Exhibit 10.23
SEPARATION AGREEMENT AND RELEASE
THIS Separation Agreement and Release ("Agreement") is entered into
effective as of March 26, 2001, between MICHAELS STORES, INC. ("Michaels")
and XXXX X. XXXXXX ("Employee").
WHEREAS, Employee has been an employee and an officer of Michaels, and
in such capacities has performed services for Michaels; and
WHEREAS, Employee wishes to resign from his position as President and
Chief Operating Officer of Michaels effective as of March 26, 2001; and
WHEREAS, Employee wishes to continue to perform services for Michaels as
a non-officer employee as directed by Michaels' Chief Executive Officer
through May 12, 2001; and
WHEREAS, the parties wish to set forth in full their agreement regarding
certain matters;
NOW, THEREFORE, in consideration of the covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties do hereby agree as follows:
Section 1. RESIGNATION AS OFFICER; CONTINUED EMPLOYMENT. Employee
hereby resigns from his position as President and Chief Operating Officer of
Michaels and from any position he holds with any subsidiary or affiliate of
Michaels effective as of March 26, 2001. Employee shall remain a non-officer
employee of Michaels beginning March 27, 2001 through, but only through, May
12, 2001 (the "Continued Employment Period"), and for his services as such
shall be compensated at a rate equal to his current base salary, subject to
all applicable or customary withholding requirements, and in accordance with
Michaels' customary payroll practices , for such period. Michaels (a) will
provide Employee with a cellular telephone, fax machine, telephone charge
card and the Michaels-owned Lexus automobile currently in his possession to
facilitate his performance of the duties of such continued employment and (b)
will reimburse Employee for all reasonable out-of-pocket expenses necessarily
incurred in the performance of such duties and which are consistent with
Michaels' expense reimbursement policies. During the Continued Employment
Period, Employee shall provide such services for Michaels as the Chief
Executive Officer of Michaels shall from time to time reasonably request.
Such services are contemplated to include, but not necessarily be limited to,
advice, consultation and/or other services related to merchandising and/or
inventory-related strategies, programs and processes. In providing services
during the Continued Employment Period, Employee shall be at all times
subject to the direction and supervision of the Chief Executive Officer of
Michaels. Employee will not be entitled to any bonus, prorated or otherwise,
for Michaels' 2001 fiscal year.
Section 2. SALARY CONTINUATION. Despite the termination of
Employee's employment effective as of May 12, 2001, Michaels agrees to
continue payment of Employee's base salary for up to twelve (12) months,
subject to all applicable or customary withholding requirements,
Exhibit 10.23
beginning May 13, 2001 until the earlier to occur of (a) May l2, 2002 or (b)
the date upon which Employee first violates any term or provision of this
Agreement (the "Severance Period").
Section 3. HEALTH CARE BENEFITS. Through May 12, 2001, Employee will
remain entitled to benefits under Michaels' officer health insurance plan;
provided, however, that such benefits shall be limited to those that are
reasonable and consistent with Employee's past practice. During the Severance
Period, Michaels will provide health care benefits to Employee on the same
terms as such benefits are provided to non-officer employees until the
earlier to occur of (a) May 12, 2002 or (b) the date upon which Employee
becomes eligible for health care benefits with another employer. Employee
acknowledges that he is responsible for the employee portion of the premium
for such non-officer health care benefits, which will be deducted from
Employee's salary continuation payments provided for in Section 2 of this
Agreement. Employee further acknowledges that he is obligated to notify
Michaels of his eligibility at any time prior to May 12, 2002 for health care
benefits with another employer. Upon the termination of such health care
benefits hereunder, Employee shall be eligible to elect health care
continuation coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA").
Section 4. STOCK OPTIONS. Employee acknowledges and agrees that all
options to purchase shares of Michaels Common Stock granted to him pursuant
to the terms of Michaels' 1997 Stock Option Plan (the "Options") are
terminated effective May 12, 2001, except as specifically provided in the
Non-Statutory Stock Option Agreements between Michaels and Employee
evidencing the Options, to the effect that the Option evidenced by each such
Non-Statutory Stock Option Agreement shall terminate on the 30th calendar day
(i.e., June 11, 2001) following the date of termination of the employment of
Employee, which date of termination is May 12, 2001. Employee acknowledges
and agrees that he has no rights in, to or under the Options or the
Non-Statutory Stock Option Agreements evidencing the Options except as
specifically set forth in this Section 4.
