EXHIBIT 99.3
TERMINATION AGREEMENT AND RELEASE
This TERMINATION AGREEMENT AND RELEASE (this "AGREEMENT") is made and
entered into as of June 23, 2004 (the "EXECUTION DATE"), by and between FRANKLIN
CAPITAL CORPORATION, a Delaware corporation (the "COMPANY") and XXXXXXX X.
XXXXX, an individual ("XXXXX").
RECITALS
WHEREAS, the Company and Xxxxx have previously entered into: (i) that
certain Employment Agreement dated as of May 1, 2000 (the "EMPLOYMENT
AGREEMENT"); and (ii) that certain Severance Compensation Agreement dated as of
May 1, 2000, as modified by certain resolutions adopted by the Board of
Directors of the Company (the "BOARD") dated as of July 1, 2002 (the "SEVERANCE
AGREEMENT" and, together with the Employment Agreement, the "EXISTING
AGREEMENTS");
WHEREAS, pursuant to the terms of the Existing Agreements, Xxxxx
currently serves as the Chairman of the Board and as the Company's Chief
Executive Officer;
WHEREAS, this Agreement is being entered into concurrently with that
certain Letter of Understanding, dated as of even date herewith (the "XXX"), by
and between the Company and Xxxx Xxxxxx & Company Investment Management LLC
("XXXX XXXXXX"), as part of the Company's Restructuring Plan (as defined and
described in the XXX);
WHEREAS, in connection with the Restructuring Plan, the Company and
Xxxxx mutually desire that, as of the Separation Date (as defined below) and
otherwise pursuant to the terms and conditions of this Agreement, Xxxxx will
voluntarily resign from his employment with the Company and from his position as
an officer of the Company and a member of the Board; and
WHEREAS, it is the further intention of the Company and Xxxxx that this
Agreement shall replace and supersede the Existing Agreements in all respects,
and that the Existing Agreements shall become null and void on the Separation
Date, as described more fully in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. SEPARATION DATE. The Company and Xxxxx acknowledge and agree that
Xxxxx'x final day of employment with the Company, and his service as an officer
of the Company and as a member of the Board, shall be the date upon which the
Company has received the Requisite Approvals (as defined in the XXX) of its
stockholders with respect to the Stockholder Proposals (as defined in the XXX)
set forth in Sections 2.1(a) and 2.1(b) of the XXX at the Stockholders' Meeting
or Reconvened Stockholders' Meeting (each as defined in the XXX), as applicable
(the "SEPARATION DATE"). On the Separation Date: (i) Xxxxx shall resign from the
Company, both as an employee and officer of the Company and as a member of the
Board; and (ii) in addition to any other payment to be made pursuant to this
Agreement, the Company will pay to Xxxxx, subject to standard withholdings and
deductions, any accrued base salary earned through the Separation Date.
