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EXHIBIT 10.11
TERMINATION, SEVERANCE AND RELEASE AGREEMENT
Termination, Severance and Release Agreement dated as of December 3,
1999, between PubliCARD, Inc., a Pennsylvania corporation (the "Company") and
Xxxxx X. Xxxx, an individual ("Weis").
Weis had been President and Chief Executive Officer of the Company
until November 3, 1999 and has been a member of its Board of Directors. The
Company and Weis desire to provide for the terms on which Weis' employment by
the Company will terminate.
The parties hereto, intending to be legally bound, hereby agree as
follows:
SECTION 1. TERMINATION. Weis' employment by the Company is terminated,
effective December 31, 1999. As a result of that termination, Weis will hold no
office or position, and after December 31, 1999 will not be employed by, the
Company or any of its subsidiaries. Weis further agrees and acknowledges that he
(i) ceased serving in the positions of President and Chief Executive Officer of
the Company on November 3, 1999 and (ii) resigned from the Board of Directors of
the Company effective as of November 5, 1999. The letter agreement dated
February 17, 1987 between the Company and Weis regarding certain conditions of
his employment and the agreement dated August 20, 1987 between the Company and
Weis are terminated and neither party shall have any liability or obligation
thereunder. Weis acknowledges and agrees that this Agreement shall be the
exclusive basis on which he is entitled to receive any compensation or benefits
of any kind from the Company or any of its subsidiaries.
SECTION 2. SEVERANCE PAYMENTS; SHARES.
2.1 GUARANTEED SEVERANCE. Weis will receive from the Company severance
payments at the rate of $25,722.22 for each month during the nine-month period
from January 2000 through September 2000 (the "Guaranteed Severance"). The
Company shall pay the Guaranteed Severance to Weis on or before the 15th day of
the applicable month in monthly installments in cash by check mailed to the
address provided in Section 8.3 hereof.
2.2 ADDITIONAL SEVERANCE. Weis will receive from the Company severance
at the rate of $25,722.22 for each month for the nine-month period from October,
2000 through June, 2001 (the "Additional Severance"). During the period, if any,
from October, 2000 through the earlier of June, 2001 and the calendar month in
which Weis becomes employed by an unrelated third party on a full-time basis the
Company shall pay the monthly installments of Additional Severance on or before
the 15th day of the applicable month in cash by check mailed to the address
provided in Section 8.3 hereof. Weis shall provide written notice of any such
full-time employment (as defined in the preceding sentence and the last sentence
of this Section 2.2) to the Company on or before the first day of such
employment (the "ReEmployment Date"). Within 45 days after the Re-Employment
Date, if any, the Company shall pay the balance of the monthly installments of
the Additional Severance in a lump-sum issuance of fully paid and non-assessable
shares of the Company's common stock, par value $0.10 per share (the "Common
Stock"), valued at the average of the closing prices of the Common Stock on the
NASDAQ National Market on the ten trading days immediately preceding the
ReEmployment Date (the "Additional Severance Shares"). The number of shares of
Common Stock to be issued shall be rounded up to the nearest whole number and no
fractional shares shall be issued. For purposes hereof, in no event shall Weis
be deemed to be employed on a full-time basis by reason of his performance of
consulting services, acceptance of part-time employment or start of his own
business (either alone or with others).
2.3 ADDITIONAL SHARES. The Company shall issue to Weis 32,500 fully
paid and non-assessable shares of Common Stock (the "Additional Shares") during
the first week of January, 2000.
2.4 REGISTRATION. The Company shall prepare and file with the
Securities and Exchange Commission (the "Commission") on or before March 31,
2000 a registration statement under the Securities Act of 1933 (the "Securities
Act") for the sale of the Additional Severance Shares and the Additional Shares
on the NASDAQ National
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Market (the "Shelf Registration Statement"), and shall use reasonable efforts to
have the Shelf Registration Statement declared effective by the Commission as
soon as practicable. The Company shall use good faith and diligent efforts to
keep the Shelf Registration Statement continuously effective for the period
beginning on the date on which the Shelf Registration Statement is declared
effective and ending when (i) all Additional Severance Shares and Additional
Shares have been sold or (ii) or all Additional Severance Shares and Additional
Shares then owned by Weis may be sold without registration under the Securities
Act without limitation as to volume or manner of sale. However, the Company
shall have no obligation to keep the Shelf Registration Statement effective
after September 30, 2001.
