NONCOMPETITION AND MUTUAL RELEASE AGREEMENT
Axiohm Transaction Solutions, Inc. a California corporation ("Employer"),
and Xxxxxxx X. Xxxxx on behalf of himself, his heirs and assigns ("Xxxxx"),
hereby enter into this Noncompetition and Mutual Release Agreement ("Agreement")
this 10th day of January, 1998.
WHEREAS, Xxxxx has resigned his positions as President and Chief Executive
Officer of Employer; and
WHEREAS, Employer is willing to provide certain benefits to Xxxxx in
exchange for the covenants and releases set forth herein;
1. In full and final satisfaction of all claims by Xxxxx against Employer
and the other Released Parties (as defined in Section 4), and in consideration
for and subject to the undertakings described in this Agreement, Employer agrees
to make the following payments and to provide the following benefits to Xxxxx
upon the Benefit Award Date, being the last to occur of (i) Xxxxx'x election not
to revoke his release in Section 4 within seven (7) days after his execution and
delivery of the Agreement, and (ii) Xxxxx'x execution and delivery to Employer
of the notarized Ratification Affidavit attached as Exhibit A between eight (8)
and fifteen (15) days after Xxxxx'x execution and delivery to Employer of the
Agreement:
(a) Employer shall pay the first six months of COBRA benefits elected
by Xxxxx;
(b) Employer shall pay To Xxxxx the sum of One Million Three Hundred
Fifty Thousand Dollars ($1,350,000);
(c) Employer shall provide Xxxxx an office in Employer's offices (the
actual space provided to be subject to Employer's other
requirements and so long as available, not to exceed in any event
the period of the noncompete covenant);
(d) Employer shall allow Xxxxx to utilize Employer's current leased
corporate apartment in Golden, Colorado until expiration of the
current term of the lease (October 1, 1998).
(e) Xxxxx may retain (and shall be deemed to have purchased for $1)
the 1997 Chevrolet Suburban used by him, all office furniture in
his current office and the two personal computers used by him.
2. (a) Xxxxx agrees that (except in connection with tax
reporting, or pursuant to legal process or any legal action to enforce the terms
of this Agreement), he shall keep confidential the terms of this Agreement, all
performance hereunder and all circumstances relating to Xxxxx'x resignation from
Employer. In addition, Xxxxx shall not take any action intended to portray
Employer, its affiliated entities, or their directors, officers, employees,
accountants, agents or attorneys (past or present) in a negative light and shall
not disclose to any one (without the prior written consent of Employer) any
information regarding Employer or its financial condition, clients, contractual
arrangements, internal affairs, or governance which is non-public, confidential,
or proprietary.
(b) Employer agrees that (except in connection with tax reporting, or
pursuant to legal process or any legal action to enforce the terms of this
Agreement or except as required by law or compliance with debt covenants), it
shall keep confidential the terms of this Agreement, all performance hereunder
and all circumstances relating to Xxxxx'x resignation from Employer. Employer
shall cause its board of directors and officers and its subsidiaries' boards and
officers not take any action intended to portray Xxxxx in a negative light.
(c) Xxxxx agrees to return all Employer property and confidential
information, if any, of Employer and its affiliated entities in his possession
or control, except those required to be utilized by him in connection with
performance of his service as a director of Employer, and only so long as so
required. Without limitation of the foregoing, files relating to Employer on
computers retained by Xxxxx may be utilized by Employee in performance of his
services as a director of Employer but shall be deleted at such time as he is no
longer a director.
3. (a) Xxxxx agrees that for a period of two years from the date of this
Agreement (the "Restricted Period") Xxxxx shall not, directly or indirectly,
without the prior written consent of a co-chairman of Employer (which may be
given or denied in his sole discretion), except in his capacity of a director of
Employer:
(i) engage from Wyoming, Colorado, New York, or from any other
state or country in which Employer or any of its direct or indirect
subsidiaries (collectively, the "Companies") have business, have
customers or have solicited customers, in the development,
manufacture, product marketing, product
-2-
management, public relations, representation or sale of any printers,
printer mechanisms, bar coding or other products competitive with any
products sold by or under development by the Companies, whether as
owner (except through mutual funds or as a less than 5% owner of a
public company), employee, consultant, distributor, independent sales
representative or otherwise, directly or indirectly (by assisting
another person or otherwise); nor
(ii) engage from any other location in the development,
manufacture, product marketing, product management, public relations,
representation or sale of any product competitive with any printers,
printer mechanisms, bar coding or other products competitive with any
products sold by or under development by the Companies, whether as
owner (except through mutual funds or as a less than 5% owner of a
public company), employee, consultant, distributor, independent sales
representative or otherwise, directly or indirectly (by assisting
another person or otherwise); nor
(iii) call upon, solicit, serve, or accept business, from any
customer or prospective customer (wherever located) of the Companies
for printers, printer mechanisms, bar coding or other products
competitive with any products sold by or under development by the
Companies, whether as owner (except through mutual funds or as a less
than 5% owner of a public company), employee, consultant, distributor,
independent sales representative or otherwise, directly or indirectly
(by assisting another person or otherwise); nor
(iv) interfere with any business relationship of any of the
Companies with any of their customers or prospective customers or
induce any of such customers to discontinue or reduce their
relationship with the Companies; nor
(v) employ or retain as an independent contractor any of the
employees or officers of the Companies or recruit, solicit or
otherwise induce any employee of the Companies to discontinue such
employment relationship unless and until such persons have been
separated from the Companies' employment for six months (but in any
event this covenant in clause (v) shall expire 24 months from the date
hereof.
