SEVERANCE, RELEASE AND COOPERATION AGREEMENT
THIS AGREEMENT, made as of the 16th day of February, 2000, is entered into
by and between XXXX X. XXXXX (hereafter "Executive") and EMPLOYEE SOLUTIONS,
INC., (hereafter "Employer") and arises out of the cessation of Executive's
employment with Employer. In consideration of the material promises contained
herein, the parties agree as follows:
1. COMPENSATION AND BENEFITS. Employer agrees to pay or provide, or arrange
for the payment or provision of the following:
a. BALANCE OF SALARY. Employer will continue to pay Executive salary
at a monthly rate of $17,500 through April 7, 2000 in accordance with Employer's
normal bi-weekly payroll practices.
x. XXXXXXXXX PAYMENTS. Executive will also be entitled to severance
payments of an additional $105,000 payable in thirteen (13) equal bi-weekly
installments of $8,076.92 (less legally required withholdings) in accordance
with Employer's normal payroll practices beginning with the first regular payday
following the Termination Date (as defined in Section 2.a.). For example, if the
Termination Date is April 7, 2000, the payments under this section shall extend
from bi-weekly pay period ending April 22, 2000 through and including pay period
ending October 7, 2000.
c. FRINGE BENEFITS. Employer shall continue coverage of Executive and
Executive's dependents under its medical and dental plans at Employer's expense
through the earlier of October 2000, or the date that Executive commences other
employment and is eligible to commence group medical coverage in connection
therewith, (unless continuation of coverage under Employer's plans is not
feasible, in which event Employer shall provide substantially similar benefits
at its expense during such periods). Employer will continue to provide
Executive's automobile expense allowance on the first pay date of each month
through the earlier of (1) April 2000 or, (2) the date that Executive commences
other full-time employment or, (3) the Termination Date if the Termination Date
is earlier than April 7, 2000. Upon the first occurrence of any of these three
events, Employer shall have no further obligation for payment of automobile
expense allowance.
d. ACCRUED BUT UNUSED VACATION. Upon the first pay date following the
Termination Date, Employer will pay Executive a lump sum amount attributable to
Executive's accrued vacation days that remain unused as of the date of this
Agreement. Such amount (subject to withholding for applicable federal, state and
local taxes) will be equal to $17,769.22.
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e. REIMBURSEMENT OF BUSINESS EXPENSES. Employer will reimburse
Executive for business expenses incurred by Executive in the course of his
employment with Employer and submitted to Employer in accordance with Employer's
policies and practices regarding expense reimbursements.
f. EXPENSES. Each party shall be responsible for its own fees and
expenses (including legal fees) in connection with this Agreement.
If Executive dies prior to receiving all amounts payable hereunder, all
remaining amounts will be paid to Executive's spouse or, if she is not then
living, to his estate.
2. RESIGNATION.
a. This Agreement will reflect Executive's resignation as Employer's
Senior Vice President and Corporate Secretary and any office or position with
any of Employer's subsidiaries, effective as of January 6, 2000. Employer will
take with all reasonable speed those actions necessary so that Executive is
removed as a "controlling person" of Employer and/ or its subsidiaries in
Florida, Texas and any other applicable jurisdiction. The Employment Agreement
dated March 19, 1997 between Employer and Executive is hereby terminated for all
purposes. Executive's employment with Employer shall terminate automatically on
April 7, 2000 or such earlier date as is specified by Executive in writing (the
"Termination Date"), provided that the reason for Executive's notification of
said earlier termination date shall be exclusively due to his commencement of
employment with a new employer. If Executive specifies a Termination Date prior
to April 7, 2000, there shall be no change to the aggregate amount of payments
due under Section 1.a. and 1.b. of this Agreement or the method of payment of
such amount, but any remaining amounts due under Section 1.a. after such earlier
specified termination date shall be characterized as severance rather than
salary. If Executive specifies an earlier termination date in accordance with
the provisions above, payments for automobile expense allowance described in
Section 1.c. will cease as of the termination date so specified.
b. Employer will not disclose to any third party any information
relating to Executive's resignation other than the information contained in an
email distributed to all of Employer's employees on January 7, 2000 or such
additional information as may otherwise be required by law.
c. Employer will continue to retain Executive for corporate and
securities legal services subject to and pursuant to an engagement letter
mutually agreed upon by Executive and Employer and provided that Executive
affiliates with a law firm acceptable to Employer (in a reasonable time frame)
with an established practice in such areas.
