EXHIBIT 10.12
SEPARATION AGREEMENT
The parties to this Separation Agreement ("Agreement") are the following:
1. The XxxXxxx-Xxxxxxxxxx Corporation ("MSC") and
2. Xxxxxx X. Xxxxx ("Xxxxx").
Whereas MSC desires to employ Xxxxx as its President and Chief
Executive Officer;
Whereas Xxxxx desires to be so employed with MSC;
Whereas both parties desire to set forth in advance their respective
rights and obligations upon the termination of their employment relationship,
the parties agree as follows:
1. Xxxxx hereby acknowledges and agrees that he is an "at will"
employee who is employed for an indefinite term. Accordingly, either he or
MSC can terminate the employment relationship at any time for any or no
reason without liability except for the obligations and rights expressly set
forth in this Agreement.
2. If Xxxxx resigns his position, dies or otherwise terminates the
employment relationship, he shall be entitled to his pro rata share of his
base salary then in effect through the last day of his employment plus any
accrued but unused vacation. Curry's resignation shall be effective on the
date he gives notice unless the parties agree otherwise. Xxxxx shall not be
entitled to any other compensation or benefits from MSC except as statutorily
required by law, such as COBRA rights.
3. If MSC terminates Xxxxx for "cause," Xxxxx shall be entitled to his
pro rata share of his base salary then in effect through the last day of his
employment plus any accrued but unused vacation. Xxxxx shall not be
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entitled to any other compensation or benefits from MSC except as statutorily
required by law, such as COBRA rights.
4. For the purposes of this Agreement, "cause" for termination shall
include any reason that would constitute "cause" under California law. It
shall also include, but not be limited to, dishonesty, fraud, theft,
embezzlement, conviction of a misdemeanor involving moral turpitude or of any
felony, failure to perform duties in a manner satisfactory to the Board of
Directors after being advised in writing of a performance deficiency,
unauthorized absence from work for a period of five or more consecutive work
days, violation of Company policy or procedure, inability to perform the
essential functions of the job for a period of 180 days due to any physical
or mental disability, competing with the MSC while in its employ, or
violation of the terms of the Employment Service/Non-Disclosure Agreement
signed by Xxxxx upon his employment as President and Chief Operating Officer.
5. If MSC terminates Xxxxx for reasons other than cause, MSC shall
provide Xxxxx with the following compensation and benefits:
(a) MSC will continue to pay Xxxxx the base salary he was receiving
at the time of termination for a period of eighteen (18) months from the
effective date of the termination as determined by MSC (the "Termination
Date"). These salary continuation payments shall be made in the form of
regular semi-monthly payroll payments with appropriate withholdings and
authorized deductions that were in effect at the time of the termination
and/or as required by law.
(b) If Xxxxx elects to exercise his rights under COBRA to continue
the medical benefits provided under the MSC medical plan in which he was
participating, MSC shall continue to pay the same amount towards the
premium as it paid towards the premium immediately prior to the
Termination Date to continue Curry's medical coverage under MSC's then
current medical plan for a period not to exceed eighteen (18) months
after the Termination Date. Other than MSC's payment of the premium,
Xxxxx shall be subject to all the terms and conditions of MSC's medical
plan that are applicable to
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MSC's other executives. MSC's obligation under this subparagraph shall
terminate immediately upon Curry's commencing employment with another
employer and becoming eligible to participate in the medical plan
offered by the new employer or if Xxxxx becomes otherwise ineligible for
continuance of medical insurance coverage under COBRA. Xxxxx agrees to
notify MSC in writing immediately of the fact that he has accepted new
employment and to provide MSC with a copy of his new employer's medical
insurance.
(c) MSC will continue Curry's participation in its then-current
Company Automobile Benefits Program (which is currently described in MSC
Program No. 8.1.4.) for a period not to exceed eighteen (18) months from
the Termination Date. Curry's continued participation in that program
during the eighteen (18) month period shall be subject to all the terms
and conditions of that program which are then in effect and applicable
to other MSC executives participating in that program.
(d) The 70,000 non-qualified stock options granted under the
special stock option agreement dated January 11, 1995, if not already
vested, shall become fully vested as of the Termination Date and Xxxxx
may exercise those options for a period of twelve (12) months from the
Termination Date. Xxxxx shall remain subject to all other terms and
conditions of the special stock option agreement. Curry's rights under
any and all other employee stock option plans shall be cancelled in
accordance with the terms of those plans.
