being authorized,
to make any representations, enter into any contracts,
commitments, or obligations, or perform any other acts as any
kind whatsoever on behalf of Xxxxxxxxxx or any of its subsidiary
corporations, except to the extent, if any, that the President
or a Vice President of Xxxxxxxxxx expressly authorizes him to do
so in connection with his performance of Services, as that term
is defined in Section 3 of this Agreement.
2. Consulting Term. Beginning June 1, 1998, Xxxxxxxxx shall
serve as a consultant to Xxxxxxxxxx for a term (the "Consulting
Term") that shall end on the earliest to occur of the following
dates:
(a) February 28, 1999;
(b) the date of Xxxxxxxxx'x death;
(c) the date on which Xxxxxxxxxx'x President and/or Board of
Directors elects to terminate the Consulting Term for
"Cause", as hereinafter defined;
(d) the date on which Xxxxxxxxx becomes a full-time employee of
a third party, or enters into any employment arrangement
with a third party that in the good faith opinion of
Xxxxxxxxxx'x President or Board of Directors creates a
conflict or potential conflict with the best interests of
Xxxxxxxxxx; or
(e) the date on which Xxxxxxxxxx and Xxxxxxxxx mutually agree
in writing to terminate the Consulting Term.
For purposes of this Paragraph 2, the term "Cause" shall
mean any of the following: (a) any act by Xxxxxxxxx that is, in the
good faith opinion of Xxxxxxxxxx'x President or Board of Directors,
adverse to the best interests of Xxxxxxxxxx; (b) conduct by
Xxxxxxxxx that (i) constitutes willful misconduct or gross
negligence in the performance of his assigned Services, (ii) is in
derogation of his duties or obligations under this Agreement, or
(iii) constitutes fraud, dishonesty, or a criminal act, whether or
not with respect to Xxxxxxxxxx, or (c) Xxxxxxxxx'x failure to
substantially perform his assigned duties as a consultant to
Xxxxxxxxxx (including but not limited to his failure to be available
to perform the Services requested by Xxxxxxxxxx on the dates set
forth in Schedule A hereto and at the locations requested by
Xxxxxxxxxx, or on such other dates and/or at such other locations as
shall be determined by mutual agreement of Xxxxxxxxxx and Xxxxxxxxx,
or his failure to meet objective criteria established by mutual
agreement of Xxxxxxxxxx and Xxxxxxxxx).
The expiration or termination of the Consulting Term shall
not terminate any rights of either party that shall have accrued at
or prior to the time of such expiration or termination, including but
not limited to the right of either party to recover damages from the
other party due to the other party's breach of this Agreement.
3. Consulting Services. During the Consulting Term, Xxxxxxxxx
shall perform for Xxxxxxxxxx such consulting services as Xxxxxxxxxx
from time to time reasonably requests ("Services"). The Services
requested by Xxxxxxxxxx may be of the same general nature as the
services that Xxxxxxxxx performed for Xxxxxxxxxx while in its employ,
other duties necessary to manage the production and shipment
of Xxxxxxxxxx products to customers, distributors and licensees
worldwide, and other duties as may be assigned from time to time
related to the international business of Xxxxxxxxxx. Xxxxxxxxx
agrees to make himself fully available to Xxxxxxxxxx to perform
Services on the dates set forth on Schedule A attached to this
Agreement and made a part hereof, unless Xxxxxxxxxx agrees to amend
such schedule at least ten business days in advance of the date of
any proposed scheduling change. Notwithstanding the foregoing,
however, Xxxxxxxxx shall not be required to perform Services for more
than three days per business week (Monday through Friday), unless he
and Xxxxxxxxxx agree otherwise. Xxxxxxxxxx shall not be obligated to
request the performance of any Services by Xxxxxxxxx.
4. Consulting Compensation and Benefits.
(a) Compensation. Xxxxxxxxx'x compensation during the
Consulting Period shall be the total sum of $115,875.00,
payable as follows: (a) $38,625.00 within five business
days of the Effective Date of this Agreement, as defined by
Paragraph 16 below, less the amount of $6,000.00 advanced
to Xxxxxxxxx by Xxxxxxxxxx on May 22, 1998 in good faith
that this Agreement will be accepted and executed by
Xxxxxxxxx, and (b) $9,656.25 on the first day of each
calendar month (or, if the first day of a month is a
Saturday, Sunday or holiday, on the last business day
preceding the first day of such month) beginning July 1,
1998 and ending with a final payment February 1, 1999.