d. Employer shall direct employees assigned to answer telephones to
advise callers who ask for Executive that Executive has resigned and that
Executive is continuing to provide post-resignation corporate and securities law
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services to Employer, and to provide callers who wish to speak with Executive
other than with respect to Employer's business with Executive's home telephone
number (or such other number as Executive may specify).
e. Employer further agrees that it will maintain Executive's personnel
records and personnel information in confidence and will not release any
information other than Executive's dates of employment by the Employer and job
title to any person without the express written consent of Executive, except as
required by law. Notwithstanding the foregoing sentence, Employer will provide a
positive reference for Executive with respect to Executive's securities-related
corporate services if requested by Executive.
f. Employer (meaning, solely for this purpose, Employer's directors
and executive officers and other individuals authorized to make official
communications on Employer's behalf) will not disparage Executive or Executive's
performance or otherwise take any action which could reasonably be expected to
adversely affect Executive's personal or professional reputation. Similarly,
Executive will not disparage Employer or any of its directors, officers, agents
or employees or otherwise take any action which could reasonably be expected to
adversely affect the personal or professional reputation of Employer or any of
its directors, officers, agents or employees.
3. STOCK OPTIONS. Executive's current stock options, as evidenced in
Employer's minutes or grant letters, shall remain outstanding pursuant to their
terms for 90 days past the Termination Date. Options that are exercisable on the
Termination Date shall remain exercisable during such 90-day period.
4. RELEASE. Executive hereby fully and forever releases and discharges
Employer and its parents, affiliates and subsidiaries, including all
predecessors and successors, assigns, officers, directors, trustees, executives,
agents and attorneys, past and present (collectively, the "Released Parties")
from any and all claims, demands, liens, agreements, contracts, covenants,
actions, suits, causes of action, obligations, controversies, debts, costs,
expenses, damages, judgments, orders and liabilities, of whatever kind or
nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising out of Executive's employment by Employer or the termination
thereof, including, but not limited to, any claims for relief or causes of
action under federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law. By this agreement Executive affirms that he is releasing all
claims for age discrimination or any other legal rights or claims pursuant to
the Age Discrimination in Employment Act as amended by the age discrimination
provisions of applicable state laws that exist as of the date of the execution
of this agreement, whether presently known or hereafter discovered. In
connection with this release for any or all claims of age discrimination,
Executive has been given the opportunity to consider entering into this
Agreement for twenty-one (21) days preceding its execution. Executive
acknowledges that he has had the opportunity to be represented by independent
legal counsel prior to the execution of this Agreement, as well as the
opportunity to consult with legal counsel as to the meaning and legal
significance of this Agreement. The foregoing release does not extend to (i)
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claims solely to enforce Employer's obligations under this Agreement; or (ii)
claims solely to enforce the Non-Director Officer's Indemnification Agreement
between Employer and Executive dated November 21, 1996, or claims for
indemnification under any applicable law of Employer's Articles of Incorporation
or By-laws (collectively with the Non-Director Officer's Indemnification
Agreement, the "Indemnification Agreements").
5. REVOCATION. Executive understands that he may revoke this agreement
within seven (7) days after the agreement has been signed by all parties
("Revocation Period"). During this Revocation Period, Executive understands that
no payment will be made under Section 1.b of this agreement, even it said
payment would otherwise have been paid in accordance with the terms of that
section. Executive further understands that if the agreement is not revoked
within or by the conclusion of the Revocation Period, the agreement will be
effective and enforceable. In order to revoke this agreement, Executive must
deliver to Employer at 0000 X. 00xx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, a signed
letter or other written notice stating that he is canceling or revoking the
agreement. Executive also understands that under these circumstances, Employer
has no obligation to pay any of the consideration described in Section 1.b or in
Section 1.c if the consideration in Section 1.c would have otherwise occurred
absent the revocation, after the Termination Date.
6. COOPERATION AGREEMENT. Executive further agrees that he will cooperate
fully with Employer and its counsel with respect to any matter (including
litigation, investigations, or governmental proceedings) with which Executive
was involved in his capacity as General Counsel or Corporate Secretary during
the term of employment with Employer. Executive will be available to perform
such services on a reasonable basis to the extent requested by Employer,
including on a full-time basis as needed, until the Termination Date.
Thereafter, Executive will be available to perform such services to the extent
reasonably requested by Employer for up to an average of 15 hours per month
through October 7, 2000. The times and places for the performance of these
services will be mutually agreeable to the parties, and Employer agrees to
cooperate with Executive in scheduling such services to minimize disruption of
any new employment or similar relationship which Executive may have commenced.
