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EXHIBIT 10.55
EXECUTIVE SEPARATION AGREEMENT
This Executive Separation Agreement (the "Agreement") is made
effective as of January 1, 1997 (the "Effective Date"), by and between X. Xxxx
Ramsbottom, Jr. ("Ramsbottom") and Xxxxxxxx PBE, Inc., a Delaware corporation
(the "Company").
RECITALS
A. The Company has employed Ramsbottom since May 1989
and Ramsbottom now serves as its Chairman of the Board, Chief Executive Officer
and Secretary.
X. Xxxxxxxxxx wishes to resign from his offices as
Chairman of the Board, Chief Executive Officer and Secretary of the Company and
as a director, officer and employee of each of its direct or indirect
subsidiaries, and the Company wishes to accept Ramsbottom's resignation, it
being understood that Ramsbottom shall remain a Director of the Company.
C. The Company wishes to provide Ramsbottom with
separation benefits upon the terms and subject to the conditions set forth
herein.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment Status
(a) Resignation. Ramsbottom hereby confirms his
voluntary resignation from his positions as Chairman of the Board, Chief
Executive Officer and Secretary of the Company and as a director, officer and
employee of each direct or indirect subsidiary of the Company as of the
Effective Date; Ramsbottom shall remain a Director of the Company. No later
than the Effective Date, Ramsbottom shall return to the Company all Company
property in his possession, including without limitation, keys, credit cards,
telephone calling cards, manuals, books, notebooks, financial statements,
computer software, cellular and portable telephone equipment, reports and other
documents, except for those documents generally provided to the members of the
Company's Board of Directors.
(b) Separation Payments. Ramsbottom's employment
with the Company and each of the Company's direct and indirect subsidiaries
shall terminate as of the Effective Date. From the Effective Date through and
including December 31, 1998 (the "Separation Term"), the Company shall remit to
Ramsbottom a semi-monthly payment of $2,500 as a separation benefit (i.e., 48
monthly payments of $2,500 each). Such payments shall be made on a
semi-monthly basis, in arrears, on the fifteenth and last day of each month
during such Separation Term, commencing January 15, 1997. Such payments shall
be made to Ramsbottom at the address identified on the signature page hereof,
or at such other place or places as identified to the Company by Ramsbottom in
writing from time to time.
(c) Exclusive Separation Benefits. The benefits
payable to Ramsbottom under this Agreement shall be in lieu of any and all
other severance or termination benefits which would otherwise be payable to
Ramsbottom under any plan, policy, agreement or arrangement of the Company
including, without limitation, pursuant to that certain Employment Agreement,
dated as of October 14, 1993, by and between Ramsbottom and the Company's
predecessor (the "Employment Agreement"), which agreement the parties agree
shall terminate effective December 31, 1996 without further liability to either
party. Notwithstanding the foregoing, however, Ramsbottom shall be entitled,
from and after the Effective Date, to receive compensation as a non-employee
director of the Company pursuant to such arrangements of the Company as shall
be in place from time to time.
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(d) Transition Agreement. During the Separation
Term, Ramsbottom shall make himself available to the Company's Board of
Directors and its Chief Executive Officer as a consultant to the extent
reasonably requested by them, provided that such requests shall not interfere
with any other employment Ramsbottom may accept.
2. Welfare Benefits
The Company shall not provide any welfare benefits (including
any coverage under the Company's group medical and dental benefit plans and its
life and voluntary accidental death and dismemberment insurance plans), from
and after the Effective Date. The termination of Ramsbottom's coverage under
the Company's group medical plan pursuant to the preceding sentence shall
constitute a "qualifying event" for the purpose of Section 4980B of the
Internal Revenue Code of 1986, as amended, and Ramsbottom shall be entitled to
elect to continue such coverage, at his expense, pursuant to the terms and
conditions of such statute.
3. Ramsbottom's Rights Under Other Company Plans
(a) Vesting of Stock Options. In consideration
for the undertakings made by Ramsbottom herein, the Compensation Committee of
the Company's Board of Directors (the "Committee"), in its capacity as the Plan
Administrator of the Company's 1994 Stock Option Plan (the "1994 Plan"), has
approved the continued status of Ramsbottom as an eligible participant of the
1994 Plan for the Separation Term pursuant to Article I, Section (D)(1)(C) of
the Plan. During the Separation Term, all options held by Ramsbottom shall
continue to vest in accordance with their respective terms.
(b) Exercise Period. Pursuant to the authority
granted to the Committee in Article II, Section 3(c) of the 1994 Plan, all
options held by Ramsbottom under the 1994 Plan shall continue to be exercisable
for the full term provided in the respective option agreements to which he is a
party, notwithstanding any provision of the 1994 Plan or any such option
agreement to the contrary. The parties recognize, however, that commencing
three months after the Effective Date any options which are presently
"incentive stock options" shall be deemed to be "non-qualified stock options"
by operation of Section 422(a)(2) of the Internal Revenue Code of 1986, as
amended.
