March 29, 2005
Exhibit
99.1
March 29,
2005
Xxx Xxxx
Xxxxxxxxxxx
0000 Xxxx Xxxxxx
Xxxxx
Bountiful, Utah
84010
Dear
Xxx:
This letter
memorializes the details of your separation from Xxxxxxxx Xxxxx.
1. Termination of
Employment. Your employment
as Executive Vice President and General Counsel of Xxxxxxxx Xxxxx Co. (the
“Company”) shall terminate effective March 29, 2005.
2. Severance
Payment and Performance Bonus. The Company
shall, within 10 days after the date of execution of this letter agreement, pay
you a lump sum severance in the gross amount of $900,000, less all applicable
withholdings. This sum represents (i) the Company’s severance obligation to you
in the amount of $450,000, representing one year’s target cash compensation,
plus (ii) $450,000, representing the one year sabbatical leave to which you were
entitled, but did not take, as an executive officer who served the Company for
more than 16 years. In addition, the Company shall pay you, at the time or times
it pays such bonuses to the executive officers of the Company, each cash
performance bonus to which you would have been entitled with respect to the
Company’s fiscal year 2005 performance as if your employment as an executive
officer of the Company had continued through the end of fiscal year 2005 and as
if each of your personal performance objectives for fiscal 2005 had been met.
Assuming the Company achieves the fiscal 2005 performance goals upon which the
maximum fiscal 2005 performance bonus you would have received are based, the
aggregate amount of this payment would be $150,000.
3. COBRA and Other
Benefits. Following
termination of your employment on March 29, 2005, you will be eligible for
continued health care coverage pursuant to COBRA. Xxxxxxxx Xxxxx will pay COBRA
premiums for the entire 18 month period during which you are eligible for COBRA
benefits. All other benefits will terminate effective March 29,
2005.
4. Existing Stock
Options and Restricted Share Awards. You shall
continue to own, hold and maintain all Xxxxxxxx Xxxxx stock options and
restricted share awards owned and held by you as of the date of this letter
agreement, subject to the following terms:
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a.
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All such stock options and restricted share awards, to the extent not yet vested, shall vest immediately. In addition, the Company shall, consistent with its policy and practice relative to other Restricted Share Award recipients, pay you the gross sum of $57,330.00 (.40 x $2.73 x 52,500 shares) to partially offset federal and state income taxes resulting from the vesting of your restricted shares. |
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b.
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The Company agrees to waive the requirement in your stock option agreements that you exercise your options within 90 days after the termination of your employment, the effect of which waiver is to allow you to continue to hold and exercise all vested options granted thereunder for the term specified therein. You acknowledge that by virtue of this waiver, all Incentive Stock Options shall become non-qualified stock options for Federal income tax purposes. |
5. Xxxxxxxx Xxxxx
Laptop Computer. You acknowledge
that the only item of Xxxxxxxx Xxxxx property in your possession is your laptop
computer (identification number 112774), which you agree to return to Xxxxxxxx
Xxxxx within 15 days after the date of FranklinCovey’s written request
therefor.
6. Noncompete;
Nondisclosure; Nonsolicitation; Nondisparagement. During the
course of your employment with Xxxxxxxx Xxxxx, you have obtained information or
knowledge that is confidential or proprietary in nature relating to Xxxxxxxx
Xxxxx’x business, operations, services, products or equipment. To remain
eligible to receive the payments and benefits described herein, you agree that
for a period of two (2) years, you will not; (i) exploit, disclose or assist
others in exploiting, using or disclosing, to compete or to assist others to
compete, directly or indirectly, with the business of Xxxxxxxx Xxxxx, and
Xxxxxxxx Xxxxx proprietary information or proprietary documents including,
without limitation: (a) market, business or alliance strategies or initiatives;
(b) pricing and material pricing information or strategies; (c) new products or
services concepts, or ideas; (d) customer lists; and (e) vendor and supplier
lists. Further, you agree that for a period of two (2) years, you will not make
any statements to third parties that disparage, demean, or criticize Xxxxxxxx
Xxxxx officers, management, employees, business practices, strategies, products,
or services. The foregoing shall not prevent you from making truthful statements
under oath as a witness in a proceeding by a court of competent jurisdiction or
administrative agency.
