SEVERANCE AGREEMENT AND RELEASE
Exhibit 10.24
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release (“Agreement”) is entered into as of the 16th day of
December, 2005 (the “Effective Date”). The parties to this Agreement are Hastings Entertainment,
Inc. (“Hastings” or the “Company”) and Xxxxx Xxxxx (“Xxxxx”).
Recitals
1. Xxxxx has been employed by Hastings as Vice President of Product and has
voluntarily resigned his position as the Vice President of Product with Hastings effective
December
7, 2005, in order to pursue other business opportunities. Xxxxx will remain an employee of
Hastings
through January 13, 2006.
2. Hastings and Xxxxx do not anticipate that there will be any dispute between them or
legal claims arising out of Xxxxx’ separation from the Company, but nevertheless desire to
settle fully
and finally any and all differences, causes of action, claims, or disputes that might
otherwise arise out
of Xxxxx’ employment with the Company.
Agreement
IN CONSIDERATION OF THE MUTUAL PROMISES CONTAINED HEREIN, IT IS AGREED AS FOLLOWS:
1. Temporary Continuation of Pay. Hastings will continue to pay Xxxxx his regular
salary through January 13, 2006. These payments will be issued through the Company’s payroll
less
all applicable taxes and withholding. Xxxxx will receive his vested employee benefits
(including a
proportionate part of the bonus payable for the period ending January 31, 2006 payable when
bonuses for the period ending January 31, 2006 are paid, and $7,379.25 for accrued but not
used
vacation pay) payable on or before December 31, 2005.
2. Severance Benefits.
(a) Following his final date of employment, Hastings agrees to pay Xxxxx a sum equal
to ten (10) months of his current base salary plus bonus computed at his bonus percentage for
such
period based upon an assumed achievement of 100%, equal to $152,303.00, payable in one lump
sum less all applicable taxes and withholding. This payment will be made after January 1,
2006, but
before February 5, 2006.
(b) If Xxxxx has not obtained employment by October 15, 2006, Hastings will pay
Xxxxx on a month by month basis his base salary plus bonus computed at his bonus percentage
for
such period based upon an assumed achievement of 100% for up to an additional three-month
period
payable in the amount of $ 15,230.30 per month, payable once a month, beginning October 15,
2006,
and continuing until January 15, 2007, unless Xxxxx finds a job sooner. If Xxxxx becomes
employed
| SEVERANCE AGREEMENT AND RELEASE | Page 1 |
during such three-month period this payment shall cease. For purposes of this Agreement,
“Employment” means any contract of hire in excess of eighty (80) hours per month whether written,
verbal or implied whereby Xxxxx receives compensation of any kind in exchange for work or services
including but not limited to consulting, customer care, data processing, data analysis or market
planning.
(c) In addition, the Company will pay the Company’s group health care plan premiums on behalf
of Xxxxx and his family for the ten (10) month period beginning January 13, 2006 and during any
period payments are made to Xxxxx pursuant to Section 2.b above.
3. Placement Assistance. The Company will provide placement assistance to assist
Xxxxx through Right Management Consultants for a period of three (3) months, starting April 1,
2006.
4. Letter of Recommendation. Hastings will execute a letter of recommendation on
Xxxxx’ behalf which letter will be subject to reasonable approval by Xxxxx. Hastings agrees to
supply
up to twenty-five (25) original copies for Xxxxx at his request. Any subsequent inquiry
regarding
Xxxxx’ employment and subsequent resignation will be addressed by supplying a copy of the
letter of
recommendation or otherwise communicating its content.
5. Options. The unvested Options granted pursuant to Option Grant Nos. 514 (being
6000 shares) and 609 (being 9000 shares) will be vested as of January 13, 2006, and all
Options
under such grants must be exercised within ninety (90) days of January 13, 2006. Any option
shares
under such grants not exercised by such date will expire. All other Options Grants remain in
force as
written, and must be exercised within ninety (90) days of January 13, 2006 and Xxxxx agrees to
release grants 12, 552 and 675 as to the unvested portions of such options.
6. Return of Property. Xxxxx agrees to return to the Company any property owned by
the Company in a timely manner, provided that he may retain his Company phone at the Company’s
expense (based upon historical costs) through March 15, 2006, retain the cell phone at his
cost
thereafter and the digital video camera provided to him by the Company.