Section 5. RESUME PREPARATION; OUTPLACEMENT SERVICES. In
anticipation of the termination of Employee's employment effective as of May
12, 2001, Michaels will pay directly, or will reimburse Employee for,
expenses incurred in connection with the preparation of Employee's resume.
In addition, during the period beginning May 13, 2001 and ending August 12,
2001, Michaels will pay directly, or will reimburse Employee for, expenses
incurred in connection with outplacement services for Employee's benefit.
Notwithstanding the foregoing, however, in no event will Michaels be liable
hereunder for expenses incurred in connection with the preparation of
Employee's resume and/or in connection with outplacement services for
Employee's benefit in a total amount in excess of $7,500 in the aggregate.
Section 6. TAXES. Employee shall pay and be solely liable for all
income and other taxes and charges imposed as a result of payments made or
other benefits provided to him pursuant to this Agreement.
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Exhibit 10.23
Section 7. EFFECTIVENESS. Upon the expiration of the 7-day
revocation period described in Section 30 below, this Agreement will become
effective as of the date first set forth above, unless Employee revokes this
Agreement during such revocation period. If this Agreement becomes effective,
it may not thereafter be revoked by either party.
Section 8. THIRD-PARTY LITIGATION. Employee agrees to make himself
reasonably available to Michaels and its subsidiaries and affiliates in
connection with any pending or threatened claims, charges or litigation in
which Michaels or any of its subsidiaries or affiliates is now or may become
involved, or any other claims or demands made against or upon Michaels or any
of its subsidiaries or affiliates, regardless of whether or not Employee is a
named defendant in any particular case.
Section 9. MICHAELS PROPERTY. Following the expiration of the
Continued Employment Period, Employee may retain and use the cellular
telephone, fax machine and telephone charge card provided to him pursuant to
Section 1 until the earlier to occur of (a) the expiration of the Severance
Period or (b) the date upon which Employee accepts employment with another
employer or engagement with any other person or entity as a consultant,
advisor or otherwise. During such period of permitted continued use by
Employee, Michaels will pay directly, or will reimburse Employee for,
expenses incurred in connection with the use of such items; provided,
however, that Michaels' liability for expenses related to the use of such
cellular telephone and telephone charge card shall not exceed $200 in any
month and provided, further, that Employee shall be liable for, and shall
indemnify Michaels in respect of, any expenses related to the use of such
cellular telephone and telephone charge card in excess of $200 in any month.
Employee shall return to Michaels such cellular telephone, fax machine and
telephone charge card immediately following the expiration of the period of
their permitted continued use by Employee as described above. Employee shall
promptly, on or before May 12, 2001, return to Michaels all other property of
Michaels in Employee's possession or subject to his control, including
without limitation any laptop computers, keys, credit cards, reports and
files. Employee shall not alter any Michaels computer files in any way after
May 12, 2001.
Section 10. AUTOMOBILE. Until May 12, 2001, Employee may purchase the
Michaels-owned Lexus automobile currently in his possession at the price of
$25,000.
Section 11. ADVICE IN WRITING. Employee represents and agrees that he
was advised by Michaels in writing, by the letter to him enclosing this
Agreement, to consult with an attorney of his choice prior to signing this
Agreement.
Section 12. PERIOD OF CONSIDERATION. Employee represents and agrees
that Michaels has given him at least twenty-one (21) days to consider whether
to execute this Agreement and during that time he has had this Agreement in
his possession.
Section 13. VOLUNTARY ACT. Employee represents and agrees that he is
fully aware of his right to discuss any and all aspects of this matter with
an attorney of his choice, that he has carefully
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Exhibit 10.23
read and fully understands all of the provisions of this Agreement, and that
he is voluntarily entering into this Agreement.
