SEVERANCE AND RELEASE AGREEMENT
Exhibit 10.1
SEVERANCE AND RELEASE AGREEMENT
On this 12th day of July, 2007, the parties (hereinafter referred to as “Party” or
“Parties”) to this Severance and Release Agreement (hereinafter referred to as “Agreement”), Xxxx
X. Xxxxxxx, XX (hereinafter referred to as “Xxxxxxx”) and Arcadia Resources, Inc. f/k/a Critical
Home Care, Inc., a Nevada corporation (hereinafter referred to as “Arcadia”) have entered this
Agreement. The effective date of this Agreement (the “Effective Date”) shall be that date upon
which the last of the Parties executes the same.
RECITALS:
X. Xxxxxxx’x employment under the Employment Agreement (see attached Exhibit B) dated May 7,
2004 (the “Employment Agreement”), will be terminating and Xxxxxxx’x last day of providing
employment services, including, but not limited to employment services as CEO and Chairman of the
Board of Arcadia, will be on the Effective Date. Certain provisions of Xxxxxxx’x Employment
Agreement shall remain in effect as provided herein.
X. Xxxxxxx will resign as a director of Arcadia on the Effective Date.
X. Xxxxxxx’x Stock Option Agreement (see attached Exhibit C) dated May 7, 2004 (the “Stock
Option Agreement”) shall remain in full force and effect, subject to the terms, conditions,
covenants, and the like as provided herein or as amended herein.
X. Xxxxxxx’x Escrow Agreement (see attached Exhibit D) dated May 7, 2004 (the “Escrow
Agreement”) shall remain in full force and effect, subject to the terms, conditions, covenants and
the like as provided herein.
X. Xxxxxxx’x Class A Warrant To Purchase Shares dated May 5, 2007 (the “Existing Warrant”),
which is described in a side letter of even date herewith (the “Side Letter”), shall remain in full
force and effect.
F. Arcadia will under no circumstances have any liability or obligation whatsoever, to Xxxxxxx
or his personal representatives, estate, heirs, beneficiaries, claiming by or through Xxxxxxx,
except for those payments, benefits, obligations and reimbursable expenses described in this
Agreement.
X. Xxxxxxx agrees that the payments, benefits, obligations and reimbursable expenses to be
made to him or for his benefit pursuant to this Agreement will be his full severance, liquidated
damages and settlement due Xxxxxxx arising out of the termination of his Employment Agreement that
Xxxxxxx may have or had with Arcadia (“Release of Claims”).
In exchange for good and valuable consideration, the receipt of which is hereby acknowledged,
and in order to set forth the terms of Xxxxxxx’x Release of Claims, Xxxxxxx and Arcadia agree as
follows:
(a) Xxxxxxx will receive as provided in Paragraph 4 of his Employment Agreement his
compensation and benefits except for bonus, vacation and sick time as hereinafter defined.
(b) Xxxxxxx will receive the sum of $15,000, as reimbursement of his attorney’s fees
incurred in connection with the negotiation and execution of this Agreement, and Arcadia
shall provide at no cost to Xxxxxxx the full COBRA benefits described in paragraph 27 of
this Agreement for eighteen (18) months beginning on the Effective Date. Arcadia shall
provide proof of payment of such COBRA benefits, in writing (on a monthly basis), to
Xxxxxxx.
(c) Xxxxxxx hereby resigns as a director and Chairman of the Board of Arcadia effective
as of the Effective Date. For the period July 12, 2007 through July 11, 2008, Arcadia will
pay Xxxxxxx xxxxxxxxx under this Agreement of One Hundred Eighty Seven Thousand Six Hundred
Five ($187,605) Dollars in equal installments of Seven Thousand Two Hundred Fifteen and
58/100 ($7,215.58) Dollars, payable every two (2) weeks. For the period July 12, 2008
through September 24, 2009, Arcadia will pay Xxxxxxx xxxxxxxxx under this Agreement at the
annual rate of One Hundred Fifty Thousand ($150,000) Dollars in equal installments of Five
Thousand Seven Hundred Sixty Nine and 23/100 ($5,769.23) Dollars, payable every two (2)
weeks. Said amounts shall be paid to Xxxxxxx in accordance with Arcadia’s normal payroll
policies as in effect from time to time, with the first such payment to be made with respect
to the first payroll period beginning on or about July 12, 2007. Arcadia shall not withhold
any sums from these amounts except to the extent it is legally required to do so.
