SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (hereinafter called
"AGREEMENT AND RELEASE") is made and entered by and between SUNGLASS HUT
INTERNATIONAL, INC. its subsidiaries, affiliates, related entities, joint
ventures, officers, directors, employees and/or agents (hereinafter called
"SGHI") and XXXX X. XXXXXXX and his representatives, executors, heirs and
assigns (hereinafter called "XXXXXXX").
W I T N E S S E T H:
WHEREAS, XXXXXXX has been and presently is employed by SGHI as
its President and Chief Executive Officer; and
WHEREAS, XXXXXXX and SGHI wish to terminate his employment
amicably and in a way that will preserve the good will that exists between them,
and to resolve all other matters between them;
NOW, THEREFORE, for and in consideration of the mutual promises
and covenants contained herein, the receipt and sufficiency of which is hereby
acknowledged, and for good and other consideration, SGHI and XXXXXXX agree as
follows:
AGREEMENTS
A. SGHI and XXXXXXX agree that effective May 29, 1997 (the
"Effective Date"), XXXXXXX will resign from his employment with SGHI, resign
from all corporate offices and committees he may hold with SGHI or any of its
subsidiaries, joint ventures or related entities, and resign from all positions
he may hold on the SGHI Board of Directors or the Board
1.
of Directors of any of its subsidiaries, joint ventures or related entities and
XXXXXXX also agrees not to stand for reelection as a director;
B. SGHI and XXXXXXX agree and acknowledge that upon his
termination of employment:
1. SGHI shall pay XXXXXXX his regular base salary of
$38,500 per month, less all applicable withholdings and deductions, for a period
of eighteen (18) months and such payments shall be made in eighteen (18) equal
monthly installments of $38,500 per month. This period shall be referred to as
the "Salary and Benefits Continuation Period".
2. SGHI shall pay the cost of XXXXXXX'x premiums for
coverage under SGHI's Group Health Plans and Group Life Insurance Plans, as well
as all other presently available insurance and benefit plans, during the Salary
and Benefits Continuation Period on the same basis and to the same extent that
it paid for such premiums prior to XXXXXXX'x separation from SGHI.
3. SGHI's obligation to pay XXXXXXX his regular base
salary pursuant to Paragraph B.1. and to pay the costs of XXXXXXX'x premiums for
coverage under SGHI's insurance and benefit plans pursuant to Paragraph B.2.
shall cease in the event, and upon the date, that XXXXXXX obtains full-time
employment which is intended to be permanent during the Salary and Benefits
Continuation Period; provided, however, that in no event shall XXXXXXX be paid
by SGHI less than twelve (12) months of Salary and Benefits Continuation,
regardless of whether he obtains subsequent employment.
4. SGHI shall, upon termination, accelerate full vesting
of all XXXXXXX'x unvested stock options and further agrees that all of the SGHI
stock options listed on attached Schedule A shall remain exercisable in full for
the total number of shares subject
2.
thereto for the thirty-six (36) month period beginning on the Effective Date,
notwithstanding any term or condition in any option plan, agreement or
certificate to the contrary; provided, however, that for a three (3) month
period following the Effective Date, XXXXXXX may exercise options and sell
shares acquired upon exercise thereof only in compliance with SGHI's published
trading calendar attached as Schedule B.
5. XXXXXXX'x vacation time shall cease accruing upon the
date of his termination.
C. SGHI shall, upon termination, pay to XXXXXXX all unused
accrued vacation, and shall thereafter reimburse him for business expenses
properly documented and incurred consistent with SGHI policy and actually
incurred through the date his employment terminates.
D. In the event of any litigation or administrative action (an
"Action") against XXXXXXX based upon his official duties while employed by SGHI,
SGHI will indemnify XXXXXXX to the extent required by law. With respect to the
XXXXXXXXXX litigation (U.S. District Court, Southern District of Florida, Case
No. 97-0191-CIV-XXXXX) and the XXXXXX litigation (U.S. District Court, Southern
District of Florida, Case No. 97-1059-CIV-XXXXX), SGHI shall continue to provide
XXXXXXX with representation pursuant to the representation agreement attached
hereto as Schedule C. If the interests of SGHI, or its officers, directors or
affiliates are adverse to or conflict with the interests of XXXXXXX in any
Action, or if XXXXXXX cannot be fairly or adequately represented by legal
counsel to SGHI in any Action, XXXXXXX shall have the right to retain
independent legal counsel (reasonably acceptable to SGHI) to represent him in
such Action and SGHI shall pay the reasonable fees and expenses of such legal
counsel. The fees and expenses in the previous sentence shall be paid by SGHI no
less frequently than
3.
quarterly. Any determination of whether interests are adverse, there is a
conflict or if XXXXXXX cannot be fairly or adequately represented shall be made
in good faith.