2. TERMINATION OF EXISTING AGREEMENTS. The Company and Xxxxx hereby
acknowledge and agree that, as of and following the Separation Date: (i) the
Existing Agreements shall be deemed terminated, superseded and replaced in their
entireties by this Agreement; and (ii) neither the Company nor Xxxxx shall have
any rights, duties, obligations or liabilities under the Existing Agreements,
which shall be deemed null and void and of no further force or effect; provided,
however, that notwithstanding the termination of the Existing Agreements,
nothing in this Agreement shall require Xxxxx to forfeit any stock options he
may now own or waive any existing rights he may have in any existing 401(k) or
similar retirement employee benefit plan now maintained for his benefit by the
Company. If the Separation Date shall not occur on or before October 31, 2004,
then this Agreement shall become null and void and neither party shall have any
rights or obligations hereunder, and Xxxxx shall be entitled to voluntarily
terminate his Employment Agreement as contemplated by Section 5.1(c) thereunder
and, thereupon, shall be paid by the Company all amounts due to him as provided
under the Existing Agreements, including, without limitation, the lump-sum
payment required by Section 2(a) of the Severance Agreement
3. SEVERANCE PAYMENTS.
3.1 INITIAL PAYMENT. On the Separation Date, the Company shall pay to
Xxxxx cash in the amount of $250,000 (the "INITIAL PAYMENT")
3.2 FINAL PAYMENT. Pursuant to the terms of this Section 3.2, on
January 3, 2005 (the "FINAL PAYMENT DATE"), the Company shall pay to Xxxxx,
without set off or deduction, the sum of $843,750 (plus an additional amount, if
any, to be determined by Ernst & Young LLP, not to exceed $75,000) together with
interest thereon calculated at the applicable federal rate of interest per annum
(the "FINAL PAYMENT" and, together with the Initial Payment, the "SEVERANCE
PAYMENTS"). The Company's obligation to make the Final Payment shall be
evidenced by a promissory note and, further in connection with the Company's
obligation to make the Final Payment, the Company agrees to deposit on the
Separation Date with the trustee (the "TRUSTEE") of a "Rabbi" trust or other
security arrangement (the TRUST") 360,000 shares (the "EXCELSIOR SHARES") of
capital stock of Excelsior Radio Networks, Inc. ("EXCELSIOR") beneficially owned
by the Company as of the Separation Date. Between the Separation Date and the
Final Payment Date (the "BALANCE PERIOD"), the Trustee shall be authorized and
directed by the terms of the Trust to release such number of Excelsior Shares as
the Company may direct in connection with any sale of such Excelsior Shares that
the Company may effect, provided that the Company agrees that the net proceeds
of any such sale shall be paid to Xxxxx until such time as the aggregate amount
of cash paid to Xxxxx equals the Final Payment. On the Final Payment Date, the
Trustee shall be authorized and directed by the terms of the Trust to release
from the Trust and to pay to Xxxxx from the Trust that number of Excelsior
Shares (rounded to the nearest whole share) equal to a fraction, (i) the
numerator of which shall be equal to the difference between the Final Payment
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and the cash proceeds previously paid to Xxxxx and (ii) the denominator of which
shall be $2.50. Following such payment to Xxxxx, the Trustee shall be authorized
and directed by the terms of the Trust to release from the Trust and to pay to
the Company any Excelsior Shares then remaining in the Trust. The Company agrees
to make good faith efforts to sell the Excelsior Shares at prevailing market
conditions during the Balance Period.
3.3 LIMITATION ON SEVERANCE PAYMENTS.
(a) Notwithstanding anything to the contrary set forth herein, if any
part of the Severance Payments, taken in combination with any other benefits
payable to Xxxxx pursuant to this Agreement (collectively, the "SEPARATION
PAYMENTS") would, if paid, constitute a "parachute payment" under Section 280G
of the Internal Revenue Code of 1986, as amended (the "CODE"), then such
Separation Payments shall be payable to Xxxxx only if the value of the
Separation Payments, less the amount of any excise taxes payable under Code
Section 4999, and any similar or comparable taxes due in connection with such
Separation Payments, is greater than the highest amount not constituting a
"parachute payment" that could be paid to Xxxxx in connection with this
Agreement (the "ALTERNATIVE PAYMENT"); otherwise, only the Alternative Payment
shall be payable to Xxxxx. For purposes of this Section 3, the value of all
payments or hypothetical payments to Xxxxx, including, without limitation, the
Separation Payments, shall be determined in accordance with Code Section
280G(d)(4) and any regulations issued thereunder.
(b) The determination of the operation of Section 3.3, and of any
reduction in the Severance Payments necessary as a result thereof, shall be made
by Xxxxx upon the reasonable advice of Xxxxx'x legal counsel or accountant;
provided, however, that should the Internal Revenue Service determine at any
time that any of the Separation Payments constitute a "parachute payment," then
Xxxxx agrees that he shall repay to the Company an amount sufficient at that
time to prevent any of such Separation Payments from constituting a "parachute
payment." In any case in which the Separation Payments are reduced or not
provided to Xxxxx on account of the operation of this Section 3.3, Xxxxx shall
select how the Separation Payments are to be reduced or not provided.
(c) If the Company shall fail to pay or provide at any time any
benefits under this Agreement or under any benefit plan, agreement or
arrangement established, agreed to or contracted for by the Company for the
benefit of or with Xxxxx, Xxxxx shall be entitled to consult with independent
counsel, and the Company shall pay the reasonable fees and expenses of such
counsel for Xxxxx in advising him in connection therewith or in bringing any
proceedings, or in defending any proceedings, involving the Xxxxx'x rights under
this Agreement, such right to reimbursement to be immediate upon the presentment
by Xxxxx of written xxxxxxxx of such reasonable fees and expenses. Xxxxx shall
be entitled to interest at the "prime rate" established from time to time by the
Bank of New York for any payments of such expenses, or any other payments
following the Xxxxx'x termination of employment, that are overdue. Additionally,
on the Separation Date, the Company shall reimburse Xxxxx for his attorneys fees
and expenses incurred in connection with execution and delivery of this
Agreement and the review and negotiation of the XXX.
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(d) The Company shall have the right to withhold from all Separation
Payments due to Xxxxx hereunder all income and excise taxes required to be
withheld by applicable law and regulations. Such payments shall be made through
the Company's existing payroll agent.
4. ADDITIONAL BENEFITS.
4.1 CONTINUATION OF BENEFIT COVERAGE. The Company agrees that it shall
continue, at its sole expense, for a period of three (3) years following the
Separation Date, coverage for Xxxxx and his wife under each of the Company's
current "employee welfare benefit plans" (as such term is defined in Section
3(1) of the Employee Retirement Income Security Act of 1974, as amended) at the
levels of coverage in effect as of the Execution Date. Such coverage shall be
provided at the expense of the Company to the extent that such coverage exists
as of the Execution Date.
4.2 COBRA. The Company and Xxxxx acknowledge and agree that, to the
extent that Xxxxx is entitled by the Consolidated Omnibus Budget Reconciliation
Act ("COBRA") to any continuation of health insurance or other benefits
following the Separation Date, any such continuation shall be deemed to run
concurrently with the continuation of Xxxxx'x coverage under the Company's
"employee welfare benefit plans" pursuant to Section 4.1 above. Notwithstanding
the foregoing, the Company shall provide Xxxxx with a separate notice of his
COBRA rights on the Separation Date.
