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EXHIBIT 10.1
SETTLEMENT AND RELEASE AGREEMENT
This Settlement and Release Agreement (the "Agreement") is hereby
entered into by and between Xxxxx X. Xxxxxxxx (the "Executive") and Inland
Entertainment Corporation, a Utah corporation (the "Company").
RECITALS
WHEREAS, Executive has been employed by the Company on an at will basis
since 2/13/94, most recently as the Company's Executive Vice President; and
WHEREAS, both the Executive and the Company have determined that it is
in their mutual interests that the Executive resign from his position as
Executive Vice President of the Company, and that his employment relationship be
dissolved; and
WHEREAS, both the Executive and the Company voluntarily elect to
terminate the employment relationships on the terms and conditions hereinafter
set forth and settle any disputes arising from such relationships without resort
to litigation; and
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises contained herein
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereby agree as follows:
1. Employment Status. The Executive voluntarily resigned from his
position as Executive Vice President of the Company as of 2/6/98 (the
"Resignation Date"). The Executive also voluntarily resigned his employment by
the Company as of the Resignation Date. The Executive was relieved of all duties
effective on the Resignation Date.
2. Compensation,Vacation Pay and Other Benefits Through the Resignation
Date. The Company paid the Executive his current base salary through the
Resignation Date. The Company and the Executive agree that the Executive does
not have any accrued or unused vacation pay earned through the Resignation Date.
The Executive acknowledges and agrees that the payment of the foregoing salary
through the Resignation Date constitutes full payment of any and all monies
(including but not limited to bonus amounts) that he earned during his
employment by the Company through the Resignation Date.
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3. Severance Benefits After the Resignation Date. The Company agrees to
make the severance benefits to the Executive as described in this Agreement. The
Executive understands that the Company will deduct from these amounts federal
withholdings taxes and other deductions that the Company is required by law to
make from wage payments to employees. The Executive further understands that
these amounts are all the Executive is entitled to receive from the Company
under this Agreement or otherwise. The Executive will receive no further wage,
vacation or other similar payments from the Company. For purposes of this
Agreement, the "Settlement Date" shall mean the date after the expiration of all
periods of revocation under this Agreement have lapsed.
3.1 Severance Payments. Following the Settlement Date, the Company shall
pay to the Executive in one single payment a net amount equal to $27,936.94
representing three (3) months base salary net of taxes and voluntary 401(k)
contribution.
3.2 Health Insurance Premiums. If the Executive (or any of his eligible
dependents) elects to continue to participate in any of the Company's group
health insurance plans pursuant to COBRA, 29 U.S.C. 1161 et seq., the company
will reimburse the executive, following the Settlement Date, for the premiums
paid by the Executive for such COBRA coverage commencing on the Resignation Date
through 2/28/98. Nothing in this Section 3.2 is intended to alter the terms of
COBRA in any way and those terms shall remain applicable in all respects.
3.3 Stock Options. As of the Resignation Date, the Executive had vested
stock options (the "Vested Options") which enable the Executive to purchase
91,135 shares of common stock, par value $.001 per share, of the Company
("Common Stock"). Prior to the Resignation Date, the Executive had options that
were not vested ("Unvested Options") which enable the Executive to purchase
108,865 shares of common stock, par value $.001 per share, of the Company stock.
Each of the Executive's Stock Option Agreements under (i) the Corporation's 1994
Stock Option Plan and (ii) the Corporation's 1995 Stock Option Plan shall be
amended to provide that as of the Resignation Date all Unvested Options shall
become Vested Options and that the Executive shall have a period of sixty (60)
months after the Resignation Date to exercise all Vested Options.
4. Continuation of Benefits After the Resignation Date. Except as
expressly provided in this agreement or in the plan documents governing the
Company's employee benefit plans, as of the Resignation Date, the Executive will
no longer be eligible for, receive, accrue, or participate in any other benefits
or benefit plans provided by the Company, including, without limitation,
medical, dental and life insurance benefits, the Company's 401(k) retirement
plan, automobile lease reimbursement, the Company's supplemental Executive
Incentive Bonus Plan and any other bonus plan of the Company; provided, however,
that health care coverage for the Executive and the Executive's dependents may
be continued under COBRA for as long as the Executive is eligible for such
coverage and so long as the Executive pays the required premiums.
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5. Company/Executive Property. On or before the Settlement Date, the
Executive shall return all property of the Company in the Executive's
possession.