(d) The Parties acknowledge that Paragraph 8 of Xxxxxxx’x Employment Agreement shall
remain in effect and Xxxxxxx shall be subject to the inventions provisions as provided
therein.
(e) The Parties acknowledge that Paragraph 9 of Xxxxxxx’x Employment Agreement shall
remain in effect as provided therein and Xxxxxxx shall be subject to the confidentiality
provisions as provided therein.
(f) The Parties acknowledge that Paragraph 10 of Xxxxxxx’x Employment Agreement is
hereby amended and restated in its entirety as set forth on Exhibit A to this Agreement, and
as so amended and restated shall remain in effect as provided therein and Xxxxxxx shall be
subject to the covenant-not-to-compete provisions as provided therein.
(g) The Parties acknowledge that Paragraph 11 of Xxxxxxx’x Employment Agreement shall
remain in effect and Xxxxxxx and Arcadia shall be subject to the enforceability provisions
as provided therein.
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(h) In consideration of the Release of Claims by Xxxxxxx set forth in Paragraph 7,
Xxxxxxx shall be paid One Hundred Eighty Seven Thousand Six Hundred Five ($187,605) Dollars
in addition to any other payments set forth in this Agreement. One twelfth (1/12) (to wit:
Fifteen Thousand Six Hundred Thirty Three and 75/100 ($15,633.75) Dollars) of this amount
shall be paid to Xxxxxxx on the first of each month commencing on August 1, 2007 until fully
paid (subject to Paragraph 31 and the Schedule attached as Exhibit E).
(i) The Parties agree that the termination hereunder is “other than for cause” within
the meaning of Paragraph 6(C) of the Employment Agreement. Paragraph 6(C) of the Employment
Agreement is amended as provided in paragraph 1(c) above.
(j) In all other respects, the Xxxxxxx’x Employment Agreement is terminated and of no
effect as of the date of this Agreement.
2. Stock Option Agreement.
(a) The Options (as defined in the Stock Option Agreement ) #5 and #6 pursuant to
Paragraph 3 of the Stock Option Agreement and totaling two million (2,000,000) option shares
of Arcadia Voting Common Stock shall vest as of the Effective Date. No other Options shall
vest and Options #1, #2, #3 and #4 are terminated and will never vest. The exercise price
under each Option shall be twenty-five ($.25) cents per Option share. Xxxxxxx may exercise
any or all of the vested Options at any time commencing December 1, 2007 and ending March
15, 2008. Arcadia shall exercise its best efforts to issue the stock to Xxxxxxx pursuant to
an exercised Option within three (3) days of exercise.
(b) The Stock Options may be exercised in whole or in part at Xxxxxxx’x demand, by
means of a cashless exercise through the surrender and cancellation of a portion of shares
of Arcadia common stock then held by Xxxxxxx or issuable on exercise of the options, Arcadia
being deemed to have received cash consideration as payment in full of the exercise price
based on the day of exercise upon the difference between the exercise price of $.25 per
share and the closing price of Arcadia stock on the American Stock Exchange as of such date,
being treated as cash consideration for the exercise of any option shares so designated by
Xxxxxxx.
(c) Any changes or modifications made in this Agreement to the Stock Option Agreement
shall be treated as amendments to the Stock Option Agreement. Subject to any such
amendments provided for in this Agreement, the Stock Option Agreement shall remain in full
force and effect.
(d) Arcadia covenants and agrees to use its commercially reasonable best efforts to
maintain the effectiveness of Arcadia’s registration statement with the SEC covering the
option shares that may be issued under the Stock Option Agreement for a period of not less
than two years from the date of termination of Xxxxxxx’x employment.
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(e) The Parties agree that through and including the date of this Agreement there has
not been a breach or default under the Stock Option Agreement by either Party.
