JANUARY 15, 1997
RE: X. X. XXXXXXXX
RELEASE AND SEPARATION AGREEMENT
Dear Xxxx:
This is to confirm our discussions regarding the terms of your separation from
employment with X. Xxxxxx Homes ("Company"). The Board certainly recognizes and
appreciates the contributions you have made to X. Xxxxxx and X. Xxxxxx Homes and
we wish you well in your future endeavors. To avoid any disputes or
misunderstandings which may arise from your employment and expiration of your
contract with the Company, and to protect the interests of both parties, we have
mutually agreed to the following terms:
1. LAST DAY OF ACTIVE SERVICE. Your last day of active service as President
and Chief Executive Officer with the Company will be December 31, 1996.
However, to assist with the transitional issues with a new Chief Executive
Officer, the Company will enter into a consulting agreement with you which
is attached as Exhibit A. Additionally, you and I will develop a mutually
agreeable reference statement which the Chairman and Board members will
utilize in the event of future reference calls from potential employers.
The separation will be characterized to the public as set forth in the
Press Release which was issued on December 27, 1996.
2. VACATION. Your vacation amount of $57,692.28 for your accrued vacation
through December 31, 1996 will be paid within seven (7) days of the
execution of this agreement. This amount represents four weeks of current
vacation, four weeks of accumulated vacation, and four weeks of carry
forward of unused vacation from 1996.
3. CONSIDERATION.
a. Consulting Fee - in lieu of severance benefits under any Company plan
or policy, you will be paid a Consulting Fee in accord with the
provisions of the Consulting Agreement (Exhibit A attached).
b. Outplacement and Business Development Expenses - You will receive up
to an additional $15,000 for approved outplacement and new business
development related expenses. Such expenses would include
outplacement counseling, travel to an interview site (travel expenses
to be consistent with the X. Xxxxxx Homes Travel Expense Reimbursement
Policy) and communications expenses (such as telephone and fax
expense) and new business development and professional advisory
services. You will submit your expense reimbursement request to the
Company's Chief Financial Officer with appropriate documentation.
This provision is applicable through January 15, 1998 and your
entitlement to any unused funds shall thereafter lapse.
c. Secretarial Assistance - In addition to the outplacement and new
business development expense reimbursement, in order to assist you
with your initial outplacement and new business development
communications efforts, the Company will provide reasonable
secretarial assistance (for outplacement and new business development
related correspondence) for a six month period expiring July 15, 1997.
4. PERFORMANCE OF DUTIES. Your duties, responsibilities and authority as
President and Chief Executive Officer of X. Xxxxxx Homes will cease at
December 31, 1996. You will use your reasonable best efforts to coordinate
any steps necessary to effect a smooth transition.
5. RETURN OF PROPERTY. On or before January 31, 1997, you will turn over to
the Company our keys and other Company materials, records, supplies or
equipment you may have in your possession subject to an extension as
granted by the Company's Chief Financial Officer.
6. CONTINUATION OF HEALTH CARE BENEFITS. As part of the Consulting Agreement,
the Company will continue your present health care (medical and dental)
insurance coverage until December 31, 1999 or the date you secure
reasonably equivalent alternate coverage, whichever is earlier. The
Company will contribute the same premium share for this insurance coverage
as it would for an active salaried employee. You must contribute your
portion of the premium to be eligible for this provision. Commencing
January 1, 2000, if reasonably equivalent alternative coverage is not
available, you may elect to continue medical and/or dental coverage under
the Company's medical and dental plans, at your own expense for a period of
18 months.
7. DEFINED CONTRIBUTION BENEFITS. You will cease to be an eligible active
participant in the Company's Defined Contribution Plan after December 31,
1996. You will be eligible for any contributions under that plan for your
eligible service under the terms of that Plan.
8. DEFERRED COMPENSATION PAYOUT. Consultant shall be paid $33,607.03 in
deferred compensation within seven (7) days of the execution of this
agreement.
9. EXECUTIVE LIFE INSURANCE. This Company will make no further payment for
the coverage under that Plan after December 31, 1996. Since you own the
Policy you may continue it or terminate it according to the specific policy
provisions.
