Exhibit 10.18
SEPARATION AGREEMENT AND MUTUAL RELEASE
BETWEEN
XXXXXXX X. X'XXXXX, XX.
AND
POLAROID CORPORATION
This Separation Agreement and Mutual General Release (the "Agreement")
is made by and between XXXXXXX X. X'XXXXX, XX. (the "Officer") and POLAROID
CORPORATION (the "Company") entered into this 29th day of October 1999, and
provided to the Officer on September 14, 1999.
RECITALS
A. The Officer is employed by the Company as an Executive Vice President.
B. The Officer and the Company have mutually agreed to terminate the
employment relationship.
C. The Officer and the Company desire to specify the terms of the
Officer's separation from the Company and to resolve fully and finally
any and all claims, disputes, or disagreements that the Officer and the
Company may have against each other.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. RESIGNATION. Upon mutual agreement, the Officer's employment with
the Company will terminate effective December 31, 1999 (the
"Separation Date").
2. ANNUAL BONUS PAYMENT. The Officer will receive a 1999 bonus from the
Polaroid Incentive Plan for Executives if a bonus is paid to active
employees. This payment would be made at the time the bonus, if any, is
paid for active employees.
3. SEVERANCE PAYMENT. The Company shall pay the Officer a severance amount
equal to twenty-four (24) months pay at the Officer's base rate in
effect on his Separation Date. Such severance shall be paid in a
stream of bi-weekly payments in accordance with the Company's regular
bi-weekly payroll schedule beginning shortly after his Separation
Date. Notwithstanding the foregoing, no payment shall be due for at
least one (1) week after the execution of this Agreement by both
parties.
4. MISCELLANEOUS ADJUSTMENTS. The Company shall have the right to deduct
from all payments referred to in this Agreement all amounts required by
applicable law to be
withheld and any amounts which the Officer may owe the Company as of
his Separation Date (including, but not limited to, items such as
company store and corporate credit card obligations, garnishments, or
liens).
5. OPTIONS.
a. The Officer agrees that he shall forfeit all unexercised
options with an exercise price at or above $30.00 issued on or
after April 1, 1993, regardless of whether such options have
been vested or are unvested as of the Officer's Separation
Date. The terms of this forfeiture are set forth in draft in a
Supplemental Option Agreement attached as Appendix A
b. The Company shall fully vest all unexercised options held by
the Officer with an exercise price below $30.00 issued on or
after April 1, 1993, and all options issued prior to April 1,
1993. The Officer shall have the lesser of two (2) years from
his Separation Date or ten (10) years from the date the
options were issued in which to exercise his options. The
terms of this acceleration are set forth in draft in a
Supplemental Option Agreement attached as Appendix A.
c. The Officer shall be awarded a Phantom Stock Agreement
for a total of 101,000 units in the form and under such
terms as set forth in Appendix B.
6. PERFORMANCE SHARES. A pro-rata portion of the Officer's Performance
Awards will not be forfeited on the Officer's Separation Date and
Common Stock will be awarded pursuant to these awards at the time such
awards, if any, are made to active employees. For this purpose, the
pro-rata portion shall be based on the period the Officer was an
employee during the performance period of each award divided by the
total period of the Performance Award. These Performance Award
distributions, as adjusted for the pro-rata period, shall be based on
the Company's actual performance during the performance period for such
award. No performance awards shall be granted after the date of this
Agreement.
7. MEDICAL AND DENTAL BENEFITS.
a. RETIREE MEDICAL BENEFITS. The Officer is entitled to medical
benefits at the employee rate for two (2) years from the
Officer's Separation Date or until he becomes eligible for
substantially similar insurance from another employer,
whichever occurs first. Thereafter, the Officer shall be
entitled, as a bona-fide retiree, to medical benefits under
the same terms and conditions as they are available to other
bona-fide retirees of the Company.
b. DENTAL BENEFITS. For two (2) years from the Officer's
Separation Date, or until he becomes eligible for
substantially similar insurance from another employer,
whichever occurs first, the Company shall continue to provide
the Officer with dental insurance at the same cost to him as
to then currently employed officers similarly situated.