Xxxxxxxxxx shall deduct from such retainer the cost payable
by Xxxxxxxxx for participating in Xxxxxxxxxx'x group
insurance plan(s) as contemplated by Section 4(c) of this
Agreement.
(b) Reimbursement of Expenses. Xxxxxxxxxx shall reimburse
Xxxxxxxxx for all reasonable and properly reimbursable
business expenses incurred by him during the Consulting
Term in connection with his performance of Services
(including reasonable expenses for travel, meals and
lodging, if he is required to travel in connection with the
performance of his Services), provided (i) Cerquiera
obtains advance written authorization from the President or
a Vice President of Xxxxxxxxxx to incur such expenses and
(ii) Xxxxxxxxx timely submits a proper expense report and
supporting documentation to Xxxxxxxxxx.
(c) Group Insurance. During the Consulting Term,
Xxxxxxxxx may participate in Xxxxxxxxxx'x group health
insurance plan, subject to the terms of such plan and
provided he timely pays any cost that he is required to pay
in connection therewith. Unless earlier terminated in
accordance with the terms of such plan, Xxxxxxxxx s
participation in such plan shall terminate upon the
expiration or termination of the Consulting Term, except to
the extent (if any) that he is entitled, and elects, to
continue insurance coverage thereafter at his own expense
pursuant to the terms of the Consolidated Omnibus Budget
Reconciliation Act of 1985.
(d) Stock Options. In consideration of Xxxxxxxxx'x
agreement to all of the terms and conditions of this
Agreement, and also in consideration of and subject to
Xxxxxxxxx'x surrender to Xxxxxxxxxx on the Resignation Date
of all of the Old Options, Xxxxxxxxxx shall grant to
Xxxxxxxxx, effective as of the first day of the Consulting
Term and pursuant to Xxxxxxxxxx'x 1995 Stock Option Plan,
as amended (the "Option Plan"), new stock options (the "New
Options") as follows: (a) an option to purchase 17,050
shares of Xxxxxxxxxx common stock at an exercise price of
$13.125, such shares to be fully vested upon grant; (b) an
option to purchase 7,500 shares of the Xxxxxxxxxx common
stock at an exercise price of $11.125, such shares to be
fully vested upon grant; and (c) an option to purchase
8,788 shares of Xxxxxxxxxx common stock at an exercise
price equivalent to the closing price of Xxxxxxxxxx common
stock on Nasdaq as of the date of grant, such shares to
vest fully on January 30, 1999. The New Options (i) shall
not be incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as
amended; (ii) shall expire and become null and void on
March 30, 1999, and shall in no event be exercisable after
the earlier of (A) the thirtieth day after the expiration
or termination of the Consulting Term for any reason other
than Xxxxxxxxx'x death or (B) March 30, 1999, if the
Consulting Term expires or terminates before February 28,
1999 due to Xxxxxxxxx'x death, and (iii) shall comply with
the provisions of Article V and all other applicable
provisions of the Option Plan.
5. Independent Contractor. During the Consulting Term,
Xxxxxxxxx shall be an independent contractor of Xxxxxxxxxx and shall
not be considered an employee of Xxxxxxxxxx for any purpose
whatsoever. Accordingly, Xxxxxxxxxx will not withhold any amounts
for income or employment taxes from the compensation it pays him
under Section 4(a) of this Agreement, and Xxxxxxxxx shall be
responsible for paying all income and self-employment taxes payable
with respect to such compensation.
6. Return of Property. Xxxxxxxxx acknowledges his obligation
to return to Xxxxxxxxxx any and all items of its property, including
without limitation keys, computers, software, calculators, equipment,
c r edit cards, forms, files, manuals, correspondence, business
records, personnel data, lists of employees, salary and benefits
information, customer lists and files, lists of suppliers and
vendors, price lists, contracts, contract information, marketing
plans, brochures, catalogs, training materials, product samples,
computer tapes and diskettes or other portable media, computer-
readable files and data stored on any hard drive or other installed
device, and data processing reports, and any and all other documents
or property which he has had possession of or control over during the
course of his employment with Xxxxxxxxxx. Such of Xxxxxxxxxx s
property as is not needed for the conduct of Xxxxxxxxx'x duties
during the Consulting Term will be returned by not later than June
10, 1998; and all other items will be returned by not later than the
date of the expiration of the Consulting Term.