Section 14. RELEASE. As a material inducement to Michaels to enter
into this Agreement, Employee hereby irrevocably and unconditionally
releases, acquits, and forever discharges Michaels and each of Michaels'
present and former stockholders, predecessors, successors, assigns, agents,
directors, officers, employees, representatives, attorneys, divisions,
subsidiaries and affiliates (and agents, directors, officers, employees,
representatives and attorneys of such divisions, subsidiaries and
affiliates), and all persons acting by, through, under or in concert with any
of them (collectively, "Releasees"), or any of them, from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including without limitation attorney's
fees and costs actually incurred), of any nature whatsoever (other than
liabilities, claims, obligations and other rights arising solely under this
Agreement), known or unknown ("Claim" or "Claims"), which Employee now has,
owns, or holds, or claims to have, own, or hold, or which Employee at any
time heretofore had, owned, or held, or claimed to have, own, or hold,
against each or any of the Releasees, including but not limited to (a) Claims
of age discrimination under the Age Discrimination in Employment Act of 1967,
as amended (the "ADEA"); (b) any and all Claims related to Employee's
employment with Michaels; and (c) any and all Claims related to the
termination of Employee's employment with Michaels. Employee understands and
acknowledges that this Agreement does not waive rights or claims under the
ADEA or comparable state law that may arise after the date this Agreement is
executed and does not waive his right to challenge this Agreement's waiver of
ADEA claims under the Older Workers Benefit Protection Act. Employee
represents and warrants to Michaels that Employee has not heretofore assigned
or transferred, or purported to assign or transfer, to any person or entity,
any Claim or any portion thereof or interest therein.
Section 15. CONFIDENTIAL INFORMATION. Employee agrees to hold
confidential, and not to disclose to any person, firm, corporation,
partnership or other entity, any trade secret or Confidential Information (as
defined below) gained in the course of his employment with Michaels
concerning Michaels and/or any of its affiliates, subsidiaries, parents,
predecessors or related entities, except if such disclosure is required by
law or legal process. "Confidential Information" shall include, without
limitation, information concerning strategic plans, financial affairs,
operating policies and procedures, vendor information, product or pricing
information, marketing plans, supply chain strategies, store sales,
e-commerce plans or results, personnel policies and practices, business or
market development plans, forecasts, proprietary statistics, reports or
merchandising or inventory- related strategies, programs or processes.
Employee agrees not to remove any trade secret or Confidential Information
from Michaels, not to request that others do so on his behalf, and promptly
to return any trade secret or Confidential Information in his possession as
of May 12, 2001 (or earlier upon request) to Michaels.
Section 16. NONDISCLOSURE OF AGREEMENT. Employee agrees that the
contents of this Agreement, including without limitation its terms and any
monetary or other consideration provided for herein, shall not be disclosed,
released or communicated by Employee to any person, including
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Exhibit 10.23
natural persons, corporations, partnerships, limited partnerships, joint
ventures, sole proprietorships or other business entities, and that all terms
of this Agreement shall remain confidential, except (a) for the purpose of
enforcing this Agreement, (b) with respect to disclosures to members of
Employee's immediate family and his attorneys, accountants and potential
employers, and (c) to the extent disclosure may be compelled by court order
or legal process. In the event that such a disclosure is sought to be
compelled from Employee by court order or legal process, whether by subpoena
or otherwise, Employee shall immediately provide written notice to Michaels
of such request and shall also provide any assistance which is reasonably
necessary in order to insure compliance with this provision of this
Agreement. Employee agrees and understands that this nondisclosure provision
is a material provision of this Agreement.
Section 17. NON-DENIGRATION. Michaels and Employee each agree not to
criticize, denigrate or otherwise speak adversely against the other in regard
to past or present activities.
Section 18. NON-SOLICITATION. Employee agrees that, until after May
12, 2002, Employee will not solicit, entice or otherwise induce any employee
of Michaels (or of any subsidiary or affiliate of Michaels) to leave the
employ of Michaels (or any such subsidiary or affiliate) for any reason
whatsoever, nor will Employee directly or indirectly hire or aid, assist or
abet any other person or entity in soliciting or hiring any employee of
Michaels (or of any such subsidiary or affiliate).
Section 19. NO REEMPLOYMENT. Employee agrees not to seek or apply for
reemployment with Michaels or any subsidiary or affiliate of Michaels.
Section 20. EQUITABLE REMEDIES. Employee expressly affirms and
recognizes that this Agreement contains obligations which, in the event of
his breach thereof, afford Michaels no adequate remedy at law. As a result
thereof, in the event of Employee's breach, or threatened breach, of any term
or provision contained in this Agreement, Employee agrees that Michaels shall
be entitled to both temporary and permanent injunctive relief. The right of
Michaels to such relief shall not be construed to prevent Michaels from
pursuing, either consecutively or concurrently, any and all other legal or
equitable remedies available to it for such breach or threatened breach,
specifically including without limitation the recovery of monetary damages.
