AGREEMENT AND RELEASE OF ALL CLAIMS
This AGREEMENT AND RELEASE OF ALL CLAIMS (the "Agreement") is by and
between HomeBase, Inc., a Delaware corporation (the "Company") and Xxxxx X.
Xxxxxxx, an individual ("Xxxxxxx"), as of March 2, 2000.
RECITALS
Xxxxxxx was employed by the Company from February 1991 through March 2,
2000.
Xxxxxxx served as President and Chief Executive Officer of the Company
from July 1997 until his voluntary resignation from those and all other officer
positions and directorships with the Company and any affiliated entities,
effective March 2, 2000.
The Company and Xxxxxxx are parties to an Employment Agreement, dated
as of June 1, 1998, attached hereto as Exhibit A (the "Employment Agreement")
certain provisions of which are expressly modified by the terms hereof.
In consideration of the mutual agreements set forth below, the parties
agree as follows:
1. Resignation of Employment. Xxxxxxx acknowledges that he voluntarily
resigned his employment and all officer positions and directorships with the
Company and any affiliated entities, effective March 2, 2000.
2. Forgiveness of Home Purchase Debt and Reconveyance of Deed of Trust.
On the third business day following the seventh day after the execution of this
Agreement by the parties, and so long as the Company receives from Xxxxxxx the
assurances set forth in Section 18 below, the Company shall forgive the
remaining $100,000 of principal balance outstanding (the "Home Purchase Debt")
pursuant to that certain Promissory Note dated January 19, 1994 from Xxxxxxx to
the Company in the original principal amount of $700,000 (the "Note"). Within
three business days thereafter, the Company shall return to Xxxxxxx marked paid
in full the original Note and deliver to Xxxxxxx a document reconveying that
certain Deed of Trust in favor of the Company encumbering Xxxxxxx'x residence in
Laguna Beach, California.
3. Tax Obligations.
(a) On the third business day following the seventh day after
the execution of this Agreement by the parties and so long as the Company
receives from Xxxxxxx the assurances set forth in Section 18 below, the Company
shall pay to the applicable tax authorities a total of $72,000 on behalf of
Xxxxxxx, $62,000 of which shall relate to state and federal withholding taxes
arising in connection with the forgiveness of Note indebtedness under Section 2
of this Agreement, and $10,000 of which shall relate to additional consideration
under this Agreement.
(b) Xxxxxxx shall be responsible for the payment of all taxes
arising out of the execution of this Agreement and the transactions contemplated
hereby.
(c) The Company reserves the right to withhold payroll and
income taxes from any payments made to Xxxxxxx, as required by applicable law
and regulations.
4. Retiree Health Plan Coverage. The parties agree that solely for
purposes of determining Xxxxxxx'x eligibility for coverage under the Company's
Retiree Health Plan, Xxxxxxx shall be credited with his period of employment by
Zayre Corp. from September 1986 through October 28, 1988, during which time
Zayre Corp. and HomeClub, Inc. (the predecessor to the Company) were part of the
same affiliated group which filed consolidated federal income tax returns
pursuant to Section 1501 of the Internal Revenue Code. The parties further agree
that as a result of this credit for his employment with Zayre Corp., Xxxxxxx has
satisfied the 10-year service requirement of the Company's Retiree Health Plan.
Xxxxxxx may thus elect to receive coverage under the Retiree Health Plan
immediately upon termination of the health plan coverage provided pursuant to
Section 5(a)(ii) of the Employment Agreement.
5. No Changes Concerning Stock Options. This Agreement shall not modify
or in any way change the existing terms and conditions governing stock options
previously granted by the Company to Xxxxxxx.
6. Continuing Obligations under the Employment Agreement. Excepting
only as expressly provided in this Agreement, the parties agree to be bound by
any and all surviving terms of the Employment Agreement including, without
limitation, Section 6 of the Employment Agreement; provided, however: (a)
Section 5(a)(i) of the Employment Agreement shall hereby be amended by
continuing the first sentence thereof as follows: ", and for 13 weeks thereafter
the Company will pay to Executive the weekly gross amount of $7,000 (subject to
reduction pursuant to the next sentence as if such payments were Base Salary
thereunder), and the period for all such payments made pursuant to this sentence
shall be deemed 'the period of Base Salary payments' for purposes of Section
5(a)(ii) of this Agreement.", and (b) Section 6(b) of the Employment Agreement
shall hereby be amended by adding the following sentence after the end of the
fourth sentence of such Section 6(b): "Notwithstanding the foregoing, the
provisions of this Section 6(b) shall terminate and no longer be effective at
the time, if ever, the Company no longer operates any retail stores in the home
improvement business."