7. Use of Confidential Information. Xxxxxxxxx acknowledges
that (i) he is a party to an existing agreement entitled Employee's
Confidentiality and Noncompetition Agreement, a copy of which is
attached hereto as Exhibit A and is hereby reconfirmed and ratified,
his obligations under which continue in full force and effect and
undiminished in any way by this Agreement; and (ii) all of the
documents and information to which he presently has during his
employment or will during the Consulting Term have had access ,
including but not limited to all information pertaining to any
specific business transactions in which Xxxxxxxxxx or any of the
other Released Parties (as defined in Paragraph 8 below) were, are,
or may be involved, all information concerning salary and benefits
paid to current or former employees of Xxxxxxxxxx or any of the other
Released Parties, all personnel information relating in any way to
current or former employees of Xxxxxxxxxx or those of any of the
other Released Parties, all information pertaining in any way to
customers and suppliers of Xxxxxxxxxx or those of any of the other
Released Parties, pricing information, all financial and budgetary
information, information regarding Xxxxxxxxxx'x sales methods and
techniques, information regarding Xxxxxxxxxx'x training methods and
techniques, all other information specified in Paragraph 6 above, and
in general, the business and operations of Xxxxxxxxxx or any of the
other Released Parties are considered confidential and are not to be
disseminated or disclosed by Xxxxxxxxx to any other parties, except
as may be required by law or judicial process. In the event it
appears that Xxxxxxxxx will be compelled by law or judicial process
to disclose such confidential information, to avoid potential
liability Xxxxxxxxx should notify Xxxxxxxxxx'x president and CEO in
writing immediately upon his receipt of a subpoena or other legal
process.
8. General Release. In consideration of the remuneration
provided pursuant to Paragraph 4 hereof, Xxxxxxxxx and his family
members, heirs, successors, and assigns (collectively the "Releasing
Parties") hereby release, acquit, and forever discharge any and all
claims and demands of whatever kind or character, whether vicarious,
derivative, or direct, that Xxxxxxxxx or any of the other Releasing
Parties, individually, collectively, or otherwise, may have or assert
against: (i) Xxxxxxxxxx; (ii) any parent company, subsidiary, or
affiliated company of Xxxxxxxxxx; or (iii) any officer, director,
stockholder, fiduciary, agent, employee, representative, insurer,
attorney, or any successors and assigns of the entities just named
(collectively the "Released Parties"). This General Release includes
but is not limited to any claim or demand based on any federal,
state, or local statutory or common law or constitutional provision
that applies or is asserted to apply, directly or indirectly, to the
formation, continuation, or termination of Xxxxxxxxx'x employment
relationship with Xxxxxxxxxx. Thus, Xxxxxxxxx and the other
Releasing Parties agree not to make any claims or demands against
Xxxxxxxxxx or any of the other Released Parties such as for wrongful
discharge, unlawful employment discrimination on the basis of age or
any other form of unlawful employment discrimination; retaliation;
breach of contract (express or implied); breach of the duty of good
faith in and fair dealing; violation of the public policy of the
United States, the State of Texas, or any other state; intentional or
negligent infliction of emotional distress, tortious interference
with contract; promissory estoppel; detrimental reliance; defamation
of character; duress; negligent misrepresentation; intentional
misrepresentation or fraud; invasion of privacy; loss of consortium;
assault; batter; conspiracy; bad faith; negligent hiring, retention,
or supervision; any intentional or negligent act of personal injury;
any alleged act of harassment or intimidation; or any other
intentional or negligent tort; or any alleged violation of the Age
Discrimination in Employment Act of 1967, Title VII of the Civil
Rights Act of 1964, the Americans with Disabilities Act of 1990, the
Family and Medical Leave Act of 1993, the Employee Retirement Income
Security Act of 1974, the Fair Labor Standards Act, the Fair Credit
Reporting Act, the Texas Commission on Human Rights Act, the Texas
Wage Payment Statute.
The effect of Xxxxxxxxx'x acceptance of this Agreement is to
release, acquit, and forever discharge any and all claims and demands
of whatever kind or character that he or any of the other Releasing
Parties may now have or hereafter have or assert against Xxxxxxxxxx
or any of the other Released Parties for any liability, whether
vicarious, derivative, or direct. This release includes any claims
or demands for damages (actual or punitive), back wages, future wages
or front pay, commissions, bonuses, severance benefits, medical
expenses and the costs of any counseling, reinstatement or priority
placement, promotion, accrued vacation leave benefits, past and
future medical or other employment benefits (except as to which there
is existing contractual or vested entitlement) including
contributions to any employee benefit plans, retirement benefits
(except as to which there is vested entitlement), relocation
expenses, compensatory damages, injunctive relief, liquidated
damages, penalties, equitable relief, attorney's fees, costs of
court, disbursements, interest, and any and all other loss, expense,
or detriment of whatever kind or character, resulting from, growing
out of, connected with, or related in any way to the formation,
continuation, or termination of his employment relationship with
Xxxxxxxxxx. This General Release applies and is fully enforceable
with respect to all rights or claims existing on or before the date
this Agreement is executed by Xxxxxxxxx, and does not act to waive
any rights or claims that arise after the date of execution.