5. NEW YORK OFFICE.
5.1 ASSIGNMENT OF NEW YORK LEASE. Following the Separation Date, the
Company agrees that it shall use commercially reasonable efforts to cause all of
its rights and obligations under the lease (the "NEW YORK LEASE") for the
Company's offices located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "NEW
YORK OFFICE"), including, without limitation, any rights upon the termination of
the New York Lease to receive the security deposit originally made by the
Company in connection with the New York Lease, to be assigned and delegated to
Xxxxx; provided, however, that the Company and Xxxxx acknowledge and agree that:
(i) any assignment or delegation of the Company's rights or obligations under
the New York Lease shall be subject to the consent of the landlord for such New
York Lease, if so provided by the terms of the New York Lease; and (ii) the
Company shall have no obligation or liability under this Section 5.1 in the
event that it is unable to obtain such landlord's consent to the assignment and
delegation of the Company's rights and obligations under the New York Lease to
Xxxxx pursuant to this Agreement.
5.2 OPTION TO BUY OFFICE ASSETS. Except as set forth in Section 5.3
below, Xxxxx shall have the option, exercisable at any time during the period
commencing with the Separation Date and ending ten (10) days thereafter (the
"OPTION PERIOD"), to purchase from the Company any or all of the equipment,
furnishings and/or fixtures present in the New York Office as of the Execution
Date (each, an "OFFICE ASSET") for a purchase price equal in each case to the
then-current book value of such Office Asset.
5.3 OPTION TO BUY ARTWORK. Xxxxx shall have the option, exercisable at
any time during the Option Period, to purchase from the Company any or all of
the pieces of artwork present in the New York Office as of the Execution Date
(each, an "ARTWORK") for a purchase price equal in each case to the current
value of such Artwork, as determined by a qualified appraiser mutually
acceptable to Xxxxx and the Company.
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6. COMPLETE RELEASE OF CLAIMS.
6.1 RELEASE OF THE COMPANY. Effective as of the Separation Date, Xxxxx
irrevocably and unconditionally releases any and all Released Claims (as defined
below) that Xxxxx may now have against: (i) the Company; (ii) each of its
current and former parents, subsidiaries, related companies, partnerships, or
joint ventures; (iii) with respect to each of parties listed in the foregoing
clauses "(i)" and "(ii)", such party's predecessors and successors; and (iv)
with respect to each of the parties listed in the foregoing clauses "(i)",
"(ii)" and "(iii)", all of such party's past, present, and future employees,
officers, directors, stockholders, owners, representatives, assigns, attorneys,
agents, insurers, employee benefit programs (and the trustees, administrators,
fiduciaries and insurers of such programs), and any other persons acting by,
through, under or in concert with any of such persons or entities and their
successors (each, a "COMPANY RELEASED PARTY" and, collectively, the "COMPANY
RELEASED Parties").
6.2 RELEASE OF XXXXX. Effective as of the Separation Date, the Company
irrevocably and unconditionally releases any and all Released Claims that the
Company may now have against Xxxxx and each of his affiliates and their
respective heirs, successors and assigns and any other persons acting by,
through, under or in concert with any of such persons or entities and their
successors (each, a "XXXXX RELEASED PARTY" and, collectively, the "XXXXX
RELEASED PARTIES"). Each of the Company Released Parties and the Xxxxx Released
Parties are sometimes individually referred to herein as a "RELEASED PARTY" and
collectively referred to herein as the "RELEASED PARTIES".
6.3 RELEASED CLAIMS. For purposes of this Agreement, the term "RELEASED
CLAIMS" shall include all known and unknown claims, promises, causes of action,
or similar rights of any type ("CLAIMS") that a party may now have with respect
to any Released Party, to the extent permitted by law. Each party expressly
acknowledges and agrees that the Released Claims might arise under many
different foreign, domestic, national, state, or local laws (including statutes,
regulations, other administrative guidance, and common law doctrines),
including, without limitation, the following:
o ANTI-DISCRIMINATION STATUTES, such as the Age Discrimination in
Employment Act (the "ADEA") and Executive Order 11,141, which
prohibit age discrimination in employment; Title VII of the Civil
Rights Act of 1964, Sections 1981 and 1983 of the Civil Rights
Act of 1866, and Executive Order 11,246, which prohibit
discrimination based on race, color, national origin, religion,
or sex; the Equal Pay Act, which prohibits paying men and women
unequal pay for equal work; the Americans With Disabilities Act
and Sections 503 and 504 of the Rehabilitation Act of 1973, which
prohibit discrimination based on disability; and any other
federal, state, or local laws prohibiting discrimination, such as
the New York State Human Rights Law and New York City Human
Rights Law, which prohibit discrimination in employment.
