SEVERANCE AGREEMENT AND GENERAL RELEASE
This Severance Agreement and General Release (this "Agreement") is made
and entered into as of the 24th day of March 1995, by and between New Image
Industries, Inc., a Delaware corporation (the "Company"), and Xxxxx Xxxxxxxxxx
("Executive").
1. RESIGNATION. Executive hereby confirms that effective as of March 24,
1995, Executive resigned from his positions as Chairman of the Board of
Directors and Chief Executive Officer of the Company. Effective as of the date
Executive is no longer employed by the Company pursuant to Sections 2 and 3
hereof, Executive hereby resigns his position as a Director of the Company and
any and all positions he holds as an officer of the Company or any subsidiary
thereof.
2. CONTINUING ENGAGEMENT AND DUTIES. In consideration of the severance
payment and other consideration provided for herein, Executive hereby agrees
as follows:
(a) Executive agrees to continue to be employed as President of the
Company for the term provided in Section 3 hereof and to assist and cooperate
in the transfer of his duties and responsibilities to his successor. Executive
shall be compensated during such term at the same base salary and shall
receive the other perquisites as he received at March 24, 1995. During such
period, Executive shall have the duties and responsibilities customarily
accorded to a President or Chief Operating Officer of a corporation and shall
serve at the direction and shall report to the Chief Executive Officer of the
Corporation.
(b) During the term of this Agreement, Executive agrees to devote his
primary business time, energies, skills, effort and attention to his duties
hereunder and will not render any material services to any other business
concern.
3. TERM. Executive's employment hereunder shall terminate on the earlier
to occur of the following:
(a) June 23, 1995;
(b) at any time upon Executive's voluntary resignation; and
(c) at any time upon delivery by the Company to Executive of written
notice of termination; or
(d) upon the death or permanent disability of Executive.
EXHIBIT: 10.18
4. AUTOMOBILE. During the term of this Agreement, Executive shall be
entitled to the full use of that certain BMW 735i automobile (the "Automobile"
currently leased by the Company for the benefit of Executive. Upon the
termination of this Agreement, Executive shall have the right to (a) return
the Automobile to the Company, in which event Executive will have no
obligations with respect to the Automobile, or (b) request that the lease
of the Automobile be assigned to him, in which event Executive shall become
and be fully responsible for all payments under such lease and all other
payments associated with the Automobile. If Executive elects the opinion set
forth in subpart (b) directly above, the Company will use its reasonable
efforts to have the lease assigned to Executive.
5. STOCK OPTIONS. Executive agrees and acknowledges that he currently
holds options to purchase 200,000 shares of the Company's Common Stock granted
under the Company's employee stock incentive plans (the "Employee Options")
and options to purchase 80,000 shares of the Company's Common Stock under the
Company's 1993 Director Incentive Plan (the "Director Options"). All of such
options provide that they shall terminate on the 90th day following the date
Executive is no longer rendering services to the Company. If Executive remains
employed by the Company through June 23, 1995 (or if he is earlier terminated
by the Company without "cause"), then at such date the Company shall amend the
Employee Options to provide that they shall remain exercisable through
June 22, 1996 at which time they shall terminate. Executive and the Company
hereby agree that the Director Options terminated and are no longer exercisable
as of March 24, 1995. For these purposes, the term "cause" shall mean
termination by reason of: any act or omission knowingly undertaken or omitted
by Executive with the intent of causing damage to the Company, its properties,
assets or business or its stockholders, officers, directors or employees, any
act of Executive involving a material personal profit to Executive, including,
without limitation, any fraud, misappropriation or embezzlement, involving
properties, assets or funds of the Company or any of its subsidiaries;
Executive's consistent and continuing failure to perform his normal duties
or any provision of this Agreement, in either case, as directed by the Board
of Directors of the Company (the "Board"), after Executive has received
written notice from the Board of his failure to so perform; conviction of,
or pleading NOLO CONTENDERE to, (A) any crime or offense involving monies
or other property of the Company, (B) any felony offense, or (C) any crime
of moral turpitude; or (V) the chronic or habitual use of non-prescription
drugs or consumption of alcoholic beverages.
