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EXHIBIT 10.4
SEVERANCE AGREEMENT AND RELEASE
THIS SEVERANCE AGREEMENT AND RELEASE ("Agreement") is made June 7, 1999 between
Gantos, Inc., a Michigan corporation (the "Company"), and Xxxx Xxxxxxxxx ("Xx.
Xxxxxxxxx "). The Company and Xx. Xxxxxxxxx are sometimes referred to together
as the "Parties" and individually as a "Party".
R E C I T A L S
A. Xx. Xxxxxxxxx is the Senior Vice President, Store Operations and Visual
Merchandising of the Company.
B. Xx. Xxxxxxxxx wishes to resign from all of his positions with the
Company and to settle and resolve all actual and potential claims
against the Company and its affiliates in accordance with this
Agreement.
C. The Company wishes to accept Xx. Xxxxxxxxx'x resignation and to settle
and resolve all actual and potential claims against Xx. Xxxxxxxxx in
accordance with this Agreement.
THEREFORE, THE PARTIES AGREE AS FOLLOWS:
1. TERMINATION OF XX. XXXXXXXXX'X EMPLOYMENT. Effective as of May 7, 1999
(the "Effective Date"), Xx. Xxxxxxxxx resigns from all of his positions
with the Company, including, without limitation, as Senior Vice
President, Store Operations and Visual Merchandising.
(a) For a reasonable period after Effective Date, Xx.Xxxxxxxxx
will answer inquiries from Company concerning aspects of the
Company's business affairs of which he has knowledge and which
occurred during his employment.
2. SEVERANCE COMPENSATION
(a) CASH PAYMENT: The Company will pay Xx.Xxxxxxxxx $56,250.00,
representing thirteen (13) weeks salary, as his exclusive
severance benefit. In addition to severance, the Company will
pay Xx. Xxxxxxxxx $16,197.82, representing 149.74 hours of
accrued vacation pay. Xx. Xxxxxxxxx agrees that he is not
otherwise entitled to the severance consideration. The cash
payments described in this paragraph 2(a) shall be paid in a
lump sum on the first regular payroll date that is at least
seven (7) days after the date this agreement is signed by both
parties.
(b) MEDICAL AND DENTAL BENEFITS: The Company will provide Xx.
Xxxxxxxxx with the opportunity to continue his current Company
health insurance coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act ("COBRA"). Xx. Xxxxxxxxx
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will pay the cost of such insurance, including any premiums
relating to such insurance, beginning as of the Effective Date
in accordance with the Company policy on "COBRA" payments.
(c) NO OTHER PAYMENT OR BENEFITS: Xx. Xxxxxxxxx will not be
entitled to any other payments or benefits whatsoever,
including participation after the Effective Date in the 401(k)
Plan or the 1999 Gantos, Inc. Executive Bonus Plan. For no
purpose (including 401(k) contributions, the 1999 Gantos, Inc.
Executive Bonus Plan, vacation benefits, or other benefits)
shall the payments and benefits described in this paragraph 2
be considered salary to Xx. Xxxxxxxxx or be deemed to continue
his employment beyond the Effective Date.
(d) STOCK OPTIONS: As of the Effective Date, (1) Xx. Xxxxxxxxx'x
stock option agreements with the Company, and (2) the letter
agreement, dated as of April 14, 1997, between the Company and
Xx. Xxxxxxxxx, are cancelled, and Xx. Xxxxxxxxx shall have no
further rights under such agreements.
(d) TAXES: The Company will withhold from the cash payments
described in this paragraph 2, withholding for federal, state,
city and other taxes.
3. CONFIDENTIALITY AND NON-SOLICITATION
(a) CONFIDENTIALITY: Xx. Xxxxxxxxx will not, at any time,
directly or indirectly, disclose or make accessible to any
person or entity or use in any way for his own personal gain
or to the Company's detriment (I) any confidential or secret
information as to the Company, including information as to the
prices, costs, discounts or profit margins of any goods or
services sold, purchased or handled by the Company, (ii) any
confidential or secret information relating to the Company's
business, sales, financial structure, store layouts, supply
sources, designs, procedures, information systems, personnel
decisions, payroll of associates, store leases, relationships
with landlords, administration, future plans or operations, or
(iii) this Agreement or its terms (except to his counsel, his
tax adviser and his immediate family, but only after advising
them of the confidential nature thereof and instructing them
to keep the information confidential), all except as
authorized or directed by the Company and except that the
foregoing restrictions will not apply to information generally
available to others in the Company's line of business,
information in the public domain (other than as a result of
Xx. Xxxxxxxxx'x violation of this paragraph 3(a)), information
disclosed or made available by the Company to any other person
on a non-confidential basis or disclosures Xx. Xxxxxxxxx is
required by law to make. These provisions against disclosure
expressly include all documents, notes, memoranda,
correspondence and other information, whether written or oral,
regardless of whether prepared by Xx. Xxxxxxxxx or another
person or entity. Xx. Xxxxxxxxx represents and warrants that
he has returned to the Company all confidential materials and
files over which he exercises any control and all other
materials and files relating to the Company, its stores or its
business.
(b) NON-DISPARAGEMENT: Xx. Xxxxxxxxx will not at any time (I) make
any statements to any third party or to any employees of the
Company about the Company, or any of its employees, officers,
directors, agents or affiliates in disparaging terms, or (ii)
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engage in any other activity calculated to damage the Company
or its best interests. The Company will not at any time (I)
make any statements to any third party about Xx. Xxxxxxxxx in
disparaging terms,or (ii) engage in any other activity
calculated to damage Xx. Xxxxxxxxx or his best interests.
(c) NON-SOLICITATION: Xx. Xxxxxxxxx will not at any time during
the twelve (12) months after the Effective Date, directly or
indirectly, solicit for any purposes, interfere with, entice
away from the Company, or hire, any employee or agent of the
Company.
(d) ENFORCEABILITY: Paragraphs 3(a) and (b) are intended, among
other things, to protect the confidential information of the
Company. If for any reason a court determines that any part of
this paragraph 3 is unreasonable in scope or otherwise
unenforceable, such provisions will be modified and fully
enforceable, as so modified, to the maximum extent the court
determines lawful and enforceable under the circumstances.
4. TERMINATION OF PRIOR AGREEMENTS: This Agreement supersedes all prior
understandings and agreements between the parties (written or
otherwise). Xx. Xxxxxxxxx acknowledges that he is not entitled to any
severance or termination payments whatsoever in connection with the
termination of his employment with the Company, except as otherwise
provided in paragraph 2.
5. RELEASE
(A) RELEASE: In consideration of, and in reliance on, the
Parties entering into this Agreement and agreeing to the terms and
conditions of this Agreement, including the severance compensation
provided in paragraph 2, which Xx. Xxxxxxxxx acknowledges as
adequate, Xx. Xxxxxxxxx hereby unconditionally and forever
releases and discharges the Company and its employees, officers,
directors, shareholders, affiliates, agents, trusts, partnerships,
attorneys and successors and assigns from, and hereby waives, any
and all causes of action, suits, damages, claims and demands which
Xx. Xxxxxxxxx ever had, which is now existing or which may
hereafter arise between him and the Company, directly or
indirectly, by reason of any facts existing on or prior to the
Effective Date, whether known or unknown, except for a Party's
violation of this Agreement, and specifically including, but not
limited to, any and all claims for defamation, wrongful discharge,
breach of contract, negligence and any other tort actions, and/or
discrimination, harassment and/or retaliation on account of age,
sex, sexual orientation, race, color, religion, marital status,
disability, height, weight, national origin, or any other
classification recognized under the common law of the State of
Michigan or the State of Connecticut, local law and/or ordinance,
any and all claims or relating to Xx. Xxxxxxxxx'x employment with
the Company, or any of its affiliates or the termination of such
employment (including severance pay, vacation pay, any rights to
any participation in the 1999 Gantos, Inc. Executive Bonus Plan,
and all other forms of any pay or benefits), and specifically
including any and all claims arising under or in connection with
the civil rights statutes, including, but not limited to,Title VII
of the Civil Rights Act of 1964, The Age Discrimination Act of
1967, The Age Discrimination in Employment Act, and/or the
Rehabilitation Act of 1973, the Older Workers Benefit Protection
Act, the Americans with Disabilities Act,
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the Family and Medical Leave Act of 1993, the Xxxxxxx-Xxxxxx Civil
Rights Act, the Michigan Persons with Disabilities Civil Rights
Act, the Michigan Whistleblower's Protection Act, the Fair Labor
Standards Act, 42 USC 1981, 1985, 1986, 1988; 20 USC 621, any and
all amendments to such statutes, all other federal, state or local
laws, the common law of the State of Michigan or the State of
Connecticut and any actions based upon tort, breach of contract,
defamation or injuries on the job. Xx. Xxxxxxxxx understands and
agrees that this is a total and complete release and waiver by Xx.
Xxxxxxxxx of all claims which he has or may have against the
Company, based on facts existing as of the Effective Date, whether
known or unknown by Xx. Xxxxxxxxx at that time and even though
there may be facts and consequences which are unknown to Xx.
Xxxxxxxxx. Xx. Xxxxxxxxx further agrees that he has suffered no
work-related injury or illness, and that he has been properly paid
all of his past wages and benefits as of this date. Neither party
will bring suit or make a claim or charge in any manner with
respect to any claim released under this Agreement.
(b) BENEFIT PLANS: Xx. Xxxxxxxxx is not releasing any rights he
may have to benefits arising under the 401(k) Plan; provided, that
Xx. Xxxxxxxxx acknowledges that he will no longer be an employee
of the Company as of the Effective Date and, therefore, is not
entitled to future contributions to the 401(k) Plan on his behalf
on or after the Effective Date.