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o FEDERAL EMPLOYMENT STATUTES, such as the WARN Act, which requires
that advance notice be given of certain work force reductions;
the Employee Retirement Income Security Act of 1974, which, among
other things, protects employee benefits; the Fair Labor
Standards Act of 1938, which regulates wage and hour matters; the
Family and Medical Leave Act of 1993, which requires employers to
provide leaves of absence under certain circumstances; and any
other federal laws relating to employment, such as veterans'
reemployment rights laws.
o OTHER LAWS, such as any federal, state, or local laws providing
workers' compensation benefits, mandating leaves of absence,
restricting an employer's right to terminate employees, or
otherwise regulating employment; any federal, state, or local law
enforcing express or implied employment contracts or requiring an
employer to deal with employees fairly or in good faith; any
other federal, state, or local laws providing recourse for
alleged wrongful discharge, tort, physical or personal injury,
emotional distress, fraud, negligent misrepresentation,
defamation, and similar or related claims, and any other law,
such as New York state labor and employment laws.
In connection with this Section 6, Xxxxx expressly acknowledges that some
examples of Released Claims include, without limitation: (i) Claims that in any
way relate to or arose during Xxxxx'x employment with the Company, or the
termination of such employment, such as Claims for compensation, bonuses,
commissions, lost wages or unused accrued vacation or sick pay; (ii) Claims that
in any way relate to the design or administration of any "employee welfare
benefit plan" maintained by the Company; or (iii) any Claims to attorneys' fees
or other indemnities (such as under the Civil Rights Attorneys' Fees Act), with
respect to the Released Claims, except as expressly provided in this Agreement.
6.4 UNKNOWN CLAIMS. Each party further expressly acknowledges that: (i)
it has been advised and understands that the Released Claims may include Claims
that it does not currently know about ("UNKNOWN CLAIMS"); (ii) it knowingly and
voluntarily intends to grant the release of such Unknown Claims as Released
Claims even though it recognizes that someday it might regret having done so;
and (iii) it desires to assume the risk of releasing the Unknown Claims as
Released Claims and acknowledges and agrees that the release set forth in this
Section 6 shall remain effective in all respects in any such case. With full
understanding of the potential consequences of its actions, to the full extent
permitted by law, each party expressly waives all rights it might have under any
law that is intended to protect parties from waiving unknown claims such as the
Unknown Claims; provided, however, that: (i) nothing in the release given by
Xxxxx under this Section 6 shall release (a) any vested rights Xxxxx may have as
of the Separation Date under any current "employee welfare benefit plans," (b)
any rights Xxxxx may have for indemnity or under any Company insurance policy
maintained for the benefit of the Company's directors and officers or (c) any
rights Xxxxx may have under the Company's bylaws or certificate of
incorporation; (ii) nothing in the release given by the Company under this
Section 6 shall release any Claims involving (a) any act of fraud perpetrated by
any of the Xxxxx Released Parties, (b) any violation by any of the Xxxxx
Released Parties of federal or state securities laws or (c) any breach by Xxxxx
of his duty of loyalty to the Company; and (iii) nothing in the release given by
either party under this Section 6 shall release any Claim such party may have
for the other party's breach of this Agreement.
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6.5 FURTHER RELEASES. On the Separation Date, Xxxxx and Xxxx Xxxxxx
shall enter into a release in substantially the form attached hereto as EXHIBIT
A.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF XXXXX. In connection with the
terms and conditions set forth in this Agreement, Xxxxx hereby represents,
warrants and covenants to and for the benefit of the Company as follows:
7.1 PURSUIT OF CLAIMS: (i) As of the Execution Date, Xxxxx has not
filed, initiated, or prosecuted (or caused to be filed, initiated or
prosecuted); (ii) as of the Separation Date, Xxxxx shall not have filed,
initiated, or prosecuted (or caused to be filed, initiated or prosecuted); and
(iii) following the Separation Date, Xxxxx shall not file, initiate or prosecute
(or cause to be filed, initiated or prosecuted) any lawsuit, complaint, charge,
action, compliance review, investigation or proceeding with respect to any
Released Claim, whether as a named plaintiff, class member or otherwise. In the
event of any such lawsuit, complaint, charge, action, compliance review,
investigation or proceeding with respect to any Released Claim, Xxxxx covenants
that he shall request any administrative agency or other body assuming
jurisdiction of any such lawsuit, complaint, charge, action, compliance review,
investigation or proceeding to withdraw from the matter or dismiss it with
prejudice. In the event that Xxxxx is ever awarded or otherwise recovers any
amount as to any Released Claim, Xxxxx hereby acknowledges and agrees that the
amount of the award or recovery shall be reduced by the amount of the Separation
Payments, increased appropriately for the time value of money, using an interest
rate of ten percent (10%) per annum. To the extent such a setoff is not
effected, Xxxxx agrees to pay, or assign to the Company Xxxxx'x right to
receive, any amount that should have been set off pursuant to this Section 7.1.
The Company and Xxxxx acknowledge and agree that this Section 7.1 shall not
apply to Claims arising under the ADEA to the extent, if any, prohibited by
applicable law.