(f) To the best of Arcadia’s knowledge, Arcadia represents and warrants that the
Options satisfy the applicable conditions of Rule 16b-3 under the Securities Exchange Act of
1934 (the “Exchange Act”) and that transactions between Arcadia and Xxxxxxx involving the
Options will qualify for the exemption from Section 16(b) provided under Rule 16b-3(a) under
the Exchange Act.
(g) Arcadia represents and warrants that, with respect to the grant of the Options
under the Stock Option Agreement, Arcadia has “timely reported all financial expenses due to
the issuance of the Options on financial statements or reports for the period in which the
related expense should have been reported under generally accepted accounting principles,”
as such terminology is used in IRS Notice 2006-79.
3. Escrow Agreement. The Parties agree that the Escrow Agreement shall remain in full
force and effect and that through and including the date of this Agreement there has not been a
breach or default under the Escrow Agreement by either Party. Xxxxxxx acknowledges and agrees that
(1) the shares held in escrow under the Escrow Agreement will be forfeited due to the failure to
achieve required EBITDA targets, and (2) any claims by him pursuant to the Escrow Agreement are
subject to the release provisions of paragraph 7 and 8 of this Agreement.
4. Return of Employer Property. On the date Xxxxxxx signs this Agreement, Xxxxxxx
will immediately turn over to Arcadia all Arcadia property which he has in his possession or
control, including any Arcadia records, files, computer disks, software, printers, cellular phones
and PDA’s issued by Arcadia, and documents, regardless of the media in which such documents are
stored, and including any keys or Arcadia credit cards, which Xxxxxxx agrees to immediately cease
using. However, Xxxxxxx may purchase his office furniture for book value. Xxxxxxx is entitled to
keep the computer(s) he currently uses, however, Arcadia reserves the right to inspect such
computer(s), or other equipment and to delete, at its option, any data Arcadia deems proprietary or
confidential in nature. Xxxxxxx agrees that should a dispute arise between Xxxxxxx and Arcadia
regarding the deletion of data on equipment retained by Xxxxxxx, then Arcadia may, at its
discretion, request the return of said computer(s) or equipment.
5. Full Payment. Xxxxxxx agrees that the consideration to be paid to him described
above in Paragraphs 1, 2, 3 and Recital Subparagraph E shall constitute full and final payment for
all services he has rendered to Arcadia and for such promises made by Xxxxxxx in this Agreement and
that such payments are in lieu of any other compensation, bonus, severance pay, vacation pay,
incentive compensation pay, or employee benefits.
6. Reimbursement of Expenses. Arcadia shall reimburse Xxxxxxx for any and all
business expenses incurred during the term of his Employment Agreement for which he is entitled to
reimbursement under Arcadia’s reimbursement policies and procedures in effect on the date hereof.
All such expenses for reimbursement shall be submitted within thirty (30) days from the date of
this Agreement. Any such expenses submitted after this thirty day period will not be reimbursed.
Arcadia shall make reimbursement payments promptly and in any event no later than seven days after
submission.
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7. Release of Claims — Xxxxxxx. Except for a breach by Arcadia of this Agreement, the
Stock Option Agreement as amended in Paragraph 2 above, portions of the Employment Agreement
addressed in this Agreement and the Existing Warrant (none of which are the subject of any release
hereunder), from the date of this Agreement forward, Xxxxxxx hereby forever releases and discharges
Arcadia and each of Arcadia’s past or present owners, members, shareholders, predecessors,
successors, assigns, agents, directors, officers, employees, representatives, attorneys, insurers,
employee benefit programs, the trustees, administrators, fiduciaries, and insurers of such
programs, parent companies, divisions, subsidiaries, affiliates (and any past or present agents,
directors, officers, employees, representatives, attorneys, insurers, and employee benefit programs
of such parent companies, divisions, subsidiaries, and affiliates), and all persons acting by,
through, under, or in concert with any of them (collectively “Releasees”), from any and all claims,
demands, rights, charges, actions, interests, debts, liabilities, damages, costs and expenses, or
causes of action of whatever type or nature, whether legal or equitable, whether in tort or in
contract, which Xxxxxxx may now have against them, either individually, jointly or severally, based
upon acts which have occurred from the beginning of time to the date of this Agreement, and
especially from any and all claims, demands, or causes of action arising out of, either directly or
indirectly, Xxxxxxx’x employment or separation of employment with Arcadia, including, but not
limited to, any rights or causes of action Xxxxxxx may have under the Age Discrimination in
Employment Act, as amended, 29 U.S.C. §621, et. seq. (“ADEA”), Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §2000 et. seq., and the Florida Civil Rights
Act (Chapter 760, Florida Statutes), the Florida Public Whistleblower Act (Fla. Stat. 112.3187, et.
