Exhibit 10.2
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (hereinafter the "Agreement") dated
as of the 20th day of June, 2002, contains all terms and compromises reached
between Xxxx X. Xxxxxxxxx ("Xx. Xxxxxxxxx"), CellStar Ltd. (hereinafter the
"Employer"), CellStar Corporation ("CellStar"), and all affiliated entities, in
connection with Xx. Xxxxxxxxx'x separation from employment with the Employer. It
is the intent of the parties, by entering into this Agreement, to resolve any
and all disputes, claims or causes of action which might now exist or arise in
the future between them.
IT IS THEREFORE AGREED THAT:
1. Employer and Xx. Xxxxxxxxx hereby mutually agree that Xx. Xxxxxxxxx'x
employment with Employer, CellStar and their affiliated entities will
automatically terminate effective June 30, 2002 (hereinafter the "Termination
Date"). Furthermore, effective upon the Termination Date, Xx. Xxxxxxxxx resigns
from all director and officer positions with CellStar and its affiliated
entities, and any other positions that he currently holds with the Company and
its affiliates. Xx. Xxxxxxxxx shall remain on the payroll as an employee from
the date of this Agreement to the Termination Date and perform the duties
reasonably assigned to him from time to time by the Chief Executive Officer and
Board of Directors of CellStar. Xx. Xxxxxxxxx will devote substantially all of
his time, energy, skill and best efforts to the performance of his duties, and
will faithfully and diligently perform such duties. During such time, Xx.
Xxxxxxxxx'x actions shall be subject to the direction of the Chief Executive
Officer and the Board of Directors of CellStar.
2. In consideration for Xx. Xxxxxxxxx'x promises and covenants in this
Agreement, the Employer agrees:
a. to pay Xx. Xxxxxxxxx'x current salary through the Termination Date.
b. to pay Xx. Xxxxxxxxx, in accordance with the formula set forth in the
Employment Agreement dated November 12, 1999 between Xx. Xxxxxxxxx
and the Employer (the "Employment Agreement"), the amount of
$546,849.11 (less required withholding), within fifteen (15) days
after the Termination Date;
c. to pay Xx. Xxxxxxxxx for accrued, but unused, vacation and personal
days upon the Termination Date;
d. to pay Xx. Xxxxxxxxx the Annual Incentive Payment (less required
withholding) pursuant to paragraph 1.4(b) and 1.6(c) of the
Employment Agreement (which sections, as modified by this paragraph
2, are incorporated herein by reference) promptly after the amount of
such payment is determined, if such payment is earned in accordance
with the terms of its grant;
e. to pay $670.58 per month (plus applicable employment taxes) of the
total monthly premium due by Employee on his COBRA health care
continuation coverage
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pursuant to Section 4980B of the Internal Revenue Code of 1986, as
amended, and Section 601, et seq. of the Employee Retirement Income
Security Act of 1974, as amended, for the continuation of the current
medical, dental and vision insurance provided by the Employer for
Employee and family until November 11, 2003 so long as Employee pays
when due the balance of the monthly premium due for such coverage.
Employee agrees to timely elect COBRA coverage upon the Termination
Date. Employee further agrees to timely submit to the Employer's
Human Resources Department his monthly payment for his portion of the
COBRA premium in accordance with Employer's standard procedures.
Employee understands that all amounts paid by Employer pursuant to
this subsection shall constitute taxable income to him. In the event
the total COBRA premium increases at any time during the effective
period, the portion payable by the Employer shall be adjusted so that
such portion constitutes 70% of the total premium payable.
f. the unvested portion of the Option (as defined in paragraph 1.4(c) of
the Employment Agreement) shall vest as of the Termination Date, as
required by Section 1.4(c) of the Employment Agreement, which section
is incorporated herein by reference; and
g. to allow Xx. Xxxxxxxxx to retain the laptop computer currently used
by Xx. Xxxxxxxxx together with the non-CellStar proprietary software
currently loaded on such computer; provided, however, that CellStar
shall have the right to delete all email and other CellStar related
data stored on such laptop.