7.2 COMPANY PROPERTY AND DEBTS. As of the Separation Date, Xxxxx shall
have returned to the Company all files, memoranda, documents, records, copies of
the foregoing, Company-provided credit cards, keys, building passes, security
passes, access or identification cards and any other property of the Company or
any other Company Released Party that was in Xxxxx'x control. In addition, as of
the Separation Date, Xxxxx shall have cleared all expense accounts, repaid any
and all outstanding debts to the Company or any other Company Released Party,
paid all amounts owed on Company-provided credit cards or accounts (such as cell
phone accounts) and canceled or personally assumed any such credit cards or
accounts. Notwithstanding the foregoing, Xxxxx shall have the right to continue
to use the New York Office following the Separation Date until the end of the
term of the New York Lease, provided that he pays all rent and additional rent
that shall become due thereunder for such period. In such event, to the extent
that access to the New York Office requires Company-provided credit cards, keys,
building passes, security passes, access or identification cards and the like,
Xxxxx shall be entitled to retain the same. The Company agrees to promptly
remove, at its expense, all of its files, memoranda, documents and other
business records from the New York Office promptly following the Separation
Date.
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7.3 TAXES. Xxxxx acknowledges that he shall be responsible for paying
any taxes due on the Separation Payments, or any portion thereof. Xxxxx further
acknowledges and agrees that he shall not make any claim against the Company or
any other Company Released Party based on how the Company reports the Separation
Payments to tax authorities.
7.4 OWNERSHIP OF CLAIMS. As of the Execution Date, Xxxxx has not
assigned or transferred (or attempted to assign or transfer), and as of the
Separation Date, Xxxxx shall not have assigned or transferred (or have attempted
to assign or transfer), any of the Released Claims to any third party.
7.5 NO ADMISSION OF LIABILITY. Xxxxx acknowledges that neither the
Company nor any of the other Company Released Parties believes or has admitted
that it has committed any wrongdoing with respect to Xxxxx, and Xxxxx agrees
that at no time following the Execution Date shall he assert that the release of
Released Claims contained in this Agreement constitutes an admission of
wrongdoing by the Company or any other Company Released Party.
7.6 NO DISPARAGEMENT OR HARM. At all times following the Execution
Date, Xxxxx agrees not to criticize, denigrate, or otherwise disparage the
Company, any other Company Released Party or any of such entities' policies,
practices or business conduct; provided, however, that nothing in this Section
7.6 shall be deemed to prohibit Xxxxx from complying with any lawful subpoena or
court order or taking any other actions affirmatively authorized by law.
7.7 CONFIDENTIAL INFORMATION. Xxxxx acknowledges that, during the term
of his employment with the Company and as a result of his service as a member of
the Board, he has gained knowledge of and had access to certain confidential and
proprietary information of and relating to the Company and the other Company
Released Parties (the "CONFIDENTIAL INFORMATION"). From and after the Execution
Date, Xxxxx agrees that he shall hold in trust and confidence all such
Confidential Information and shall not disclose such Confidential Information to
any third parties without the prior written consent of the Company; provided,
however, that nothing in this Section 7.7 shall prohibit Xxxxx from making any
disclosures to the extent legally required, provided that he notifies the
Company in advance of any such required disclosure and permits the Company to
take all steps it deems to be appropriate to prevent or limit such disclosure.
Without limiting the generality of the foregoing, Xxxxx further acknowledges and
agrees that he shall remain bound by any agreement with or policy of the Company
or any other Company Released Party relating to the Confidential Information (or
any portion thereof) or otherwise, to which he is subject as of the Execution
Date.
7.8 IMPLEMENTATION. Xxxxx agrees that, at all times following the
Execution Date, he shall sign any and all documents, certificates and other
instruments, and take any and all other actions reasonably requested by the
Company or any other Company Released Party, necessary to implement the terms of
this Agreement.
7.9 NO WRONGFUL ACTS. As of the Execution Date: (i) Xxxxx has not
suffered any discrimination on account of his age, sex, race, national origin,
marital status, sexual orientation or any other protected status; (ii) none of
the foregoing attributes has ever been an adverse factor used against him by any
Company Released Party; (ii) Xxxxx has not suffered any job-related wrongs or
injuries for which he might still be entitled to compensation or relief, such as
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an injury for which he might receive a workers' compensation award in the
future; and (iii) Xxxxx has already been paid all wages, commissions,
compensation, benefits, and other amounts that any Company Released Party has
ever owed to him, except for the amounts or benefits expressly payable under the
terms of this Agreement. In the performance of his duties for the Company, Xxxxx
has at all times complied with all applicable state and federal laws.
7.10 ADEA CLAIMS. Xxxxx acknowledges and agrees that, prior to the
Execution Date, he was advised, as required by the ADEA that: (i) the release of
the Released Claims pursuant to this Agreement does not apply to any Claims that
may arise after he signs this Agreement; (ii) he had the right to consult, and
should have consulted, with an attorney prior to executing this Agreement; (iii)
he was entitled to a period of twenty-one (21) days to consider the release
contained in this Agreement (although he may choose to voluntarily execute this
release earlier); (d) he will have seven (7) days following the execution of
this Agreement to revoke such Agreement; and (e) this Agreement will not be
deemed effective until the eighth (8th) day after the Execution Date.