2.5 STOCK OPTIONS. Weis currently holds fully vested options to acquire
165,667 shares of Common Stock (the "Options") granted under the Company's 1993
Long-Term Incentive Plan (the "Plan"); incentive stock options to acquire
174,333 shares were exercised by Weis on November 26, 1999 (in connection with
which exercise Weis delivered 47,019 shares of Common Stock in payment of the
exercise price).
(a) The expiration date of the Options shall be extended to
June 30, 2001 (or the stated expiration date thereof, whichever is earlier) and
the Options, to the extent currently exercisable, may be exercised at any time
or from time to time until June 30, 2001 (or the stated expiration date thereof,
whichever is earlier), subject to Section 9 of the Plan. The Options, to the
extent then exercisable, shall terminate and cease to be exercisable on June 30,
2001. The Company hereby warrants and represents to Weis that (i) the Company
has full right, power and authority to so extend the expiration of the options
and (ii) the approval or vote of the stockholders of the Company is not required
in order to do same.
(b) The exercise price of the Common Stock issuable upon
exercise of the Options may be paid by Weis by the delivery of shares of Common
Stock owned by him in accordance with Section 6(b) of the Plan, including,
without limitation, the Additional Shares and the Additional Severance Shares.
(c) The Company hereby warrants and represents to Weis that
the shares of Common Stock issuable upon exercise of the Options have been
registered under the Securities Act.
2.6 LIMITATIONS ON SALES. During the period from January, 2000 through
June, 2001, Weis shall not offer, sell, contract to sell, transfer or otherwise
reduce his risk with respect to any shares of Common Stock (or publicly announce
an intention to do any of the foregoing) other than
(i) sales during a calendar month in ordinary brokerage
transactions effectuated through the NASDAQ National Market of a number
of shares of Common Stock not exceeding the quotient obtained by
dividing (x) the excess, if any, of (1) the sum of 549,500
(representing the number of shares of Common Stock previously held by
Weis or issuable upon exercise of Options held by Weis on the date of
this Agreement) and the number of Additional Shares and Additional
Severance Shares, if any, issued to Weis during or prior to that
calendar month over (2) the number of shares of Common Stock, if any,
delivered by Weis in payment of the exercise price of Options during or
prior to that calendar month (including the delivery of 47,019 shares
referred to below) by (y) 18; and
(ii) transfers by gift to members of Weis' family or trusts,
partnerships, limited liability companies or other entities for his or
their benefit, but only if the transferee enters into an agreement with
the Company, in form and substance reasonably satisfactory to the
Company, not to offer, sell, contract to sell, transfer or otherwise
reduce its risk with respect to any shares of Common Stock (or publicly
announce an intention to do any of the foregoing) until after June 30,
2001 except to the extent of sales that Weis would be permitted to
effect pursuant to clause (i) on the basis of aggregating the sales
effected by Weis and all transferees pursuant to this clause (ii) (Weis
hereby agrees that the number of shares of Common Stock he may sell
pursuant to clause (i) shall be reduced by all such sales by
transferees).
Weis represents and warrants to the Company that during the period from November
3, 1999 through the date of this Agreement he has not offered, sold, contracted
to sell, transferred or otherwise reduced his risk with respect to any shares of
Common Stock except for 15,700 shares sold and 47,019 shares delivered in
connection with the exercise of options as described above. For purposes of this
Section 2.6, (a) any sale or other transaction effected from the date
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of this Agreement through December 31, 1999 shall be deemed to occur in January,
2000 and (b) "reducing risk" includes any short-sale, any purchase, sale or
issuance of options or other derivative securities, any pledge or financing or
any other similar transaction.
SECTION 3. OTHER BENEFITS.
3.1 OUTPLACEMENT PACKAGE. The Company shall bear the cost of
outplacement services obtained by Weis to the extent not exceeding $18,000.