7. Release by Xxxxxxx. In consideration of the promises set forth in
this Agreement and the complete release of claims given by the Company in this
Agreement, Xxxxxxx, for himself and his heirs, successors and assigns, does
hereby and forever release and discharge the Company and its past, present and
future affiliated entities and the directors, officers, employees, agents,
attorneys, accountants, representatives, successors and assigns of them and any
of them from any and all causes of action, actions, judgments, liens,
indebtedness, damages, losses, claims, liabilities and demands of whatsoever
kind and character in any manner whatsoever arising prior to the date of this
Agreement, on any theory of pleading or proof, including but not limited to any
claim for breach of contract, breach of implied covenant, breach of oral or
written promise, wrongful termination, infliction of emotional distress,
defamation, interference with contract relations or prospective economic
advantage, negligence, misrepresentation or employment discrimination, and
including without limitation alleged violations of the California Labor Code,
the California Family Rights Act, the Xxxxx Act, the California Constitution,
the California Fair Employment and Housing Act prohibiting discrimination based
on race, religious creed, color, national origin, ancestry, physical disability,
mental disability, medical condition, marital status, sex or age over 40, Title
VII of the 1964 Civil Rights Act prohibiting discrimination based on race,
color, religion, sex or national origin, the Americans With Disabilities Act
prohibiting discrimination based on disability, the Family and Medical Leave Act
respecting leaves of absence, and the Age Discrimination in Employment Act
prohibiting discrimination based on age over 40, as these statutes have been
from time to time amended, excepting only (i) those obligations expressly
recited herein or to be performed hereunder, (ii) workers' compensation claims
preserved by law notwithstanding this Agreement, (iii) obligations arising under
any provisions of the Employment Agreement which survive termination of
employment and are not expressly varied by the terms of this Agreement, and (iv)
any rights Xxxxxxx may have pursuant to the express provisions of any employee
benefit plans identified in Exhibit B.
8. Release by the Company. In consideration of the complete release of
claims promised by Xxxxxxx in this Agreement, the Company does hereby and
forever release and discharge Xxxxxxx and his heirs, successors, assigns,
attorneys, and representatives from any and all causes of action, actions,
judgments, liens, indebtedness, damages, losses, claims, liabilities and demands
of whatsoever kind and character in any manner whatsoever arising prior to the
date of this Agreement, on any theory of pleading or proof, including but not
limited to any claim for breach of contract, breach of implied covenant, breach
of oral or written promise, wrongful termination, infliction of emotional
distress, defamation, interference with contract relations or prospective
economic advantage, negligence, misrepresentation or employment discrimination,
and including without limitation alleged violations of the California Labor
Code, the California Family Rights Act, the California Constitution, the
California Fair Employment and Housing Act prohibiting discrimination based on
race, religious creed, color, national origin, ancestry, physical disability,
mental disability, medical condition, marital status, sex or age over 40, Title
VII of the 1964 Civil Rights Act prohibiting discrimination based on race,
color, religion, sex or national origin, the Americans With Disabilities Act
prohibiting discrimination based on disability, the Family and Medical Leave Act
respecting leaves of absence, and the Age Discrimination in Employment Act
prohibiting discrimination based on age over 40, as these statutes have been
from time to time amended, excepting only those obligations expressly recited
herein or to be performed hereunder.
9. Unknown Claims Released. Xxxxxxx and the Company each assumes the
risk of any mistake of fact and of any facts which are unknown, and thereby each
waives the benefits of Section 1542 of the Civil Code of the State of
California, to the extent that such section may apply to this Agreement. Civil
Code Section 1542 provides:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with debtor."
10. Mutual Agreement Regarding Confidentiality and Nondisparagement.
Xxxxxxx and the Company agree not to make public the terms of this Agreement or
negative matters pertaining to Xxxxxxx'x employment, and not to disparage each
other or state contentions of wrongful conduct by Xxxxxxx or his agents,
relatives, lawyers or representatives or by the Company or its directors,
officers, employees, agents, lawyers or representatives except: as may be
required by applicable law, as may be necessary in a proceeding to secure
compliance with or enforcement of the terms of this Agreement, upon lawful
inquiry by federal or state tax authorities or other governmental agencies, or
in response to a lawful subpoena or court order.
(a) Nothing in this Agreement shall be construed to affect the
obligations of the parties to testify truthfully or to provide truthful report
upon lawful inquiry by governmental agencies, or in response to a lawful
subpoena or court order.
(b) Notwithstanding any other provision of this Agreement,
Xxxxxxx may disclose the terms of this Agreement to his immediate family
members, attorneys and accountants, provided he advises each such individual of
this confidentiality provision and such individual agrees that he or she shall
not further disclose any of the terms of this Agreement except for the purposes
expressly provided in this Section 10.