(c) MSC shall pay, directly to the service provider, reasonable
job search/out placement fees actually incurred by Xxxxx in his efforts
to secure new employment, but in no event shall the total amount of such
fees exceed $35,000.
6. Curry's entitlement to the compensation and benefits described in
Paragraph 5 (a) - (e) is expressly conditioned upon his execution, at the
time of his termination, of MSC's then-current Separation Non-Disclosure
Agreement and the execution of a general release of MSC, its directors,
officers, employees, attorneys, insurers and affiliated entities from any and
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all liability. If Xxxxx fails to sign either the Separation Non-Disclosure
Agreement or the general release, he shall be entitled to nothing under this
Agreement other than what he would receive upon his resignation pursuant to
Paragraph 2 plus two (2) weeks severance pay. Moreover, if Xxxxx subsequently
violates the terms of the Separation Non-Disclosure Agreement, he shall
immediately forfeit any rights to the benefits set forth in Paragraph 5 (a) -
(e) and shall immediately repay to MSC any and all compensation and the cost
of any and all benefits already received pursuant to Paragraph 5 (a) - (e).
7. The parties acknowledge and agree that the compensation and benefits
described in Paragraph 5 (a) - (e) (or, in the alternative, Paragraph 6) are
the sole and exclusive relief to which Xxxxx shall be entitled if he is
terminated without cause. Accordingly, Xxxxx shall not be entitled to any other
fringe benefits, bonuses, payments, compensation, severance pay or
participation in any other MSC programs or plans then in existence except as
expressly set forth in Paragraph 5 (a) - (e).
8. The parties acknowledge and agree that the compensation and benefits
set forth in Paragraph 5 (a) - (e) (or, in the alternative, Paragraph 6)
shall be the limitation of MSC's liability in connection with any termination
of Curry's employment under this Agreement. Accordingly, if MSC terminates
Xxxxx for cause and it is later determined that cause did not exist, MSC's
liability shall be limited to the compensation and its cost of the benefits
described in Paragraph 5 (a) - (e).
9. This Agreement sets forth the entire agreement between MSC and Xxxxx
with respect to Curry's term of employment and the termination of that
employment. No express or implied modification, alteration or termination of
this Agreement shall be valid except if it is made in writing and executed by
the Chairman of the Board of Directors of MSC. Accordingly, this Agreement
supersedes any and all previous or concurrent arrangements and agreements,
written or oral, expressed or implied, if any, which may have existed between
MSC and Xxxxx, including but not limited to the "Agreement Re: Change in
Control" dated April 14, 1994.
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10. If any provision of this Agreement is illegal and unenforceable in
whole or in part, the remainder of this Agreement shall remain enforceable to
the extent permitted by law.
11. The parties agree that any lawsuit or action filed in connection
with Curry's employment, this Agreement and/or the termination of Curry's
employment shall be filed in California Superior court for the County of Los
Angeles. Moreover, all disputes arising out of or relating to Curry's
employment with MSC, or to enforce or interpret this Agreement, shall be
resolved by way of a reference procedure, as described in Code of Civil
Procedure Section 638, et seq. Both parties agree to waive any right to a
jury trial. The scope of this clause is to be broadly construed, so as to
include both contract, tort and statutory causes of action of whatever
description. In the event of such a dispute, the parties shall jointly
appoint a Referee, and, in the event that no referee can be agreed upon, then
the parties shall apply to the Judicial Arbitration and Mediation Service for
a list of seven available referees, and each party shall be entitled to
strike names from the list, alternating between them and beginning with
Xxxxx, until only one name remains, and that person shall be designated the
referee. The cost of the reference procedure shall be evenly divided between
the parties, but the referee may, at the conclusion of the reference
procedure, allocate the reference costs as he or she deems appropriate.
Notwithstanding Code of Civil Procedure Section 643, the referee may render
his or her decision within sixty (60) days after the close of proceedings,
but, in the event that no decision is rendered after that time, the referee
shall nonetheless not lose jurisdiction over the matter, and shall render a
decision as soon thereafter as is practicable.
/s/ Xxxxxxx X. XxxXxxx
________________________________________
For The XxxXxxx-Xxxxxxxxxx Corporation
/s/ Xxxxxx X. Xxxxx
________________________________________
Xxxxxx X. Xxxxx
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