Subject to the foregoing sentence, Executive shall render such cooperation in a
timely manner on reasonable notice from Employer, and agrees to travel as
reasonably requested by Employer in connection with performing such services.
Employer will reimburse Executive's reasonable out-of-pocket expenses incurred
in connection with providing such services in accordance with Employer's
policies as in effect from time to time.
7. RETURN OF EMPLOYER PROPERTY. Employer acknowledges receipt of all
documents and files from Executive, as well as Employer property such as
Executive's personal digital assistant. Employer acknowledges that Executive may
possess copies of Employer-related documents from time to time as needed to
provide requested services. On or prior to the earlier of the Termination Date,
or the date that Executive commences other employment, Executive will return to
Employer the cellular phone and accessories previously furnished to Executive.
The business use (and incidental personal use) of the cellular phone during this
period is intended for the Executive only, as reasonable and necessary in the
performance of services for the Employer. Other office equipment purchased by
Employer for Executive's use (e.g. a laptop computer and docking station,
discarded desktop computer and fax machine) will become property of Executive
and need not be returned to Employer.
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8. EXECUTIVE'S ACKNOWLEDGMENT. Executive has fully reviewed the terms of
this Agreement, acknowledges that he understands the terms of this Agreement and
states that he is entering into this Agreement knowingly and voluntarily.
9. EXECUTIVE'S SUCCESSORS. This Agreement will be binding upon and inure to
the benefit of the parties hereto, their representatives, agents and assigns,
and as to Executive, his spouse, heirs, legatees, administrators and personal
representatives.
10. ENTIRE AGREEMENT OF THE PARTIES. This Agreement, together with the
Indemnification Agreements and Employee's confidentiality/noncompete agreement,
constitutes the exclusive and complete agreement between the parties hereto
relating to the subject matter hereof. No amendment of this Agreement will be
binding unless in writing and signed by the parties.
11. SEVERABILITY. The provisions of this Agreement are severable. If any
provision or the scope of any provision is found to be unenforceable or is
modified by a court of competent jurisdiction, the other provisions or the
affected provisions as so modified shall remain fully valid and enforceable.
12. GOVERNING LAW. This Agreement shall be governed by the law of the
Arizona, without regard to the application of the principles of conflicts of
laws. Exclusive venue for any dispute or disagreement with respect to this
Agreement shall lie in Maricopa County, Arizona.
13. COMMUNICATIONS. Executive shall not discuss, with any ESI employee or
any other person, any matter relating to Employer or its subsidiaries,
affiliates, officers, directors, employees or agents without the prior written
authorization of Employer's Chief Executive Officer. The foregoing shall not
apply to (i) communications to persons other than Employer's employees and
independent contractors consisting solely of information publicly available
through Employer's Securities and Exchange Commission filings or press releases;
(ii) communications in the course of services being provided to persons with a
need to receive such communications to perform the specific business functions
with respect to which Executive has been requested to provide services; (iii)
factual communications to prospective employers concerning Executive's duties
and responsibilities with Employer to the extent necessary in connection with
job interviews; or (iv) testimony in a judicial or administrative proceeding.
14. TENDER BACK. Should Executive attempt to challenge the enforceability
of this Agreement or any provision herein, or attempt to initiate any legal
proceedings, including but not limited to administrative agency or court
proceedings arising out of or related to Executive's employment or termination
of employment with Employer, Executive shall initially tender to Employer, by
certified check delivered to counsel for Employer, the full amount of cash
consideration paid to him hereunder, plus interest at the legal rate from the
date of Executive's execution of this Agreement, and shall invite Employer to
cancel this Agreement. If Employer accepts the offer to cancel the Agreement,
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this Agreement shall be canceled. If Employer does not accept this offer to
cancel, Employer shall so notify Executive and shall place the amount tendered
by Executive in an interest-bearing account pending a determination of the
enforceability of this Agreement. If the Agreement is determined to be
enforceable, 100% of the amount of the account shall be repaid to Executive; if
this Agreement is not determined to be enforceable, the amount in the account
shall be retained by Employer or its designee. This Section 14 shall not be
applicable to actions brought by Executive to enforce Employer's obligations
hereunder.
IN WITNESS WHEREOF, the undersigned acknowledge that they have executed
this instrument as their free and voluntary act, for the uses and purposes set
forth herein on the dates set forth below.
EMPLOYEE SOLUTIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------------
Title: Chief Executive Officer
Date: February 16, 2000
XXXX X. XXXXX
By: /s/ Xxxx X. Xxxxx
------------------------------------
Date: February 10, 2000
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