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Exhibit 10.28
AGREEMENT
This Agreement is entered into this 16th day of October, 1998
by and between Stuart Entertainment, Inc., a Delaware corporation (the
"Company"), with its principal place of business at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxx Xxxxxx, Xxxx 00000, and Xxxx X. Xxxxxx, an individual (the "Employee"),
with his address at 0000 X. 000xx Xxxxxx, Xxxxx, Xxxxxxxx 00000. The Company and
Employee are sometimes referred to herein individually as a "Party" and
collectively as the "Parties."
WHEREAS, Employee desires to resign from his position as an
officer and employee of the Company.
WHEREAS, the Company and Employee desire to enter into this
Agreement to set forth the terms of such resignation.
NOW, THEREFORE, in consideration of the covenants undertaken, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties hereto agree as follows:
1. Resignation. Employee's employment with the Company as its Chief
Financial Officer will terminate effective October 16, 1998 (the "Resignation
Date"). Effective on the Resignation Date, Employee will relinquish all
positions as an officer and/or employee of the Company, as well as its
subsidiaries and affiliates. Employee acknowledges that upon receipt of the
Employee's final salary payment for the period ending October 16, 1998, that the
Company will have paid him for all work performed on or prior to the Resignation
Date based on Employee's base annual salary of One Hundred Twenty-Eight Thousand
Dollars ($128,000) ("Base Salary"). Employee further acknowledges that the
Company has provided Employee with all benefits to which he was entitled through
the Resignation Date. Employee hereby waives any right to claim reinstatement as
an officer and/or employee of the Company following the Resignation Date.
2. Severance.
a) Severance Payment. The Company shall provide Employee with the
cash equivalent of twelve (12) months of Employee's Base
Salary minus Twelve Thousand Dollars ($12,000) to facilitate
the Company's provision of severance benefits as provided for
in Section 2(b), for a total of One Hundred Sixteen Thousand
Dollars ($116,000) (the "Severance Payment"). Employee will
receive the Severance Payment in a lump-sum payment within
five (5) days of the Resignation Date. The Company shall
deduct all applicable tax withholdings for state and federal
income taxes, FICA and other deductions required by law and/or
authorized by Employee from the Severance Payment.
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b) Severance Benefits. The Company shall provide Employee with
medical and dental insurance coverage on the same terms and
conditions as the Company provided to Employee prior to the
Resignation Date for a period of twelve (12) months from the
Resignation Date (the "Severance Period"). In addition, in
order to facilitate the Company's providing medical and dental
benefits, the Company shall pay Employee Twelve Thousand
Dollars ($12,000) in twelve equal monthly installments in
accordance with the Company's normal payroll procedures during
the Severance Period, provided Employee does not become
employed by any entity, organization, company and/or employer,
other than the Company, during the Severance Period. In the
event that Employee becomes employed by any entity, company,
organization and/or employer, other than the Company, at any
time during the Severance Period, the Company's obligation to
provide medical and/or dental insurance coverage shall cease
on the date that Employee becomes eligible to participate in
the health, medical and/or dental programs of such other
employer. Thereafter, Employee shall not be entitled to
participate in the Company's medical and/or dental insurance
plans, and the Company's sole obligation to Employee shall be
to pay Employee the remainder, if any, of the Twelve Thousand
Dollars in a lump sum, less all applicable tax withholdings
for state and federal income taxes, FICA and other deductions
required by law and/or authorized by Employee.
(c) Outplacement Services. The Company shall pay up to a total of
Eight Thousand Dollars ($8,000.00) for Employee to receive
reasonable outplacement counseling and services by an entity
of Employee's choosing for up to six months following the
Resignation Date. All invoices for such counseling and
services shall be sent to the attention of: Xxxxxx X.
Xxxxxxxx, Chairman and Chief Executive Officer at the Company
for his approval and direct payment to the outplacement
company. Payment for any outplacement or counseling services
which exceed Eight Thousand Dollars ($8,000.00) shall be the
sole responsibility of Employee.
The Severance Payment described in Section 2(a) and the
benefits described in Sections 2(b) and 2(c) shall constitute
the complete Severance Payment and Severance Benefits provided
to Employee. Employee acknowledges that except as provided for
in this Agreement, Employee shall not otherwise be entitled to
any other payments or benefits from the Company.
3. Vacation. The Company shall pay Employee the total sum of $9,302.16
on the Resignation Date. This sum represents the cash equivalent, less all
applicable tax withholdings for state and federal income taxes, FICA and other
deductions required by law and/or authorized by Employee, for all previously
accrued yet
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unused vacation remaining as of the Resignation Date. Employee acknowledges that
he is entitled to compensation for no other vacation.
