TERMINATION AGREEMENT
---------------------
THIS TERMINATION AGREEMENT (the "Agreement"), made as of this 20th day of
August, 2002, by and between EDISON CONTROLS CORPORATION, a New Jersey
corporation (the "Company"), and Xxxx X. XxXxxxxxx ("XxXxxxxxx").
BACKGROUND
----------
X. XxXxxxxxx and the Company executed an Employment Agreement, dated as of
February 1, 1995 (the "Employment Agreement"), and a Stock Option Agreement,
dated as of February 1, 1995 (the "Option Agreement"), pursuant to which, among
other things, XxXxxxxxx was (i) employed by the Company as its Chief Executive
Officer and served on the Company's Board of Directors, and (ii) granted an
option to purchase 200,000 shares of common stock of the Company pursuant to the
Company's 1986 Stock Option Plan, as amended (the "Option").
X. XxXxxxxxx and the Company executed a letter agreement, dated as of
October 17, 1997 (the "Letter Agreement"), pursuant to which, among other
things, the parties agreed that the term of XxXxxxxxx'x employment with the
Company pursuant to the Employment Agreement would expire on March 31, 1998, and
that the Employment Agreement, except as expressly modified by the Letter
Agreement, would remain in full force and effect.
C. Pursuant to Sections 4(d) and 7(a)(ii) of the Option Agreement,
XxXxxxxxx is entitled to exercise the Option at any time prior to March 31,
2003.
X. XxXxxxxxx and the Company desire to terminate (i) the Option Agreement;
(ii) the Letter Agreement; and (iii) all terms and conditions of the Employment
Agreement remaining in effect immediately prior to the execution of this
Agreement, all in exchange for the consideration set forth herein.
AGREEMENT
---------
NOW, THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and intending to be legally bound hereby, the
parties covenant and agree as follows:
1. Termination of Agreements. XxXxxxxxx and the Company agree that (i) the
Option Agreement; (ii) the Letter Agreement; and (iii) all terms and conditions
of the Employment Agreement remaining in effect immediately prior to the
execution of this Agreement are hereby terminated and are of no further force or
effect, and that neither party has any further rights or obligations thereunder
or pursuant thereto.
2. Payment to XxXxxxxxx. In consideration of XxXxxxxxx'x covenants and
agreements contained in this Agreement, within three (3) business days of the
date hereof, the Company shall pay to XxXxxxxxx the amount of $800,000 as a
termination fee.
3. Release. XxXxxxxxx, for herself and her heirs, assigns, executors,
administrators, personal representatives and other successors, and in any and
all capacities including, without limitation, as an individual, shareholder,
former employee and former director of the Company, does herewith now and
forever remise, release and discharge the Company and its present and former
affiliates, officers, directors, employees or agents from any and all claims,
demands, actions, suits, liabilities and causes of action of any kind and nature
whatsoever, fixed or contingent, known or unknown, which any of them or any
person claiming through or under XxXxxxxxx ever had or now has or hereafter can,
shall or may have for, upon, or by reason of any matter, cause or thing
resulting from, arising out of, or incurred with respect to, or alleged to
result from, arise out of, or incurred with respect to acts or omissions to act
of all nature and kind whatsoever through the time of the execution of this
Agreement.
4. Confidentiality. XxXxxxxxx recognizes and acknowledges that Confidential
Information (as defined below) with respect to the Company's business methods,
systems, plans and policies which she has heretofore received or obtained as an
employee and/or director of the Company, is a valuable and unique asset of the
Company. Accordingly, XxXxxxxxx shall not at any time disclose, use, furnish or
make accessible to any person or entity Confidential Information acquired by
XxXxxxxxx, including, without limitation, Confidential Information that relates
to the Company's management, financial condition, strategies, subscription
mailing or customer lists, sources of supply, subcontractors, business,
personnel, policies, prospects, business practices, business plans, methods,
processes, equipment, or other confidential, proprietary or secret aspects of
any business conducted or proposed to be conducted by the Company (individually
and collectively, "Confidential Information") without prior written consent from
the Company, unless such Confidential Information shall have become public
knowledge other than by being divulged or made accessible by XxXxxxxxx in breach
of this Section 4. This Section 4 shall not preclude XxXxxxxxx from disclosure
of such Confidential Information as may be required by any applicable law,
regulation or directive of any governmental agency, court or other authority
having jurisdiction in the matter, or in the proper course of conduct of the
Company business. In the event that any person seeks legally to compel XxXxxxxxx
to disclose Confidential Information, XxXxxxxxx shall promptly provide the
Company with notice so that the Company may have opportunity to seek a
protective order or other appropriate remedy. XxXxxxxxx shall promptly return to
the Company all memoranda, notes, rolodex or similar listings, reports, records,
computer disks and other documents made or compiled by XxXxxxxxx, or made
available to XxXxxxxxx, which describe, contain or concern any Confidential
Information. Return of such information and materials shall in no event relieve
XxXxxxxxx of any obligations of confidentiality contained herein respecting such
Confidential Information.
5. Equitable Relief for Violations. XxXxxxxxx hereby agrees that the
provisions and restrictions contained in Section 4 are necessary to protect the
legitimate continuing business interests of the Company, and that any violation
or breach of such Section will result in irreparable injury to the Company for
which a remedy at law would be inadequate and that, in addition to any relief at
law which may be available to the Company for such violation or breach and
regardless of any other provision contained in this Agreement, the Company shall
be entitled to injunctive and other equitable relief as a court may grant after
considering the intent of Section 4.
2
6. Binding Effect. The provisions of this Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
personal representatives, successors and assigns. Once executed by the parties
hereto, this Agreement shall be irrevocable.
7. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters set forth herein.
8. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9. Headings. The headings in this Agreement are inserted for convenience
only and shall not constitute a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
EDISON CONTROLS CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Xxxx X. Xxxxxxxx
Chief Executive Officer
/s/ Xxxx X. XxXxxxxxx
-------------------------------------
Xxxx X. XxXxxxxxx
3