3. In consideration for the promises, payments and benefits provided
herein by Employer, and in order to fully compromise and settle any and all
claims and causes of action of any kind whatsoever relating to or arising out of
Xx. Xxxxxxxxx'x employment with Employer, including any claim arising under
common law, contractual claim (except for and as set forth in this Separation
Agreement and Release or in any stock option agreement existing at the
Termination Date between Xx. Xxxxxxxxx and CellStar), or any other federal,
state or local statute or ordinance, Xx. Xxxxxxxxx agrees:
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a. that Xx. Xxxxxxxxx will and hereby does unconditionally release,
acquit and forever discharge Employer, all of its parent, subsidiary
and affiliated companies, and all of their officers, directors,
representatives, employees and agents from any and all charges,
complaints, claims, causes of action, suits and expenses (including
attorney fees and costs actually incurred) of any nature whatsoever,
known or unknown, regarding any matter existing on or prior to the
date hereof, including without limitation those obligations or
matters relating to or arising out of the Employment Agreement which
is hereby terminated and Xx. Xxxxxxxxx'x employment or separation
thereof from Employer, except as specifically expressed in this
instrument or under any stock option agreement existing at the
Termination Date between Xx. Xxxxxxxxx and CellStar or under any
employee welfare benefit plan or 401(k) plan of Employer in which Xx.
Xxxxxxxxx participates on the Termination Date. THIS RELEASE
INCLUDES, BUT IS NOT LIMITED TO, ANY CLAIM OR CAUSE OF ACTION ARISING
OUT OF THE EMPLOYMENT AGREEMENT (EXCEPT FOR AND AS SET FORTH IN THIS
SEPARATION AGREEMENT, AND IN ANY STOCK OPTION AGREEMENT EXISTING AT
THE TERMINATION DATE BETWEEN XX. XXXXXXXXX AND EMPLOYER), XX.
XXXXXXXXX'X EMPLOYMENT WITH EMPLOYER AND THE SEPARATION THEREOF, OR
ANY BENEFITS ASSOCIATED WITH SUCH EMPLOYMENT, INCLUDING ANY CLAIM
UNDER TITLE VII OF THE CIVIL RIGHTS ACTS OF 1964, THE AGE
DISCRIMINATION IN EMPLOYMENT ACT, OR ANY OTHER COMMON LAW,
CONTRACTUAL OR STATUTORY CLAIM; and
b. that Xx. Xxxxxxxxx will not file any charges or complaints against
Employer or any of its affiliates with the Equal Employment
Opportunity Commission, the Texas Commission on Human Rights, or any
other local, state or federal agency or court, and that if Xx.
Xxxxxxxxx filed or has filed any such complaint or charge, and/or if
any such agency or court assumes jurisdiction of any complaint or
charge against Employer or any of its affiliates on behalf of Xx.
Xxxxxxxxx, Xx. Xxxxxxxxx will request such agency or court to
withdraw from the matter and dismiss said action.
4. Employer and CellStar, for themselves and each of their affiliated
companies, release, acquit and forever discharge Xx. Xxxxxxxxx from any and all
claims related to, or arising out of, Xx. Xxxxxxxxx'x performance of his job
duties for Employer, CellStar or their affiliated companies, so long as he acted
in good faith, in a manner he reasonably thought to be in, or not opposed to,
the best interests of Employer, CellStar or their affiliated companies and had
no reasonable cause to believe his conduct was unlawful or illegal.
5. Notwithstanding anything herein contained to the contrary, from and
after the date hereof Xx. Xxxxxxxxx shall have full rights as described in
Article 4 of the Employment Agreement with respect to actions taken or omitted
by him on behalf of the Employer during his employment and also with respect to
any third-party claims.
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6. Except as required by law, all parties agree that they will keep the
terms, amount and existence of this Agreement confidential, except for
disclosures to Xx. Xxxxxxxxx'x spouse, attorney and financial advisors, and that
neither party hereto will make any disparaging statements or allegations about
the other to any person or governmental agency, including comments about
Employer's employees, officers, directors or agents or about the reputations of
Employer or any such person. It is recognized that CellStar may be required to
file a copy of this Agreement with the Securities and Exchange Commission, issue
a press release relating to Xx. Xxxxxxxxx'x separation, and make other
disclosures required of a public company pursuant to applicable law, and any
such filing, press release or disclosure shall not be deemed to violate the
provisions of this Agreement. CellStar agrees that Xx. Xxxxxxxxx shall have the
opportunity to review any draft press release relating to Xx. Xxxxxxxxx'x
separation prior to its release.
7. The provisions of Article 2 of the Employment Agreement are
incorporated herein and remain in effect as if set forth herein in their
entirety, for a period of one (1) year following the Termination Date; provided,
however, that Section 2.4(d) thereof is amended and restated in its entirety as
follows:
(d) Competing Business. "Competing Business" shall mean any
individual, business, firm, company, partnership, joint venture,
organization, or other entity primarily engaged in the wholesale or retail
distribution of wireless handheld mobile phones in any domestic or
international market area in which Employer, Parent or any of their
Affiliates does business at any time during the Employee's employment with
Employer or any of its Affiliates.