(c) The Company shall refer inquiries about Xxxxxxx from
potential future employers to the Company's Vice President, Human Resources. The
Company further agrees to respond to such inquiries only by stating that Xxxxxxx
was employed by the Company from February 1991 to March 2000, that he resigned
his employment, that pursuant to the Company's standard policies no further
information can be provided, and that all matters between Xxxxxxx and the
Company respecting his employment have been amicably resolved.
(d) Proof of breach of this Section 10 shall be by clear and
convincing evidence in arbitration pursuant to this Agreement.
11. Continuing Availability to Consult on Certain Matters. Xxxxxxx
acknowledges that he has information that may be or may become relevant to the
Company's operations or claims that may be brought against the Company. As a
result, Xxxxxxx agrees to make himself available at reasonable times and places
to provide the Company with his full and accurate recollection of such matters
at the request of the Company and further agrees to provide truthful testimony
at the Company's request in any court proceedings on such matters. The Company
agrees to indemnify and hold Xxxxxxx harmless from and against any and all
claims concerning his provision of such consulting services to the Company;
provided, however, that the indemnification obligations of the Company pursuant
to this sentence shall not apply to Xxxxxxx'x acts or omissions which constitute
willful misconduct or gross negligence.
12. Arbitration. Xxxxxxx and the Company agree that, to the extent
permitted by law and to the extent the enforceability of this Agreement is not
thereby impaired, any and all disputes, controversies or claims between Xxxxxxx,
his heirs, successors, attorneys, and assigns, on the one hand, and the Company,
its past and present directors, officers, employees, agents, attorneys,
accountants, representatives, successors and assigns, on the other hand, arising
from this Agreement shall be determined exclusively by final and binding
arbitration before a single arbitrator in Los Angeles, California, under the
National Rules For the Resolution of Employment Disputes of the American
Arbitration Association and the provisions of the California Code of Civil
Procedure governing arbitrations. Xxxxxxx and the Company further agree that
judgment upon the award rendered by the arbitrator may be entered in any court
of competent jurisdiction.
(a) Claims subject to exclusive final and binding arbitration
under this Agreement include, without limitation, claims that otherwise could be
tried in court to a jury in the absence of this Agreement. Xxxxxxx and the
Company expressly waive all rights to a jury trial in court on all claims
arising under this Agreement.
(b) The arbitration shall be administered by the American
Arbitration Association, and the arbitrator shall be selected from a list of
arbitrators provided by the American Arbitration Association following a request
by the party seeking arbitration for a list of retired or former jurists with
substantial professional experience in employment matters.
(c) This Agreement shall be construed according to California
law without reference to California law governing conflict of laws. Each party
has had the assistance of legal counsel in connection with this Agreement and,
accordingly, this Agreement shall be construed according to its fair meaning and
not for or against any party. The arbitrator's authority and jurisdiction shall
be limited to determining the dispute in arbitration in conformity with law, to
the same extent as if such dispute were determined as to liability and any
remedy by a court without a jury. The arbitrator shall render an award which
shall include a written statement of opinion setting forth the arbitrator's
findings of fact and conclusions of law.
(d) To the extent permitted by law and to the extent the
enforceability of this Agreement is not thereby impaired, each party shall
initially pay its or his own costs of arbitration including, without limitation,
attorneys' fees and costs and fees and costs of any experts. However, the
arbitrator shall award reasonable attorneys' fees (with or without expert fees)
and costs to the prevailing party.
(e) Any controversy over whether a dispute is an arbitrable
dispute or as to the interpretation or enforceability of this Section 12 with
respect to such arbitration shall be determined by the arbitrator.
(f) Notwithstanding the foregoing provisions of this Section
12, Xxxxxxx and the Company agree that breaches of continuing obligations under
the Employment Agreement or this Agreement concerning confidential information
and trade secrets and concerning restrictions on competition and solicitation of
employees of the Company by Xxxxxxx cannot adequately be remedied at law or in
arbitration, and that Xxxxxxx or the Company may seek and obtain otherwise
available injunctive relief, including ancillary monetary relief, in Court for
any violation or breach of such obligations; provided, however, that final
resolution of disputes shall be by arbitration and neither the grant nor the
denial of injunctive relief shall prejudice the result of such arbitration.
13. No Admissions. Neither this Agreement nor any statement or action
of any of the parties to this Agreement constitutes any admission of wrongful
act or omission, and no finding of any wrongful act or omission has been made by
any person, entity or agency.
14. No Assignments. Each of the parties hereby represents and warrants
that he or it has not heretofore assigned or transferred or purported to assign
or transfer to any person or entity not a signatory to this Agreement any claim,
including fee or cost claims, or matter herein released, disclaimed, discharged
or terminated. Each party also represents and warrants that he or it has no
knowledge of any such assignment to any individual or entity who is not a party
to the Agreement. In the event of any such assignment or transfer of any claim
to another individual or entity of matters herein released, discharged,
terminated or disclaimed, the party making such assignment or transfer agrees to
indemnify and hold harmless the other party from and against any liability or
loss, and for any cost, expense or judgment or settlement arising out of or
occasioned by, or arising in connection with any such assignment or transfer.