seq.), the Florida Equal Pay Act, and waivable rights under the Florida Constitution, the Americans
With Disabilities Act, and the Persons With Disabilities Civil Rights Act, the Employee Retirement
Income Security Act of 1974, the Family and Medical Leave Act of 1993, and the Xxxxxxxx-Xxxxx Act
of 2002, including any claim for or right to attorney fees, costs and expenses thereunder. Xxxxxxx
does not intend to waive and does not waive any claims that may arise under the ADEA after the date
on which he signs this Agreement. Xxxxxxx understands that this Agreement may not affect the
rights and responsibilities of the Equal Employment Opportunity Commission (“EEOC”) to enforce the
ADEA and that this Agreement may not be used to justify interfering with the protected right of
employees, including Xxxxxxx, to file a charge or participate in an investigation or proceeding
conducted by the EEOC under the ADEA.
8. Knowing and Voluntary Release. Xxxxxxx acknowledges and agrees that:
(a) He is the sole owner of the claims that are released in this Agreement and that he
has the full right and power to grant, execute and deliver the releases and promises in this
Agreement;
(b) This Agreement covers all claims arising out of his employment, including those
that he does not know about;
(c) This Agreement is written in a manner that Xxxxxxx understands;
(d) Xxxxxxx is waiving claims under the foregoing laws, including specifically the Age
Discrimination in Employment Act, as amended, 29 U.S.C. 621, et. seq.;
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(e) Except as otherwise provided in this Agreement, Xxxxxxx is waiving and releasing
only those claims based on acts or omissions or transactions and dealings that arose prior
to the execution of this Agreement;
(f) That no representations of any kind have been made by Arcadia to induce Xxxxxxx to
execute this Agreement, and that the only representations made to Xxxxxxx in order to obtain
his consent to this Agreement are as stated herein;
(g) That he is entering into this Agreement of his own free will and without coercion,
intimidation or threat of retaliation. He acknowledges and agrees that Arcadia has not
exerted undue pressure or influence in this regard;
(h) That a portion of the consideration offered herein is accepted by him as being in
full accord, satisfaction, compromise and settlement of any and all claims or potential
claims and that he expressly agrees that he is not entitled to and shall not receive any
further recovery of any kind from Arcadia or its affiliates and that in the event of any
further action, charge, complaint, arbitration or proceeding of any kind in any court, or
before any administrative or investigative body or agency (whether public, quasi-public or
private) against Arcadia arising out of any act, omission, transaction or occurrence up to
and including the effective date, except claims to enforce this Agreement, Arcadia shall
have no further monetary or other obligation of any kind to him, including any obligation
for any costs, expenses and attorneys’ fees incurred by him or on his behalf or on behalf of
any other person or entity and/or on behalf of or as a member of any alleged class of
persons; and
(i) Xxxxxxx has been advised to consult with an attorney and to have an attorney review
this Agreement.
9. Revocation Period. For a period of seven (7) days following Xxxxxxx’x execution of
this Agreement (“Revocation Period”), Xxxxxxx may revoke this Agreement, and this Agreement shall
not become effective or enforceable until the Revocation Period has expired. In the event that
Xxxxxxx shall revoke this Agreement, Xxxxxxx and Arcadia shall have no obligations under this
Agreement.
10. Covenant-Not-to-Xxx. Xxxxxxx further agrees that he will not file a lawsuit
against the Releasees and will not file a charge of discrimination with any state or federal
administrative agency against the Releasees based upon any acts or omissions which have occurred
prior to the date of this Agreement. Xxxxxxx also understands and agrees that by signing this
Agreement, Xxxxxxx is agreeing not to xxx the Releasees for any claims covered by the releases
included in Paragraphs 7 and 8. Xxxxxxx represents and warrants that neither he nor any person,
organization or entity acting on his behalf has filed or initiated any complaint, charge, claim or
proceeding against Arcadia or its affiliate entities before any court or other body relating to his
employment or the termination thereof, nor does he have actual knowledge of, or reasonable cause to
believe that there may exist now or hereafter, any claims asserted or assertable against Arcadia by
other persons based on his acts or omissions through the date of the execution of this Agreement.
