EXHIBIT 10.28
TERMINATION AND CONSULTING AGREEMENT - Xxxxxxx Xxxxxxxxx
This Termination and Consulting Agreement (hereinafter "Agreement") is
entered into under seal this 27th day of September 1999, by Xxxxxxx X. Xxxxxxxxx
("Xxxxxxxxx") and Carnegie International Corporation ("Carnegie" or the
"Company") (Xxxxxxxxx and Carnegie are sometimes referred to herein collectively
as the "Parties").
RECITALS
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WHEREAS, Xxxxxxxxx and Carnegie entered into an Employee Agreement
("Employment Agreement") dated February 1999, by which Xxxxxxxxx agreed to
become employed by Carnegie and Carnegie agreed to employ Xxxxxxxxx in the
capacity of Executive Vice President and Chief Financial Officer of Carnegie,
commencing on or about February 15, 1999.
WHEREAS, Carnegie has employed Xxxxxxxxx and Xxxxxxxxx has served in
the capacity as Executive Vice President and Chief Financial Officer of Carnegie
from on or about February 15, 1999 through the date of this Agreement.
WHEREAS, Carnegie and Xxxxxxxxx have mutually agreed to terminate
Xxxxxxxxx'x employment with Carnegie, to terminate and cancel the terms of the
Employment Agreement, to enter into an independent consulting arrangement, and
to provide each other with certain further agreements in connection with the
termination of the employment relationship, all as set forth herein.
NOW, THEREFORE, in consideration of the mutual undertakings and
agreements of the Parties hereto, the receipt and adequacy of which
consideration is hereby expressly acknowledged, the Parties hereto agree under
seal as follows:
1. Termination of Employment. Xxxxxxxxx and Carnegie agree that
Xxxxxxxxx'x employment with Carnegie was terminated effective September 10,
1999, by mutual agreement of the Parties. Xxxxxxxxx shall confirm his
resignation from the position of Executive Vice President and Chief Financial
Officer of Carnegie, together with all other offices or positions he holds with
Carnegie, by letter dated and delivered on or before September 30, 1999.
2. Cancellation of Employment Agreement. Xxxxxxxxx and Carnegie hereby
agree and acknowledge
that the Employment Agreement, together with all of its covenants, promises and
terms, shall be and is terminated, cancelled and voided, so that it shall no
longer be legally operative or of any force and effect.
3. Consulting Agreement. Xxxxxxxxx and Carnegie agree that for a period
of six months from September 10, 1999 he will perform certain consulting
services for Carnegie, and will be available during regular business hours to
advise, counsel and inform designated officers and employees of Carnegie about
the industry, business, customers, budgeting, finances, expenses, marketing and
other aspects of or concerning Carnegie's business about which Xxxxxxxxx has
knowledge or expertise. Xxxxxxxxx shall provide such services if and when
requested, from time to time, by Carnegie's executive officers or by its board
of directors. Notwithstanding the foregoing, Xxxxxxxxx shall have no obligation
to perform a specified number of hours of consulting services per week.
Xxxxxxxxx and Carnegie agree that the consulting services to be provided by
Xxxxxxxxx to the Company will be performed in a capacity as independent
contractor, and not as an employee. Xxxxxxxxx and Carnegie also agree that
Xxxxxxxxx shall have no right or authority at any time to make any contract or
binding promise of any nature on behalf of Carnegie, either oral or written,
without the advance express written consent of an authorized representative of
the Company.
4. Compensation as Consultant and Severance Benefits. Xxxxxxxxx and
Carnegie agree that Carnegie shall provide to Xxxxxxxxx the following
consideration in connection with the consulting services, the termination of the
employment and the cancellation of the Employment Agreement, as described in
paragraphs 1, 2 and 3 above.
x. Xxxxxxxx shall continue to pay to Xxxxxxxxx, for a period of
six months from September 13, 1999, compensation totaling $87,500 in thirteen
equal bi-weekly installments of $6,730.77, without withholding.
b. Subject to the qualification set forth in the last sentence
of this paragraph, Carnegie will continue to pay health insurance premiums under
its health plan on behalf of Xxxxxxxxx for six months following the date of this
Agreement, so as to provide to the extent feasible the same or equivalent
coverage to that which Xxxxxxxxx currently receives under Carnegie's health care
insurance plan. The Parties acknowledge that the health care coverage may be
provided by Carnegie's insurance carrier through Xxxxxxxxx'x COBRA rights and,
if so, Xxxxxxxxx agrees that Carnegie may comply with the obligations set forth
in this subparagraph in that manner with the proviso and understanding that
Carnegie shall pay the premiums as provided in this subparagraph. Carnegie will
have no obligation to provide or pay for health insurance coverage in the event
he becomes employed by an entity that offers health insurance as a benefit
generally to its employees.