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The foregoing medical and dental benefits are intended to be in full
satisfaction of the Company's obligations under the Consolidated
Omnibus Budget Reconciliation Act of 1986 (COBRA). The Officer hereby
waives any rights under COBRA to which he otherwise would have been
entitled.
8. PENSION ENHANCEMENT. The Officer's pension benefit shall be enhanced
based upon the assumption that his age is sixty-five (65) on his
Separation Date for the calculation of his annuity. All forms of
benefits currently available shall be available to the Officer upon
his election. Such forms currently available include, but are not
limited to, lump sum distribution as of the Officer's Separation Date.
This benefit enhancement will be from the non-qualified Supplemental
Benefit Plan as set forth in draft in Appendix C.
9. OUTPLACEMENT. The Company will provide the Officer outplacement
assistance up to a maximum value of $30,000 in the twelve (12) month
period following the Separation Date. The Officer shall be entitled to
the services of any executive recruiter of his choice. The Company
hereby expressly waives any such pre-existing agreement with any
executive recruiter with respect to services for the Officer and for
no other purpose. The Company shall negotiate a contract and make
payments directly to the executive recruiter selected by the Officer.
10. EXECUTIVE LIFE INSURANCE BENEFITS. The Company shall continue to
provide the Officer with the executive life insurance program that is
being provided to other officers as of the Separation Date for two (2)
years from his Separation Date, or until he becomes eligible for
substantially similar insurance from another employer, whichever comes
first.
11. FINANCIAL PLANNING. Upon proper documentation that the expense has
been incurred, the Company agrees to reimburse the Officer in an
amount not to exceed eight thousand dollars ($8,000) for financial
planning expenses that he incurs during the calendar year 2000.
12. OFFICER'S GENERAL RELEASE. In exchange for the severance benefits
just described, except as otherwise provided below, which the Officer
acknowledges are in excess of what would otherwise have been due him,
the Officer agrees to and hereby does release all claims the Officer
may have against the Company, the Company's employee benefit plans
(including any trusts, or insurance contracts forming part of any such
plans), and its directors, trustees, officers, shareholders,
employees, agents, administrators, successors and assigns, including,
but not limited to, any claims arising out of or in connection with
the Officer's employment by the Company or the termination of the
Officer's employment. This release includes a waiver of any claims
that the Officer may have under the Age Discrimination in Employment
Act of 1967, as amended (29 U.S.C.Section 621), except for any claims
under that Act which may arise after the Effective Date of this
Agreement.
This release includes, but is not limited to, any pending grievances or
claims, internal or otherwise, and any claims which might be brought
under or on the basis of:
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- Any employment relations law;
- Any state, federal or local law, regulation or executive order
prohibiting discrimination on account of age, race, color,
sex, sexual orientation, national origin, religion, handicap
or veteran status, including, without limitation, the Age
Discrimination in Employment Act of 1967, as amended (29
U.S.C. Section 621);
- Common law, including, without limitation, claims arising from
any contract or tort law;
- Any public policy, law or equity claims for expenses,
attorneys' fees, or other monetary or equitable relief; and
- Any other claim arising out of the Officer's employment with
the Company or termination of the Officer's employment with
the Company, from his first date of employment to the
Effective Date of this Agreement.
This release will not preclude claims arising from workers compensation
laws or for vested accrued benefits under the Polaroid Pension Plan or
the Polaroid Retirement Savings Plan as determined by the plan
administrators of such Plans.
Further, nothing in this release shall operate as a release or waiver
by the Officer of any claims or rights to defense and/or
indemnification under any:
- Indemnification agreement to which the Company (including any
Polaroid subsidiary or parent) is a party;
- Applicable law;
- Certificates of Incorporation and/or By-Laws of the Company
(including any subsidiary or parent); or
- Directors' and Officers' Liability Policy.