Xxxxxxx acknowledges that he waives any right he may have to benefit in any manner from any relief,
monetary or otherwise, arising out of any past, present or future proceeding. The
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foregoing waiver does not apply to Xxxxxxx’x rights under this Agreement and from the date of
this Agreement forward under the other agreements that remain in effect as provided elsewhere in
this Agreement.
11. Release of Claims — Arcadia. Except for a breach, from the date of this Agreement
forward, by Xxxxxxx of this Agreement, the Stock Option Agreement as amended in Paragraph 2 above,
portions of the Employment Agreement addressed in this Agreement, or the Existing Warrant (none of
which are the subject of any release hereunder), Arcadia and all their past or present parent
companies, affiliates, shareholders, agents, directors, officers, employees and attorneys, and all
persons acting by, through or in concert with it, hereby forever release and discharge Xxxxxxx and
his successors, heirs, assigns, representatives, attorney and all persons acting by, through or in
concert with him (collectively “Xxxxxxx Releasees”), from any and all claims, demands, rights,
charges, actions, interests, debts, liabilities, damages, costs and expenses, or causes of action
of whatever type or nature, whether legal or equitable, whether in tort or in contract, which
Arcadia may now have against him, either individually, jointly or severally, based upon acts which
have occurred from the beginning of time to the date of this Agreement.
12. Covenant-Not-to-Xxx — Arcadia. Except for a breach by Xxxxxxx of this Agreement,
the Stock Option Agreement including the amendments in Paragraph 2 above, portions of the
Employment Agreement addressed in this Agreement, the Escrow Agreement, the Existing Warrant and
except for matters excluded from the scope of the release given by Arcadia in Paragraph 11
hereunder, Arcadia further agrees it will not file a lawsuit against the Xxxxxxx Releasees.
13. Entire Agreement. This Agreement sets forth the entire agreement between Xxxxxxx
and Arcadia, and supersedes any and all other previous or contemporaneous communication,
representations, understandings, assignments, negotiations and discussions, either oral or written
between the Parties with respect to the subject matter of this Agreement. Notwithstanding the
above sentence, portions of the Employment Agreement addressed in this Agreement, the Stock Option
Agreement including the amendments in Paragraph 2 above, the Existing Warrant and the Escrow
Agreement shall remain in full force and effect, subject to any modifications made in this
Agreement. This Agreement may not be modified in any manner except by the mutual written agreement
of the Parties hereto. Xxxxxxx acknowledges that Arcadia has made no representations or promises
to him (such as that Xxxxxxx’x former position will remain vacant), other than those in this
Agreement. If any provision of this Agreement is found to be unenforceable, all other provisions
will remain enforceable.
14. Arcadia Representations, Etc. Arcadia represents and warrants, as follows:
(a) The execution, delivery and performance of this Agreement by Arcadia has been duly
approved by Arcadia’s Board of Directors and no further corporate or other action, consent
or waiver is necessary or appropriate as a precondition to making this Agreement the valid
and binding agreement of Arcadia enforceable against Arcadia in accordance with its terms.
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(b) To the best of Arcadia’s knowledge other than knowledge derived from Xxxxxxx,
within the past twelve (12) months Xxxxxxx has not engaged in any purchase, sale or other
transactions in any of Arcardia’s equity securities that are required to be reported under
Section 16(a) of the Exchange Act.
(c) To the best of Arcadia’s knowledge, as of the date of this Agreement, Xxxxxxx is
the “beneficial owner” (as that term is defined under Rule 16a-1 under the Exchange Act) of
less than 10% of any class of equity security of Arcadia and would also be the owner of less
than 10% of any such class even if solely for purposes of this calculation the Options were
deemed to be immediately convertible into Arcadia stock.