Xxxxx acknowledges that these restrictions are reasonable in scope,
are necessary to protect the trade secrets and other proprietary information of
the Companies, that the
-3-
benefits provided hereunder are fair compensation for these covenants and that
these covenants do not impair Xxxxx' ability to be employed as a managerial
level officer or other areas of his expertise and experience. Specifically,
Xxxxx acknowledges the reasonableness of the international scope of these
covenants by reason of the international customer base and prospective customer
base and activities of the Companies and the widespread domestic and
international scope of Xxxxx'x contacts created during his employment with the
Companies and his domestic and international scope of Xxxxx'x responsibilities
with the Companies and his access to marketing strategies of the Companies.
(b) In the event that Xxxxx shall violate any of the covenants in
Section 3(a) (i), (ii), (iii) or (iv) which are not cured within 30 days of
written notice by Employer to Xxxxx, Employer shall at its option, be entitled
to a pro-rated return of the amounts paid under Section 1(b) for the not yet
elapsed period of those covenants and cancellation of remaining benefits under
Section 1(c) and 1(d) in lieu of enforcing those covenants. Return of those
amount and cancellation of those benefits shall not affect the enforceability of
any releases or other covenants in this Agreement.
At Xxxxx' option, upon written notice to Employer accompanied by
payment of a pro-rated return of the amounts paid under Section 1(b) for the not
yet elapsed period of covenants in Section 3(a)(i), (ii), (iii) or (iv) and
notice of relinquishment of remaining benefits under Section 1(c) and 1(d) of
this Agreement, Xxxxx shall be released from further compliance with covenants
in Section 3(a)(i), (ii), (iii) or (iv). Return of those amounts and
cancellation of those benefits shall not affect the enforceability of any
releases or other covenants in this Agreement.
4. Xxxxx, on behalf of himself, his heirs, executors, attorneys,
administrators, successors and assigns, hereby fully and forever, to the full
extent permitted by law, releases and discharges Employer (except to the extent
of indemnification to which he is otherwise entitled under Employer's bylaws or
required by law) and each of Employer's affiliated entities and each of their
directors, officers, employees, accountants, agents and attorneys, past, present
and future, and all predecessors, successors and assigns thereof (collectively
"Released Parties") from any and all claims, demands, agreements, actions,
suits, causes of action, damages, injunctions, restraints and liabilities, of
whatever kind or nature, in law, equity or otherwise, whether now known or
unknown or which have ever existed or which may now exist (except to enforce the
terms of this Agreement or his vested retirement benefits), including, but not
limited to, any and all claims, liabilities, demands or causes of action
relating to or arising out of Xxxxx'x employment
-4-
or separation from Employer, including, without limitation, any and all stock
option grants and agreements granted under Employer's 1983 Incentive Stock
Option Plan and/or 1992 Stock Plan, claims under Title VII of the Civil Rights
Act of 1964, as amended, 42 U.S.C. Section 2000e ET SEQ., 42 U.S.C. Section
1981, the Civil Rights Act of 1991, the Americans with Disabilities Act, the
Family and Medical Leave Act, the Age Discrimination in Employment Act, as
amended by the Older Workers Benefit Protection Act, the anti-trust and
restraint of trade statutes and common law, the federal and state statutes or
common law, or claims for breach of contract, for misrepresentation, for
violation of any other federal, state or local statute, ordinance or regulation
or common law dealing in any respect with discrimination in employment or
otherwise, defamation, retaliatory or wrongful discharge under the common law of
any state, infliction of emotional distress or any other tort under the common
law of any state or for attorney's fees. Xxxxx acknowledges and agrees that
this release and the covenant not to xxx set forth in Section 5 are essential
and material terms of this Agreement and that without such release and covenant
not to xxx no agreement would have been reached by the parties. Xxxxx
understands and acknowledges the significance and consequences of this release
and this Agreement.