E. In exchange for the payments and agreements set forth in
paragraph B above, which, but for this AGREEMENT AND RELEASE, XXXXXXX would not
otherwise be entitled, XXXXXXX shall release, discharge and covenant not to xxx
SGHI, its directors, officers, employees, agents, and subsidiaries and other
affiliated entities, from any and all claims, demands, damages, lawsuits,
obligations, promises, administrative actions, charges and causes of action,
both known and unknown, in law or in equity, of any kind whatsoever, which
XXXXXXX ever had, now has, or may have against SGHI, by reason of any matter,
cause or thing whatsoever, up to and including the Effective Date, including but
not limited to any and all claims and causes of action arising out of XXXXXXX'x
employment with SGHI, any and all claims and causes of action under Title VII of
the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment
Act of 1967, as amended ("ADEA"), the Americans With Disabilities Act ("ADA"),
the Employee Retirement Income Security Act ("ERISA"), and any other federal,
state or local anti-discrimination law, statute or ordinance; and any lawsuit
founded in tort, contract or any other common law or equitable basis of action.
Notwithstanding the foregoing, this paragraph does not release SGHI from its
obligations under this AGREEMENT AND RELEASE. This release shall not apply to
(i) any rights of XXXXXXX under this AGREEMENT AND RELEASE, (ii) any rights
XXXXXXX may have to indemnification from SGHI or under any directors and
officers liability insurance or similar policy purchased by SGHI, or (iii) any
amounts owed to XXXXXXX under SGHI's 401(k) plan, 401(k) "wrap around" plan and
deferred compensation plan accrued through the Effective Date.
4.
SGHI shall release, discharge and covenant not to xxx XXXXXXX and
his beneficiaries, heirs and assigns from any and all claims, demands, damages,
lawsuits, obligations, promises, administrative actions, charges and causes of
action, both known and unknown, in law or in equity, of any kind whatsoever,
which SGHI ever had, now has, or may have against XXXXXXX by reason of any
matter, cause or thing whatsoever, up to and including the Effective Date,
including any claims related to his employment with SGHI or his status as an
officer and director of SGHI.
X. XXXXXXX acknowledges that he is currently being represented by
Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP in connection with the XXXXXXXXXX and XXXXXX
litigations and has been represented by Xxxxxxx, Phleger & Xxxxxxxx LLP in
connection with a dispute with Xxxxxx Xxxxxxxxx and hereby waives any and all
conflicts which may arise by virtue of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP's
representation of SGHI in connection with the negotiation of this AGREEMENT AND
RELEASE.
X. XXXXXXX and SGHI agree not to institute any administrative
proceeding or lawsuit against the other upon any basis outlined in paragraph E
above, and represent and warrant that neither party has authorized any other
person or entity to initiate such administrative proceedings or lawsuit.
X. XXXXXXX and SGHI agree that nothing contained in this
AGREEMENT AND RELEASE shall constitute or be treated as an admission of
liability or wrongdoing by either party, and each of the parties hereto hereby
deny any liability or wrongdoing.
X. XXXXXXX agrees that he will not seek employment or
re-employment with SGHI at any time in the future, unless the then Board of
Directors of SGHI desires to hire or rehire XXXXXXX. Company termination
documents will reflect that XXXXXXX has "resigned".
5.
In connection with such resignation, SGHI shall issue a press release in the
form attached hereto as Schedule D and will not make or publish any statement to
the press, third-parties or employees of SGHI which conflicts with the terms of
such press release.
X. XXXXXXX and SGHI shall not, without compulsion of legal
process, discuss with others, either directly or by implication, the fact or
terms of this settlement, the amounts referred to in this AGREEMENT AND RELEASE,
or the fact of the payment of said amounts, except that each party may disclose
them to his attorneys or accountants to whom the disclosure is necessary to
effect the purposes for which he has consulted such attorneys or accountants and
SGHI may make disclosures required by applicable securities laws (which may
require the filing of this AGREEMENT AND RELEASE with the SEC), and Xxxxxxx may
disclose the confidentiality, nonsolicitation, and noncompete provisions of this
AGREEMENT AND RELEASE to employers or prospective employers. If either party is
served with legal process compelling disclosure of any matters referenced in
this AGREEMENT AND RELEASE, such party shall immediately notify the other party
hereto so that it may have the opportunity to interpose an objection.
X. XXXXXXX agrees not to divulge, communicate, use to the
detriment of SGHI or for the benefit of any other person or persons, or misuse
in any way, any Confidential Information (as hereinafter defined) pertaining to
the business of SGHI. Any Confidential Information or data known or hereafter
acquired by XXXXXXX with respect to the business of SGHI (which shall include,
but not be limited to, information concerning SGHI personnel issues, financial
condition, prospects, methods of doing business and marketing and promotion of
SGHI's services) shall be deemed a valuable, special and unique asset of SGHI
that is received by XXXXXXX in confidence and as a fiduciary, and XXXXXXX shall
remain a fiduciary to SGHI
6.
with respect to all such information. XXXXXXX shall, prior to termination,
return to SGHI all originals and copies of any SGHI company document in his
possession.
For purposes of this AGREEMENT AND RELEASE, "Confidential
Information" means information disclosed to XXXXXXX or known by XXXXXXX as a
consequence of or through his employment by SGHI (including information
conceived, originated, discovered or developed by SGHI) prior to or after the
date hereof, and not generally known, about SGHI's business, which has not been
previously disclosed to the public.