7. General
Release. For and in
consideration of the payments and benefits described herein, the receipt and
sufficiency of which you hereby acknowledge, on your own behalf, and on behalf
of your heirs and assigns, and all persons claiming under you, you hereby fully
and forever unconditionally release and discharge Xxxxxxxx Xxxxx Co., all of its
affiliated and related corporations, their predecessors, successors and assigns,
together with their divisions and departments, and all past or present officers,
directors, employees, insurers and agents of any of them (hereinafter referred
to collectively as “Releasees”) of and from, and you covenant not to sue or
assert against Releasees, for any purpose, all claims, administrative
complaints, demands, actions and causes of action, of every kind and nature
whatsoever, whether at law or in equity, and both negligent and intentional,
arising from or in any way related to your employment by Xxxxxxxx Xxxxx, based
in whole or in part upon any act or omission occurring on or before the date of
this general release, without regard to your present actual knowledge of the act
or omission, which you may now have, or which you, or any person acting on your
behalf may at any future time have or claim to have, including specifically, but
not by way of limitation, matters which may arise at common law or under
federal, state or local laws, such as the Fair Labor Standards Act, the Employee
Retirement Income Security Act, the National Labor Relations Act, Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Older Workers Protection Act, the Rehabilitation Act of 1973, the American With
Disabilities Act, and the Equal Pay Act. You warrant that you have not assigned
or transferred any right or claim described in this general release. You
expressly assume all risk that the facts and law concerning this general release
may be other than as presently known to you. You acknowledge that, in signing
this general release, you are not relying on any information provided to you by
Releasees or upon Releasees to provide information not known to
you.
8. Acknowledgment. You acknowledge
that you have read this agreement, understand its terms, and have had an
opportunity to have answered to your satisfaction any questions concerning the
terms hereof. You execute this agreement voluntarily and of your own free will
and choice, after having been advised to seek your own legal counsel, without
threat, coercion or duress, intending to be legally bound.
9. Waiver of
Review Period. You acknowledge
that Xxxxxxxx Xxxxx provided you with a copy of this letter agreement for your
review and consideration on March 10, 2005, and advised you that you have
twenty-one (21) days in which to consider and review this letter agreement prior
to signing it, and that you have knowingly waived that twenty-one (21) day
review period prior to your execution of this letter agreement. You further
acknowledge that for a period of seven (7) days following the execution of this
letter agreement, you may revoke this agreement by providing notice of such
revocation to Xxxxxxxx Xxxxx. You agree that any such notice shall be given to
Xxxxxxxx Xxxxx Co., Attn. Xxxxxx X. Xxxxxxx, 0000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxx
Xxxx Xxxx, Xxxx 00000. Such notice, if given, must be actually received by
Xxxxxxxx Xxxxx (7) days following your execution of this letter agreement. You
agree that if you exercise your revocation right, the respective rights and
obligations of the parties to this agreement will be automatically void and you
will immediately pay to Xxxxxxxx Xxxxx, upon demand, any and all payments made
by Xxxxxxxx Xxxxx to you under this letter agreement. You acknowledge that the
irrevocable termination of your employment as of the date stated in Section 1,
above, will not be altered by your exercise of your revocation
right.
10. Remedies. In addition to
any other legal or equitable remedies Xxxxxxxx Xxxxx may have, all unpaid
payments and benefits described in this agreement shall be immediately canceled,
terminated and forfeited in their entirety in the event you violate any of the
provisions hereof.
11. Governing
Law. The laws of the
State of Utah shall govern this agreement. This is the entire agreement between
the parties. No other promises or agreements have been made to you except as
stated in this agreement. This agreement may not be changed or modified except
by a written document signed by the parties.
12. Entire
Agreement. This letter
agreement reflects the entire agreement of the parties relative to the subject
matter hereof and supercedes any oral or written agreements relating thereto.
Please signify
your agreement with the foregoing by signing both original letters where
indicated below and returning one original to me.
Sincerely,
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/s/ XXXXXX
X. XXXXXXX |
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Xxxxxx X.
Xxxxxxx |
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President
and CEO |
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Xxxxxxxx
Xxxxx Co. |
ACCEPTED AND
AGREED
This 29th day
of March, 2005.
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/s/ XXX XXXX
XXXXXXXXXXX |
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Xxx Xxxx
Xxxxxxxxxxx |