Section 21. EXPENSES OF COUNSEL. In the event Employee in any respect
breaches the terms and conditions of this Agreement, or threatens to do the
same, and in the event that it becomes necessary for Michaels to employ legal
counsel to enforce any provision of this Agreement or to seek or obtain
relief through legal proceedings on account of such breach or threatened
breach of this Agreement, Employee shall pay to Michaels reasonable
attorneys' fees, as well as all court costs, disbursements and other expenses
of any nature whatsoever, which Michaels may expend or incur in connection
with the enforcement of this Agreement or of any rights and remedies provided
by this Agreement. However, Employee understands that nothing in this
Agreement is intended to interfere with or deter his right to challenge the
waiver of an ADEA claim or the filing of an ADEA charge
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Exhibit 10.23
or ADEA complaint with the Equal Employment Opportunity Commission or to
participate in any investigation or proceeding conducted by that agency.
Section 22. AMENDMENT. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by both of the parties
hereto.
Section 23. ASSIGNMENT. Neither this Agreement nor any right or
obligation created hereby shall be assignable by either party hereto, without
the express written permission of the other party, except by operation of
law, including, but not limited to, the applicable laws of descent and
distribution.
Section 24. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties and supersedes any and all other agreements between
the parties hereto with respect to the subject matter hereof.
Section 25. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING
CONFLICTS OF LAWS) OF THE STATE OF TEXAS. THE PARTIES AGREE THAT THIS
AGREEMENT SHALL BE PERFORMABLE IN DALLAS COUNTY, TEXAS.
Section 26. ENFORCEABILITY/REFORMATION. If any court of competent
jurisdiction determines that any of the provisions hereof, or any parts
thereof, are invalid or unenforceable, the other provisions and the remainder
of any of the provisions so impaired shall not thereby be affected and shall
be given full effect, without regard to the invalid provisions or portions of
provisions. Notwithstanding the foregoing, it is the intent of each of the
parties that the provisions of this Agreement be enforced to the fullest
extent permitted by applicable law. If any court of competent jurisdiction
determines that any of the provisions of this Agreement, or any parts
thereof, are unenforceable under applicable laws or public policies, it is
the intent of the parties, and the parties hereby request, that the court
reform such provisions in such manner as such court may determine is
necessary to make such provisions enforceable.
Section 27. HEADINGS. The headings, captions and arrangements used
herein are for convenience only and shall not be deemed to limit, amplify or
modify the terms hereof, nor affect the meaning thereof.
Section 28. MULTIPLE COUNTERPARTS. This Agreement has been executed
in a number of identical counterparts, all of which constitute, collectively,
one agreement; but in making proof of this Agreement, it shall not be
necessary to produce or account for more than one such counterpart.
Section 29. PARTIES BOUND. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
representatives, heirs, successors and permitted assigns.
Section 30. REVOCATION PERIOD. It is expressly agreed that for seven
(7) days following execution of this Agreement by Employee, Employee may
revoke this Agreement; it is further
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Exhibit 10.23
expressly agreed by the parties that this Agreement shall not become
effective and/or fully made and enforceable until the seven (7) day
revocation period described above has expired.
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Exhibit 10.23
EXECUTED effective as of the date first set forth above.
MICHAELS STORES, INC.
By: /s/ Xxx Xxxxxxx
---------------------------------------
Title: Senior Vice President - Human Resources
---------------------------------------
/s/ Xxxx X. Xxxxxx
------------------------------------
XXXX X. XXXXXX
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Exhibit 10.23
ACKNOWLEDGMENTS
STATE OF TEXAS Section
Section
COUNTY OF DALLAS Section
BEFORE ME, the undersigned authority, on this day personally appeared
Xxx Xxxxxxx, Senior V.P. - HR of MICHAELS STORES, INC., a Delaware
corporation, known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated
and as the act and deed of said corporation.
GIVEN under my hand and seal of office this 17th day of April, 2001.
/s/ Xxxxxxxx Xxxxxx
--------------------------------
Notary Public in and for the
State of Texas
Xxxxxxxx Xxxxxx
--------------------------------
Notary's Printed Name and
Commission Expiration
STATE OF TEXAS Section
Section
COUNTY OF DALLAS Section
BEFORE ME, the undersigned authority, on this day personally appeared
XXXX X. XXXXXX, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed the same for
the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL on this 16th day of April, 2001.
/s/ Xxxx Xxxx Xxxx
--------------------------------
Notary Public in and for the
State of Texas
Xxxx Xxxx Xxxx
--------------------------------
Notary's Printed Name and
Commission Expiration
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