EXHIBIT 10.12
October 1, 2002
VIA FEDERAL EXPRESS
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Xx. Xxxxxx X. XxXxxx
Dear Xxx:
This letter agreement will confirm the understanding we have reached regarding
your employment separation from Midas International Corporation ("Midas"). The
terms of the employment separation are as follows:
1. Your last day of active employment with Midas was May 28, 2002 (the
"Separation Date"). Effective as of the Separation Date, you formally
resigned as an officer of Midas, Inc., Midas and all direct and
indirect subsidiaries of Midas.
2. You will be provided with six (6) months of severance allowance in the
form of base salary and auto allowance continuation beginning on the
first calendar day after the Separation Date. This severance allowance
will be subject to normal Federal, State (where applicable) and FICA
withholdings.
3. During the six (6) month severance period, you (and your covered
dependents, if applicable) will continue to participate in and be
covered by the company's medical, dental and basic life insurance
plans under the same terms and conditions as the company's active
employees. The applicable employee medical and dental coverage
contributions will be deducted from your severance payments. After the
severance period, you may continue the group medical and dental
coverage at your own expense for up to eighteen (18) months. You can
expect further correspondence from the company's Human Resources
Department on this matter as well as life insurance conversion
information.
Xx. Xxxxxx X. XxXxxx
October 1, 2002
Page 2
4. Immediately following the Separation Date, you will no longer be
eligible to participate in or be covered under any of the company's
other welfare or pension programs (e.g., short and long term
disability, travel accident, Retirement Savings Plan (RSP), pension,
supplemental and dependent life) other than those referenced in
paragraph 2 above.
5. Any distribution to which you are entitled under the Non-Qualified
Deferred Compensation Plan will be made in the manner previously
elected by you.
6. You will be paid for any vacation time earned but not taken during
calendar year 2002, pro-rated as of the Separation Date.
7. Your rights with respect to any vested stock options owned by you on
the Separation Date will be subject to the terms of your Nonqualified
Stock Option Agreement(s).
8. You will be provided with executive outplacement assistance from a
service selected by Midas.
9. As you are aware, you previously executed a Promissory Note dated
March 17, 1999, in the original principal amount of Eight Hundred
Thousand Nine and 06/100 Dollars ($800,009.06) in favor of Midas (the
"Stock Note") in order to acquire 35,655 shares of restricted stock as
part of Midas' Executive Stock Ownership Program. The Stock Note was,
in accordance with its terms, due and payable in full on or before the
one (1) month anniversary of the Separation Date (the "Maturity
Date"). However, in order to help finance your payment obligation to
Midas under the Stock Note, Midas will agree to accept, in full
satisfaction of the Stock Note balance, an amount equal to the Fair
Market Value of the Shares (as defined below). For purposes of the
foregoing, the "Fair Market Value of the Shares" means the product of
(i) 35,655 multiplied by (ii) the officially-quoted closing selling
price of a share of Midas, Inc. common stock on the principal
securities exchange on which such shares are then listed for trading,
on September 19, 2002 (i.e., $6.60 per Share). Upon receipt of the
foregoing payment, Midas will forgive the amount, if any, by which the
face value of the Stock Note exceeds the amount remitted to Midas
under this paragraph 9. In addition, Midas will pay you an amount
equal to your taxes resulting from the forgiveness of the remainder of
the Stock Note plus your taxes on such tax reimbursement payment
promptly after presentation to Midas of reasonable documentation of
the amounts of such taxes. Midas may withhold from such payments taxes
which Midas is required to pay or withhold on your behalf with respect
to such forgiveness and payments to you.
Xx. Xxxxxx X. XxXxxx
October 1, 2002
Page 3
10. In partial consideration of the agreements of Midas contained herein,
you agree to execute the attached General Release concurrently with
your execution of this letter agreement.