7.11 CONFIDENTIALITY OF AGREEMENT. As of and following the Execution
Date, Xxxxx has not disclosed and will not disclose the underlying facts that
led up to the settlement evidenced by this Agreement, or the terms, amount, or
existence of that settlement or this Agreement, to anyone other than a member of
his immediate family or his attorney or other professional advisor and, even as
to such a person, only if the person agrees to honor this confidentiality
requirement. Nothing in this Section 7.11 shall prohibit Xxxxx from making any
disclosures to the extent necessary legally to enforce this Agreement or
otherwise legally required; provided, however, that Xxxxx agrees to notify the
Company in advance of any permitted or required disclosure pursuant to this
Section 7.11 and permit the Company to take all steps it deems to be appropriate
to prevent or limit such disclosure.
8. TRANSITION CONSULTING SERVICES. For a period not to exceed ninety
(90) days following the Separation Date, Xxxxx agrees to provide to the Company
such transition consulting services as are reasonably requested by a designee of
the Board.
9. MISCELLANEOUS.
9.1 NOTICES. Any notices or other communications required or permitted
hereunder shall be given to the appropriate party at the address of such party
set forth on the signature page(s) hereto or at such other address as such party
shall specify by ten (10) days advance written notice to the other party hereto.
Such notice shall be in writing and shall be deemed given: (i) upon personal
delivery; (ii) upon delivery by facsimile transmission with receipt confirmed if
sent during normal business hours; if not, then on the next business day; (iii)
if sent by certified or registered mail, postage prepaid, three (3) days after
the date of mailing; or (iv) one (1) day after deposit with a
nationally-recognized overnight courier, specifying next day delivery, with
verification of receipt.
9.2 GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of Delaware as
applied to contracts to be performed entirely within such state. Each party
hereby irrevocably submits to the jurisdiction of the state and federal courts
located in the State of Delaware in any action, suit or proceeding arising in
connection with this Agreement, and agrees that any such action, suit or
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proceeding may be brought in such court (and waives any objection based on forum
non conveniens or any other objection to venue therein); provided, however, that
such consent to jurisdiction is solely for the purpose referred to in this
Section 9.2 and shall not be deemed to be a general submission to the
jurisdiction of such court or in the State of Delaware other than for such
purposes. The parties agree that irreparable damage would occur if any of the
provisions of this Agreement is not performed in accordance with its specific
terms or is otherwise breached. Each party agrees that, following any breach or
threatened breach by such party of any covenant or obligation contained in this
Agreement, the other party shall be entitled (in addition to any other remedy
that may be available to it, including monetary damages) to (a) a decree or
order of specific performance to enforce the observance and performance of such
covenant or obligation and (b) an injunction restraining such breach or
threatened breach. Neither party shall be required to provide any bond or other
security in connection with any such decree, order or injunction or in
connection with any related action or proceeding.
9.3 SUCCESSORS AND ASSIGNS. This Agreement shall bind the heirs,
personal representatives, successors, assigns, executors, and administrators of
each party, and inures to the benefit of each party, its agents, directors,
officers, employees, servants, heirs, successors and assigns.
9.4 AMENDMENTS. No amendments or additions to this Agreement shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
9.5 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, each such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
9.6 ENTIRE AGREEMENT. This Agreement, together with the exhibits
hereto, constitutes the entire agreement among the parties, and no party shall
be liable or bound to any other party in any manner by any warranties,
representations or covenants except as specifically set forth herein or therein.
9.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signature pages
shall be effective as originals for all purposes hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
10
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Execution Date.
COMPANY:
FRANKLIN CAPITAL CORPORATION
/s/ Xxxxx X. Xxxxx
--------------------------------------
XXXXX X. XXXXX
Chief Financial Officer
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
/s/ Xxxxxxx X. Xxxxx
--------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
11
EXHIBIT A
RELEASE
THIS RELEASE (this "RELEASE") is being executed and delivered as of
___________, 2004, by and on behalf of XXXX XXXXXX & COMPANY INVESTMENT
MANAGEMENT LLC ("XXXX XXXXXX") to and in favor of, and for the benefit of,
XXXXXXX X. XXXXX, an individual ("XXXXX"), and the other Released Parties (as
defined below).
RECITALS
WHEREAS, Xxxxx and Franklin Capital Corporation, a Delaware corporation
(the "COMPANY"), have previously entered into that certain Termination and
Release Agreement, dated as of June 22, 2004 (the "TERMINATION AGREEMENT"),
pursuant to which Xxxxx agreed to voluntarily resign from his employment with
the Company and from his position as an officer of the Company and a member of
the Company's Board of Directors, effective as of even date herewith; and
WHEREAS, pursuant to Section 6.5 of the Termination Agreement, Xxxx
Xxxxxx is required to deliver this Release to Xxxxx in connection with Xxxxx'x
resignation from the Company pursuant to the terms and conditions of the
Termination Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. RELEASE OF CLAIMS.