6. General Release by the Executive. In consideration of the payments
specified in Section 3 of this Agreement and the other matters described herein,
the receipt and adequacy of which are hereby acknowledged, the Executive, for
himself and his heirs, executors, administrators, assigns, affiliates,
successors and agents (collectively, the "Affiliates") hereby fully and without
limitation release and forever discharges the Company and its agents,
representatives, stockholders, parents, subsidiaries, divisions, owners,
officers, directors, employees, consultants, attorneys, auditors, accountants,
investigators, affiliates, successors and assigns (collectively the Releasees"),
both individually and collectively, from any and all rights, claims, demands,
liabilities, actions, causes of action, damages, losses, costs, expenses and
compensation, of whatever nature whatsoever, known or unknown, fixed or
contingent ("Claims"), which the Executive or his Affiliates has or may have or
may claim to have against the Releasees by reason of any matter, cause, or thing
whatsoever, from the beginning of time to the date hereof, including, without
limiting the generality of the foregoing, any Claims arising out of, based upon,
or relating to the recruitment, hire, employment, relocation, remuneration,
investigation, or termination of the Executive by the Company or the other
Releasees, the Executive's tenure as a director of the Company , any agreement
or compensation arrangement between the Executive and the Company or the other
Releasees, or any act or occurrence in connection with any actual, existing,
proposed prospective or claimed ownership interest of any nature of the
Executive or the Executive's Affiliates in equity capital or rights in equity
capital or other securities of the Company or the other Releasees to the maximum
extent permitted by law.
The Executive specifically and expressly releases any Claims arising out
of or based on the California Fair Employment and Housing Act, as amended; Title
VII of the Civil rights Act of 1964, as amended; the Age Discrimination in
Employment Act, as amended; the Americans With Disabilities Act; the National
Labors Relations act, as amended; the Equal Pay Act; ERISA; any provision of the
California Labor Code; California common law of fraud, misrepresentation,
negligence, defamation, infliction of emotional distress, or wrongful
termination; state or federal wage and hour laws; or any other state or federal
law, rule, or regulation dealing with the employment relationship.
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7. Release of Unknown Claims by Executive. The Executive is aware of
California Civil Code Section 1542, which provides as follows:
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 THE DEBTOR.
With full awareness and understanding of the above provision, the
Executive hereby waives any rights he may have under Section 1542. The Executive
intends to, and hereby does, release Releasees from claims which he does not
presently know or suspect to exist at this time. However, the Executive is not
waiving any rights or claims that may arise out of acts or events that occur
after the Settlement Date.
8. Breach of Release. The Executive agrees that if he hereafter
commences, joins in, or in any manner seeks relief through any suit arising out
of, based upon, or relating to any of the Claims released by the Executive
hereunder, or in any manner asserts against the company or the Releasees any of
the claims released hereunder, the Executive shall pay to Company or such
Releasee, as the case may be, in addition to any other damages caused to the
Company or such Releasee, as the case may be, all attorneys fees incurred in
defending or otherwise responding to said suit or claim.
9. Rights Under the Older Workers Benefit Protection Act. In accordance
with the Older Workers Benefit Protection Act of 1990, the Executive is aware of
the following:
(a) The Executive has the right to consult with an attorney
before signing this Agreement and is hereby advised by the Company to do so;
(b) The Executive has twenty-one (21) days from the receipt of
this document to consider this Agreement; and
(c) The Executive has seven (7) days after signing this Agreement
to revoke this Agreement, and this Agreement will not be effective until that
revocation period has expired. The Executive agrees that in order to exercise
his right to revoke this Agreement within such seven (7) day period, he must do
so in a signed writing delivered to the Company's Controller and Chief
Accounting Officer before the close of business on the seventh calendar day
after signing the Agreement.
10. Confidentiality of Agreement. Except as may be required by law,
neither the Executive, his attorney, nor any person acting by, through, under or
in concert with them, shall disclose any of the terms of or facts relating to
this Agreement or the negotiation thereof to any individual or entity, except
for disclosures made between the Executive, his attorney, spouse, children or
advisors.