15. Xxxxxxx and the Company Each Relies On Own Judgment and Own
Counsel. Each party to this Agreement respectively represents and declares that
in executing this Agreement such party relies solely upon such party's own
judgment, belief and knowledge, and the advice and recommendations of such
party's independently selected counsel, concerning the nature, extent and
duration of such party's rights and claims. Each party acknowledges that no
other party nor any agent or attorney of any other party has made any promise,
representation or warranty, express or implied, not expressly contained in this
Agreement, to induce acceptance or execution of this Agreement. Each party to
this Agreement further acknowledges that such party is not executing this
Agreement in reliance on any promise, representation or warranty not expressly
contained in this Agreement. Xxxxxxx acknowledges that neither the Company nor
any of its directors, officers, employees, agents, attorneys, accountants or any
other person associated with the Company has advised Xxxxxxx as to the tax
consequence of his receipt of payments under this Agreement and that he is
solely responsible for any and all taxes resulting from his receipt of such
payments, unless otherwise provided by this Agreement.
16. Integrated Complete Agreement. This Agreement integrates, cancels
and supersedes all other prior and contemporaneous written and oral agreements
and understandings of every character between Xxxxxxx and the Company and
comprises the entire agreement between Xxxxxxx and the Company; provided,
however, that the parties shall continue to be bound by Xxxxxxx'x resignation
letter to the Company dated March 2, 2000, that certain Indemnification
Agreement by and between Xxxxxxx and the Company dated as of May 25, 1993, any
and all surviving terms of the Employment Agreement and the express provisions
of the employee benefit plans identified in Schedule X. Xxxxxxx and the Company
understand and agree that this Agreement may be amended only by a further
express written agreement between Xxxxxxx and the Company, signed by Xxxxxxx and
the Chief Executive Officer of the Company and stating an intention to amend
this Agreement, and that this Agreement cannot be amended by oral or written
statements or communications.
17. Partial Invalidity. The invalidity or unenforceability of any
provision or portion of this Agreement, including, without limitation, any
provision or portion of Section 12 of this Agreement, will not affect the
validity or enforceability of the other provisions or portions of this
Agreement. The parties intend that this Agreement be construed in favor of
arbitration as the final and binding means for resolving any disputes between
them arising out of the matters settled herein that are not resolved informally.
18. Revocation of Acceptance. Xxxxxxx acknowledges that he has had
twenty-one (21) days within which to consider this Agreement if he has wished to
do so, that he has seven (7) days from the date of his acceptance of this
Agreement within which to revoke his acceptance, that he is hereby advised to
consult with a lawyer representing him concerning this Agreement and has had an
opportunity to do so, and that no payments will be made to Xxxxxxx by the
Company hereunder until after such seven (7) days and until after Xxxxxxx
provides reasonable written assurances that he has not revoked his acceptance of
this Agreement.
19. THE PARTIES FURTHER STATE THAT HE/IT HAS CAREFULLY READ THIS
AGREEMENT, THAT IT HAS BEEN FULLY EXPLAINED TO THEM BY THEIR LEGAL COUNSEL, THAT
THEY FULLY UNDERSTAND ITS FINAL AND BINDING EFFECT, THAT THE ONLY PROMISES MADE
TO THEM TO SIGN THIS AGREEMENT ARE THOSE STATED ABOVE, AND THAT THEY ARE SIGNING
THIS AGREEMENT VOLUNTARILY.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and at the location set forth below.
Dated March 21, 2000 at Laguna Beach California.
/s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
Dated March 21, 2000 at Irvine, California.
HomeBase, Inc.
By: /s/ XXXXXXX X XXXXXX
-----------------------
Xxxxxxx X Xxxxxx
Title: Chairman of the Board,
President and Chief
Executive Officer
I RECEIVED THIS AGREEMENT AND RELEASE OF ALL CLAIMS on March 2, 2000.
I understand that I have had twenty-one (21) days within which to consider this
Agreement if I wished to do so, that I have been encouraged to consult with
legal counsel, that I have seven (7) days from the date of my execution of this
Agreement within which to revoke my acceptance, and that no payments will be
made to me under this Agreement until after such seven (7) days.
No promises have been made to me other than as expressly stated in the
Agreement and Release of All Claims, which I voluntarily accept on the date
shown by my signature.
Dated: March 21, 2000 at Laguna Beach, California.
/s/ XXXXX X. XXXXXXX
-----------------------
Xxxxx X. Xxxxxxx