1.1 RELEASE OF XXXXX. Effective as of the date of this Release, Xxxx
Xxxxxx irrevocably and unconditionally releases any and all Released Claims (as
defined below) that Xxxx Xxxxxx may now have against Xxxxx and each of his
affiliates and their respective heirs, successors and assigns and any other
persons acting by, through, under or in concert with any of such persons or
entities and their successors (each, a "RELEASED PARTY" and, collectively, the
"RELEASED PARTIES").
1.2 RELEASED CLAIMS. For purposes of this Release, the term "RELEASED
CLAIMS" shall include all known and unknown claims, promises, causes of action,
or similar rights of any type ("CLAIMS") that Xxxx Xxxxxx may now have with
respect to any Released Party, to the extent permitted by law.
1.3 UNKNOWN CLAIMS. Xxxx Xxxxxx further expressly acknowledges that:
(i) it has been advised and understands that the Released Claims may include
Claims that it does not currently know about ("UNKNOWN CLAIMS"); (ii) it
knowingly and voluntarily intends to grant the release of such Unknown Claims as
Released Claims even though it recognizes that someday it might regret having
done so; and (iii) it desires to assume the risk of releasing the Unknown Claims
as Released Claims and acknowledges and agrees that the release set forth in
this Section 6 shall remain effective in all respects in any such case. With
full understanding of the potential consequences of its actions, to the full
extent permitted by law, Xxxx Xxxxxx expressly waives all rights it might have
under any law that is intended to protect parties from waiving unknown claims
such as the Unknown Claims; provided, however, that nothing in this Release
shall release any Claims involving: (i) any act of fraud perpetrated by any of
the Released Parties; (ii) any violation by any of the Released Parties of
federal or state securities laws; (iii) any breach by Xxxxx of his duty of
loyalty to the Company; or (iii) any breach by Xxxxx of any term of this Release
or the Termination Agreement.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF XXXX XXXXXX. In
connection with the terms and conditions set forth in this Release, Xxxx Xxxxxx
hereby represents, warrants and covenants to and for the benefit of Released
Parties as follows:
2.1 PURSUIT OF CLAIMS: As of the date of this Release, Xxxx Xxxxxx has
not filed, initiated, or prosecuted (or caused to be filed, initiated or
prosecuted), and following the date of this Release, Xxxx Xxxxxx shall not file,
initiate or prosecute (or cause to be filed, initiated or prosecuted) any
lawsuit, complaint, charge, action, compliance review, investigation or
proceeding with respect to any Released Claim, whether as a named plaintiff,
class member or otherwise. In the event of any such lawsuit, complaint, charge,
action, compliance review, investigation or proceeding with respect to any
Released Claim, Xxxx Xxxxxx covenants that it shall request any administrative
agency or other body assuming jurisdiction of any such lawsuit, complaint,
charge, action, compliance review, investigation or proceeding to withdraw from
the matter or dismiss it with prejudice. In the event that Xxxx Xxxxxx is ever
awarded or otherwise recovers any amount as to any Released Claim, Xxxx Xxxxxx
hereby agrees to pay to Xxxxx, or assign to Xxxxx Xxxx Xxxxxx'x right to
receive, any such amount.
2.2 OWNERSHIP OF CLAIMS. As of the date of this Release, Xxxx Xxxxxx
has not assigned or transferred (or attempted to assign or transfer) any of the
Released Claims to any third party.
2.3 NO ADMISSION OF LIABILITY. Xxxx Xxxxxx acknowledges that neither
Xxxxx nor any of the other Released Parties believes or has admitted that it has
committed any wrongdoing with respect to Xxxx Xxxxxx, and Xxxx Xxxxxx agrees
that at no time following the date of this Release shall it assert that the
release of Released Claims contained in this Release constitutes an admission of
wrongdoing by Xxxxx or any other Released Party.
2.4 NO DISPARAGEMENT OR HARM. At all times following the date of this
Release, Xxxx Xxxxxx agrees not to criticize, denigrate, or otherwise disparage
Xxxxx or any other Released Party or any of such Released Party's policies,
practices or business conduct; provided, however, that nothing in this Section
2.4 shall be deemed to prohibit Xxxx Xxxxxx from complying with any lawful
subpoena or court order or taking any other actions affirmatively authorized by
law.
2.5 IMPLEMENTATION. Xxxx Xxxxxx agrees that, at all times following the
date of this Release, it shall sign any and all documents, certificates and
other instruments, and take any and all other actions reasonably requested by
Xxxxx or any other Released Party, necessary to implement the terms of this
Release.