x. Xxxxxxxx agrees to provide, promptly after seven (7) days
following the final execution of this Agreement, purchase warrants entitling
Xxxxxxxxx to purchase 100,000 shares of the common stock of Carnegie at the
price of $2.50 per share. It is agreed and understood between Carnegie and
Xxxxxxxxx that the warrants shall have a cashless exercise provision or feature,
and that warrants for 33,334 shares will vest on the first anniversary of the
date of this Agreement, warrants for 33,333 shares of Carnegie stock will vest
on the second anniversary of the date of this Agreement, and warrants for 33,333
shares of common stock of Carnegie shall vest on the third anniversary of the
date of this Agreement. The warrants for all 100,000 shares of common stock
shall expire thirty (30) days after the third anniversary of this Agreement. The
specific terms of the warrants shall be governed by a separate Warrant Agreement
or the warrants themselves, the economic terms of which shall be in substance
identical to those stated in this paragraph, and which otherwise shall contain
ordinary and customary terms for warrants issued by Carnegie.
5. Accrued and Unpaid Benefits. Carnegie will pay Xxxxxxxxx for any
accrued but unpaid benefits, if any, through September 10, 1999, in accordance
with Carnegie's established policies, including but not limited to auto
allowance, professional dues, life insurance and disability insurance.
6. Expense Reimbursements and Refunds. Carnegie agrees to reimburse
Xxxxxxxxx for all reasonable, legitimate and authorized business expenses
incurred by Xxxxxxxxx in connection with his duties as Executive Vice President
and Chief Financial Officer of Carnegie prior to September 10, 1999. Such
expenses shall be reimbursed in the ordinary course of business consistent with
standard internal practices and policies of Carnegie. Xxxxxxxxx agrees to
reimburse or refund to Carnegie any expenses he has incurred with Company funds,
through the use of Company credit cards, cash advances or any other means, which
were personal in nature and/or not reasonable, legitimate and authorized
business expenses of Carnegie. The Company and Xxxxxxxxx agree to work with each
other reasonably and cooperatively to identify any such business expenses or
personal expenses, and in connection therewith, Xxxxxxxxx agrees to provide
sufficient information and documentary backup to document his claim to business
expenses.
7. Return of Company Property. Xxxxxxxxx agrees to return promptly, and
in no event later than seven (7) days after the date of this Agreement, all
credit cards, keys, records, documents, files of every nature, policy manuals,
security access cards, computer-stored material, financial information,
equipment (including mobile telephones and computers) and all other property of,
or relating to the operations and affairs of, Carnegie. Any
records, files or documents relating in any manner to the operations and affairs
of Carnegie, or copies thereof, which Xxxxxxxxx desires to maintain in his
possession shall be provided to the President of Carnegie, and permission shall
be obtained from the President by Xxxxxxxxx before such records, files or
documents shall or may be retained by Xxxxxxxxx. Notwithstanding any provision
of this paragraph to the contrary, Xxxxxxxxx shall prepare a schedule of
property and documents returned to the Company, which schedule shall be
acknowledged by the President, in writing. Xxxxxxxxx and Carnegie shall each be
entitled to retain copies of said schedule.
8. Acknowledgement of Return of Confidential Property. Xxxxxxxxx
acknowledges that the records, files and documents relating to the operations
and affairs of Carnegie which he has used, reviewed or prepared in conjunction
with his employment as Executive Vice President and Chief Financial Officer of
Carnegie, and any copies thereof, are proprietary to Carnegie and confidential
in nature. Xxxxxxxxx hereby acknowledges that all such records, files and
documentation constitute the property of Carnegie and that he has or will,
consistent with paragraph 6 hereof, return all such property to the President of
Carnegie or obtain express permission from the President to retain such
materials.