11. Also in partial consideration of the agreements of Midas contained
herein, you must, at all times from and after the Separation Date,
refrain from disparaging or otherwise making any negative public
statements or remarks regarding: (i) Midas or any of its parent
corporations, subsidiaries, affiliates or franchisees, or any of their
respective shareholders, directors, officers, members, managers,
employees, representatives, agents, successors or assigns, (ii) any of
Midas' branded or non-branded products or services, whether now
offered or hereafter developed, or (iii) the Midas name or system
generally. In addition, at all times from and after the Separation
Date until the first (1st) anniversary thereof, you must refrain from
soliciting or encouraging, whether directly or indirectly through a
third party, any current employee of Midas to leave or otherwise
terminate his or her employment with Midas for any reason.
12. Also in partial consideration of the agreements of Midas contained
herein, you must, at all times from and after the date of this General
Release, maintain in the strictest of confidence, and refrain from
disclosing to or discussing with any third party for any purpose
whatsoever: (a) any confidential and proprietary information of Midas
which was made known to you as a result of your employment with Midas,
or (b) any of the terms of this letter agreement (other than to your
legal, business or accounting advisors, and except as may be required
by law).
You agree that you have carefully read and fully understand the provisions
of this letter agreement and that you have had the opportunity to consult
with an attorney of your choice regarding its implications. This letter
agreement sets forth the entire agreement between you and Midas, and you
agree that you have not relied upon any representation, written or oral,
not contained herein. This letter agreement supersedes all other prior
agreements or understandings between you and Midas. This agreement shall
inure to the benefit of and be binding upon your heirs, executors,
administrators, successors and assigns, and shall inure to the benefit of
Midas' administrators, representatives, successors and assigns.
This letter agreement is being entered into and is to be performed within
the State of Illinois and shall be governed by Illinois law. Any dispute
under this letter agreement shall be subject to binding arbitration before
the American Arbitration Association in Chicago, Illinois.
Please confirm your understanding of and agreement with the foregoing terms
by signing this letter agreement where indicated below and returning the
executed original to me on or before October 8, 2002. In the event that we
do not receive your signed confirmation
Xx. Xxxxxx X. XxXxxx
October 1, 2002
Page 4
on or before that date, this letter agreement shall be immediately and
automatically revoked and rescinded and shall be of no further force or
effect.
Very truly yours,
MIDAS INTERNATIONAL CORPORATION
Xxxxxxx X. Xxxxx
Senior Vice President and
Chief Financial Officer
UNDERSTOOD AND AGREED TO
this 1st day of October, 2002.
/s/ Xxxxxx X. XxXxxx
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Xxxxxx X. XxXxxx
GENERAL RELEASE
Xx. Xxxxxx X. XxXxxx
October 1, 2002
Page 5
The undersigned, XXXXXX X. XXXXXX ("XxXxxx"), for and in consideration of
the mutual promises and covenants contained in that separate letter agreement by
and between XxXxxx and MIDAS INTERNATIONAL CORPORATION (the "Company") dated
October 1, 2002 (the "Letter Agreement") and other good and valuable
consideration, the receipt, adequacy and sufficiency of which is hereby
acknowledged, hereby releases and forever discharges the Company, its officers,
directors, representatives, agents, employees, and insurers, and its related and
affiliated entities, and their officers, directors, representatives, agents,
employees, and insurers (hereinafter collectively and individually "Releasees")
from any and all rights, claims, demands, debts, dues, sums of money, accounts,
attorneys' fees, complaints, judgments, executions, actions and causes of action
of any nature whatsoever, cognizable at law or equity, which XxXxxx now has or
claims or might hereafter have or claim, against Releasees based upon or arising
out of any matter or thing whatsoever prior to the execution of this General
Release, including but not limited to, any rights, claims, complaints or actions
or causes of action which were or could have been asserted by XxXxxx arising out
of or related to (i) that certain employment offer letter dated August 31, 1998,
from Midas, Inc. to XxXxxx, (ii) that certain Change in Control Agreement dated
September 21, 1998, by and between XxXxxx and Midas, Inc., as amended, and (iii)
his employment by the Company or his separation therefrom, or under any local,
state or federal law dealing with employment discrimination including the
Illinois Human Rights Act, the Age Discrimination in Employment Act, as amended
by the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, the Vocational Rehabilitation Act of
1973, the Americans with Disabilities Act, and any and all claims for
retaliatory or wrongful discharge, it being the intention of both parties to
make this release as broad and general as the law provides. XxXxxx acknowledges
and agrees that this release, the release contained in the next paragraph, and
the covenant not to xxx, are essential terms of the Letter Agreement and that,
without this release and covenant not to xxx, no agreement would have been
reached.