L. Each party to this AGREEMENT AND RELEASE agrees that such
party will do or say nothing in the future to disparage or otherwise impugn the
commercial or personal reputations of the other party hereto, or any of its or
his officers, directors, employees and/or agents. SGHI's current officers and
directors will not expressly disparage XXXXXXX or his performance while serving
in their capacity as officers and directors of SGHI.
X. XXXXXXX further agrees that he will not voluntarily, and
without compulsion of legal process, assist or encourage others to assert claims
against SGHI or against any affiliates, related entities, officers, directors,
employees and/or agents of SGHI or to commence or maintain litigation against
SGHI or any affiliate, related entity, officer, director, employee and/or agent
of SGHI. SGHI agrees that it will not voluntarily, and without compulsion of
legal process, assist or encourage others to assert claims against XXXXXXX or to
commence or maintain litigation against XXXXXXX.
X. XXXXXXX agrees that, upon reasonable notice and at reasonable
times, he shall make himself available to and cooperate with SGHI in connection
with any threatened or ongoing litigation matters involving SGHI or XXXXXXX,
including but not limited to conferences, preparation for deposition, deposition
and trial. XXXXXXX shall be available to
7.
SGHI for consultation on general corporate matters. SGHI shall reimburse
XXXXXXX, to the extent not prohibited by law, for all reasonable expenses
incurred by XXXXXXX in complying with his obligations under this paragraph.
Nothing in this paragraph N shall require XXXXXXX to take any action that would
conflict with his duties and obligations to any subsequent employer (subject to
XXXXXXX'x use of good faith reasonable efforts to obtain reasonable time off
when there is no significant interference with the business of such subsequent
employer).
X. XXXXXXX agrees that for a period coextensive with the Salary
and Benefits Continuation Period, and in no event less than twelve (12) months
("non-compete period"), XXXXXXX will not accept employment with, provide
services to, engage in or have any interest in any sole proprietorship,
partnership, corporation or business or any other person or entity (whether as
an employee, officer, director, partner, agent, security holder, creditor,
consultant or otherwise) that, directly or indirectly, whether through retail,
catalog or Internet sales, engages in the sale primarily of watches or related
accessories or primarily the sale, manufacture, or distribution of optical
products of any kind, including sunglasses, or prescription and nonprescription
eyewear.
X. XXXXXXX further agrees that, during the non-compete period,
XXXXXXX shall not hire or encourage his employer to hire any employee of SGHI,
and shall not induce or attempt to influence any employee of SGHI or any
independent contractor of SGHI to terminate or modify his employment or
relationship with SGHI.
X. XXXXXXX and SGHI understand that the covenants contained in
this AGREEMENT AND RELEASE, including the covenants in paragraphs J, K, L, M,
and O, above, of nondisclosure, confidentiality, nondisparagement,
nonassistance, and non-competition are material inducements to each party for
the making of this settlement and that, for the breach
8.
thereof, each party will be entitled to pursue its legal and equitable remedies,
including without limitation the right to recover damages and seek injunctive
relief.
R. In the event it becomes necessary to commence litigation in
order to enforce performance of this AGREEMENT AND RELEASE or for breach
thereof, the prevailing party shall recover its costs and reasonable attorneys'
fees.
S. This AGREEMENT AND RELEASE shall be deemed to have been
entered into in the State of Florida and shall be construed and interpreted in
accordance with the laws of that state. The parties agree that any and all
claims and lawsuits pertaining to paragraph O of this AGREEMENT AND RELEASE
shall be brought in the state or federal courts in Dade County, Florida, and the
parties expressly waive the right to proceed in any other jurisdiction or forum.
X. XXXXXXX and SGHI acknowledge and agree that no promises or
representations were made which do not appear written herein and that this
AGREEMENT AND RELEASE contains the entire agreement of the parties as to the
subject matter thereof.
X. XXXXXXX and SGHI acknowledge and agree that if any provision
of this AGREEMENT AND RELEASE is found to be unenforceable, it shall not affect
the enforceability of the remaining provisions and the court shall enforce all
remaining provisions to the extent permitted by law.
X. XXXXXXX hereby acknowledges that he has been given at least
twenty-one (21) days to review this AGREEMENT AND RELEASE, and that he has seven
(7) days after signing this AGREEMENT AND RELEASE within which to rescind this
AGREEMENT AND RELEASE by providing notice to SGHI in writing. XXXXXXX
acknowledges that he has been represented by counsel in connection with this
AGREEMENT AND RELEASE and all the
9.
waivers contained herein. XXXXXXX further acknowledges that this AGREEMENT AND
RELEASE satisfies all the requirements for an effective release by XXXXXXX of
all age discrimination claims under the ADEA.
Executed this 29th day of May, 1997.
-------------------------------
XXXX X. XXXXXXX
SUNGLASS HUT INTERNATIONAL, INC.
By:
----------------------------
Xxxxx X. Xxxxxxxx
Chairman of the Board
10.