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11. Proprietary Information. The Executive acknowledges that certain
information, observations, and data obtained by him during the course of or
related to his employment with the Company (including without limitation certain
financial information, intellectual property, stockholder information, product
design information, business plans, marketing plans or proposals, customer lists
and other customer information) are the sole property of the Company and
constitute trade secrets of the Company. The Executive agrees to promptly return
all files, customer lists, financial information and other Company property that
are in the Executive's possession or control without making copies thereof. The
Executive further agrees that he will not disclose to any person or use any such
information, observations or data without the written consent of the Company's
Board of Directors, unless and to the extent that the aforementioned matters
become generally known to and available for use by the public other than as a
result of the Executive's acts or omissions to act, which acts or omissions were
unauthorized by the Company. Further, the Executive acknowledges that any
unauthorized use of trade secrets will cause irreparable harm to the Company and
will give rise to an immediate action by the Company for injunctive relief. If
the Executive is served with a deposition subpoena or other legal process
calling for the disclosure of such information, or if he is contacted by any
third person requesting such information, he will immediately notify the
Company's General Counsel and will fully cooperate with the Company in
minimizing the disclosure thereof.
12. Unfair Competition.
(a) The Executive agrees not to (whether as an employee,
director, owner, stockholder, consultant, limited or general partner, or
otherwise), for himself or for any other person or entity, engage in any unfair
competition with the Company.
(b) The Executive also covenants and agrees not to intentionally
interfere with, disrupt, or attempt to disrupt, the relationship, contractual or
otherwise, between the Company and any customer of the Company as of the
Resignation Date.
(c) The Executive acknowledges that any unfair competition or
misuse of trade secret or proprietary information belonging to the Company, or
any violation of Sections 10 through 12 of this Agreement, will result in
irreparable harm to the Company and will give rise to an immediate action by the
Company for injunctive relief.
13. Cooperation Clause. The Executive agrees to cooperate with the
Company and its counsel (a) in any investigation (including internal
investigations) and audits of the Company's management's current and past
conduct and business and accounting practices and (b) in the Company's defense
of, or other participation in, any administrative, judicial, or other proceeding
arising from any charge, complaint or other action which has been or may be
filed relating to the period during which the Executive was engaged in
employment with the Company. Except as required by law or authorized in advance
by the Company's Board of Directors, the Executive will not communicate,
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directly or indirectly, with any third party concerning the management or
governance of the Company, the operations of the Company, the legal positions
taken by the Company, or the financial status of the Company. The Executive
shall direct inquiries from third parties on these issues to the Company. The
Executive acknowledges that any violation of this Section 13 will result in
irreparable harm to the Company and will give rise to an immediate action by the
Company for injunctive relief.
14. Non-disparagement: Employment Reference. Each party to this
Agreement will use his or its best efforts not to disparage or otherwise publish
or communicate derogatory statements or opinions about the other to any third
party for a period of three (3) years after the Resignation Date. It shall not
be a breach of this Section 14 for either party to testify truthfully in any
judicial or administrative proceeding, or to make factual accurate statements in
legal or public filings. If any prospective employers contact the Company
concerning the Executive, they will be told only that the Executive was employed
from 2/13/94 until he voluntarily resigned as of the Resignation Date. The
Company will issue on its letterhead a statement in the form attached hereto as
Exhibit 1 in response to any requests for references or recommendations.
15. Remedies for Breach. If the Executive willfully and materially
breaches his obligations under this Agreement, in addition to whatever other
rights the Company may have, the Executive shall forfeit his right to receive
any further payments or benefits under this Agreement.
16. California Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of California, including all maters of
construction, validity, performance and enforcement, without giving effect to
principles of conflict of laws.
17. Attorneys' Fees. In any action, litigation or proceeding between the
parties arising out of or in relation to this Agreement, the prevailing party in
such action will be awarded, in addition to any damages, injunctions or other
relief, and without regard to whether or not such matter is prosecuted to final
judgment, such party's costs and expenses, including reasonable attorneys' fees.
Such award will include post judgement attorneys' fees and costs, which will not
be deemed as merged into the final judgement.
18. Non-Admission Liability. Both the Executive and the Company
understand and agree that neither the payment of any sum of money nor the
execution of this Agreement by the parties will constitute or be construed as ad
admission of any liability whatsoever by either party.
19. Withholding Taxes: Tax Reporting. The Company may, if required in
its reasonable judgment, withhold from any amounts payable under this Agreement
all such Federal, state, city and other taxes, and may file with appropriate
governmental
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authorities all such information returns or other reports with respect to the
tax consequences attendant to any amounts payable under this Agreement, as may,
in its reasonable judgment, be required by law.
20. Severability. If any one or more of the provisions contained herein
(or parts thereof), or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity
and enforceability of any such provision in every other respect and of the
remaining provisions hereof will not be in any way impaired or affected, it
being intended that all of the rights and privileges shall be enforceable to the
fullest extent permitted by law.