15. Xxxxxxx Representations, Etc. Xxxxxxx represents and warrants that to the best of
Xxxxxxx’x knowledge, neither Xxxxxxx nor his spouse, directly or indirectly, has within the past
twelve (12) months, engaged in any purchase, sale or other transactions with respect to any of
Arcadia’s equity securities that are required to be reported under Section 16(a) of the Exchange
Act, that Xxxxxxx has not previously disclosed to Arcadia.
16. Successors; Obligations to Xxxxxxx’x Estate. This Agreement binds Xxxxxxx’x
heirs, administrators, representatives, executors, successors, and assigns and will inure to the
benefit of all Releasees and their respective heirs, administrators, representatives, executors,
successors and assigns. If Xxxxxxx should die prior to the payment of all amounts due under this
Agreement, Arcadia shall continue to make the payments called for under this Agreement to Xxxxxxx
or to Xxxxxxx’x estate, as the case may be. Arcadia shall also be obligated to Xxxxxxx or
Xxxxxxx’x estate for any benefits provided for under this Agreement, including COBRA benefits, the
Stock Option Agreement provisions set forth in Section 2, and any warrants or other benefits that
Xxxxxxx is entitled to exercise under prior agreements between Xxxxxxx and Arcadia.
17. Confidentiality; Press Release. Xxxxxxx agrees to keep the financial terms of
this Agreement strictly confidential; provided that it shall not be a breach of this provision for
Xxxxxxx to discuss this Agreement with his spouse, attorney, or financial advisor, all of whom
shall be subject to the requirement of strict confidentiality, or to make disclosure pursuant to a
validly issued subpoena or court order from a court or agency of competent jurisdiction. The
foregoing covenants shall terminate immediately and be void and of no force or effect if at any
time Arcadia files this Agreement (or a form of this Agreement) with the SEC or otherwise makes
public disclosure of the general terms of this Agreement. Within a reasonable time prior to any
press release or other public disclosure of the termination of Xxxxxxx’x employment and other
relationships with Arcadia, Xxxxxxx shall be given a copy of the proposed press release and other
public disclosure and an opportunity to provide his comments and input with respect thereto.
18. Cooperation in Disclosure of Confidential Information. Xxxxxxx agrees that in the
event that he is required to make disclosure of confidential or proprietary information or
materials relating to his employment by Arcadia under any court order, subpoena, or other judicial
process, he will cooperate with Arcadia and provide Arcadia with prompt written notice, take all
commercial reasonable steps reasonably requested by Arcadia to defend against the compulsory
disclosure and permit Arcadia to participate with counsel of its choice in any proceeding relating
to the compulsory disclosure. Arcadia shall promptly pay for or reimburse
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Xxxxxxx for his reasonable out of pocket expenses (including the expense of counsel of
Xxxxxxx’x own choosing) incurred in connection with any of the activities referred to in this
Paragraph 18.
19. Indemnification, Etc. If Xxxxxxx is made a party to or a witness in or is
otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of, arising out of or relating to (A) Xxxxxxx’x service as an employee,
officer or director of Arcadia or any of Arcadia’s subsidiaries or affiliates or (B) at the request
of Arcadia or for the benefit of Arcadia Xxxxxxx’x service as a trustee or in any fiduciary or
similar capacity for or in connection with any employee benefit plan maintained by Arcadia or for
the benefit of any of the employees of Arcadia or any of its affiliates, or service on any trade
association, civic, religious, educational or charitable boards or committees, Arcadia hereby
agrees, in each instance, to the same extent and on a basis no less favorable than it does for
Arcadia’ directors and senior executive officers (i) to indemnify Xxxxxxx and hold Xxxxxxx harmless
from any and all cost, expense and damages by reason of in each instance, and (ii) to promptly pay
as incurred all Xxxxxxx’x expenses (including fees and expenses of counsel of Xxxxxxx’x choosing)
incurred in any matter as to which Xxxxxxx is entitled to be indemnified under this Agreement or,
if more favorable to Xxxxxxx, otherwise to the same extent and on a basis no less favorable than it
does for Arcadia’s directors and senior executive officers, and (iii) so long as Arcadia maintains
any policy of directors and officers’ liability insurance (or any similar or successor policy), to
include Xxxxxxx as an insured on each such policy with coverage and benefits no less favorable than
those provided to other officers and directors. Arcadia has furnished or will promptly furnish to
Xxxxxxx a copy of any documents regarding indemnification of officers and directors and any related
policies of insurance as the same may be updated from time to time for a period of three years
after the termination of Xxxxxxx’x employment.