4. Stock Options. Employee has vested stock options to acquire 20,200
shares of the Company's common stock (the "Options"), with an exercise price of
$3.00 per share. Employee and Company agree that the Company will cancel the
Options and grant to Employee non-qualified stock options for 20,200 shares of
common stock with an exercise price of $3.00 per share, which must be exercised
within twelve (12) months of the Resignation Date. Employee acknowledges that he
has no other stock options or ownership interests in the Company.
5. Company Property. Employee represents that he will turn over to the
Company all files, memoranda, records, other documents and all other physical
property which Employee received from Company and which are the property of the
Company by the Resignation Date, or sooner if requested by the Company.
6. Tax Liability. Employee agrees that Employee is exclusively liable
for the payment of any federal, state, city or other taxes which may be due as a
result of any consideration received by Employee as provided by this Agreement;
provided, however, that Company shall pay all federal, state and local amounts
withheld from payments to Employee and all other employment taxes of the type
normally paid by Company on employee salaries in connection with the
consideration payable to Employee pursuant to Sections 2 and 3 of this
Agreement.
7. Releases by Employee. Except for obligations created by this
Agreement, Employee hereby covenants not to xxx and fully releases Company and
its subsidiaries and affiliates, past and present, and each of them, as well as
their directors, partners, officers, agents, attorneys, insurers, employees,
stockholders, representatives, assigns and successors, past and present, and
each of them (hereinafter together and collectively referred to as "Releasees")
with respect to and from all actions, and claims of any kind, known or unknown,
suspected or unsuspected, which Employee may now have or has ever had against
any of the Releasees, including all claims arising from Employee's employment as
a chief financial officer and/or in any other capacity as an officer and/or
employee of the Company Releasees (defined below), and arising out of the
termination of his employment as the chief financial officer and/or in any other
capacity as an officer and/or employee of the Company Releasees (defined below)
as of the Resignation Date (and specifically including any and all claims
related to prior promises or contracts of employment and any and all claims for
wages, benefits, vacation pay, and wrongful termination or discrimination
whether based on age, race, sex, disability or otherwise including specifically
and without limitation claims under the Federal Age Discrimination in Employment
Act, Americans with Disabilities Act, and any state or local statute or law).
Employee warrants and represents that Employee has not assigned or transferred
to any person or entity any of the claims released by this Agreement and
Employee agrees to defend, by counsel of Company's choosing, and indemnify and
hold harmless any of the Releasees from and against any claims based on or in
connection with or arising out of any such assignment or transfer made.
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8. Releases by Company. Except for obligations created by this
Agreement, the Company, its subsidiaries and affiliates (collectively the
"Company Releasees") hereby covenant not to xxx and fully release Employee and
his successors and assigns (the "Employee Releasees"), with respect to and from
all actions, and claims of any kind, known or unknown, suspected or unsuspected,
which the Company Releasees may now have or have ever had against any of the
Employee Releasees, including all claims arising from Employee's position as the
chief financial officer, an officer and/or employee of the Company Releasees and
the termination of that relationship (and specifically including any and all
claims related to prior promises or contracts of employment) provided, however,
the Company Releasees do not release the Employee Releases with respect to
claims arising out of or relating to the fraud, gross negligence or willful
misconduct of the Employee. The Company Releasees warrant and represent that the
Company Releasees have not assigned or transferred to any person or entity any
of the claims released by this Agreement and the Company Releasees agree to
defend, by counsel of Employee's choosing, and indemnify and hold harmless any
of the Employee Releasees from and against any claims based on or in connection
with or arising out of any such assignment or transfer made.
9. Indemnification and Defense by Company. The Company Releasees shall
indemnify and defend Employee in any threatened, pending, or contemplated
action, suit or proceeding, whether civil or criminal, administrative or
investigative, or whether formal or informal which arises by reason of the fact
that Employee was the chief financial officer, an employee and/or officer of the
Company Releasees prior to the Resignation Date, against expenses, including
attorney's fees, judgments, penalties, fines and amounts to be paid in
settlement in connection with such action, suit or proceeding if it is
determined by the Company Releasees that Employee conducted himself in good
faith and that Employee reasonably believed (i) in the case of conduct in his
official capacity with the Company Releasees, that his conduct was in the
Company Releasees' best interests, or (ii) in all other cases (except criminal
cases), that his conduct was at least not opposed to the Company Releasees' best
interests, or (iii) in the case of any criminal proceeding, that he had no
reasonable cause to believe that his conduct was unlawful ("Indemnified
Claims"). The Company Releasees shall have the sole and exclusive right to
select legal counsel to represent the Company Releasees and Employee, and to
control the defense and/or settlement of any Indemnified Claims. Employee agrees
to cooperate with the Company Releasees in the defense of any Indemnified
Claims, and make available to the Company Releasees any and all documents in his
possession and/or control that may be necessary or useful to such defense and/or
settlement.