21. Entire Agreement. This Agreement represents the sole and entire
agreement between the parties and, except as expressly stated herein, supersedes
all prior agreements, negotiations and discussions between the Executive and the
Company with respect to the subject matters contained herein.
22. Waiver. No waiver by any party hereto at any time of any breach of,
or compliance with, any condition or provision of this Agreement to be performed
by any other party hereto may be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or at any prior or subsequent time.
23. Amendment. This Agreement may be modified or amended only if such
modification or amendment is agreed to in writing and signed by duly authorized
representatives of the parties hereto, which writing expressly states the intent
of the parties to modify this Agreement.
24. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original as against any
party that has signed it, but all of which together will constitute one and the
same instrument.
25. Assignment. This Agreement inures to the benefit of and is binding
upon the Company and its successors and assigns, but the Executive's rights
under this Agreement are not assignable.
26. Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and shall be delivered by hand or sent
by fax, telex, cable or telecopy, or sent, postage prepaid, by registered,
certified or express mail, or sent by reputable overnight courier service, and
shall be deemed given when so delivered by hand, upon transmission if faxed,
telexed, cabled or telecopied, or if mailed, three days after deposit in a
United States mailbox, one business day in the case of express mail or overnight
courier service, as follows:
If to the Company:
Inland Entertainment Company
00000 Xxx xxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
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Fax: (000) 000-0000
Attn: Xx. Xxxx Xx Xxxxxx
Controller and Chief Accounting Officer
If to the Executive:
0000 Xxxxxxxxxx
Xxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
or such other address as one party may have furnished to the other party in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
27. Miscellaneous Provisions.
(a) The parties represent that they have read this Agreement and
fully understand all of its terms; that they have conferred with their
attorneys, or have knowingly and voluntarily chosen not to confer with their
attorneys about this Agreement; that they have executed this Agreement without
coercion or duress of any kind; and that they understand any rights that they
have or may have and sign this Agreement with knowledge of any such rights.
(b) The language in all parts of this Agreement must be in all
cases construed simply according to its fair meaning and not strictly for or
against any party. Whenever the context requires, all words used in the singular
must be construed to have been use din the plural, and vice versa, and each
gender must include any other gender. The captions of the Sections of this
Agreement are for convenience only and must not affect the construction or
interpretation of any of the provision herein.
(c) Each provision of this Agreement to be performed by a party
hereto is both a covenant and condition, and is a material consideration for the
other party's performance hereunder, and any breach thereof by the party will be
a mate4rial default hereunder. All rights, remedies, undertakings, obligations,
options, covenants, conditions and agreements contained in this Agreement are
cumulative and no one of them is exclusive of any other. Time is of the essence
in the performance of this Agreement.
(d) Each party acknowledges that no representation, statement or
promise made by any other party, or by the agent or attorney of any other party,
has been relied on by him or it in entering into this Agreement.
(e) Each party understand that the facts with respect to which
this Agreement is entered into may be materially different from those the
parties now believe to be true. Each party accepts and assumes this risk and
agrees that this Agreement and the release in it shall remain in full force and
effect, and legally binding, notwithstanding
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the discovery or existence of any additional or different facts, or of any
claims with respect to those facts.
(f) Unless expressly set forth otherwise, all references herein
to a "day" are deemed to be a reference to a calendar day. All references to
"business day" mean any day of the year other than a Saturday, Sunday or a
public or bank holiday in San Diego, California. Unless expressly stated
otherwise, cross-references herein refer to provisions within this Agreement and
are not references to the overall transaction or to any other document.
(g) Each party to this Agreement will cooperate fully in the
execution of any and all other documents and in the completion of any additional
actions that may be necessary or appropriate to give full force and effect to
the terms and intent of this Agreement.
THE EXECUTIVE AND THE COMPANY ACKNOWLEDGE THAT EACH HAS READ THIS
AGREEMENT, UNDERSTANDS IT AND IS VOLUNTARILY ENTERING INTO IT. THE EXECUTIVE
ACKNOWLEDGES AND UNDERSTANDS THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN
AND UNKNOWN CLAIMS.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the dates indicated below.
INLAND ENTERTAINMENT CORPORATION,
A Utah corporation
Dated: 2/10/98 By: /S/ L. Xxxxxx Xxxxx
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L. Xxxxxx Xxxxx, XX
Chairman of the Board and Chief Executive
Officer, President and Chief Operating Officer
"Executive"
Dated: 2/10/98 /S/ Xxxxx X. Xxxxxxxx signature
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Xxxxx X. Xxxxxxxx printed name
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