This Agreement is an important and binding legal document, and the
Company therefore encourages the Officer to consider its terms
carefully and to seek the advice of an attorney before the Officer
signs it.
By signing this Agreement, the Officer acknowledges that he has been
given a period of at least twenty-one (21) days to consider the terms
of this Agreement. If the Officer chooses to sign this Agreement before
the end of the twenty-one (21) day period the Company has set, he
expressly waives any right to the balance of that period.
13. GENERAL COVENANTS.
a. For a period of five (5) years from the Officer's Separation
Date, the Officer shall not commit any act, or in any way
assist others to commit any action, intended to injure the
Company, nor shall the Officer divulge (except as required by
law) any confidential information or make available to any
others
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any documents, files, or other papers concerning the Company,
or its financial affairs.
b. For a period of five (5) years from the Officer's Separation
Date, the Officer, on behalf of himself and his spouse,
attorneys acting on his behalf, agents, and representatives,
agrees not to engage in any public criticism regarding his
employment or the business affairs of the Company, nor to
make any negative, detrimental, or derogatory comments
concerning the Company or its parents, partners, owners, and
affiliates, and their owners, stockholders, directors,
officers, employees, partners, trusts, agents, attorneys,
and representatives, past and present; the Company agrees to
make no public criticism regarding the Officer or his
employment with the Company.
c. The Officer shall not disclose the terms of this Agreement
unless required to do so by law; provided, however, that the
terms of this Agreement may be disclosed in confidence to
the following: to the Officer's immediate family, attorneys,
and tax or financial consultants. Before disclosing the
terms of this Agreement to anyone as permitted under this
paragraph, the Officer shall first obtain an agreement from
the person receiving the information that he or she will not
disclose the terms of the Agreement to any other person. The
unauthorized disclosure of the terms of this Agreement by
any person shall constitute a violation of this paragraph by
the party who initially disclosed the terms of this
Agreement. If and when this Agreement becomes a public
document, this paragraph shall become null and void.
14. MUTUAL AGREEMENT. The parties understand and agree that nothing
contained in this Agreement shall constitute or be construed in any way
as an admission of any liability whatsoever by either the Officer or
the Company.
15. NON-COMPETITION AND CONFIDENTIALITY.
a. NON-COMPETITION. For a period of twenty-four (24) months
following the Separation Date, the Officer shall not engage
in any activity or become associated with any entity or
venture, whether as a principal, partner, employee,
consultant, shareholder (other than as a holder of not in
excess of one percent (1%) of the outstanding voting shares)
or otherwise, of either Xxxxxxx Kodak Company or Fuji Film
Corporation, any affiliates thereof or any person or entity
working on their behalf. The intent of this Section is not
to prevent the Officer from working, but to protect the
Company and give the Company the opportunity to evaluate
situations in certain potentially sensitive areas.
Accordingly, the foregoing limitation on the Officer's
activities shall not apply to the extent the Company
consents to such activities.
Notwithstanding the foregoing, the immediately preceding
paragraph shall not apply when:
(i) the Officer has obtained consent from the appropriate
Company designee
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that a certain job or venture is not in violation of
this Section 15; or,
(ii) if an Arbitrator concludes that the activity that the
Officer has undertaken does not violate the terms of
this Section as it exists when signed.