6. COMPENSATION UPON TERMINATION. In consideration of Executive
performing his duties under Section 2 hereof, if Executive remains employed
by the Company through June 23, 1995 (or if he is earlier terminated by
the Company without "cause" or as a result of his death or permanent
disability), then on such date Company shall pay Executive, or, if
termination is caused by Executive's death or disability the Company shall
instead pay to Xxxxxx Xxxxxxxxxx, a xxxxxxxxx payment equal to 20.8 weeks
Base Salary (i.e., $110,000), plus one day of Base Salary for each day of
unused vacation accrued by Executive through the date of termination
(together, the "Severance Payment") in full and final satisfaction of all
obligations of the Company to Executive.
7. CONFIDENTIALITY AND TRADE SECRETS. Executive shall not, at any time
during the term of his employment or for any period thereafter exploit, use
for any purpose not specifically related to Executive's employment by the
Company pursuant to the terms of this Agreement or disclose to any person
(except as required by law after first notifying the Company and giving them
an opportunity to object) any confidential information, including price
lists, pricing information, customer lists, customer names, financial
information, knowledge, trade secrets, know-how, unprinted or printed data,
and related intangible property developed during or prior to the term of
this Agreement, belonging to, used by, or developed by or for the benefit
of the Company (collectively, the "Trade Secrets"). For purposes of this
Agreement "Trade Secrets" do not include information available to diligent
business persons from sources other than the Company or persons in a
fiduciary or confidential relationship with the Company ("Independent
sources"), and which is not available not as a result of any breach of
trust or agreement with the Company by such Independent Source.
8. RETURN OF CORPORATE PROPERTY AND TRADE SECRETS. Upon any termination
of employment, Executive shall turn over to the Company, as appropriate,
all property, writings or documents then in his possession or custody
belongings to or relating to the affairs of the Company or comprising or
relating to Trade Secrets.
9. WAIVER UNDER SECTION 1542 OF THE CALIFORNIA CIVIL CODE. With regard
to any claims which may exist or arise out of the Executive's current or
any prior affiliation with the Company (the "Disputes"), Executive expressly
waives all claims against the Company, including, without limitation, any
and all rights under Section 1542 of the Civil Code of the State of
California which provides as follows:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with the debtor.
Executive waives and releases any right or benefit which he has or may
have under any similar law or rule of any other jurisdiction pertaining to
the Disputes. It is the intention of Executive, through this Agreement, and
with the advice of counsel, fully, finally, and forever to settle and
release all such matters and claims relative thereto which have existed,
do now exist or may exist between the parties arising out of or related to
the Disputes. In furtherance of such intention, the release herein given
shall be, and remain in effect as, a full and complete release of such
matters notwithstanding the discovery of the existence of any additional
claims or facts relating thereto. Notwithstanding the foregoing, Executive
expressly does not waive any claim for indemnity for any losses arising out
of his conduct as an officer or director of the Company.
10. MISCELLANEOUS.
(a) NOTICES. All notices, requests and other communications
(collectively, "Notices") given pursuant to this Agreement shall be in
writing, and shall be delivered by personal services or by United States
first class, registered or certified mail (return receipt requested),
postage prepaid, addressed to the party at the address set forth below:
If to Company:
New Image Industries, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: Board of Directors
If to Executive:
Xxxxx Xxxxxxxxxx
0000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Any Notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be
deemed to have been duly given three days from date of deposit in the United
States mails, unless sooner received. Either party may from time to time
change its address for further Notices hereunder by giving notice to the
other party in the manner prescribed in this section.
(b) ENTIRE AGREEMENT. This Agreement contains the sole and entire
agreement and understanding of the parties with respect to the entire subject
matter of this Agreement, and any and all prior discussions, negotiations,
commitments and understandings, whether oral or otherwise, related to the
subject matter of this Agreement are hereby merged herein. No representations,
oral or otherwise, express or implied, other than those contained in this
Agreement have been relied upon by any party to this agreement.
(c) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES THEREOF.
(d) CAPTIONS. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
(f) AMENDMENTS AND WAIVERS. No amendment or waiver of any term or
provision of this Agreement shall be effective unless made in writing. Any
written amendment or waiver shall be effective only in the instance given
and then only with respect to the specific term or provision (or portion
thereof) of this Agreement to which it expressly relates, and shall not
be deemed or construed to constitute a waiver of any other term or provision
(or portion thereof) waived in any other instance.
In witness whereof, the parties have executed this Agreement as of the
date first set forth above.
Company: Executive:
New Image Industries, Inc.
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxxxxxx
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Xxxxxx X. Xxxxxx Xxxxx Xxxxxxxxxx
Chief Executive Officer
