SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.37
Borders Group, Inc., its affiliates, subsidiaries, divisions, successors and assigns and the
past, present and future employees, officers, shareholders, directors, agents, attorneys and
insurers thereof, both individually and in their official capacities (collectively referred to
throughout this Separation Agreement and General Release as “Borders Group”) and Xxxxxxx Xxxxxxx
(referred to throughout this Separation Agreement and General Release as “Altruda” and more
specifically defined in paragraph 5) agree that:
1. Separation from Employment. This Separation Agreement and General Release
(“Agreement”) is made by Borders Group and Altruda based on Altruda’s separation of employment with
Borders Group effective February 2, 2007 (the “Effective Date”).
2. Consideration. In consideration for signing this Agreement and
compliance with the promises made herein, Borders Group agrees that Altruda: (a) will continue to
receive his current salary through the Effective Date; (b) subject to the mitigation and revocation
provisions set forth below, as well as the provisions of paragraph 10 of the Executive Agreement
dated August 1, 2006, will receive as severance pay, twelve (12) months salary and bonus being
eighty-four thousand three hundred seventy-five dollars ($84,375.00) per month (thirty-eight
thousand nine hundred forty-two dollars and thirty-one cents ($38,942.31) per normal pay period for
twenty-six (26) periods) for the twelve (12) month period following the Effective Date minus, in
each case, the amount of applicable withholding taxes; and (c) a cash payment as soon as
practicable following Altruda’s separation from Borders Group, in an amount equal to the fair
market value of the restricted shares (but not the restricted share units) awarded to Altruda in
March 2006. The fair market value of the restricted shares shall be based upon the closing price
of Borders Group, Inc.’s shares on the New York stock Exchange on the day prior to Altruda’s
termination date. The amount of severance described in (b) above shall be reduced by the amount
that Altruda receives from other employment during the twelve (12) month period. Altruda agrees to
make reasonable efforts to seek other employment, and to immediately notify Borders Group if he
accepts other employment and the amounts received therefrom. Except for the payments described in
(a), (b) and (c) above, Altruda shall not be entitled to any payments of any nature whatsoever from
Borders Group.
3. No Consideration Absent Execution of this Agreement. Borders Group and
Altruda acknowledge and agree that, prior to the signing of this Agreement, Altruda did not have a
contract for employment for any definite period of time. As such Altruda understands and agrees
that Borders Group would not be obligated to employ him through the Effective Date and he would not
be eligible for the payments provided for herein except for his execution of this Agreement.
4. Revocation. Altruda may revoke this Agreement for a period of seven days
following the day he executes this Agreement. Any revocation within this period must be submitted,
in writing, to Borders Group and state, “I hereby revoke my acceptance of the Agreement.” The
revocation must be personally delivered to Xxxxxx Xxxxx or his designee, or mailed to Xxxxxx Xxxxx
and postmarked within seven days of execution of this Agreement. This Agreement shall not become
effective or enforceable until the revocation period has expired. If the last day of the
revocation period is a Saturday, Sunday, or legal holiday in Michigan, then
the revocation period shall not expire until the next following day which is not a Saturday,
Sunday, or legal holiday.
