EXHIBIT 10.26
AMENDMENT TO EMPLOYMENT AGREEMENT
AND RELEASE
THIS AMENDMENT TO EMPLOYMENT AGREEMENT AND RELEASE (this "Amendment") is
dated as of the 21st day of January 2000 by and between XXXXXX X. XXXXX
("Employee"), and GARGOYLES, INC., a Washington corporation (the "Company").
RECITALS
A. Employee and the Company are parties to that certain Employment
Agreement dated as of June 14, 1999 (the "Employment Agreement").
B. Subject to the terms and conditions set forth herein, the parties
desire to terminate the Employment Agreement and to resolve all matters related
thereto.
C. Capitalized terms used but not otherwise defined herein shall have
the meanings set forth in the Employment Agreement.
AGREEMENT
1. TERMINATION OF EMPLOYMENT AGREEMENT. Subject to the terms and
conditions of this Amendment, the parties have agreed to terminate the
Employment Agreement as of January 21, 2000 (the "Termination Date").
2. SEVERANCE BENEFITS.
(a) AMENDMENT TO SECTION 6.5. Section 6.5 of the Employment
Agreement shall be amended to provide that the $200,000 severance payment (the
"Severance Payment") to be made to Employee upon termination of the Employment
Agreement shall be paid in four equal installments of $50,000 on each the date
of this Amendment, February 22, March 22, and April 21 in the year 2000. If
Employer fails to pay an installment of the Severance Payment on the date
specified, then the Company's obligation to pay the Severance Payment shall be
accelerated, and the entire balance of the Severance Payment shall be due and
payable to Employee.
(b) EXPENSE REIMBURSEMENT. Employee will be reimbursed for any
reasonable expenses incurred by Employee prior to the Termination Date on
behalf of the Company, subject to the receipt by the Company of all supporting
documentation. Employee understands that after the Termination Date Employee is
no longer authorized to incur expenses or to make commitments on behalf of the
Company.
(c) FTO. Employee understands that he will accrue no further
Flexible Time Off from and after the Termination Date. On the Termination
Date, Employee will be paid for any earned but unused Flexible Time Off
benefits, less all required and authorized deductions.
(d) COBRA; LIFE AND DISABILITY INSURANCE. In accordance with
Section 6.5 of the Employment Agreement, for a period of twelve (12) months
after the Termination Date or until Employee is covered under another Employer-
sponsored medical plan, the Company will reimburse Employee for such portion of
Employee's COBRA benefits equal to the contribution amount the Company would
otherwise have paid towards Employee's medical and dental coverages under the
Company's group medical and dental benefits plans if Employee had been employed
by the Company during such twelve-month period. After that time, Employee may
elect to pay for COBRA medical and dental plan continuation coverage for
another six months, until Employee is entitled to Medicare, or until Employee
is covered under other plans with no pre-existing exclusion. The insurance
provider will provide Employee with further information about his COBRA rights
after the Termination Date.
It is the understanding of the Company that the Company can maintain Employee's
life and disability coverage for the next twelve months through Fortis Benefits
Insurance Company, the provider of the Company's Group Life and Long-term
Disability coverage, so long as Employee completes the Extended Employee
Enrollment form to be provided by Fortis. The Company will continue Employee's
life and disability coverage through Fortis on condition that Employee
completes such forms and satisfies any conditions precedent for Employee's
continued coverage.
(e) ELIGIBILITY FOR UNEMPLOYMENT. Employee understands that while
the Company has no authority to determine unemployment benefits, the Company
will not attempt to interfere or deny such benefits if and when they should
become available to Employee.
3. STOCK OPTIONS. As of the Termination Date, Employee is vested in
17,500 options to purchase the Company's common stock, at an exercise price of
$0.32 per share. Employee understands that he will not continue to vest in any
more options, that his rights to unvested options shall immediately terminate,
and that the vested options will continue to be governed by the Gargoyles, Inc.
1995 Stock Incentive Compensation Plan, as Amended and Restated on July 22,
1996 (the "Plan"). Under the terms of the Plan, Employee's right to exercise
the vested options shall terminate on April 21, 2000.