10. OTHER BENEFITS/STOCK OPTIONS.
a. Your coverage under the other insurance plans (group life, AD&D,
travel accident, etc.) will expire as of December 31, 1996. Some have
conversion features which will be communicated to you by the X. Xxxxxx
Human Resources Department.
b. Tax preparation services for the year 1996 will be provided up to a
maximum cost of $2,500.
c. Any normal reimbursable business expense, as customarily determined
under the Company's expense reimbursement policy, incurred before
December 31, 1996, will be paid within fourteen days following the
receipt of the expense form by the Company.
d. Subject to the explicit terms of the X. Xxxxxx Homes, Inc. 1993 Stock
Option/Stock Issuance Plan ("Plan") and your expiring Employment
Agreement, you may exercise any vested shares in accordance with the
Plan. Notwithstanding the foregoing, you shall receive the option for
82,500 shares which should have been issued on December 14, 1995 for
which you shall be twenty (20%) vested as of December 14,
2
1996 and everything else in connection with this stock option issuance
shall be in accordance with the Plan. In the event you exercise any
of the above options and you sell the shares associated with such
options, you agree to market those shares in a reasonable and orderly
manner.
11. RELEASE OF CLAIMS. In consideration of the above paragraphs, you hereby
release the Company and its directors, officers, employees, and agents from
any and all claims (including, but not limited to, claims for personal
injury, distress, breach of contract or for violation of Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990,
the Hawaii Civil Rights Commission Act, and the Hawaii Employment Practices
Law, H.R.S. Chapter 378) you now have, known or unknown, arising out of
your employment with or separation from employment with the Company. This
Release of Claims by the you does not apply to any claims which may arise
because of breach of this agreement.
In consideration for the covenants and understandings herein, the Company
releases you from any and all claims the Company may have, known or
unknown, against you arising out of your employment with or separation from
employment with the Company. This Release of Claims by the Company does
not apply to any claims which may arise because of breach of this
agreement.
12. CONFIDENTIALITY. You agree to refrain from disclosing to the general
public any confidential information about the Company which you acquired
while an employee of the Company.
13. DEFENSE OF CLAIMS. You and the Company expressly understand and
acknowledge that this Agreement may be pleaded as a defense to, and may be
used as the basis for an injunction against any action, suit,
administrative or other proceedings which may be instituted, prosecuted or
attempted as a result of an alleged breach of this Agreement by either
party, or arising out of your employment or separation from the Company.
14. ARBITRATION. You and the Company expressly understand and agree that any
disputes arising out of (1) the terms and conditions of this Agreement; (2)
your employment or separation of employment with the Company; or (3) any
claims which either party contends are not waived and released by the
operation of paragraph 11 above shall be subject, absent settlement by the
parties, to final and binding arbitration in accordance with the Model
Employment Arbitration Procedures of the American Arbitration Association.
The Arbitrator, who shall be domiciled in Hawaii, shall be required to
abide by the provisions of this Agreement and the policies and practices of
the Employer in force as of December 31, 1996, and the Arbitrator shall not
modify or alter those provisions and policies.
In arbitrations under this Agreement, each party shall bear the costs, fees
and expenses of presenting its own case, and half of the Arbitrator's fees
and administrative expenses, unless otherwise ordered by the Arbitrator.
15. NONADMISSIONS CLAUSE. It is understood and agreed by the parties hereto
that this Agreement sets forth the terms of your separation from the
Company and that nothing contained herein shall be construed in any other
manner.
16. ENTIRE AGREEMENT. This Agreement contains the entire understanding of you
and the Company, and fully supersedes any and all prior agreements,
negotiations or understandings pertaining to the subject matter of this
Agreement. Each of the parties hereto acknowledges that no party or agent
of
3
any party has made any promise, representation or warranty whatsoever,
either express or implied, not contained in this Agreement concerning the
subject matter hereof to induce any other party to execute this Agreement,
and each of the parties hereto acknowledge that it has not executed this
Agreement, in reliance of any such promises, representations or warranties
not specifically contained in this Agreement.
17. REVIEW AND AGREEMENT. We will provide you ample time and opportunity to
consider the terms of this Agreement and to consult with an attorney if you
choose to do so. If you agree to all the provisions of this Agreement,
please return the executed original of this Agreement to me. You shall
have twenty-one (21) days from the date you receive this letter within
which to sign this Agreement. You shall have seven (7) days from the date
you sign the Agreement within to revoke your signature.
18. COOPERATION. All Parties agree to cooperate fully and execute any and all
supplementary documents and to take all additional actions which may be
necessary or appropriate to give full force and effect to the basic terms
and intent of this Agreement.
X. Xxxxxx Homes, Inc.
By /s/J. W.A. Buyers, Chairman
---------------------------
J. W.A. Buyers, Chairman
Date: 01/15/97
--------------------------
Agreed and Accepted
/s/X. X. Xxxxxxxx
--------------------
X. X. Xxxxxxxx
Date: 01/16/97
----------------
4