9. Covenants to Cooperate and Representations and Waivers Regarding
Possible Conflicts of Interest.
x. Xxxxxxxxx hereby covenants and agrees to cooperate in all
reasonable ways with Carnegie in the defense of certain lawsuits brought as
putative class actions by certain shareholders of Carnegie (the "Putative Class
Action Lawsuits"). Such cooperation will include, but not be limited to, making
himself available at reasonable times and upon reasonable notice to the Company
and its counsel to consult with regard to issues raised in the lawsuits, to
provide full and accurate information and input relating to the issues in the
lawsuit, and to make himself available for deposition and trial testimony, to
the extent requested by the Company or its counsel.
x. Xxxxxxxxx hereby covenants and agrees that, as of the date of
this Agreement, he is aware of no conflicting interests between the Company or
its various officers and directors, on the one hand, and Xxxxxxxxx, on the other
hand, relating to the issues raised in the Putative Class Action Lawsuits and
that consequently, he is aware of no circumstances at the present time which
would give rise to a conflict of interest on the part of legal counsel currently
representing the Company and various directors and officers (including
Xxxxxxxxx) who are defendants in the Putative Class Action Lawsuits.
Furthermore, Xxxxxxxxx hereby covenants and agrees that, to the extent in the
future conflicting interests arise between the Company and/or any of its
directors or officers and
Xxxxxxxxx such that current legal counsel representing these parties can no
longer continue to represent all of these parties, then in that event Xxxxxxxxx
will seek new legal counsel and will not argue or maintain that the current
legal counsel for the Company and its various officers and directors are
required to withdraw from their representation of any of the other parties
because or by virtue of their prior representation of Xxxxxxxxx in the Putative
Class Action Lawsuits. Xxxxxxxxx hereby waives any such conflict of interest and
consents to legal counsel's continued representation of the Company and other
officers and directors of the Company in the event such future conflict may
appear or arise. In addition, in the event a conflict of interest arises in the
future, Xxxxxxxxx agrees to continue to cooperate, in the manner described
above, with the Company and its counsel in the defense of the claims asserted in
the Putative Class Action Lawsuit, and further agrees to continue to abide by
the terms of any joint defense agreement which may have been entered into by
Xxxxxxxxx and other parties prior to the time any such future conflict appears
or, in the event no such joint defense agreement has at that time been entered
into, to enter into a joint defense agreement with the Company and its directors
and officers containing standard terms and conditions.
10. Releases.
a. In consideration of the agreements set forth herein and other
good and valuable consideration, Xxxxxxxxx, together with his heirs, successors
and assigns, hereby release and forever discharge Carnegie, its affiliate and
subsidiary corporations, and its directors, officers, employees, representatives
and attorneys, from any and all manner of action, cause and causes of action,
suits, debts, dues, duties, sums and sums of money, accounts, reckonings, bonds,
bills, specialties, covenants, contracts, agreements, promises, warranties,
damages, judgments, expenses, execution, claims and demands whatsoever, in law,
equity or mixed, whether known or unknown, whether appreciated or unappreciated,
which Xxxxxxxxx ever had, now has or which he or his heirs, successors or
assigns can, shall or may have, in connection with any matter relating to or
arising out of or in connection with Xxxxxxxxx'x employment with Carnegie, the
Employment Agreement, or any statements, actions or inactions on the part of
Carnegie in connection with the employment relationship. This release includes,
but is not limited to, any such claim under Title VII of the Civil Rights Act of
1964, as amended, any state or local fair employment practices law, the
Rehabilitation Act of 1973, the Americans With Disabilities Act, any state or
federal law regarding wages, benefits or employment practices, The Family and
Medical Leave Act, the Employee Retirement Income Security Act, the Age
Discrimination in Employment Act, or any other federal, state or local law or
common law, whether before any state or federal court, administrative agency,
civil rights commission or other
forum.
b. In consideration of the agreements set forth herein and other
good and valuable consideration, Carnegie, together with its successors and
assigns, hereby releases and forever discharges Xxxxxxxxx, and his heirs,
successors and assigns, from any and all manner of action, cause and causes of
action, suits, debts, dues, duties, sums and sums of money, accounts,
reckonings, bonds, bills, specialties, covenants, contracts, agreements,
promises, warranties, damages, judgments, expenses, executions, claims, and
demands whatsoever, in law, equity or mixed, whether known or unknown, whether
appreciated or unappreciated, which Carnegie ever had, now has or which Carnegie
or its successors or assigns can, shall or may have in connection with any
matter relating to or arising from Xxxxxxxxx'x employment with Carnegie, the
Employment Agreement, or any statement, action or inaction on the part of
Xxxxxxxxx in connection with the employment relationship. It is expressly agreed
and understood that the scope of this release by Carnegie of Xxxxxxxxx does not
include any of his actions or any potential claims the Company may have against
Xxxxxxxxx arising in connection with matters other than Xxxxxxxxx'x employment
with Carnegie.