7. Agreement Confidentiality. Xxxxx represents and agrees that the existence, terms
and conditions of this Agreement shall be kept strictly and completely confidential subject
only to
the following exceptions:
| X. | Xxxxx may tell, on condition of confidentiality, his immediate family, appropriate governmental agencies, such as the Internal Revenue Service, Bankruptcy trustee, his investment adviser, attorneys, and accountant; and any other person he is required to tell by law or must do so to effectuate this Agreement. |
| SEVERANCE AGREEMENT AND RELEASE | Page 2 |
| X. | Xxxxx may disclose relevant information regarding the terms and conditions of this Agreement in response to a validly executed and served subpoena or other court order. However, in so responding, Xxxxx will advise the court and all interested parties of the existence and substance of this confidentiality agreement and will take all reasonable steps necessary to limit his disclosure of confidential information governed by this Agreement. |
The phrase, “terms and conditions of this Agreement” means those terms and conditions that
appear on the face of the Agreement and any and all discussions, information and documentation
used, generated and/or relied upon in producing this Agreement. Except to the extent necessary to
enforce this Agreement, it is further agreed that neither this Agreement nor any part thereof is to
be used or admitted into evidence in any proceeding of any character, judicial or otherwise, now
pending or hereafter instituted.
8. Release. In consideration of the severance pay, severance benefits, and other
promises contained herein, and as a material inducement to Hastings to enter into this
Agreement,
Xxxxx hereby irrevocably and unconditionally releases, acquits, forever discharges, and agrees
to hold harmless Hastings and its agents, assigns, directors, officers, employees,
representatives,
attorneys, divisions, subsidiaries, affiliates and all persons acting by, through, under, or
in concert
with any of them (hereinafter “the releasees”), from any and all claims, causes of action,
demands or
liabilities whatsoever, whether known or unknown or suspected to exist by Xxxxx that he ever
had or
may now have against the releasees, or any of them, including, without limitation, any claims,
causes
of action, demands, or liabilities in connection with either Xxxxx’ employment with the
Company or
his resignation from the Company. This Agreement expressly covers, but is not limited to, any
claims that Xxxxx may have raised under any state or federal statutory or common law
prohibiting
discrimination in employment on the basis of age, gender, disability, race, national origin,
religion,
“whistleblower” or on any other basis prohibited by law including claims arising under Title
VII of
the Civil Rights Act of 1964, Section 21.051 of the Texas Labor Code, and the Americans with
Disabilities Act.
In addition and in consideration of the promises contained in this Agreement, Xxxxx hereby
waives, releases and forever discharges, and agrees that he will not in any manner institute,
prosecute, or pursue, any complaint, claim, charge, demand, or suit, whether in law or in equity,
which asserts or could assert at common law or any statute, rule or any grounds whatsoever, any
claim or claims under the federal Age Discrimination in Employment Act, 29 U.S.C. §621 et seq.,
against any one or all of the releasees with respect to any event, matter, claim, damage, or
injury, whether known or unknown, arising out of his employment and resignation of employment with
the Company and its subsidiaries and/or the execution of this Agreement.
9. Reasonable Assistance & Cooperation. In consideration of the severance payment
and other benefits provided to Xxxxx in this Agreement, from the Effective Date through
January 13,
2006, Xxxxx agrees to provide reasonable assistance and cooperation to Hastings regarding
certain
items and areas over which he managed or otherwise worked on while employed at the Company,
| SEVERANCE AGREEMENT AND RELEASE | Page 3 |
not to exceed twenty (20) hours per month or a total of thirty (30) hours overall. Xxxxx
acknowledges and agrees that his receipt of the severance payment and other benefits provided for
in this Agreement are contingent upon his good faith efforts to provide reasonable assistance and
cooperation during the transition period identified in paragraph 1 above. Further, the parties
acknowledge and agree that “reasonable assistance and cooperation” includes both parties, including
their representatives or family members, refraining from communicating in any manner any
disparaging remarks, comments or gestures concerning each other or any employee, officer or agent
of Hastings. Xxxxx agrees to hold an exit interview upon his final day of employment, and the
Parties agree that anything stated in the exit interview will not violate any of the terms of this
Agreement.
10. COBRA. Xxxxx hereby acknowledges that Hastings or its authorized designee has
advised him that pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA) he has the right to elect continued coverage under the Company’s group health plan at
his
own expense once Hastings stops paying for his health insurance under paragraph 2. Such
election
must be made no later than sixty (60) days after his resignation.