8. As a further material inducement to enter into this Agreement, any
party who breaches this Agreement must reimburse the non-breaching party for any
and all loss, cost, damage or expense, including, without limitation, attorneys
fees incurred as a result of any effort, action or lawsuit to enforce this
Agreement. In addition, any breach of the Agreement will entitle the
non-breaching party to seek injunctive relief to enforce this Agreement and to
recover any actual damages incurred as a result of said breach. In the event of
litigation, the losing party must pay the attorneys fees of the prevailing
party.
9. Xx. Xxxxxxxxx represents and acknowledges that in executing the
Agreement he does not rely and has not relied upon any representation made by
Employer or its agents, representatives or attorneys with regard to the subject
matter, basis or fact of said Agreement, except on those contained in this
Agreement. The parties agree that this Agreement represents a resolution of
various matters and shall not be construed to be an admission of any liability
or obligation by either party to the other party.
10. This Agreement shall be binding upon and inure to the benefit of Xx.
Xxxxxxxxx and, upon Xx. Xxxxxxxxx'x death, his heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
binding upon and inure to the benefit of the Employer, all of its parent,
subsidiary and affiliated companies, and any corporation or other entity into
which or with which any thereof shall be liquidated, merged or consolidated.
11. This Agreement is made within the State of Texas and shall in all
respects be
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interpreted, enforced and governed under the laws thereof, and shall in all
cases be construed as a whole (according to its fair meaning and not strictly
for or against any of the parties).
12. Should any provision of this Agreement be declared or be determined
illegal and invalid, the validity of the remaining parts will not be affected.
13. The parties, by their signatures below, represent and agree that (a)
each has read this Agreement carefully and completely, and understands all
provisions contained therein; (b) Xx. Xxxxxxxxx has been given a period of at
least twenty-one (21) days to consider and review this Agreement; (c) Xx.
Xxxxxxxxx has seven (7) days after he signs this Agreement to revoke it, in
which case this Agreement and all obligations contained herein are null and
void; and (d) Xx. Xxxxxxxxx is aware of his right to consult with legal counsel
and has ample opportunity to do so if he so desires.
14. No change or modification of this Agreement shall be valid unless in
writing and signed by all parties hereto.
15. Xx. Xxxxxxxxx will, if possible, cooperate with Employer in response
to reasonable requests for information or assistance by Employer in connection
with all matters relating to or arising out of his employment with Employer.
16. Xx. Xxxxxxxxx represents that he has not disclosed, and agrees that he
will not disclose material non-public information about Employer or any of its
parent, subsidiary or affiliate companies to anyone other than Employer's
officers, directors, attorneys and accountants.
17. CellStar guarantees the payment and performance of all obligations of
Employer under this Separation Agreement and Release and agrees it will pay or
perform those obligations if for any reason Employer fails to do so. This
guarantee is absolute, continuing, irrevocable and not conditional or
contingent. Any notice given hereunder to either Employer or CellStar will be
deemed to be notice to CellStar for purposes of this guaranty.
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18. MY SIGNATURE BELOW INDICATES THAT I HAVE READ THE ABOVE AGREEMENT AND
VOLUNTARILY AGREE AND CONSENT TO THE TERMS AND CONDITIONS THEREIN.
/s/ Xxxx X. Xxxxxxxxx Signed in Carrollton, Texas
--------------------------------------- on June 20, 2002.
Xxxx X. Xxxxxxxxx
SUBSCRIBED AND SWORN to before me, the undersigned Notary Public on this
the 20 day of June, 2002.
/s/ Xxxxxx X. Xxxxxx
-------------------------------
Notary Public in and for the
State of Texas
CELLSTAR LTD.
By: National Auto Center, Inc.
By: /s/ Xxxxx X. Xxxxxx Signed in Carrollton, Texas
------------------------------- on June 20, 2002.
Xxxxx X. Xxxxxx
Chief Executive Officer
CELLSTAR CORPORATION
By: /s/ Xxxxx X. Xxxxxx Signed in Carrollton, Texas
------------------------------------ on June 20, 2002.
Xxxxx X. Xxxxxx
Chief Executive Officer
SUBSCRIBED AND SWORN to before me, the undersigned Notary Public on this
the 20 day of June, 2002.
/s/ Xxxxxx X. Xxxxxx
---------------------
Notary Public in and for the
State of Texas
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