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5. General Release of Claims. Altruda knowingly and voluntarily releases
and forever discharges Borders Group of and from any and all claims, known and unknown, against
Borders Group, which Altruda, his heirs, executors, administrators, successors, and assigns
(referred to collectively throughout this Agreement as “Altruda”) have or may have as of the date
of execution of this Agreement, including, but not limited to, any alleged violation of:
• | The National Labor Relations Act, as amended; | ||
• | Title VII of the Civil Rights Act of 1964, as amended; | ||
• | The Civil Rights Act of 1991; | ||
• | Sections 1981 through 1988 of Title 42 of the United States Code, as amended; | ||
• | The Employee Retirement Income Security Act of 1974, as amended; | ||
• | The Immigration Reform Control Act, as amended; | ||
• | The Americans with Disabilities Act of 1990, as amended; | ||
• | The Age Discrimination in Employment Act of 1967, as amended; | ||
• | The Occupational Safety and Health Act, as amended; | ||
• | The Fair Credit Reporting Act; | ||
• | The Family and Medical Leave Act of 1933; | ||
• | The Equal Pay Act, as amended; | ||
• | The Worker Adjustment and Retraining Notification Act, as amended; | ||
• | The Michigan Xxxxxx-Xxxxxx Civil Rights Act; | ||
• | The Michigan AIDS Testing and Confidentiality Act; | ||
• | The Michigan Persons with Disabilities Civil Rights Act, as amended; | ||
• | The Michigan Equal Pay Law; | ||
• | The Michigan Comp. Xxxx Xxx. “Whistleblowers Protection Act” provision (sec. 15-361-15.369); | ||
• | The Michigan Comp. Xxxx Xxx. “Workers’ Compensation: Retaliation” provision (sec. 418.301(11) and (12)); | ||
• | Any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance; | ||
• | Any public policy, contract, tort, or common law; or | ||
• | Any allegation for costs, fees or other expenses including attorneys’ fees incurred in these matters. | ||
• | Any claims arising from or related to tax obligations to any payment made hereunder, including but not limited to any acceleration of income or social insurance taxes, or increase in income taxes, or interest and penalties imposed with respect to any of his severance benefits (as determined under the guidance issued under Section 409A including, but not limited to, the plan aggregation rules under Section 409A). |
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Without limiting the generality of the foregoing, Altruda hereby releases any and all claims he may
have against Borders Group pertaining in any way to his employment with Borders Group or the
termination thereof, whether known or unknown at the time of this Agreement, and Altruda assumes
the risk that he might subsequently discover claims or causes of action which are presently unknown
to him. Accordingly, Altruda voluntarily agrees that this release extends to all claims, whether
known to him or unknown, existing at the time of this Agreement.
Notwithstanding the foregoing or any other provision of this Agreement, Altruda is not waiving or
releasing any benefits to which he may be entitled under the Borders Group Savings Plan or any
medical or other welfare benefit plan of Borders Group.
6. Altruda’s Acknowledgment of Tax Liability. Altruda hereby acknowledges and agrees
as follows: (a) nothing in this Agreement constitutes tax advice; (b) Borders Group does not take
any responsibility, or have any liability to Altruda with respect to his tax liability and/or his
personal tax reporting; (c) Altruda has been given the opportunity and encouraged to consult with
his own attorney and to seek professional tax advice prior to execution of this Agreement; and (d)
Altruda agrees to indemnify Borders Group and hold it harmless from any liability for income taxes,
interest or penalties that may be imposed as a result of under-payment or non-payment of taxes on
any amounts paid Altruda under the terms of this Agreement.
7. Affirmations. Altruda affirms that he has not filed, caused to be filed, or
presently is a party to any claim, complaint, or action against Borders Group in any forum or form.
Altruda further affirms that he has been paid and has received all leave (paid or unpaid),
vacation pay, compensation, wages and bonuses to which he may be entitled and that no other leave
(paid or unpaid), vacation pay, compensation, wages or bonuses are due to him, except as provided
in this Agreement. Employee furthermore affirms that he has no known workplace injuries or
occupational diseases; and has been provided and/or has not been denied any leave requested under
the Family and Medical Leave Act.
8. Confidentiality and Return of Property. Altruda agrees that he will maintain in
strict confidence and will not, directly or indirectly, divulge, transmit, publish, release or
otherwise use or cause to be used in any manner, any confidential information relating to Borders
Group, including but not limited to, clients, customers, proprietary knowledge and trade secrets,
research, business plans, business methods, operating procedures or programs, merchandising
strategies, pricing strategies, sales and financial information, technology, software systems,
operations, processes, computer programs and data bases, records, development data and reports,
store designs, quality control specifications, cost analysis, flow charts, know-how, employee
lists, customer lists, supplier lists, marketing data, personnel data, or any other information of
like nature. Altruda acknowledges that all information regarding Borders Group compiled or obtained
by, or furnished to, him in connection with his employment or association with Borders Group is
confidential information and Borders Group’s exclusive property. Upon demand by Borders Group,
Altruda will surrender to Borders Group all original and facsimile records, documents and data in
his possession pertaining to Borders Group. The foregoing covenant of confidentiality has no
temporal, geographical or territorial limitation.