4. Promissory Note.
(a) Repayment Agreement. On or before March 31,
1997, Ramsbottom will cause all unpaid principal and interest on the promissory
notes due from him to the Company in the aggregate original principal amount of
$146,016 (the "Notes") to be repaid in full. At his option, Ramsbottom may
repay such Notes by: (i) remitting cash to the Company; (ii) delivering shares
of the Company's common stock, par value $.001 per share ("Common Stock"),
owned by him to the Company for cancellation as provided herein; or (iii) a
combination of (i) and (ii). In the event that Ramsbottom shall elect to repay
any of the Note by delivering shares of Common Stock, the amount of principal
and/or interest attributable to shares of Common Stock shall be equal to the
average last reported sales price of the Common Stock for the five trading days
prior to the date Ramsbottom irrevocably notifies the Company of his intention
to deliver such shares as payment on the Note. The underlying share
certificates shall be delivered to the Company promptly thereafter.
Notwithstanding the foregoing provisions of this Section 4, however, the option
of Ramsbottom to pay the Note by delivery of Common Stock is conditioned upon
the requirement that any such redemption of shares does not violate any
agreement to which the Company is then a party including, without limitation,
its Credit Agreement with Xxxxxx Financial, Inc. as lender and agent. In the
event of a conflict with any such agreement, the Company shall use reasonable
commercial efforts to obtain a consent to such restriction necessary to permit
Ramsbottom to redeem shares of Common Stock in payment of the Note, it being
understood, however, that the Company shall not be obligated to pay any
consideration for such a consent.
(b) Grant of Security Interest. As of the Effective
Date, Ramsbottom represents that he is the sole record and beneficial owner of
his interests in that certain Memorandum of Understanding and Stock
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Option Agreement (the "Stock Option"), dated as of June 29, 1994, by and among
Chase Venture Capital Associates, LP (formerly Chemical Venture Capital
Associates ("CVCA"), Wedbush Capital Partners ("Wedbush"), Ramsbottom and
Xxxxxxxx X. Xxxxx, III ("Xxxxx"). The Stock Option represents a presently
exercisable right of Ramsbottom to acquire, for an exercise price of $0.91 per
share, (i) 36,322 shares of Common Stock from CVCA and (ii) 11,817 shares of
Common Stock from Wedbush. As security for the prompt and complete repayment
of the Notes and all interest and other obligations in respect thereof,
Ramsbottom hereby grants to the Company a security interest in all right, title
and interest of Ramsbottom in, to, under or derived from the Stock Option
Agreement. Ramsbottom agrees that the Company may enforce this security
interest by any means permitted under applicable law and expressly consents to
the entry of a "stop-transfer" order on the books of the Company's transfer
agent to prevent the conveyance of any interest in the shares underlying the
Stock Option if any obligation under the Notes is still outstanding.
Ramsbottom, by his execution of this Agreement, hereby consents to the
amendment of the Stock Option to the extent necessary to permit the grant of
the foregoing security interest by Ramsbottom including, without limitation,
any necessary amendment to the "No Transfer" provision contained in Section 6
of the Stock Option. Ramsbottom shall take all further actions requested by
the Company to perfect the security interest granted in this Section 4(b)
including, without limitation, execution of any financing statements. This
security interest shall relate solely to Ramsbottom's interest in the Stock
Option and shall not affect in any way Xxxxx'x rights thereunder.
(c) Registration Agreement. The Company agrees that if,
on or before June 30, 1998, it has not provided Ramsbottom with the opportunity
to register and sell his interest in the shares of Common Stock underlying the
Stock Option, it will upon his written request use all reasonable commercial
efforts promptly to register the shares of Common Stock underlying his interest
in the Stock Option for resale under the Securities Act of 1933, as amended, on
Form S-3 or a similar "short-form." This agreement by the Company shall relate
solely to the registration for resale of such shares in market or privately
negotiated transactions, shall not be used in connection with an underwriting,
and shall be conditioned on the eligibility of the Company to use Form S-3 or a
similar "short-form." The procedures for registration provided in the
Registration Rights Agreement, dated as of March 31, 1994, as amended (the
"Registration Rights Agreement"), shall apply generally except that the Company
shall have no obligation to provide accountants' comfort letters, legal
opinions or other documentation to the selling stockholder that is customarily
provided in connection with underwritten offerings. The Company and Ramsbottom
acknowledge that the grant of registration rights under this Section 4(c) may
require the consent of other parties to the Registration Rights Agreement,
depending on when exercised, that these rights are subordinate to the
Registration Rights Agreement, and that the Company and Ramsbottom will use
commercially reasonable efforts to obtain any necessary consents. The June 30,
1998 date provided above shall be accelerated if the sale by Ramsbottom of his
interest in the Stock Option is necessary to facilitate his repayment of the
Notes or to satisfy other significant personal financial needs. In such event,
however, the Board of Directors may defer the initial filing of the
registration statement for up to 45-days if it reasonably deems such deferral
to be in the best interests of the Company and its stockholders, such
determination to be made in a written resolution; provided, however, that if
the election of such deferal by the Company materially impedes the repayment by
Ramsbottom of the Notes, then the repayment of the Notes shall be appropriately
deferred until the Company satisfies its registration obligations hereunder.