2.6 CONFIDENTIALITY OF RELEASE. As of and following the date of this
Release, Xxxx Xxxxxx has not disclosed and will not disclose the underlying
facts that led up to the settlement evidenced by this Release, or the terms,
amount, or existence of that settlement or this Release, to anyone other than
its employees, agents and representatives and, even as to such parties, only if
such parties agree to honor this confidentiality requirement. Nothing in this
Section 2.6 shall prohibit Xxxx Xxxxxx from making any disclosures to the extent
necessary legally to enforce this Release or otherwise legally required;
provided, however, that Xxxx Xxxxxx agrees to notify Xxxxx in advance of any
permitted or required disclosure pursuant to this Section 2.6 and permit Xxxxx
to take all steps it deems to be appropriate to prevent or limit such
disclosure.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF XXXXX.
3.1 REPRESENTATIONS AND WARRANTIES FROM TERMINATION AGREEMENT. Xxxxx
hereby acknowledges and agrees that each of the representations and warranties
he made to and for the benefit of the Company pursuant to the Termination
Agreement shall be deemed incorporated by reference herein and made to and for
the benefit of Xxxx Xxxxxx.
3.2 CONFIDENTIALITY OF RELEASE. As of and following the date of this
Release, Xxxxx has not disclosed and will not disclose the underlying facts that
led up to the settlement evidenced by this Release, or the terms, amount, or
existence of that settlement or this Release, to anyone other than a member of
his immediate family or his attorney or other professional advisor and, even as
to such a person, only if the person agrees to honor this confidentiality
requirement. Nothing in this Section 3.2 shall prohibit Xxxxx from making any
disclosures to the extent necessary legally to enforce this Release or otherwise
legally required; provided, however, that Xxxxx agrees to notify Xxxx Xxxxxx in
advance of any permitted or required disclosure pursuant to this Section 3.2 and
permit Xxxx Xxxxxx to take all steps it deems to be appropriate to prevent or
limit such disclosure.
4. MISCELLANEOUS.
4.1 NOTICES. Any notices or other communications required or permitted
hereunder shall be given to the appropriate party at the address of such party
set forth on the signature page(s) hereto or at such other address as such party
shall specify by ten (10) days advance written notice to the other party hereto.
Such notice shall be in writing and shall be deemed given: (i) upon personal
delivery; (ii) upon delivery by facsimile transmission with receipt confirmed if
sent during normal business hours; if not, then on the next business day; (iii)
if sent by certified or registered mail, postage prepaid, three (3) days after
the date of mailing; or (iv) one (1) day after deposit with a
nationally-recognized overnight courier, specifying next day delivery, with
verification of receipt.
4.2 GOVERNING LAW. This Release shall be construed in accordance with,
and governed in all respects by, the laws of the State of Delaware as applied to
contracts to be performed entirely within such state. Each party hereby
irrevocably submits to the jurisdiction of the state and federal courts located
in the State of Delaware in any action, suit or proceeding arising in connection
with this Release, and agrees that any such action, suit or proceeding may be
brought in such court (and waives any objection based on forum non conveniens or
any other objection to venue therein); provided, however, that such consent to
jurisdiction is solely for the purpose referred to in this Section 4.2 and shall
not be deemed to be a general submission to the jurisdiction of such court or in
the State of Delaware other than for such purposes. The parties agree that
irreparable damage would occur if any of the provisions of this Release is not
performed in accordance with its specific terms or is otherwise breached. Each
party agrees that, following any breach or threatened breach by such party of
any covenant or obligation contained in this Release, the other party shall be
entitled (in addition to any other remedy that may be available to it, including
monetary damages) to (a) a decree or order of specific performance to enforce
the observance and performance of such covenant or obligation and (b) an
injunction restraining such breach or threatened breach. Neither party shall be
required to provide any bond or other security in connection with any such
decree, order or injunction or in connection with any related action or
proceeding.
4.3 SUCCESSORS AND ASSIGNS. This Release shall bind the heirs, personal
representatives, successors, assigns, executors, and administrators of each
party, and inures to the benefit of each party, its agents, directors, officers,
employees, servants, heirs, successors and assigns.
4.4 AMENDMENTS. No amendments or additions to this Release shall be
binding unless made in writing and signed by all of the parties, except as
herein otherwise specifically provided.
4.5 SEVERABILITY. If one or more provisions of this Release are held to
be unenforceable under applicable law, each such provision shall be excluded
from this Release and the balance of the Release shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
4.6 ENTIRE AGREEMENT. This Release, together with the exhibits hereto,
constitutes the entire agreement among the parties, and no party shall be liable
or bound to any other party in any manner by any warranties, representations or
covenants except as specifically set forth herein or therein.
4.7 COUNTERPARTS. This Release may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signature pages
shall be effective as originals for all purposes hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have caused this Release to be
executed as of the date first written above.
XXXX XXXXXX & COMPANY INVESTMENT MANAGEMENT LLC
/s/ Xxxxxx Xxxx III
-----------------------------------------------------
XXXXXX "XXXX" XXXX III
Managing Partner
Address: 000 Xxxxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
/s/ Xxxxxxx X. Xxxxx
-----------------------------------------------------
XXXXXXX X. XXXXX
Address: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