b. CONFIDENTIALITY. Without the prior written consent of the
Company, except to the extent required by an order of a
court having competent jurisdiction or under subpoena from
an appropriate government agency, the Officer shall comply
with the Confidentiality Agreement the Officer executed when
hired and shall not disclose any trade secrets, customer
lists, drawings, designs, information regarding product
development, marketing plans, sales plans, manufacturing
plans, management organization information (including data
and other information relating to members of the Board and
management), operating policies or manuals, business plans,
financial records or other financial, commercial, business
or technical information relating to the Company or any of
its subsidiaries or information designated as confidential
or proprietary that the Company or any of its subsidiaries
may receive belonging to suppliers, customers or others, who
do business with the Company or any of its subsidiaries
(collectively, "Confidential Information") to any third
person unless such Confidential Information has been
previously disclosed to the public by the Company or is in
the public domain (other than by reason of the Officer's
breach of this Section 15).
c. COMPANY PROPERTY. Promptly following the Officer's Separation
Date, the Officer shall return to the Company all property of
the Company, and all copies thereof in the Officer's
possession or under his control.
d. NON-SOLICITATION OF EMPLOYEES. For a period of twenty-four
(24) months following the Officer's Separation Date, the
Officer shall not directly or indirectly induce any employee
of the Company or any of its subsidiaries to terminate
employment with such entity, and shall not directly or
indirectly, either individually or as owner, agent, employee,
consultant or otherwise, employ or offer employment to any
person who is employed by the Company or a subsidiary unless
that person has received notice of termination of employment
by the Company or a subsidiary.
e. NON-SOLICITATION OF CUSTOMERS. For a period of twenty-four
(24) months following the Officer's Separation Date, the
Officer shall not solicit customers of the Company for any
venture or business opportunity, which could directly or
indirectly be considered in competition with the Company's
business, as reasonably determined by the Company in its sole
discretion.
16. INJUNCTIVE RELIEF WITH RESPECT TO COVENANTS. The Officer
acknowledges and agrees that his covenants and obligations with
respect to non-competition, non-solicitation, confidentiality and
Company property relate to special, unique and extraordinary matters,
including his own skills, and that a violation of any of the terms of
such
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covenants and obligations will cause the Company irreparable injury
for which adequate remedies are not available at law. Therefore, in
the event of a breach or threatened breach, the Officer agrees that
the Company shall be entitled to an injunction, restraining order, or
such other equitable relief (without the requirement to post bond)
restraining the Officer from committing any violation of the covenants
and obligations contained in this Agreement. These injunctive remedies
are cumulative and are in addition to any other rights and remedies
the Company may have at law or in equity.
The Officer agrees that restraints imposed upon him pursuant to this
section are necessary for the reasonable and proper protection of the
Company and its subsidiaries and affiliates and that each and every
one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The parties further agree that, in
the event that any provision of this Agreement shall be determined by
any court of competent jurisdiction to be unenforceable by reason of
its being extended over too great a time, too large a geographic area
or too great a range of activities, such provision shall be deemed to
be modified to permit its enforcement to the maximum extent permitted
by law.
The Officer agrees and convenants that he will not assert any claim of
any type (whether by complaint, counterclaim, cross-claim or
otherwise) in any forum or before any tribunal pursuant in which he
seeks to have declared unenforceable, in whole or in part, any of the
restraints imposed upon him by this section or to limit their
enforceability in any way. The Officer further agrees that, should he
file any such claim: (a) he will reimburse the Company for its
reasonable costs and attorneys fees should the Company succeed in
enforcing any such restraint in whole or in part; and (b) he will
repay to the Company any severance paid him under this Agreement.
17. PAYMENTS IN EVENT OF DEATH. Should the Officer become eligible to
receive payments and benefits under this Agreement and die prior to
receipt of all such payments and benefits, the residual payments shall
be made to the beneficiaries identified on the Officer's beneficiary
designation form for the Executive Deferred Compensation Plan. Any
residual family medical and dental benefits which the Officer was
receiving on the date of death shall continue to the family members to
the extent such family members had coverage under such medical and
dental plans on such date.
18. INDEMNIFICATION: DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. The
Officer shall, after the Separation Date, retain all rights to defense
and indemnification:
- Under applicable law;
- Under any applicable agreements and/or insurance policies;
- Under any Company's subsidiary/parent Certificates of
Incorporation; or
- Under any Company's subsidiary/parent By-Laws, as they may be
amended or restated from time to time.