Xx. Xxxxxx X. XxXxxx
October 1, 2002
Page 6
SPECIFICALLY INCLUDED IN XXXXXX'X AGREEMENT TO RELEASE AND DISCHARGE THE
COMPANY ARE ANY AND ALL RIGHTS AND CLAIMS XXXXXX MAY HAVE UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. SEC 621 AND
FOLLOWING ("ADEA"), AS OF THE DATE XXXXXX SIGNS THIS GENERAL RELEASE. THIS
PARAGRAPH DOES NOT WAIVE RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE DATE THIS
GENERAL RELEASE IS SIGNED. XXXXXX AGREES THAT THIS GENERAL RELEASE AND THE
LETTER AGREEMENT PROVIDE BENEFITS TO WHICH HE IS NOT OTHERWISE ENTITLED AND THAT
THE COMPANY HAS HEREBY ADVISED XXXXXX TO CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING THIS GENERAL RELEASE.
XXXXXX HAS BEEN PROVIDED WITH A MIMIMUM OF TWENTY-ONE (21) DAYS WITHIN
WHICH TO CONSIDER WHETHER TO SIGN THIS GENERAL RELEASE AND WAIVE AND RELEASE ALL
CLAIMS AND RIGHTS ARISING UNDER THE ADEA. XXXXXX UNDERSTANDS AND AGREES THAT HE
HAS SEVEN (7) DAYS AFTER EXECUTION OF THIS GENERAL RELEASE WITHIN WHICH TO
REVOKE IT. ANY SUCH REVOCATION MUST BE MADE IN WRITING AND DELIVERED TO THE
GENERAL COUNSEL OF THE COMPANY BY 5:00 P.M. ON THE SEVENTH (7TH) DAY FROM
EXECUTION OF THIS GENERAL RELEASE. REVOCATION OF THIS GENERAL RELEASE BY XXXXXX
SHALL, WITH NO ACTION REQUIRED TO BE TAKEN BY THE COMPANY, ALSO CAUSE THE LETTER
AGREEMENT TO BE AUTOMATICALLY REVOKED AND RESCINDED AND SHALL RESULT IN THE
AUTOMATIC AND IMMEDIATE TERMINATION OF XXXXXX'X EMPLOYMENT EFFECTIVE AS OF THE
DATE OF THE LETTER AGREEMENT.
Xx. Xxxxxx X. XxXxxx
October 1, 2002
Page 7
To the maximum extent permitted by law, XxXxxx covenants not to xxx or to
institute, or cause to be instituted, any action or other proceeding in any
Federal State, or local agency or court against the Company or any of the
Releasees, concerning any matter or matters released in the preceding
paragraphs.
This General Release shall be governed by and construed in accordance with
the Laws of the State of Illinois.
XxXxxx acknowledges and agrees that he has carefully read and understands
this General Release, has been represented by counsel of his choosing who has
reviewed this General Release and advised him regarding its terms. XxXxxx
further states that, based on his careful reading of this General Release and
his knowledge of the contents hereof, and upon the advice of his attorney, he
freely and voluntarily assents to all the terms and conditions hereof, and is
signing this General Release as his free act.
IN WITNESS WHEREOF, XxXxxx has executed this General Release at Itasca,
Illinois, this 1st day of October, 2002.
/s/ Xxxxxx X. XxXxxx
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XXXXXX X. XXXXXX