9. Confidentiality of this Agreement. Altruda agrees that he will maintain in strict
confidence and will not, directly or indirectly, divulge, transmit, publish, release or otherwise
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disclose, the terms of this Agreement except to his spouse, domestic partner (as defined by Borders
Group Inc. benefits plans), tax advisor and an attorney with whom Altruda chooses to consult
regarding his consideration of this Agreement, provided that said individuals agree to be bound by
the terms of this Confidentiality Clause and Altruda agrees to be liable for any breach by them.
10. Non-Disparagement. Altruda agrees not to defame, disparage or demean Borders
Group in any manner whatsoever.
11. Discontinuance of Severance Payments. Altruda agrees that any right to receive
severance payments hereunder will cease if, during the one-year period following his termination of
employment, he directly or indirectly becomes an employee, director, advisor of, or otherwise
affiliated with, any other entity or enterprise whose business is in competition with the business
of Borders Group.
12. Enforcement. The parties agree that in the event any dispute arises relating to
or arising out of this Agreement such dispute will be resolved through arbitration conducted by the
American Arbitration Association in Ann Arbor, Michigan. The parties further agree that the award
in such arbitration will be binding and enforceable pursuant to the Michigan Arbitration Act and
the Federal Arbitration Act. This section will not restrict Borders Group’s right of equitable
relief in a court of law having competent jurisdiction for any breach or violation of any duty owed
or obligation of non-disparagement, confidentiality, non-competition, or duty loyalty owed by
Altruda to Borders Group.
13. Governing Law and Interpretation. This Agreement shall be governed and conformed
in accordance with the laws of the State of Michigan without regard to its conflict of laws
provision. Should any provision of this Agreement be declared illegal or unenforceable by any
court of competent jurisdiction or arbitrator/arbitration panel, and cannot be modified to be
enforceable, excluding the general release language, such provision shall immediately become null
and void, leaving the remainder of this Agreement in full force and effect.
14. No Admission of Wrongdoing. Altruda agrees that neither this Agreement nor the
furnishing of the consideration for this Release shall be deemed or construed at anytime for any
purpose as an admission by Borders Group of any liability or unlawful conduct of any kind.
15. Amendment. This Agreement may not be altered, modified or changed
except upon express written consent of both parties wherein specific reference is made to this
Agreement.
16. Entire Agreement; Termination of Prior Agreements. This Agreement sets forth the
entire agreement between the parties hereto, and fully supersedes any prior written or oral
agreements or understandings between the parties, which are hereby terminated and of no further
force and effect, including but not limited to prior employment agreement(s), with the exception of
the provisions set forth in paragraph 10 of the Executive Agreement dated August 1, 2006 (a copy of
which is attached hereto). Altruda acknowledges that he has not relied on any representations,
promises, or agreements of any kind made to him in connection with his decision to sign this
Agreement, except for those referenced in this paragraph.
ALTRUDA HAS BEEN ADVISED IN WRITING THAT HE HAS AT LEAST TWENTY ONE (21) CALENDAR
DAYS TO CONSIDER THIS AGREEMENT, IN WHICH YOU WAIVE IMPORTANT RIGHTS, INCLUDING THOSE UNDER THE AGE
DISCRIMINATION IN
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EMPLOYMENT ACT OF 1967. WE ADVISE YOU TO CONSULT WITH AN ATTORNEY PRIOR TO
EXECUTION OF THIS AGREEMENT.
ALTRUDA AGREES THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT DO NOT
RESTART OR AFFECT IN ANY MANNER THE ORIGINAL TWENTY ONE (21) DAY CONSIDERATION PERIOD.
HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE PROMISES SET FORTH HEREIN, AND TO
RECEIVE THEREBY THE SUMS AND BENEFITS SET FORTH IN PARAGRAPH “2” ABOVE, ALTRUDA FREELY AND
KNOWINGLY, AND AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND
RELEASE ALL CLAIMS HE HAS OR MIGHT HAVE AGAINST BORDERS GROUP.
IN WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this Agreement as of the
date set forth below:
/S/ XXXXXXX XXXXXXX ————————————————————— Xxxxxxx Xxxxxxx Date: February 2, 2007 BORDERS GROUP, INC. |
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By: | /S/ XXX XXXXX | |||||
Date: February 2, 2007 | ||||||
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