No indemnification shall be made to Employee under this Section 9
with respect to any claim, issue or matter in connection with a proceeding by or
on behalf of the Company or any other entity in which Employee's actions giving
rise to the action, suit, proceeding or claim constituted fraud, gross
negligence and/or willful misconduct on the part of the Employee.
1. Confidentiality.
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a) Employee will not at any time, disclose or use for his own
benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business
organization, entity or enterprise other than the Company or
its affiliates and subsidiaries, any trade secrets,
information, data, or other confidential information relating
to customers, development programs, costs, marketing, trading,
investment, sales activities, promotion, credit and financial
data, manufacturing processes, financing methods, plans, or
the business and affairs of the Company or its affiliates
and/or subsidiaries ("Proprietary Information"). The term
Proprietary Information shall not include information which is
not unique to the Company, its affiliates or subsidiaries, or
which is generally known to the industry or the public other
than as a result of the Employee's breach of this covenant.
The Employee agrees that all materials or articles of
information of any kind furnished to the Employee by the
Company or developed by the Employee in the course of his
employment are and shall remain the sole property of the
Company and that by the Resignation Date, Employee will return
to the Company, all Proprietary Information and all copies
thereof, in any way relating to the business of the Company
and its affiliates or subsidiaries, except that Employee may
retain personal notes, notebooks and diaries. The Employee
further agrees that he will not retain or use for his account
at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the
business of the Company or its affiliates or subsidiaries. The
Employee agrees that all Proprietary Information shall be the
sole property of the Company and its assigns, and the Company
and its assigns shall be the sole owner of all licenses and
other rights in connection with such Proprietary Information.
b) Employee acknowledges that the Company from time to time
received from third parties confidential or proprietary
information subject to a duty on the Company's part to
maintain the confidentiality of such information and to use it
only for certain limited purposes ("Third Party Information").
Employee agrees to hold Third Party Information in the
strictest confidence and will not disclose or use Third Party
Information except as permitted by any agreement between the
Company and such third party.
c) Employee acknowledges that the Company's customers and
suppliers constitute a valuable and unique asset of the
Company. Employee will not at any time (i) disclose such list
of customers and/or suppliers or any part thereof to any
person, firm, corporation, association or other entity for any
reason or purpose whatsoever, (ii) assist in obtaining
customers for any other similar business, or (iii) encourage
any customer or supplier to terminate their relationship with
the Company.
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d) Employee agrees to assign to the Company, without further
consideration, his entire right, title, and interest
(throughout the United States and in all foreign countries),
free and clear of all liens and encumbrances, in and to all
Inventions. The Inventions shall be the sole property of the
Company, whether or not copyrightable or patentable. In
addition, Employee agrees to maintain adequate and current
written records on the development of all Inventions, which
shall also remain the sole property of the Company. Employee
understands that "Inventions" means all ideas, processes,
inventions, technology, designs, formulas, discoveries,
patents, copyrights, and trademarks, and all improvements,
rights, and claims related to the foregoing, that are
conceived, developed, or reduced to practice by Employee alone
or with others using confidential and/or proprietary
information of the Company. If, in the course of Employee's
employment, with the Company, Employee incorporated into
Company property an invention owned by Employee or in which
Employee has an interest, the Company is granted a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide
license to make, modify, use and sell Employee's invention as
part of and in connection with the Company property.
2. Cooperation. Employee agrees to fully cooperate with Company in all
matters relating to the winding up of pending work on behalf of Company and the
orderly transfer of work to other employees of the Company following the
Resignation Date and thereafter. Employee shall also cooperate in the resolution
of any dispute, including litigation of any action, involving the Company that
relates in any way to Employee's activities while employed by Company. In the
event that Employee performs services at the Company's request under this
Section 11, Company shall pay Employee for his services at an hourly rate of
Sixty-Five ($65.00) per hour, and shall pay Employee's out of pocket expenses
incurred in connection with his services. Unless otherwise agreed by the
Parties, Employee's services to the Company under this Section 11 shall not
exceed a total of forty (40) hours. The terms and conditions of this Section 11
shall not apply to the Company's defense and/or indemnification of Employee with
respect to the Indemnified Claims under Section 9 of this Agreement.
3. Nondisruption. Employee agrees not to make any negative,
disparaging, disruptive or damaging statements, comments or remarks to any third
party concerning Company or its business, parents, subsidiaries, affiliates,
owners, partners, employees, or management. Company agrees to inform its current
executive officers not to make any negative, disparaging disruptive or damaging
statements, comments or remarks to any third party concerning the Employee.
However, the Employee agrees that the Company is not responsible or liable for
comments made by other employees of the Company. In response to inquiries about
Employee from individuals outside of Company, the Company's official response
shall be: Employee chose to resign to pursue other opportunities.
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4. Nonadmission of Violation. This Agreement is not, and shall not be
construed as, an admission by Company of any violation of its policies or
procedures, or of any local, state or federal law or regulation.