The following provisions are applicable to and made a part of this
Agreement and the foregoing general release and waiver:
(a) Xxxxx does not release or waive any right or claim which he may
have under the Age Discrimination in Employment Act, as amended
by the Older Workers Benefits Protection Act, which arises after
the date of execution of this Agreement, it being acknowledged
that any claim based upon his separation from Employer has arisen
prior to the execution of this Agreement;
(b) In exchange for this general release and waiver hereunder, Xxxxx
hereby acknowledges that he has received separate consideration
beyond that to which he is otherwise entitled under Employer
policy or applicable law;
(c) Employer has advised, and hereby again expressly advises, Xxxxx
to consult with an attorney of his choosing regarding, and prior
to executing, this Agreement which contains a general release and
waiver.
(d) Xxxxx has twenty-one (21) days from the date of receiving this
document to consider whether or not to execute this Agreement.
In the event of such
-5-
execution, Xxxxx has a further period of seven (7) days from such
date in which to revoke said execution and this Agreement shall
not become effective or enforceable prior to the expiration of
such period.
Xxxxx shall ratify the release thereafter, in accordance with the provisions of
Section 1 above, in order to receive the payments described in Section 1.
This release and the covenant not to xxx under Section 7 shall not
apply to workers' compensation claims, rights under Employer's 401(k) plan,
claims under the Employee Retirement Income and Security Act and claims under
state and federal insurance laws. This release and the covenant not to xxx in
Section 5 shall also not apply to rights under the Resignation Agreement between
the parties dated the date hereof.
Xxxxx acknowledges that he may learn of circumstances bearing upon the
things and items released by this Section 4, but it is his intention by doing so
and doing the acts called for by this Agreement, that this Agreement shall be
effective as a full and final accord and satisfaction and release of each and
every thing and item released herein, whether known or unknown.
Xxxxx agrees that he waives any protective law under the law of the
state of Wyoming or any other state which would otherwise prevent him from
releasing all claims that he may have against the Released Parties (except those
specifically reserved hereunder), even though he does not know of their
existence at the time of executing this Agreement. Thus, notwithstanding the
provisions of the laws of the state of Wyoming or any other state, and for the
purpose of implementing a full and complete release and discharge of the
Released Parties, Xxxxx expressly acknowledges that this Agreement is intended
to include in its effect, without limitation, all of Xxxxx' claims which he does
not know or suspect to exist in his favor at the time of execution hereof, and
that this Agreement contemplates the extinguishment of any such claim or claims,
except as specifically reserved hereunder.
5. To the maximum extent permitted by law, Xxxxx covenants not to xxx or
to institute or cause to be instituted any kind of claim or action in any
federal, state or local agency or court against any of the Released Parties
relating to the matters covered by the foregoing release. In addition, Xxxxx
covenants not to xxx to contest the enforceability of any provision of this
Agreement.
Xxxxx warrants and represents that he has neither made, will make, nor
suffered to be made any assignment or transfer of any right, claim, demand or
cause of action covered by the above
-6-
release or covenant not to xxx, that Xxxxx is the sole and absolute owner of all
thereof, and that Xxxxx has not filed or suffered to be filed on its behalf any
claim, action, demand of any kind covered by the above release or covenant not
to xxx as of the date and time of the execution of this Agreement.
6. Employer fully and forever, to the full extent permitted by law,
releases and discharges Xxxxx from any and all claims, demands, agreements,
actions, suits, causes of action, damages, injunctions, restraints and
liabilities, of whatever kind or nature, in law, equity or otherwise, whether
now known or unknown or which have ever existed or which may now exist (except
to enforce the terms of this Agreement and any criminal acts). Employer
acknowledges and agrees that this release and the covenant not to xxx set forth
in Section 7 are essential and material terms of this Agreement and that without
such release and covenant not to xxx no agreement would have been reached by the
parties. Employer understands and acknowledges the significance and
consequences of this release and this Agreement.
Employer acknowledges that it may learn of circumstances bearing upon
the things and items released by this Section 6, but it is its intention by
doing so and doing the acts called for by this Agreement, that this Agreement
shall be effective as a full and final accord and satisfaction and release of
each and every thing and item released herein, whether known or unknown.
Employer agrees that it waives any protective law under the law of the
state of Wyoming or any other state which would otherwise prevent it from
releasing all claims that it may have against Xxxxx (except those specifically
reserved hereunder), even though it does not know of their existence at the time
of executing this Agreement. Thus, notwithstanding the provisions of the laws of
the state of Wyoming or any other state, and for the purpose of implementing a
full and complete release and discharge of the Xxxxx, Employer expressly
acknowledges that this Agreement is intended to include in its effect, without
limitation, all of Employer's claims which it does not know or suspect to exist
in its favor at the time of execution hereof, and that this Agreement
contemplates the extinguishment of any such claim or claims, except as
specifically reserved hereunder.