11. Covenant Not to Xxx.
x. Xxxxxxxxx hereby covenants not to xxx Xxxxxxxx, its affiliate
or subsidiary corporations, or its directors, officers, employees,
representatives and attorneys, for any of the claims or other matters which are
the subject of the release provided by Xxxxxxxxx in paragraph 10 a. above.
x. Xxxxxxxx hereby covenants not to xxx Xxxxxxxxx, in his
individual capacity, for any matters relating to or arising in connection with
Xxxxxxxxx'x work for Xxxxx Xxxxxxxx prior to the time Xxxxxxxxx became employed
by Carnegie. This provision shall not be construed to limit in any manner
Carnegie's right or ability to maintain any claims it might have against Xxxxx
Xxxxxxxx in connection with the services rendered by Xxxxx Xxxxxxxx (through
Xxxxxxxxx or otherwise) to the Company at any time.
12. Certain Notices to Xxxxxxxxx. Carnegie hereby provides notice to
Xxxxxxxxx that he has twenty-one (21) days from the date this Agreement is
furnished to him to consider the terms of this Agreement before signing it.
Carnegie has further advised Xxxxxxxxx that he may wish to discuss this
Agreement with an attorney, and Carnegie understands that Xxxxxxxxx is, indeed,
represented by counsel in connection with the negotiation and consummation of
this Agreement. Further, Carnegie hereby provides notice that, for a period of
seven (7) days following the execution of this Agreement, Xxxxxxxxx may revoke
it, and this Agreement shall not become finally effective and
enforceable until the revocation period has expired.
13. Agreements Relating to Indemnification. The Company and Xxxxxxxxx
agree that the contractual indemnity provision set forth in paragraph 12 of the
Employment Agreement, consistent with paragraph 2 of this Agreement, shall be
deemed terminated, cancelled and voided, and of no further effect. Carnegie
shall indemnify and hold Xxxxxxxxx harmless from any and all claims or demands
made against him by any party as a result of any act, omission, or decision made
by him in good faith during the term of his employment by the Company. Carnegie
shall maintain Directors and Officers insurance coverage for any such acts,
omissions or decisions. In the event that insurance coverage is unavailable
and/or inadequate to provide a defense to any such claim, Carnegie shall pay all
expenses, including reasonable fees and related disbursements of attorneys and
other professionals actually and necessarily incurred by Xxxxxxxxx in connection
with the defense of such act, omission or decision in any threatened or actual
suit or proceeding.
14. Acknowledgments and Representations by Xxxxxxxxx. Xxxxxxxxx hereby
acknowledges, covenants and represents that he is aware of no improper or
illegal actions having been committed by any of the officers, directors or
employees of Carnegie in connection with the affairs and business of Carnegie.
By "improper or illegal actions," Xxxxxxxxx means any actions which would
constitute a violation of any federal or state law (including without limitation
any laws regulating the purchase or sale of securities), any actions committed
by a director, officer or employee inconsistent with such person's fiduciary
duties to Carnegie, or any action taken by the Company, or any of its directors,
officers or employees, which would give rise to a clear cause of action on the
part of a third party against the Company for any liability. Xxxxxxxxx hereby
acknowledges that he is voluntarily agreeing to terminate his employment with
the Company for personal reasons and in order to pursue other employment and
professional opportunities.
15. Payment of Xxxxxxxxx'x Attorney's Fees. Carnegie shall pay within
seven (7) days of the date of this Agreement, directly to Xxxxxxxxx'x counsel,
Xxxxxxx & Xxxxx, Xxxxxxxxx'x attorney's fees incurred to date in connection with
the defense of the class action lawsuits, interpretation of his rights under his
Employment Agreement, and representation in connection with work performed by
Xxxxx Xxxxxxxx. This payment obligation shall in no event exceed Twelve Thousand
Five Hundred Dollars ($12,500.00). Xxxxxxx & Xxxxx shall provide to Carnegie and
its counsel, within three (3) days of the date of this Agreement, a copy of its
xxxx, showing in reasonable detail the fees and expenses incurred on a daily
basis.