11. No Admission of Fault on Behalf of Hastings. This Agreement shall not in any way
be construed as an admission by Hastings, its agents, employees, directors, officers,
representatives, or assigns, or its subsidiaries, of any act of wrongdoing whatsoever against
Xxxxx or any other person.
12. Complete Agreement. This Agreement sets forth the entire agreement between the
parties hereto and fully supersedes any and all prior agreements or understandings between the
parties hereto pertaining to the subject matter hereof.
13. Acknowledgment of Right to Seek Counsel. Xxxxx acknowledges that he has a
complete and unequivocal right to seek legal advice and/or representation from any attorney of
his choice regarding the matters set forth in this Agreement. Xxxxx acknowledges that he has
either consulted with counsel and is satisfied with the representation he received with respect to
this Agreement, or he acknowledges that he has knowingly and voluntarily waived his right to seek
legal representation.
14. Choice of Forum and Venue. The terms of this Agreement shall be construed in
accordance with the laws of the State of Texas. Any proceeding brought to enforce or interpret
this Agreement shall be brought in Potter County, Texas.
15. Time to Sign and Revoke Agreement. In accordance with the Older Workers
Benefit Protection Act, 29 U.S.C. §626(f)(l), Xxxxx acknowledges and agrees that he has the
right to examine the terms of this Agreement for twenty-one (21) calendar days from the date he first
received this Agreement before executing the Agreement, but has chosen to waive this right.
| SEVERANCE AGREEMENT AND RELEASE | Page 4 |
Xxxxx understands that for a period of seven (7) calendar days after he executes this
Agreement he has the right to revoke it and this Agreement shall not become effective and
enforceable until after the passage of this seven day period without Xxxxx having revoked it.
Non-revocation shall be evidence by an executed copy of the attached Statement of Non-Revocation.
This Agreement may not be revoked after the seven day period.
16. Confidentiality, Non-Disclosure Following Termination and Covenant Not to Compete. Xxxxx
acknowledges and stipulates that: 1) during the time he worked for Hastings, he was placed in a
position to become acquainted with Hastings’ Proprietary and Confidential Information (defined
below); 2) the use or disclosure of Proprietary and Confidential Information by Xxxxx, except as
expressly authorized by Hastings, is prohibited and would seriously damage Hastings; 3) in
addition to being given access to Proprietary and Confidential Information Xxxxx received material
benefits as a result of his employment, including compensation and experience; and 4) in addition
to the foregoing, Xxxxx agrees as follows:
| X. | Xxxxx and his immediate family shall not, without the prior written consent of Hastings, directly or indirectly: | ||
| (i) | disclose, divulge, furnish or make accessible to any person, or copy, take or use in any manner, any of the Proprietary and Confidential Information of Hastings; | ||
| (ii) | take any action that might reasonably or foreseeably be expected to compromise the confidentiality or proprietary nature of any of the Proprietary and Confidential Information of Hastings; | ||
| (iii) | fail to follow the reasonable guidelines established by Hastings from time to time regarding the confidential and proprietary nature of the Proprietary and Confidential Information; or | ||
| (iv) | divulge, furnish or make accessible to any other employee of Hastings a copy of this Agreement, or in any other manner divulge the contents thereof. | ||
| (v) | discuss or disclose information relating to his employment or matters or issues relating to the Company. |
| X. | Xxxxx agrees to return all documents, discs, files, software, compilations of information, or any other materials provided or made available to him by Hastings (including all copies of any such material) that contain Proprietary and Confidential Information as defined by this Agreement. |
| SEVERANCE AGREEMENT AND RELEASE | Page 5 |
| C. | “Proprietary and Confidential Information” means all of the data, documents, materials, information and ideas of Hastings, including, without limitation: any and all applicant and employee records and information, customer and vendor records and information, operation methods and information, marketing information and strategies, accounting and financial information, internal publications and memoranda, goodwill, this Agreement and its contents, computer systems, software, and other matters considered proprietary or confidential by Hastings. Proprietary and Confidential Information shall not include: (i) any information or material that Xxxxx can establish has become publicly available; (ii) any information or material required to be disclosed by order of a court of competent jurisdiction; or (iii) any otherwise confidential information or material that Hastings* Board of Directors allows to be disclosed by Xxxxx, as evidenced by the Board’s written consent for such disclosure. | ||
| D. | Covenant Not to Compete. | ||
| (a) | Length of Time and Area. For a period of ten(10) months after the Effective Date, Xxxxx shall not accept any position with Blockbuster, Inc., Movie Gallery, Inc., or Best Buy Co., Inc. | ||
| (b) | The ownership by Xxxxx of ten percent (10%) or less of a publicly-traded class of securities in one of the above-named companies shall not be deemed a violation of this Section 16. | ||
| (c) | Reasonableness of Limitations. Xxxxx acknowledges and agrees that the covenant not to compete contained this Section 16 is ancillary to or part of this Severance Agreement and Release and that the limitations contained in this covenant not to compete (1) are reasonable limitations as to time, geographical area, and scope of activity to be restrained; (2) do not impose a greater restraint than is necessary to protect the business interests of Hastings, which, not by limitation, include the Proprietary and Confidential Information; and (3) will not create a hardship on Xxxxx. | ||
| (d) | Partial Invalidity. If for any reason any court of competent jurisdiction determines that the restrictions contained in this covenant not to compete are not reasonable, that the consideration is inadequate, or that Xxxxx has been prevented from earning a livelihood, such restrictions should be interpreted, modified, or rewritten to include as much of the duration, scope, and geographic area identified in this Section 16 as will render such restrictions valid and enforceable. |
| SEVERANCE AGREEMENT AND RELEASE | Page 6 |
| (e) | Nonsolicitation of Employees. For a period of ten months (10) months following the Effective Date, Xxxxx shall not directly solicit, encourage, or induce any other employees of Hastings to terminate employment with Hastings or employ or offer employment to any such other employee of Hastings. |
| 17. | Assignment of Intellectual Property. |
| X. | Xxxxx agrees that any idea, innovation, concept, useful article, software, program, database, system, modification to an existing system or program, or other analytical tool he created or developed as part of his employment with Hastings (collectively referred to as ‘“Development”) shall be the sole exclusive property of Hastings, and Xxxxx agrees that he retains no intellectual property rights in any such Development. As such, Xxxxx expressly assigns to Hastings all right, title and interest in any and all Developments, made or conceived solely or jointly by Xxxxx, whether or not such Developments are patentable, copyrightable, or protectable in any other manner, that relate in any way to the business or operations of Hastings. | ||
| B. | The assignment of any Development only applies to any Development(s) created while Xxxxx was employed by Hastings. | ||
| C. | To the extent Xxxxx claims that any Development was his own intellectual property prior to the date he began his employment with Hastings, Xxxxx agrees to list such Development below, with a brief description that is sufficient to allow the parties to easily identify what Xxxxx claims as his own. Xxxxx claims the following Development(s) as his own creation prior to the date he began his employment with Hastings, and does not assign his right, title and interest in such Development(s) to Hastings: |
None
| (Write “NONE” if no prior Developments exist). | |||
| D. | Excluded from Xxxxx’ assignment of his Developments are the following, which Xxxxx cannot assign to Hastings because of a prior agreement with , which is effective until . |
None
| SEVERANCE AGREEMENT AND RELEASE | Page 7 |
| (Write “NONE” if no prior agreements exist). |
| X. | Xxxxxxxx and its licensees are not required to designate Xxxxx as the author or creator of any Development assigned in this paragraph 16 when distributing the Development publicly or otherwise. To the extent Xxxxx writes any article in any publication or trade journal referencing or relating to any Development, the article shall be considered a joint work of Hastings and Xxxxx, shall recognize both Hastings and Xxxxx as joint authors, and shall include information identifying Xxxxx as an employee of Hastings. |
18. Right to Injunctive Relief and Other Remedies. If it is determined that Xxxxx has
breached any of the covenants contained in paragraphs 8, 16, and 17, Hastings may obtain an
injunction prohibiting such breach. Xxxxx expressly stipulates and agrees that his obligations
under this Agreement are specifically enforceable by temporary and permanent injunctive relief.
Xxxxx further agrees that Hastings shall not be required to post a bond in order to obtain
injunctive relief against Xxxxx for violating any of the covenants contained in paragraphs 8, 16, and 175, or if
a bond is required by law or by any court of competent jurisdiction, Xxxxx hereby agrees to a bond in
the lowest amount permitted by law. Nothing in this paragraph shall be deemed to deny Hastings the
right to seek damages, or any other remedy that may be available, in addition to the
injunctive provided herein.
19. Notices. All communications and notices between the parties hereto shall be given at
the following addresses:
Hastings Entertainment, Inc.
c/o Xxxx Xxxxxxx, Vice-President Human Resources
0000 Xxxxxx Xxxx.
Xxxxxxxx, Xxxxx 00000
c/o Xxxx Xxxxxxx, Vice-President Human Resources
0000 Xxxxxx Xxxx.
Xxxxxxxx, Xxxxx 00000
Xxxxx Xxxxx
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
0000 Xxxxx Xxxxx
Xxxxxxxx, XX 00000
Notice under this Agreement will be considered to have been accomplished on the date the party
deposits in the United States Mail a copy of the notice at issue, which must be properly addressed
using the addresses identified in this paragraph, postage prepaid with adequate postage thereon.
| SEVERANCE AGREEMENT AND RELEASE | Page 8 |
20. INDEMNITY. XXXXX AGREES TO INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS HASTINGS
AND ITS EMPLOYEES, AFFILIATES, AND ASSIGNS FROM ANY AND ALL LIABILITY, CLAIMS, LOSSES, COSTS,
ATTORNEYS’ FEES AND/OR DAMAGES OF ANY SORT THAT ARISE OR RESULT FROM THE BREACH OF ANY WARRANTIES
OR REPRESENTATIONS MADE IN THIS AGREEMENT.
HASTINGS AGREES TO INDEMNIFY, RELEASE, DEFEND AND HOLD HARMLESS XXXXX FROM ANY AND ALL
LIABILITY, CLAIMS, LOSSES, COSTS, ATTORNEYS’ FEES AND/OR DAMAGES OF ANY SORT THAT ARISE OR RESULT
FROM THE PERFORMANCE OF XXXXX’ DUTIES CONDUCTED IN GOOD FAITH WHILE ACTING ON HASTINGS’ BEHALF OR
THE BREACH OF ANY WARRANTIES OR REPRESENTATIONS MADE BY IT IN THIS AGREEMENT.
BY SIGNING BELOW, XXXXX ACKNOWLEDGES THAT HE HAS READ AND CAREFULLY CONSIDERED THIS AGREEMENT
AND UNDERSTANDS THAT IT IS A FULL RELEASE OF ALL CLAIMS KNOWN OR UNKNOWN. XXXXX ACKNOWLEDGES AND
AFFIRMS THAT HE HAS HAD AN OPPORTUNITY TO ASK QUESTIONS CONCERNING THIS AGREEMENT AND HE HAS HAD
HIS QUESTIONS ANSWERED TO HIS COMPLETE SATISFACTION. XXXXX ACKNOWLEDGES THAT HE IS SIGNING THIS
AGREEMENT FREELY AND VOLUNTARILY.
| HASTINGS ENTERTAINMENT, INC., a Texas corporation |
||||
| By: | /s/ Xxxx X. Xxxxxxxxx | |||
| Title: | 12/16/05 | |||
| on Behalf of the corporation | ||||
| EMPLOYEE |
||||
| /s/Xxxxx Xxxxx | ||||
| XXXXX XXXXX | ||||
| 12/14/05 | ||||
| Date | ||||
| SEVERANCE AGREEMENT AND RELEASE | Page 9 |
STATEMENT OF NON-REVOCATION
By signing below, 1 hereby verify that I have chosen not to revoke my Agreement to and
execution of the “Severance Agreement and Release” dated December 16, 2005 between myself and
HASTINGS ENTERTAINMENT, INC. My signature below confirms my continued agreement to the terms of
that Agreement in all its particulars including my release and waiver of any and all claims
relating to my employment and voluntary resignation of employment with HASTINGS ENTERTAINMENT, INC.
/s/ Xxxxx Xxxxx |
12/22/05 | |||
/s/
Xxxx Xxxxxxx |
12/22/05 | |||
Xxxx Xxxxxxx |
||||
NOTICE: DO NOT SIGN, DATE OR RETURN THIS DOCUMENT UNTIL EIGHT (8) DAYS AFTER YOU SIGN THE
“SEVERANCE AGREEMENT AND RELEASE.”
| SEVERANCE AGREEMENT AND RELEASE | Page 10 |