9. Confidentiality, Nonprosecution, Nondisparagement and
Cooperation.
(a) The terms of this Agreement shall be and remain
confidential, and shall not be disclosed by Xxxxxxxxx to any
persons other than the Releasing Parties and Xxxxxxxxx'x
attorney and accountant or tax return preparer if such persons
have agreed to keep such information confidential. If any
confidential information is released by Xxxxxxxxx, such release
shall be grounds for immediate termination of all benefits
listed herein. Notwithstanding the foregoing, either Xxxxxxxxx
or Xxxxxxxxxx may make any disclosures concerning the terms of
the Agreement that are required by law.
(b) Except as requested by Xxxxxxxxxx or as compelled by law or
judicial process, Xxxxxxxxx will not assist, cooperate with, or
supply information of any kind to any individual or private-
party litigant or their agents or attorneys (i) in any
proceeding, investigation, or inquiry raising issues under the
Age Discrimination in Employment Act of 1967, Title VII of the
Civil Rights Act of 1964, the Americans with Disabilities Act of
1990, the Family and Medical leave Act of 1993, the Employee
Retirement Income Security Act of 1974, the Fair Labor Standards
Act, the Fair Credit Reporting Act, the Texas Commission on
Human Rights Act, the Texas Wage Payment Statute, or any other
federal, state, or local law involving the formation,
continuation, or termination of Xxxxxxxxx'x employment
relationship, or the employment of other persons by Xxxxxxxxxx
or any of the other Released Parties; or (ii) in any other
litigation against Xxxxxxxxxx or any of the other Released
Parties.
(c) Except as permitted by law, Xxxxxxxxx will not initiate any
investigation or inquiry, or any other action of any kind,
including an administrative charge with any governmental agency,
with respect to Xxxxxxxxxx'x facilities, employment practices,
or business operations, relating to the termination of his
employment as provided for in this Agreement.
(d) Xxxxxxxxx will not make to any other parties any statement,
oral or written, which directly or indirectly impugns the
quality or integrity of Xxxxxxxxxx'x or any of the other
Released Parties business or employment practices, or any other
disparaging or derogatory remarks about Xxxxxxxxxx or any of the
other Released Parties, their officers, directors, stockholders,
managerial personnel, or other employees.
(e) It shall not be a breach of the obligations set forth in
this Paragraph 9 for Xxxxxxxxx, his spouse, or his attorneys to
state to any person that any differences, if he believes any to
exist, between Xxxxxxxxx and Xxxxxxxxxx have been settled or
satisfactorily resolved.
(f) During and after the Consulting Term with Xxxxxxxxxx,
Xxxxxxxxx agrees to cooperate fully and completely with
Xxxxxxxxxx, or the other Released Parties in any matter related
to Xxxxxxxxxx'x business or activities, as follows: to be
available at mutually agreeable times, personally or by
telephone, as necessary, (i) at such reasonable times and
without unreasonable interference with his future employment or
personal activities, to provide such information as may be from
time to time requested by Xxxxxxxxxx in its sole discretion in
connection with various matters in which Xxxxxxxxx was involved
during his employment with Xxxxxxxxxx; and (ii) in all pending
and future litigation involving Xxxxxxxxxx or any of the other
Released Parties, which obligation includes promptly meeting
with counsel for Xxxxxxxxxx and/or the other Released Parties at
reasonable times upon its or their request, and providing
testimony in court or upon deposition that is truthful,
accurate, and complete, according to information known to him.
If Xxxxxxxxx appears as a witness in any pending or future
litigation at the request of Xxxxxxxxxx or any of the other
Released Parties, Xxxxxxxxxx agrees to reimburse Xxxxxxxxx, upon
submission of substantiating documentation, for necessary and
reasonable expenses, including actual lost earnings, incurred by
him as a result of his testifying.
10. Agreement Regarding Solicitation of Employees, Customers
and Suppliers. For a period of one year following the Resignation
Date, and thereafter to the extent provided by law, Xxxxxxxxx will
not, directly or indirectly, for his own account or for the benefit
of any other person or party:
(a) Solicit, induce, entice, or attempt to entice any employee,
contractor, or subcontractor of Xxxxxxxxxx to terminate his or
her employment or contract with Xxxxxxxxxx, or
(b) Solicit, induce, entice or attempt to entice any customer
or supplier of Xxxxxxxxxx, including any firms that have been
customers or suppliers of Xxxxxxxxxx within one year preceding
the Resignation Date, to terminate its business relationship
with Xxxxxxxxxx.