4. COMPLETE RELEASE OF CLAIMS. By signing this Agreement, the Company
and Employee agree not to start any lawsuits, charges, or other legal action
against the other relating to Employee's employment with the Company or the
benefits that Employee received or should have received from the Company
(except with respect to a breach of the Company's obligations under this
Amendment or the Employee's obligations under Section 7 through 9 of the
Employment Agreement, which are not released by this Section 4). In addition,
the Company and Employee, for itself and himself and for each of their
respective heirs, representatives, executors, and successors or assigns, waives
any rights or claims each may have against the other, any employee benefit
plans sponsored by the Company in which Employee participated, and any of the
Company's or Employee's affiliated and related entities, owners, shareholders,
officers, directors, trustees, agents, spouses. employees, employees' spouses,
insurers, either past or present, and all of their successors, agents or
assigns (collectively "Releasees"). The Company and Employee each hereby
releases the Releasees from any and all claims, actions, causes of action,
obligations, costs, expenses, damages, losses, debts, and demands, including
attorneys' fees and costs actually incurred (collectively "Claims") of whatever
kind, in law or in equity, known or unknown, suspected or unsuspected, which
arose prior to the Termination Date.
This release includes, but is not limited to: (i) any Claims under any
local, state or federal laws regulating employment, including without
limitation, the Civil Rights Acts, the Age Discrimination and Employment Act,
the Americans with Disabilities Act, the Workers' Adjustment and Retraining
Notification Act, and the Washington State Law Against Discrimination; (ii)
Claims under the Employee Retirement Income Security Act; (iii) Claims under
any local, state or federal wage and hour laws; or (iv) Claims alleging any
legal restriction on the Company's right to terminate their employees, or
personal injury claims, including without limitation wrongful termination,
discrimination, harassment, breach of contract, defamation, tortuous
interference with business expectancy, black listing, or infliction of
emotional distress, whether arising under statute or common law.
5. CONTINUATION OF CONFIDENTIALITY PROVISIONS. Employee understands
that as of the Termination Date the Term of the Employment Agreement is
terminated and Employee has no further obligations to the Company under the
Employment Agreement, or otherwise, except for the terms set forth in Sections
7 through 9 of the Employment Agreement relating to "Intellectual Property;
Nondisclosure of Confidential Information; Covenant Not to Compete, Dispute
Resolution, and Enforcement", which shall remain in effect following the
Termination Date in accordance with their terms.
6. CONSULTATION WITH LEGAL COUNSEL. Employee has carefully read all of
the provisions of this Amendment, and further acknowledges that the Company has
encouraged Employee to review and discuss all aspects of this Amendment with
legal counsel and that he has taken advantage of that opportunity to the full
extent that he deemed appropriate.
7. CONSIDERATION PERIOD; REVOCATION PERIOD. Employee acknowledges that
he has been given 21 days to consider this Amendment, and that he was given the
option to sign the Amendment in fewer than twenty-one (21) days if he so
desired. Employee understands that this Amendment will not be effective for
seven (7) days after it is signed by the Company and Employee, and that
Employee may revoke this Amendment at any time during that seven-day period.
Employee acknowledges, however, that any severance payments made to Employee in
accordance with this Amendment prior to any revocation must be repaid to the
Company in full as a condition to any such revocation becoming effective.
8. VOLUNTARY AGREEMENT. Employee understands and acknowledges the
significance and consequences of this Amendment, that it is voluntary, that it
has not been given as a result of any coercion, and expressly confirms that it
is to be given full force and effect according to all of its terms, including
those relating to unknown Claims.
9. SUCCESSORS. This Amendment shall be binding upon the parties hereto
and their heirs, representatives, executors, administrators, successors and
assigns, and shall inure to the benefit of each and all of the Releasees, and
to their heirs, representatives, executors, administrators, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ARGOYLES, INC.,
a Washington corporation
By /s/ Xxx Xxxxxxxxxxx
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Xxx Xxxxxxxxxxx, CEO and CFO
/s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