6. REMEDIES: The Parties' rights, undertakings and provisions under this
Agreement are related to matters which are of a special and unique
character, and a violation of any of the terms of this Agreement will
cause irreparable injury, the amount of which will be difficult, if not
impossible, to determine and cannot be adequately compensated by
monetary damages alone. Therefore, if a Party breaches or threatens to
breach any of the terms of this Agreement, in addition to any other
remedies that may be available under this Agreement, applicable law or
equity, the Party injured or threatened to be injured by such breach
will be entitled, as a matter of course, to specific performance, an
injunction, a restraining order, or any other equitable relief from any
court of competent jurisdiction, requiring compliance with this
Agreement or restraining any violation or threatened violation of any
such terms by a Party or by such other persons as the court may order.
7. MISCELLANEOUS:
(A) SUCCESSORS: This Agreement will be binding upon the Parties
and their respective successors, assigns, heirs, executors and
administrators.
(B) GOVERNING LAW: This Agreement will be governed by and
construed in accordance with, the internal laws of Connecticut.
The Parties select the state and federal court of appropriate
jurisdiction in Connecticut as the sole proper forms having
jurisdiction over all disputes arising from or in connection with
this Agreement. The Parties consent to be subject to personal
jurisdiction of the courts of Connecticut with respect to any such
dispute.
(c) COUNTERPARTS: This Agreement may be signed in counterparts
both of which together will be deemed an original of this
Agreement.
(d) ENTIRE AGREEMENT AMENDMENT: This Agreement constitutes the
entire
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Agreement of the Parties with respect to the subject matter of
this Agreement and such other Agreements; this Agreement may be
amended only by a written instrument executed by both parties.
(e) LEGAL FEES: DAMAGES FOR BREACH: The prevailing Party in any
action under this Agreement will be entitled to recover from the
other Party, in addition to any other relief provided by law, such
costs and expenses as may be incurred by the prevailing Party
(including court costs and reasonable attorneys fees) in
connection with enforcing or establishing the applicability or
validity of this Agreement (including investigating and responding
to any demand of claim) and in prosecuting any counterclaim or
cross-claim based thereon. Each party shall be liable to the other
Party for any damages (including costs and reasonable attorneys'
fees) resulting from any breach of this Agreement by such Party.
The rights and remedies set forth in this paragraph 7(e) are in
addition to the rights and remedies otherwise available to the
Parties under any applicable agreement between the Parties or
applicable law (including injunctive or other equitable relief).
(f) SEVERABILITY: The provisions of this Agreement will be deemed
severable, and if any part of any provision is held illegal, void
or unenforceable under applicable law, such provision may be
changed to the extent necessary to make the provision, as so
changed, legal, valid, binding and enforceable. If any provision
of this Agreement is held illegal, void, invalid or unenforceable
in its entirety, the remaining provisions of this Agreement will
not in any way be affected or impaired but will remain valid,
binding and enforceable in accordance with their terms.
(g) NO DURESS OR COERCION: This Agreement (including the release
contained in paragraph 5) is freely and voluntarily entered into
by each Party without duress or coercion and after consultation
with counsel or the right to such consultation; and each Party has
carefully and completely read all of the terms and provisions of
this Agreement.
IN WITNESS WHEREOF, the Parties have signed this Agreement on the date set forth
in the introductory paragraph above.
THIS IS AN AGREEMENT FOR RELEASE AND WAIVER OF CLAIMS
______________________________ GANTOS,INC.
Xxxx Xxxxxxxxx
Date:________________ By: ____________________________
Xxxxxx X. Xxxxx
Its: President & CEO
Date:___________________
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I UNDERSTAND THAT BY THIS AGREEMENT I AM WAIVING ANY RIGHTS I MAY PRESENTLY HAVE
UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT, AS AMENDED. I ENTER INTO THIS
AGREEMENT FREELY AND VOLUNTARILY WITHOUT ANY DURESS OR COERCION, AND AFTER I
HAVE CAREFULLY AND COMPLETELY READ ALL OF THE TERMS AND PROVISIONS OF THIS
AGREEMENT. I HAVE BEEN ADVISED TO CONSULT WITH LEGAL COUNSEL AND UNDERSTAND I
WILL BE ALLOWED TO CONSIDER THIS AGREEMENT FOR TWENTY-ONE (21) DAYS, PRIOR TO
SIGNING IT. I UNDERSTAND THAT THIS AGREEMENT SHALL NOT BECOME EFFECTIVE FOR
SEVEN (7) DAYS FOLLOWING THE DATE IT IS SIGNED, DURING WHICH TIME I MAY REVOKE
THE AGREEMENT BY WRITTEN NOTICE TO THE EMPLOYER. I UNDERSTAND FURTHER THAT
PAYMENTS TO BE MADE TO ME AS PROVIDED IN THIS AGREEMENT WILL NOT COMMENCE UNTIL
THE EXPIRATION OF SUCH SEVEN (7) DAYS.
WITNESSES:
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EMPLOYER
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EMPLOYEE
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