Should Xxxxxxxxx breach this obligation, Xxxxxxxxxx will be
entitled to enforce the provisions of this Paragraph 10 by seeking
injunctive relief in addition to recovering any monetary damages
Xxxxxxxxxx may sustain as a result of such breach, and Xxxxxxxxx may
be required to repay any amounts provided to him under the provisions
of Paragraph 4 of this Agreement.
11. Effect and Use of Agreement. This Agreement does not in
any manner constitute an admission of liability or wrongdoing on the
part of Xxxxxxxxxx or any of the other Released Parties, but
Xxxxxxxxxx expressly denies any such liability or wrongdoing. Except
to the extent necessary to enforce this Agreement, neither this
Agreement nor any part of it may be construed, used, or admitted into
evidence in any judicial, administrative or arbitral proceeding as an
admission of any kind by Xxxxxxxxxx or any of the other Released
Parties.
12. Authority to Execute. Xxxxxxxxx represents and warrants
that he has the authority to execute this Agreement on behalf of all
the Releasing Parties. Xxxxxxxxx further agrees to indemnify fully
and hold harmless Xxxxxxxxxx and any of the other Released Parties
from any and all claims brought by the Releasing parties or
derivative of his own with respect to the subject matter of this
Agreement, including the amount of any such claims Xxxxxxxxxx or any
of the other Released Parties are compelled to pay, and the costs and
attorney's fees incurred in defending against all such claims.
13. Governing Law and Interpretation. This Agreement and the
rights and duties of the parties under it shall be governed by and
construed in accordance with the laws of the State of Texas. If any
provision of this Agreement is held to be unenforceable, such
provision shall be considered separate, distinct, and severable from
the other remaining provisions of this Agreement, and shall not
affect the validity or enforceability of such other remaining
provisions, and, in all other respects, this Agreement shall remain
in full force and effect. If any provision of this Agreement is held
to be unenforceable as written but may be made to be enforceable by
limitation thereof, then such provision shall be enforceable to the
maximum extent permitted by applicable law. The language of all
parts of this Agreement shall in all cases be construed as a whole,
according to its fair meaning, and not strictly for or against any of
the parties.
14. Effect of Breach. Xxxxxxxxx acknowledges and agrees that
should he or any of the other Releasing Parties breach any of their
obligations set forth in this Agreement, (i) Xxxxxxxxxx will have no
further obligation to comply with its undertakings in Paragraphs 2, 3
and 4 hereof, but all of the other provisions of this Agreement shall
remain in full force and effect; (ii) Xxxxxxxxx may be required to
repay any payments made to him and reimburse Xxxxxxxxxx for any
payments made on his behalf or for his benefit pursuant to Paragraphs
2 and 4 hereof; and (iii) the Releasing Parties also may be liable
for any of the Released Parties damages caused by the breach,
including without limitation their costs and attorney's fees incurred
in defending claims brought in breach of this Agreement or bringing
claims to enforce this Agreement.
15. Time for Consideration, Consultation with Attorney, and
Knowing and Voluntary Action. Xxxxxxxxx acknowledges that (i) he has
had the opportunity to consider the terms of the General Release
contained in Paragraph 8 above, including its waiver of any claims
under the Age Discrimination in Employment Act, for more than 21
days; (ii) he has been advised by Xxxxxxxxxx of his right to consult
an attorney of his choosing in connection with his consideration of
the terms of this Agreement, including such General Release and
waiver; and (iii) his execution of this Agreement is knowing and
voluntary.
16. Effective Date. This Agreement will become effective and
enforceable upon the expiration of seven days after Xxxxxxxxx s
execution of it (the "Effective Date"). At any time before
the Effective Date of this Agreement, Xxxxxxxxx may revoke his
acceptance.
17. Entire Agreement. This Agreement contains and constitutes
the entire understanding and agreement between Xxxxxxxxx and
Xxxxxxxxxx, and may be modified only by a writing of contemporaneous
or subsequent date executed by both Xxxxxxxxx and an authorized
official of Xxxxxxxxxx.
SIGNED on the dates shown below.
XXXXXXXXXX LABORATORIES, INC.
Dated: ________________________, 1998 By : __________________________
Xxxxxxx X. Xxxxxx
President & CEO
Date: _________________________, 1998 ______________________________
Xxxx X. Cerqueia