16. Withholding Taxes. Carnegie shall indemnify and hold Xxxxxxxxx
harmless from any and all claims, irrespective of how asserted, in connection
with any nonpayment of withholding taxes or other trust fund contributions
incurred on account of compensation paid to Carnegie employees.
17. Miscellaneous Provisions
a. Further Assurances. The Parties hereto hereby agree to do
such further acts and things, and to execute and deliver such additional
conveyances, assignments, agreements and instruments from time to time, as
either of them may at any time reasonably request in order to better assure and
confirm unto each party their respective rights, powers and remedies conferred
hereunder.
b. No Agency. This Agreement shall not be deemed to constitute
the Parties hereto as partners or joint ventures, nor shall either party hereto
be deemed to be an agent of any nature, kind or description whatsoever of the
other.
c. Severability. If any term or condition of this Agreement
shall be held invalid by a court, arbitrator or tribunal of competent
jurisdiction in any respect, such invalidity shall not affect the validity of
any other term or condition hereof. If any term or condition of this Agreement
shall be held to be unreasonable as to time, scope or otherwise by such a court,
arbitrator or tribunal, it shall be construed by limiting or reducing it to the
minimum extent so as to be enforceable under the then applicable law. The
Parties hereto acknowledge that they would have executed this Agreement with any
such invalid term or condition excluded or with any such unreasonable term or
condition so limited or reduced.
d. Entire Agreement; Amendment. This Agreement constitutes the
entire agreement of the Parties with regard to the specific subject matter
hereof and supersedes all prior written and/or oral understandings between the
Parties. As the final written expression of all of the agreements and
understandings among the Parties hereto, this Agreement is an exhaustive and
complete expression of the Parties' intent and, therefore, may be modified only
by a writing signed by all of the Parties.
e. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall neither be considered a
waiver nor deprive that party of any right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing and signed by
the party to be charged therewith.
f. Binding Effect. This Agreement shall be binding upon, and
inure to the benefit of, the heirs, personal representatives, legal successors
and assigns of the respective Parties hereto. Nothing in this Agreement shall be
construed as granting to any person or entity whatsoever other than the Parties
hereto and their respective heirs, successors and assigns, any remedy, claim or
other privilege or right under or in respect of this Agreement or any provision
hereof.
g. Construction. This Agreement shall be governed, enforced,
performed and construed in accordance with the laws of the State of Maryland
(excepting those conflicts of laws provisions which would serve to defeat
application of Maryland substantive law).
h. Counterparts. Provided that all Parties hereto execute a copy
of this Agreement, this Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument. Executed copies of this Agreement may be delivered by
facsimile transmission or other comparable means.
i. Headings; Recitals. The headings contained herein are
included solely for the ease of reference and in no way shall limit, expand or
otherwise affect either the substance or construction of the terms and
conditions of this Agreement or the intent of the Parties hereto. The Recitals
set forth on the first page of this Agreement are an integral part hereof.
j. Voluntary Agreement. The Parties hereto represent that they
have carefully read the foregoing Agreement, understand its terms, consulted
with an attorney of their choice, and voluntarily signed the Agreement as their
own free act with intent to be fully and legally bound thereby. The terms of
this Agreement are contractual and not a mere recital.
k. Authority. Each of the Parties hereto represents unto the
other that the person executing this Agreement on his or its behalf has full
authority to bind that party to the terms of this Agreement.
l. Time of the Essence. Time is of the essence with respect to
the performance of this Agreement.
m. Notices. Any notice, demand or other communication required
or permitted by this Agreement shall be either in writing and mailed, forwarded
by telecopy or delivered by hand to the applicable party or Parties at the
addresses indicated below:
If to Xxxxxxxxx:
----------------
Xxxxxxx X. Xxxxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
with a copy to:
Xxxxxx Xxxxxx
Xxxxxxx & Xxxxx
0000 Xxx Xxxx Xxxxxx, X.X.
Xxxxxxxxx
Xxxxxxxxxx, XX 00000
If to Carnegie:
---------------
Xxxxxx Xxxxxx
President
Executive Xxxxx 0, Xxxxx 0000
Carnegie International Corporation
00000 XxXxxxxxx Xxxx
Xxxx Xxxxxx, XX 00000
with a copy to:
Xxxxxxxxx X. Xxxxxx, Esq.
Miles & Stockbridge P.C.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
IN WITNESS WHEREOF, the undersigned Parties have executed this
Agreement under seal as of the date first above written:
WITNESS/ATTEST:
