EXHIBIT 10.31
SEPARATION AGREEMENT AND RELEASE
THIS SEPARATION AGREEMENT AND RELEASE (the "Agreement") is made and entered
into as of the 11th day of NOVEMBER, 1996 by and between FIRST AMERICAN
RAILWAYS, INC., (the "Company"), and XXXXXX X. XXXXXXXX ("Garfield").
RECITALS
A. Company and Garfield are parties to a certain employment agreement
dated as of the 16th day of February, 1994 (the "Employment Agreement"); and
X. Xxxxxxxx has stated his desire to resign his current positions as a
director and Vice Chairman of the Board of Directors of the Company, and to
cease further employment by the Company. Company and Garfield desire to
terminate those relationships on the terms and conditions as set forth herein;
and
C. As used herein the termination date ("Termination Date") shall mean
November 9, 1996 for employment purposes. Garfield's resignation as director and
Vice Chairman shall be effective upon his execution of this Agreement. The
Company and Garfield agree to the release of the press release attached as
Exhibit "A" as an announcement of the termination of Garfield's relationship
with the Company. From and after the termination date, Garfield shall not hold
himself out as an employee or officer. As of the execution of this Agreement
Garfield shall not hold himself out as a director of the Company, and shall not
be entitled to any further compensation from the Company, except as set forth
herein.
NOW, THEREFORE, in consideration of the recitals set forth above, which are
acknowledged as true and are to be considered part of this Agreement, the mutual
promises and agreements herein contained, and other good and valuable
consideration the present receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
Section 1. SEVERANCE PAYMENT. In consideration of this Agreement and the
releases granted by Garfield herein, Company agrees to pay Garfield upon
conclusion of the revocation period set forth in Section 9 and after receipt of
the items described in Section 10 the total gross sum of Fifty Thousand Dollars
and NO/100 ($50,000.00)), subject to deduction for any and all income tax and
other withholding required under the laws of the United States and the State of
Florida. The severance payment provided for hereunder also includes any and all
travel and other claimed business expenses incurred by Garfield as of the date
of this Agreement. No further compensation or benefits or other monies are owed
to Garfield by Company or arising out of his employment.
Section 2. STOCK REGISTRATION AND PURCHASE OPTION. At any time and from
time to time after the date of this Agreement, whenever the Company in its sole
discretion proposes to file a Registration Statement with the Securities and
Exchange Commission for a public offering and sale of securities of the Company
and such Registration Statement includes shares of the Company's securities
beneficially owned by Xxxxx X. Xxxxxx or Xxxxxx X. Xxxxx or both, the Company
will prior to such filing give written notice to Xx. Xxxxxxxx of its intention
to do so. Upon the written request of Xx. Xxxxxxxx, given within fifteen (15)
days after the Company provides such notice, the Company shall cause an amount
of shares proportionate to that offered by Xxxxx X. Xxxxxx or Xxxxxx X. Xxxxx
(or if Xxxxx X. Xxxxxx or Xxxxxx X. Xxxxx offer in different proportions, then
at the higher of the proportions) owned by Xx. Xxxxxxxx, which the Company has
been requested in writing by Xx. Xxxxxxxx to register, to be included in such
Registration Statement and registered under the Securities Act of 1933 to the
extent necessary to permit the sale or other disposition of such securities. Any
such registration of the Company's securities beneficially owned by Xx. Xxxxxxxx
shall be at the Company's expense (except for any underwriter's commission and
discount as well as any underwriter expense allowance or reimbursement
therefore) and shall otherwise be effected on the same terms and conditions
under which the Company registers shares of its securities beneficially owned by
Xxxxx X. Xxxxxx, or, in the absence of such shares, on the same terms and
conditions under which the Company registers shares of its securities
beneficially owned by Xxxxxx X. Xxxxx.
Section 3. NON-DISCLOSURE NON-COMPETITION AGREEMENT. Garfield remains
subject to the provisions of the Employment Agreement dated February 16, 1994
with respect to confidentiality and non-competition (the "Restrictive
Covenants"). In the event a court of competent jurisdiction should determine
that the Restrictive Covenants are not enforceable by reason of duration or
geographical extent, the parties request such court or panel of arbitrators to
reform the Restrictive Covenants such that the Company shall enjoy to the
maximum possible extent the non-competition provisions thereof.
Garfield acknowledges that the Company engages or is considering engaging
in an entertainment type "Fun-Train" operation in the State of Florida, a
destination railway (i.e. The Durango & Silverton Narrow Gauge Railroad Company)
in the State of Colorado, and is considering Fun-Train and shortline, scenic,
tourist, destination related railroad business opportunities in the States of
Colorado, California, Nevada, Arizona, New Mexico, North Carolina, Tennessee,
Alaska, Virginia, and the countries of Panama and Jamaica. Garfield acknowledges
that there are numerous other business and employment opportunities for which he
is suited by reason of education and experience which would provide satisfactory
employment opportunities for Garfield during the two year period
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following the Termination Date with businesses which do not compete with the
business of the Company as described above.
The Company acknowledges that Garfield intends to and agrees that he may
enter into and actively work on a project for the development and construction
of a rail system between Orlando and Port Canavral (the "Beeline Project"). The
Beeline Project may include passenger and freight service, track leasing,
property development, and other commercial ventures. The Company agrees that
Garfield's work on, or participation in, the Beeline Project, either directly or
through an entity in which he has an ownership interest (collectively, the
"Beeline Entity"), shall not constitute competition with the Company in
violation of the Restrictive Covenants. During the two year period covered by
the Restrictive Covenants, Garfield agrees that he and the Beeline Entity shall
not develop a Fun-Train or similar entertainment train concept as part of the
Beeline Project or otherwise. In addition, for a two year period commencing upon
the date upon which trackage is complete and made available for the commercial
use by the Beeline Entity and for only so long as Xxxxx X. Xxxxxx or his estate
owns at least 10% of the outstanding shares of stock of the Company, Garfield
and/or the Beeline Entity will grant the Company a right to offer fun-style,
shortline, scenic, tourist, destination related passenger service on any
trackage of the Beeline Project at a market rate as charged any other operator
and on such other customary terms agreed to with any other operator.
Notwithstanding Section 11C of this Agreement, this right may be assigned only
to a subsidiary of the Company or a joint venture in which the Company owns at
least a 50% interest.
Company's agreement to Section 3 of this Agreement shall not constitute a
waiver of any exclusive contractual right Company has with any non party to this
Agreement.
Section 4. GARFIELD'S RELEASE AND COVENANT NOT TO XXX. In consideration of
the severance payments to be paid to him and the other consideration provided
herein, Garfield, to the maximum extent permitted by applicable law, hereby
releases and forever discharges the Company, and any subsidiary affiliated or
related company or trust, including but not limited to, its or their respective
predecessors, past and present officers, directors, shareholders, agents,
employees, legal representatives, successors, trustees, fiduciaries, and assigns
(collectively the "Company Group") of and from (and does hereby waive), any and
all rights, contracts, claims (including claims sounding in tort or equity and
any and all administrative claims), damages, actions, causes of actions, common
suits, whether or not presently known suspected or claimed, which Garfield ever
had, now has or claims, or might hereafter have or claim against the Company
Group (including the Company) and each and all of them, relating to directly or
indirectly, any matter or thing occurring, in whole or in part, from the
beginning of time to the date hereof, including without limitation, any and all
rights, claims, grievances, arbitrations, or causes of action which Garfield has
asserted, could assert or
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which could be asserted on his behalf (A) relating to his employment with the
Company prior to the date of execution and delivery of this Agreement or his
separation from such employment and (B) under the Age Discrimination Act of 1967
(the "ADEA"), Title VII of the Civil Rights Acts of 1991, the American with
Disabilities Act of 1990, the Fair Labor Standards Act, and wage and
discrimination laws of the United States or any state of the United States or
any other country and their subdivisions, including any state or local law,
ordinance regulation or rule, all the foregoing as heretofore or hereafter
amended or any court decree, heretofore or hereinafter promulgated. Garfield
hereby also waives any and all rights under any laws of any jurisdiction in the
United States which would limit the foregoing release and waiver of which he has
knowledge as of the date hereof. Garfield recognizes that, among other things,
he is releasing the Company Group (including the Company) of and from any and
all claims he might have against them for pain and suffering, emotional
distress, and for discrimination based on age, sex, national origin or color,
mental or physical handicapped or disability, and religious belief.
Garfield represents and warrants that he has not heretofore assigned or
transferred to any person any of the matters released under this Section, nor
has he filed any grievances, charges or complaints against any of the Company
Group with any governmental or administrative agency or court.
Garfield also covenants not to xxx the Company Group, including the Company
and each of them, for any of the matters covered by this Section. Garfield
agrees to and shall indemnify and hold the members of the Company Group
(including the Company), and each of them, harmless from and against any claims,
grievance, loss, damage, liability cost or expense including without limitation
attorneys fees by reason of his breach of his releases, representations,
warranties and covenants made under this Section.
Section 5. COMPANY'S RELEASE AND COVENANT NOT TO XXX. In consideration of
the consideration provided pursuant to this Agreement, the Company, to the
maximum extent permitted by applicable law, hereby releases and forever
discharges Garfield and his personal representatives (collectively, "Garfield
Group") of and from (and does hereby waive) any and all rights, contracts,
claims (including claims sounding in tort or equity), damages, actions, causes
of action, and suits, whether or not presently known, which the Company ever
had, now has or claims, or might hereafter have or claim against the Garfield
Group (including Garfield) and each and all of them, relating to, directly or
indirectly, any manner or thing occurring in whole or in part, from the
beginning of time to the date hereof. The Company hereby also waives any and all
rights under any laws of any jurisdiction in the United States which would limit
the foregoing release and waiver.
The Company represents and warrants that it has not heretofore assigned or
transferred to any person or entity any of the matters
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released under this section, nor has it filed any grievances, charges or
complaints against any of the Garfield Group with any governmental or
administrative agency or court. The Company also covenants not to xxx the
Garfield Group, including Garfield, and each of them, for any of the matters
covered by this section. The Company agrees to and shall indemnify and hold the
members of the Garfield Group (including Garfield), and each of them, harmless
from any and against any claim, grievance, loss, damage, liability, cost or
expense, without limitation, attorneys' fees by reason of its breach of this
release, representation, warranties and covenants made under this section.
Section 6. NO INVOLUNTARY AGREEMENTS. GARFIELD ACKNOWLEDGES THAT THE
COMPANY HAS GIVEN GARFIELD 21 DAYS TO CONSIDER THIS AGREEMENT. GARFIELD ALSO
ACKNOWLEDGES THAT THE COMPANY HAS ADVISED HIM TO CONSULT WITH A LAWYER BEFORE
SIGNING THIS AGREEMENT. GARFIELD ALSO REPRESENTS AND WARRANTS THAT (1) HE HAS
HAD THE OPPORTUNITY TO CONSULT WITH AND HAS OBTAINED THE BENEFIT OF THE LEGAL
COUNSEL OF HOLLAND & KNIGHT IN NEGOTIATION AND PREPARATION OF THIS AGREEMENT;
(2) THAT HE SIGNS THIS AGREEMENT OF HIS OWN FREE WILL WHILE NOT SUBJECT TO
DURESS; (3) THAT HE IS RECEIVING CONSIDERATION IN ADDITION TO THAT WHICH HE IS
ALREADY ENTITLED TO; (4) THAT HE HAS RECEIVED ALL INFORMATION HE REQUIRES FROM
COMPANY IN ORDER TO MAKE A KNOWING AND VOLUNTARY RELEASE AND WAIVER OF ALL
CLAIMS AGAINST COMPANY, INCLUDING A RELEASE OF ALL CLAIMS UNDER ADEA; AND (5)
THAT HE HAS NOT RELIED UPON ANY STATEMENT OF FACT OR OPINION BY COMPANY OR ANY
OF ITS REPRESENTATIVES IN ENTERING INTO THIS AGREEMENT.
THE PARTIES ACKNOWLEDGE AND AGREE THAT THEY HAVE READ THIS AGREEMENT IN ITS
ENTIRETY, THAT THEY HAVE HAD AMPLE OPPORTUNITY TO CONFER WITH THEIR OWN COUNSEL
FOR THEIR ASSISTANCE AND ADVICE CONCERNING THIS AGREEMENT, THAT THEY HAVE
NEGOTIATED THE TERMS OF THIS AGREEMENT, THAT THEY UNDERSTAND THE TERMS OF THIS
AGREEMENT, AND UNDERSTAND THAT THE TERMS OF THIS AGREEMENT ARE ENFORCEABLE,
AND THAT THEY HAVE ENTERED INTO THIS AGREEMENT FREELY AND VOLUNTARILY.
Section 7. REVOCATION PERIOD. The parties further acknowledge that for a
period of seven (7) days following the execution of this Agreement, Garfield
may revoke this Agreement and this Agreement shall not become effective or
enforceable until the seven (7) day revocation period has expired. Garfield
further acknowledges that this Agreement and the release contained herein
satisfy all requirements for an effective release by Garfield of all age
discrimination claims under ADEA.
Section 8. RETURN OF COMPANY PROPERTY. Prior to his entitlement to receive
the severance payment described in Section 1, Garfield shall return to the
Company any and all property belonging to or relating to the Company which has
been in his possession, custody or control, including, without limitation, that
certain '94 Oldsmobile automobile leased from SmartLease,
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photocopier, video recorder, fax machine, Samsung 75 computer, Hewlett Packard
printer, any and all office keys, file keys, cellular phones, identification
cards, security cards, credit cards, computer access codes, customer, supplier
and advertiser lists and data, reports, memoranda, notes, financial data
(including, without limitation, balance sheets, profit and loss statements,
income and expense statements, projections, forecasts and budgets), and any
other such material and other property which he prepared or helped to prepare or
to which he had access, and any and all copies, records of and extracts from any
such materials and any other property. Upon execution of this Agreement Garfield
will cease using phone number 000-000-0000. Xxxxx Xxxxx is authorized to receive
the property described in this Section on behalf of the Company.
Section 9. REMEDIES. Garfield expressly acknowledges and agrees that
the business of the Company is highly competitive and that a violation of any of
the provisions of this Agreement (including especially the non-disclosure and
non-competition agreements hereof) may cause immediate and irreparable harm,
loss and damages to the Company not adequately compensable by a monetary award.
Without limiting any of the other remedies available to the Company at law or in
equity, Garfield agrees that any actual or threatened violation of any of the
provisions of this Agreement may be immediately restrained or enjoined by any
court of competent jurisdiction, and that any temporary restraining order or
emergency, preliminary or final injunction may be issued in any court of
competent jurisdiction without notice and without bond. As used in this
Agreement, the term "any court of competent jurisdiction" shall include the
state and federal courts sitting in or with jurisdiction over actions arising in
Broward County, State of Florida, the jurisdiction and venue of which are hereby
expressly consented to by Garfield, all objections thereto being expressly
waived by Garfield. Garfield agrees to indemnify and hold the Company harmless
for any costs, including reasonable attorneys' fees incurred by the Company in
enforcing the provisions hereof, including obtaining any injunction hereunder.
Section 10. NON-INTERFERENCE WITH CSXT AGREEMENT. The Company has entered
into an agreement with CSXT, dated October 31, 1996 the ("CSXT Agreement"),
concerning, among other things, the granting to the Company of certain track
usage rights. Garfield agrees not to take any actions which would interfere,
directly or indirectly, with the Company's rights under the CSXT Agreement.
Section 11. MISCELLANEOUS.
A. Each party hereby agrees to cooperate with the other and to execute
and deliver any additional documents and instruments, and to take such other
action, as the other party may reasonably request from time to time to
effectuate the provisions and purposes of this Agreement or to satisfy any
requirements of
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the Securities and Exchange Commission, or any other state or fedreal agency.
B. Except as otherwise provided in this Agreement, all notices required
or permitted hereunder or process relating thereto shall be in writing and
signed by the party giving notice, and shall be deemed to have been given when
hand delivered by personal delivery, by Federal Express or similar courier
service, by facsimile, or three (3) days after being deposited in the United
States Mail, registered or certified, with postage prepaid, return receipt
requested, addressed to the following:
If to the Company: First American Railways, Inc.
0000 Xxxxx Xxxxx Xxxxxxx
Xxxxx Xxxxxx, XX 00000
Facsimile: 000-000-0000
Attn: Xxxxx X. Xxxxxx
If to Garfield: Xxxxxx X. Xxxxxxxx
0000 Xxxxx Xxxxx Xxxx.
Xxxxxxx Xxxxx, XX 00000
Facsimile: 000-000-0000
With a copy to: Holland & Knight
Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: 000-000-0000
Attn: Xxxxxx Xxxxxxx
or to such other address as either party may designate for himself or itself by
notice given to the other party from time to time in accordance with the
provisions hereof.
C. This Agreement may not be assigned by Garfield, whether by operation
of law or otherwise. Any right, title or interest of the Company arising out of
this Agreement shall be assigned to any corporation controlling, controlled by,
or under the common control of the Company, or succeeding to the business and
substantially all of the assets of the Company. Subject to the foregoing, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective heirs, legatees, devises, personal representatives,
successors and assigns.
D. No delay on the part of either party in the exercise of any right or
remedy shall operate as a waiver hereof, and no single or partial exercise by a
party of any right or remedy shall preclude other or further exercise thereof or
the exercise of any other right or remedy. The waiver any breach or condition of
this Agreement by either party shall not constitute a precedent in the future
enforcement of any of the terms and conditions of this Agreement.
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E. The headings of sections and subsections contained in this Agreement
are merely for convenience of reference and shall not affect the interpretation
of any of the provisions of this Agreement. This Agreement is demed to have
been negotiated jointly by the parties, and any uncertainty or ambiguity shall
not be construed for or against either party as an attribution of drafting to
either party. Whenever the context so requires, the singular shall include the
plural and vice versa. All words and phrases shall be construed as masculine,
feminine or neuter gender, according to the context.
F. Whenever possible, each provision of this Agreement shall be
construed and interpreted in such manner as to be effective and valid under
applicable law, but if any other provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or be invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition without invalidating the remainder of such provision or any other
provision of this Agreement or the application of such provision to other
parties or circumstances.
G. Any modification of this Agreement may be made only by written
agreement signed by both of the parties to this Agreement.
H. This Agreement is deemed to be delivered to the Company in the State
of Florida, which is recognized by the parties as the place of the making of
this Agreement and the place where the primary obligations of the parties are to
be carried out. Garfield acknowledges that as of the time of entering into this
Agreement he is a resident of the State of Florida. The validity, construction
and enforceability of this Agreement shall be governed in all respects by the
internal laws of the State of Florida, without regard to principles of conflicts
of law. The parties agree to exclusive jurisdiction and venue of any action
brought with respect to this Agreement in accordance with the State of Florida,
sitting in Broward County, Florida.
I. Each party agrees that any dispute arising under this Agreement
(except with respect to any proceeding seeking injunctive relief or temporary
restraint against Garfield, in favor of Company, which may be brought in any
court of competent jurisdiction) shall be submitted by the parties to binding
arbitration by a panel of arbitrators sitting in the City of Fort Lauderdale,
Florida. Any such arbitration proceeding shall be conducted in accordance with
the rules of the American Arbitration Association and the laws of the State of
Florida. The award of the panel of arbitrators who shall be appointed by the
American Arbitration Association, with each party having the right to strike the
name of any one arbitrator (proposed by the Association), shall be final and
binding upon the parties and shall be entered as a final judgment by any court
requested to do so by either party to this Agreement. All costs of such
proceedings, including
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reasonable attorneys' fees and expenses of the prevailing party, shall be
assessed against the non-prevailing party. In the event of any dispute as to
which party is the "prevailing party", the panel of arbitrators shall be
requested to designate the prevailing party for all purposes herunder.
X. Xxxxxxxx and the Company shall keep confidential the terms of this
Agreement. Neither party shall disclose or cause to be disclosed the existence
of the terms of this Agreement. Neither party shall disclose or cause to be
disclosed the events leading up to this Agreement in a fashion which would
disparage the Company or Garfield or interfere with or be detrimental to any
underwriting or financing proposed by Company, Garfield, or Beeline Entity.
Garfield and the Company may disclose the terms of this Agreement only to their
accountant or counsel, and they shall be instructed not to disclose such
information. Garfield and the Company may also disclose the terms of this
Agreement only in response to a lawful subpoena or other governmental process,
after giving notice five (5) days before complying with the subpoena or process,
or in the Company's case, as it may be required by any state or federal law.
K. No third party shall be deemed to be or shall be or become a
beneficiary of any provision of this Agreement. By entering into this Agreement,
the Company has not agreed to grant similar benefits to any other employee,
whether or not similarly situated, and no precendent, practice, policy or usage
shall be established by the entry of the Company into this Agreement. Nothing
contained in this Agreement or any other document or instrument delivered by the
Company to Garfield shall constitute an admission that the Company is liable to
Garfield in any way or has in any way violated any law.
L. This Agreement may be executed in any one or more counterparts, each
of which shall consitute an original, no other counterpart needing to be
produced, and all of which, when taken together, shall constitute one and the
same agreement.
M. THE PARTIES WAIVE THEIR RIGHT TO A JURY TRIAL IN ANY SUBSEQUENT
LITIGATION ARISING FROM OR RELATING TO THIS AGREEMENT.
N. THE PARTIES REPRESENT AND WARRANT TO EACH OTHER THAT THEY HAVE READ
THIS AGREEMENT IN ITS ENTIRETY, THAT THEY UNDERSTAND THE TERMS OF THIS AGREEMENT
AND UNDERSTAND THAT THE TERMS OF THIS AGREEMENT ARE LEGALLY ENFORCEABLE; THAT
THEY HAVE HAD AMPLE OPPORTUNITY TO NEGOTIATE WITH EACH OTHER WITH REGARD TO ALL
OF ITS TERMS; THAT THEY HAVE ENTERED INTO THIS AGREEMENT FREELY, VOLUNTARILY AND
WHILE THEY ARE FREE OF ANY DURESS; THAT THIS AGREEMENT MERGES INTO IT ALL PRIOR
ORAL OR WRITTEN COMMUNICATIONS; THAT THEY INTEND TO AND SHALL BE LEGALLY BOUND
BY THIS AGREEMENT; AND THAT THEY HAVE FULL POWER, RIGHT, AUTHORITY AND
COMPETENCE TO ENTER INTO AND EXECUTE THIS AGREEMENT.
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IN WITNESS THEREOF, the parties hereto have executed this Agreement on the
dates set forth below and as of the date and year first above written.
Witness: FIRST AMERICAN RAILWAYS, INC.
/s/ XXXXX X. XXXXXXXX
------------------------ By: /s/ XXXXX X. XXXXXX
--------------------------------
/s/ [illegible] Name: /s/ Xxxxx X. Xxxxxx
------------------------ --------------------------------
Title: Chairman, CEO
--------------------------------
Date: 11/11/96
--------------------------------
Witness:
/s/ [illegible] /s/ Xxxxxx X. Xxxxxxxx
------------------------ --------------------------------
/s/ XXXXX X. XXXXXXXX XXXXXX X. XXXXXXXX
------------------------
STATE OF FLORIDA )
------------- ) SS:
COUNTY OF DADE
------------- )
The foregoing instrument was acknowledged before this 11th day of November,
1996 by XXXXXX X. XXXXXXXX. He personally appeared before me, is/are personally
known to me, and did not take an oath.
Notary: /s/ XXXXXX X. XXXX
--------------------------
Print Name: Xxxxxx X. Xxxx
[NOTARY SEAL] ----------------------
Notary Public, State of Florida
----------
My commission expires: March 25, 1997
----------
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EXHIBIT A
DRAFT
PRESS RELEASE
-------------
First American Railways announced that Xx. Xxxxxx X. Xxxxxxxx has tendered his
resignation as a director and Vice-Chairman of the Board of First American
Railways, Inc. Xx. Xxxxxxxx had served as President and Chief Operating Officer
of First American Railways from February, 1994, until June, 1996. Xx. Xxxxxxxx
stated that he intends to pursue other business interest.