3.2 MEDICAL INSURANCE. During the period from January 1, 2000 through
the earlier of December 31, 2001 and the Re-Employment Date (the "Health
Coverage Period") the Company shall (i) continue to provide the current health
insurance coverage for Weis and his dependents presently covered by the
Company's medical insurance plan (to the extent that such dependents would have
continued to be so covered had Weis remained an employee of the Company) or
otherwise provide benefits comparable to those provided by the Company's medical
insurance plan and (ii) continue the coverage of Weis and such dependents under
the Company's Supplemental Medical Plan or otherwise provide benefits comparable
to those provided by the Company's Supplemental Medical Plan. In addition, upon
expiration of the Health Coverage Period Weis and such dependents shall be
entitled to health continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1986 at their own expense. Weis shall, and shall cause his
dependents to, cooperate as the Company may from time to time reasonably request
in connection with obtaining or insuring the benefits required by this Section.
3.3 LIFE INSURANCE. The Company shall continue Weis' term life
insurance reimbursement benefits through the American Institute of Certified
Public Accountants at the current coverage level, and to the extent permitted by
the insurer his group life insurance coverage, pro-rated through of June 30,
2001.
3.4 AUTOMOBILE ALLOWANCE. The Company shall continue to pay Weis an
automobile allowance of $850 per month through of June 30, 2001.
SECTION 4. OFFICE/EQUIPMENT.
4.1 USE OF PREMISES; LEASE. The Company shall permit Weis to use on a
non-exclusive basis the Company's offices located at Xxx Xxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx (the "Premises") through May 31, 2000. Subject to obtaining the
consent of the landlord under the lease relating to such Premises (the "Lease"),
the Company shall assign the Lease to Weis or his designee effective June 1,
2000 on the basis that the Company has no continuing obligation thereunder. The
Company acknowledges that prior to June 1, 2000 it will not take any action or
fail to take any reasonable action that it knows would result in the termination
of the lease.
4.2 OFFICE SERVICES, During Weis' occupancy of the Premises through May
31, 2000, Weis shall be entitled to use the telephones and other services
currently available at the Premises. The Company shall arrange to have email
messages addressed to Weis at xxxxx@xxxxxxxxx.xxx promptly forwarded to him at
such internet email address as he may specify by notice to the Company. In
addition, the Company's reception service shall forward to Weis at the Premises
incoming telephone calls and messages until May 31, 2000.
4.3 EQUIPMENT. The Company hereby transfers to Weis, on an "as is"
basis without representation or warranty, ownership of his desk and chairs at
the Company's office and the Company's personal computer, laptop, scanners,
laserjet printer, home facsimile machine and cellular telephone currently in his
possession.
SECTION 5. INDEMNIFICATION.
To the extent permitted by law, the Company shall indemnify Weis with
respect to matters arising from his service as a director or officer or employee
of the Company as provided by the Company's Articles of Incorporation and
By-Laws as currently in effect.
SECTION 6. RELEASE.
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For valuable consideration, the receipt and adequacy of which are
hereby acknowledged, Weis hereby releases and forever discharges the Company and
its subsidiaries, and their respective past, present and future affiliates,
stockholders, officers, directors, employees, agents, and controlling persons,
and the respective heirs, administrators, successors and assigns of each of the
foregoing (each, a "Releasee"), of and from any and all manner of action or
actions, cause or causes of actions, in law or in equity, suits, debts,
contracts, agreements, promises, liability, claims, demands, damages, loss, cost
or expense, of any nature whatsoever, known or unknown to him, fixed or
contingent, xxxxxx or inchoate, which Weis ever had, now has or may have at any
time arising out of or relating to Weis' employment or status as a director or
officer or the termination of such employment or status (or any promise or
agreement made or entered into, or any action taken or omitted, in connection
with such employment, status or termination), including, but not limited to,
those arising under the federal Civil Rights Acts of 1866, 1871, 1964 and 1971,
as amended, the Age Discrimination in Employment Act of 1967, as amended by,
inter alia, the Older Workers Benefit Protection Act of 1990, the Americans with
Disabilities Act of 1990, the Employee Retirement Income Security Act of 1974 or
any other federal, state or local statute or principle of common law. Weis shall
refrain from asserting any matter released hereby against any Releasee in any
manner, including, but not limited to, by way of counterclaim, offset or defense
and shall actively resist any effort to assert on his behalf any such matter.