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In addition, the Company shall maintain Directors' and
Officers' liability insurance on the Officer's behalf, at
the level in effect immediately prior to the Officer's
Separation Date, for the first two (2) year period following
the Separation Date, and throughout the period of any
applicable statute of limitations.
19. ENTIRE AGREEMENT. This Agreement represents the sole and entire
agreement between the parties and supersedes all prior agreements,
negotiations, and discussions between the parties with respect to the
Officer's termination of employment with the Company and any and all
other subject matters covered by this Agreement. Any amendment to this
Agreement must be in writing, signed by the parties or their duly
authorized representatives, and must state the intention of the
parties to amend this Agreement.
20. BINDING TERMS. This Agreement shall be binding upon the Officer and
his spouse, heirs, administrators, representatives, executors,
successors, and assigns and shall inure to the benefit of the Company
and its parents, partners, owners, and affiliates, and their owners,
stockholders, directors, officers, employees, partners, trusts,
agents, attorneys, representatives, successors, and assigns.
21. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts. In the
event that any part of this Agreement is found to be void or
unenforceable, all other provisions of the Agreement shall remain in
full force and effect.
22. DISPUTES. Subject to Section 16, all claims, disputes, questions,
or controversies arising out of or relating to this Agreement,
including, without limitation, the construction or application of any
of the terms, provisions, or conditions of this Agreement, shall, on
written request of either party served upon the other, be submitted to
final and binding arbitration. Such arbitration shall be compelled and
enforced by any court of competent jurisdiction and shall be conducted
according to the Model Employment Arbitration Procedures of the
American Arbitration Association ("AAA"), except as otherwise provided
herein. The arbitration shall be conducted before AAA or such other
arbitration service as the parties may, by mutual agreement, select.
The arbitrator shall be appointed by agreement of the parties hereto
or, if no agreement can be reached, by AAA pursuant to its rules.
Judgment on the award the arbitrator renders may be entered in any
court having jurisdiction over the parties. The arbitration shall be
conducted in Boston, Massachusetts. Costs, including reasonable
attorneys' fees, as well as the expenses of the arbitration, shall be
paid as awarded by the arbitrator.
23. REPRESENTATION AND VOLUNTARY EXECUTION.
a. The Officer represents and acknowledges that he has been
advised in writing to consult an attorney, that he has had an
adequate opportunity to consult and discuss all aspects of
this Agreement with an attorney and that he has carefully read
and fully understands all of its provisions.
b. The Officer represents and acknowledges that he has had an
adequate
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opportunity to make whatever investigation he or his counsel
may deem necessary or desirable in connection with the
subject matters of this Agreement.
c. The Officer represents and acknowledges that his decision to
enter into this Agreement has been made voluntarily,
knowingly, and without coercion of any kind.
25. EXECUTION. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which
together, shall be deemed to constitute a single document.
If the terms of this Agreement are acceptable to the Officer, please
sign and return it no later than November 5, 1999. The Officer may revoke this
Agreement at any time during the seven (7) day period immediately following the
date of the Officer signing. If the Officer does not revoke this Agreement, then
on the eighth (8th) day following the date of the Officer signing (that eighth
day being the "Effective Date" of this Agreement), this Agreement shall take
effect as a legally binding agreement between the Officer and the Company.
IN WITNESS WHEREOF, the parties hereto have each executed this
Agreement as of the date first above written.
XXXXXXX X. X'XXXXX, XX. POLAROID CORPORATION
/s/ XXXXXXX X. X'XXXXX, XX. By: /s/ XXXX X. XXXXXXXXX
--------------------------- ---------------------
Name: Xxxx X. XxXxxxxxx
Title: Chairman and Chief Executive Officer
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