5. Release
For valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Ramsbottom, on behalf of his heirs and assigns, hereby
releases the Company, its associates, owners, stockholders, affiliates,
divisions, subsidiaries, predecessors, successors, heirs, assigns, agents,
directors, officers, partners, employees, insurers, representatives and lawyers
from all claims arising out of, based upon, or relating to his hire,
employment, remuneration or resignation from the Company. The foregoing shall
not affect any matters related to Ramsbottom's service as a Director of the
Company.
6. Confidentiality
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Ramsbottom understands that in the course of his employment
with the Company, he has acquired confidential information and trade secrets
concerning the operation of the Company and the Company's future plans and
methods of doing business, which information Ramsbottom understands and agrees
would be extremely damaging to the Company if disclosed to a competitor.
Ramsbottom understands and agrees that such information has been divulged to
Ramsbottom in confidence and Ramsbottom understands and agrees that Ramsbottom
will keep such information secret and confidential.
7. Non-Disparagement Covenant
Ramsbottom agrees not to make any statement, publicly or
privately, disparaging any of the persons identified in the release provided in
Section 5.
8. Specific Performance
Ramsbottom and the Company agree that the Company will be
irreparably harmed by any violation or threatened violation of any of the
provisions of Sections 6 or 7 if such provisions are not specifically enforced
and therefore that the Company shall be entitled to seek an injunction
restraining any violation of these paragraphs by Ramsbottom or any other
appropriate decree of specific performance. Such remedies shall not be
exclusive and shall be in addition to any other remedy to which the Company may
be entitled.
9. Waiver of Breach
A waiver by Ramsbottom or the Company of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach by either party.
10. Enforcement of Agreement
If any party to this Agreement brings an action to enforce its
rights hereunder, the prevailing party shall be entitled to recover its costs
and expenses, including court costs and attorneys' fees, if any, reasonably
incurred in connection with such suit.
11. Construction of Agreement
This Agreement shall be construed in accordance with the laws
of the State of California, without regard to the conflicts of laws provisions
thereof.
12. Severability; Enforceability
If any provision of this Agreement, or the application
thereof, to any person, place, or circumstance, shall be held to be invalid,
unenforceable, or void such clause or provision shall be deemed eliminated from
this Agreement but the remaining provisions shall nevertheless be given full
force and effect. In the event this Agreement or any portion hereof is more
restrictive than permitted by the law of the jurisdiction in which enforcement
is sought, this Agreement or such portion shall be limited in that jurisdiction
only, and shall be enforced in that jurisdiction as so limited to the maximum
extent permitted by the law of that jurisdiction.
13. Amendment to Agreement
Any amendment to this Agreement must be in a writing signed by
duly authorized representatives of the parties hereto and stating the intent of
the parties to amend this Agreement.
14. Successors and Assigns
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This Agreement shall be binding upon the Company and its
successors and assigns, and shall inure to the benefit of Ramsbottom's heirs,
executors and administrators.
15. Entire Agreement
This Agreement sets forth the entire agreement between the
parties with respect to the termination of Ramsbottom's employment with the
Company and, except as otherwise expressly provided herein, supersedes all
other prior agreements, oral or written, between the parties (including,
without limitation, the Employment Agreement).
16. Counterparts
This Agreement may be executed in counterparts, each of which
shall be deemed an original and all which taken together shall constitute but
one and the same instrument.
17. Acknowledgement
Ramsbottom represents and agrees that he fully understands his
right to discuss all aspects of this Agreement with his private attorney, and
that to the extent, if any, that he desired, he availed himself of such right.
Ramsbottom further represents that he has carefully read and fully understands
all of the provisions of this Agreement, that he is competent to execute this
Agreement, that his agreement to execute this Agreement has not been obtained
by any duress and that he freely and voluntarily enters into it, and that he
has read this document in its entirety and fully understands the meaning,
intent and consequences of this document.
(Signature Page Follows)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
effective as of the Effective Date specified above.
/s/ Xxxx Ramsbottom
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X. Xxxx Ramsbottom, Jr.
Address: 000 Xxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
XXXXXXXX PBE, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
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Authorized Signatory
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