Weis shall indemnify and hold harmless each Releasee from and against all
losses, liabilities, claims, damages and expenses (including costs of
investigation and defense and reasonable attorneys' fees), arising directly or
indirectly from or in connection with the assertion by or on behalf of Weis of
any claim or other matter released pursuant to this Section.
Notwithstanding anything contained herein to the contrary, there is and
shall be excepted from the within and foregoing release and discharge any and
all of the following: any and all of the obligations of the Company under this
Agreement or for the payment of compensation and benefits with respect to Weis'
continued employment through December 31, 1999; all of Weis' accrued and/or
vested benefits under any pension, profit sharing or other welfare or benefit
plan or program in which he is or has been a participant; and any and all rights
which Weis may have as an owner of Common Stock and/or Options.
SECTION 7. NO DISPARAGEMENT. The Company shall not , directly or
indirectly, disparage or impugn the reputation of Weis. Weis shall not, directly
or indirectly, disparage or impugn the reputation of the Company, any of its
subsidiaries or any of their respective shareholders, directors, officers,
employees or agents. Weis hereby confirms that he does not intend to and shall
not, directly or indirectly, make or deliver to the Company any statement for
inclusion (or that the Company might be required to include or refer to) in the
Company's proxy statement or any filing by the Company with the Commission.
SECTION 8. MISCELLANEOUS.
8.1 Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York, without regard to any
conflicts of laws principles thereof that would call for the application of the
laws of any other jurisdiction.
8.2 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which, when
taken together, shall constitute one and the same agreements.
8.3 NOTICES. All notices, demands, requests or other communications
which may be or are required to be given, served or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be mailed
by first class, registered or certified mail, return receipt requested, postage
prepaid, or transmitted by hand delivery (including delivery by courier), or
facsimile transmission, addressed as follows (or to such other addresses as a
party may specify as to itself by notice to the other):
If to the Company:
PubliCARD, Inc.
Rockefeller Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Weis:
Xxxxx X. Xxxx
0 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Telephone & Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxxx, Xxxxxx & Xxxxxx, LLC
000 Xxxx Xxxx Xxxx
X.X. Xxx 000
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8.4 BINDING NATURE OF AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns as
provided herein.
8.5 ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.
8.6 INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power of privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and signed by the party asserted to have granted such waiver.
8.7 CONFIDENTIALITY. Weis shall keep the terms of this Agreement
confidential and he will not hereafter disclose any information concerning the
Company or any of its subsidiaries and/or this Agreement to anyone except his
attorneys, accountants, tax and financial advisors, if any, and as otherwise may
be required by law.
8.8 INDEPENDENT JUDGMENT; REVOCATION. The Company and Weis have each
been represented and advised by counsel in connection with the negotiation,
execution and delivery of this Agreement, have exercised independent
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judgment in connection therewith, and have not relied on any statement, promise,
representation or warranty not expressly set forth in this Agreement. Weis may
revoke this agreement by written notice given to the Company within seven
calendar days after the date on which this Agreement is executed by Weis; if so
revoked, this agreement shall be of no effect. Weis hereby waives the benefit of
any longer revocation or review period to which he may be entitled under any
applicable law.
8.9 DEATH OR DISABILITY. Notwithstanding anything contained in this
Agreement to the contrary, all sums to be paid, stock to be issued and/or
benefits to be provided to Weis under this Agreement shall be paid, issued
and/or provided, as the case may be, notwithstanding Weis' death or disability
at any time after the execution hereof.
8.10 TIME OF THE ESSENCE. Time is of the essence with respect to the
parties' obligations under this Agreement.
PUBLICARD, INC.
By: _____________________________
Name:
Title:
______________________________________
Xxxxx X. Xxxx
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