5. Legal Fees. In the event a dispute arises out of this Agreement, the
Employee shall have the right to select counsel, provided however that such
counsel must be reasonably acceptable to the Company, and the Company shall pay
all reasonable legal fees and expenses incurred by Employee in connection with
the dispute.
6. Complete Agreement. This Agreement constitutes the full and entire
agreement and understanding of the Parties. This Agreement supersedes and
replaces all prior negotiations and all agreements, proposed or otherwise,
between the Parties, whether written or oral, concerning the subject matters
hereof. This Agreement also supersedes, replaces and terminates as null and void
all prior employment and severance agreements between Employee and the Company.
All such prior negotiations and agreements are merged into this Agreement. This
Agreement does not, however, affect or limit the Parties' past or ongoing
respective rights and responsibilities under any applicable stock option
agreement which provides for disposition of stock which Employee may hold in the
Company. The terms and conditions contained herein shall inure to the benefit
of, and be binding upon, the heirs, representatives, assigns and
successors-in-interest of the Parties. This is an integrated document.
7. Severability of Invalid Provisions. If any provision or portion of
this Agreement or the application thereof is held by a court of competent
jurisdiction or arbitrator to be invalid, unlawful or unenforceable, the
remaining provisions or portions of provisions of this Agreement shall remain in
full force and effect. Such invalidity shall not affect other provisions or
applications of the Agreement which can be given effect without the invalid
provisions or applications and to this end the provisions of this Agreement are
declared severable.
8. Choice of Law. Except for claims relating to trade secrets, any
dispute between the Parties relating in any way to Employee's employment, the
termination of that employment or this Agreement, including, without limitation,
the formation, implementation, or termination thereof shall be resolved by
arbitration before a single arbitrator in Council Bluffs, Iowa according to the
commercial rules of the American Arbitration Association. The Parties also agree
that prior to commencing any arbitration proceedings, as provided above, the
Parties shall first attempt to resolve any dispute between or among them through
mediation with the assistance of a mediator selected by or agreeable to the
Parties to the dispute. The costs and expense of arbitration and mediation shall
be paid by the Company. The rights and obligations of the Parties hereunder,
including any agreement to arbitrate and the law to be applied in the
arbitration shall be construed and enforced in accordance with and governed by
the law of the United States to the extent applicable and otherwise the laws of
the State of Delaware, without giving effect to principles of conflicts of law.
9. Joint Preparation of Agreement. This Agreement is deemed to have
been drafted jointly by the Parties. Hence, in any construction to be made of
this
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Agreement, the provisions of the Agreement shall not be construed against any
Party on the basis that the Party was the drafter.
10. Waiver of Breach. No waiver, amendment or modification of this
Agreement shall be effective unless in writing and signed by the Party against
whom the waiver, amendment or modification is sought to be enforced. No waiver
of any term, condition, breach or default of this Agreement shall be construed
as a waiver of any other term, condition, breach or default. Failure to enforce
any breach or default of this agreement shall not be a waiver of that breach or
default or any other breach or default of this Agreement.
11. Further Executions. All Parties agree to cooperate fully and to
execute any and all supplementary documents and to take all additional actions
that may be necessary or appropriate to give full force to the basic terms and
intent of this Agreement and which are not inconsistent with its terms.
12. Headings. The use of headings in this Agreement is only for ease of
reference and the headings have no effect and are not to be considered a part or
term of this Agreement.
13. Each Party to Bear Own Costs. Except as provided herein, the
Parties agree that each Party shall be responsible for the payment of its own
costs, attorneys' fees, and all other expense in connection with the negotiation
of this Agreement.
14. Counterparts. This Agreement may be executed in counterparts,
provided, however, that this Agreement shall not be binding or effective to or
against any Party hereto until the date first written above.
15. Further Acknowledgments. Employee further acknowledges that: (a)
Employee has read this agreement; (b) Employee has been provided a full and
ample opportunity to study it; (c) Employee hereby is advised in writing to
consult with an attorney prior to signing this Agreement; (d) Employee enters
into this Agreement based upon Employee's own knowledge and judgment and not in
reliance on any representations or promises of Company other than those
contained in this Agreement; (e) Employee understands that if any facts or
matters upon which employee has relied in entering into this Agreement shall
hereinafter prove to be otherwise, this Agreement shall nevertheless remain in
full force and effect; and (f) Employee is signing this agreement voluntarily,
without coercion, and with full knowledge that it is intended, to the maximum
extent permitted by law, as a complete and final release and waiver of any and
all claims.
In Witness Whereof, the Parties have duly executed this Agreement as of
the date first written above.
Stuart Entertainment, Inc. Employee
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx, Chairman Xxxx X. Xxxxxx
and Chief Executive Officer
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