This release and the covenant not to xxx in Section 7 shall also not apply
to rights under the Resignation Agreement between the parties dated the date
hereof.
7. To the maximum extent permitted by law, Employer covenants not to xxx
or to institute or cause to be instituted any kind of claim or action in any
federal, state or local agency or court against Xxxxx relating to the matters
covered by the foregoing release. In addition, Employer covenants not to xxx to
-7-
contest the enforceability of any provision of this Agreement.
Employer warrants and represents that it has neither made, will make,
nor suffered to be made any assignment or transfer of any right, claim, demand
or cause of action covered by the above release or covenant not to xxx, that
Employer is the sole and absolute owner of all thereof, and that Employer has
not filed or suffered to be filed on its behalf any claim, action, demand of any
kind covered by the above release or covenant not to xxx as of the date and time
of the execution of this Agreement.
8. Xxxxx and Employer each agrees that neither this Agreement nor
performance hereunder constitutes an admission by the other of any violation of
any federal, state or local law, regulation, common law, of any breach of any
contract or any other wrongdoing of any type.
9. The parties represent and warrant to each other that this Agreement is
the result of negotiations that began on December 2, 1997 and no provision
hereof was part of any earlier negotiation, understanding, agreement or
arrangement.
-8-
10. In the event that any Section or provision of this Agreement shall be
determined to be contrary to governing law or otherwise unenforceable, all
remaining portions of this Agreement shall be enforced to the maximum extent
permitted by law; the unenforceable paragraph, subparagraph or provision shall
first be construed or interpreted, if possible, to render it enforceable and, if
that is not possible, then the provision shall be severed and disregarded, and
the remainder of this Agreement shall be enforced to the maximum extent
permitted by law. No such modification or severance shall, however, affect the
payments in Section 1, which are irrevocable except as provided in Section 3(b).
11. Xxxxx shall continue to honor and be bound by all obligations of
confidentiality and assignment of inventions regarding Employer information and
property to which he is currently bound under state law or under any general
confidentiality, nondisclosure or invention assignment agreement previously
executed by him in favor of Employer.
12. No warranties or representations are made by either party as to the
proper tax treatment of the benefits granted or payable under this Agreement.
13. This Agreement shall be governed by and construed in accordance with
the internal substantive laws, but not the choice of law rules, of the state of
Wyoming, which is Xxxxx' legal state of residence and the place of execution of
this Agreement by Xxxxx. The parties agree that the state and federal courts in
the state of Wyoming shall be the sole venue and exclusive jurisdiction for any
dispute or any action for enforcement of this Agreement and each party agrees to
the personal jurisdiction and venue of such courts.
AXIOHM TRANSACTION SOLUTIONS, INC.
By: /s/ XXXXXXX XXXXX
----------------------------------
Its Co-Chairman
/s/ XXXXXXX X. XXXXX
---------------------------------------
XXXXXXX X. XXXXX
-9-
EXHIBIT A
STATE OF _________ ) RATIFICATION AFFIDAVIT
)SS:
COUNTY OF _________ )
Xxxxxxx X. Xxxxx, being first duly cautioned and sworn on oath, deposes and
states:
1. I am the same Xxxxxxx X. Xxxxx who is a party to a Noncompetition and
Mutual Release Agreement (Agreement) between Axiohm Transaction Solutions, Inc.
and myself dated January 10, 1998.
2. I affirm that, prior to my acceptance of that Agreement on January __,
1998 I was advised to seek my own lawyer's advice, and further I was advised
that I had a minimum of 21 days in which to consider the matter (which period of
time I utilized to the extent deemed prudent by myself, I being under no
compulsion to make a decision sooner). I further affirm that the Agreement was
written in such a manner that I understood the terms, and that the consideration
called for by the Agreement in exchange for the release and covenant not to xxx
arises solely from that aspect of the Agreement, and is something to which I
would not otherwise be entitled absent the Agreement. I have been advised by my
attorney of my right to waive consideration of the Agreement for the entire 21
day period permitted by law and,, I hereby elect to waive the remainder of such
21 period, if any.
3. More than seven calendar days have passed since I executed the
Agreement and I have not taken any action to revoke the Agreement. In full
recognition of my rights and obligations under that Agreement, I ratify my
initial acceptance.
4. I have read all of the statements in this Ratification Affidavit, and
all of the facts are true to my own personal knowledge.
5. Further this affiant sayeth naught.
-------------------------------------------
XXXXXXX X. XXXXX
Notarization on next page
-10-
Subscribed and sworn to before me, the undersigned notary public, this
____ day of __________________, 1998.
----------------------------------
Notary public in and for the
State of ______________
-11-