20. Cost of Enforcement; Interest. The prevailing party in any action brought under
this Agreement shall be entitled to recover all reasonable costs and expenses (including reasonable
attorneys’ fees before and at trial and in appellate proceedings). If any monies shall be due
either of the Parties to this Agreement hereunder and shall not be paid within ten (10) days from
the date of written request for payment, interest shall accrue on such unpaid amount at the rate of
ten (10%) percent per annum, or any lower rate as may be required to comply with applicable law.
21. Indemnification by Arcadia and Xxxxxxx. The Parties understand that the Parties
have relied upon each other’s representations and warranties and covenants and agreements in
entering into this Agreement and that but for the Parties’ willingness to make such representations
and warranties and covenants and agreements, the Parties would not have been willing to enter into
this Agreement. Accordingly, in addition to any other obligations the Parties have to each other
under this Agreement, each Party shall also indemnify the other Party and its respective heirs,
administrators, representatives, executors, successors, and assigns (collectively, the “Indemnified
Parties”) and save and hold each of the Indemnified Parties harmless against and pay on behalf of
or reimburse such Indemnified Parties as and when incurred for any loss, liability, demand, claim,
action, cause of action, cost, damage, deficiency, tax, penalty, fine or expense, whether or not
arising out of third-party claims (including interest, penalties, reasonable attorneys’ fees and
expenses and all amounts paid in investigation, defense or settlement of any of the foregoing),
which any such Indemnified Party may suffer, sustain or
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become subject to, as a result of, in connection with, relating or incidental to or by virtue
of: (i) any breach by a Party of any representation or warranty made by such Party in this
Agreement or any of the Exhibits attached hereto, or in any other instruments or documents
furnished by such other Party pursuant to this Agreement; or (ii) any nonfulfillment or breach of
any covenant, agreement or other provision by a Party under this Agreement or any of the Exhibits
attached hereto.
22. Nondisparagement. Xxxxxxx agrees not to disparage Arcadia, all its parent
companies and affiliates, its operations, products, shareholders, employees, officers or directors.
Arcadia, all its parent companies and affiliates, its shareholders, employees, officers and
directors agree not to disparage Xxxxxxx.
23. Future Employment. Xxxxxxx acknowledges that his employment, including but not
limited to his status as President and CEO with Arcadia, has been ended and it will not be resumed
again at any time in the future, and Xxxxxxx agrees not to seek such employment from Arcadia at a
later time. Xxxxxxx agrees not to bring any claim or cause of action against Arcadia or any of its
respective affiliated entities for failing or refusing to hire him.
24. Non-Admission. This Agreement is not and shall not be deemed or construed to be
an admission by Arcadia or by Xxxxxxx of any wrongdoing of any kind or of any breach of any
contract, obligation, policy, or procedure of any kind or nature.
25. Validity. Each of the paragraphs of this Agreement shall stand independently and
severally, and the invalidity of any one paragraph or portion shall not affect the validity of any
other provision. In the event any provision shall be construed to be invalid, no other provision
of this Agreement shall be affected.
26. Governing Law. This Agreement shall be governed and construed in accordance with
the laws of the State of Florida, including its choice of laws, statutes, and common law,
notwithstanding the fact that a Party is or may hereafter become domiciled or located in a
different state.
27. COBRA. Xxxxxxx acknowledges that he, his spouse and dependent children
(collectively, “qualified beneficiaries”) may elect COBRA (Consolidated Omnibus Budget
Reconciliation Act of 1985) continuation of medical and/or dental coverage for the maximum coverage
period of up to eighteen months at a monthly premium equal to 102% of actual plan cost, effective
as of the Effective Date. If a qualified beneficiary elects to continue this coverage under the
provisions of COBRA, he/she will be permitted to continue participation in Arcadia’s group medical
and/or dental benefit plans for the maximum coverage period at the contribution level in effect for
active employees until the earlier of (i) the date the qualified beneficiary becomes entitled to
and is covered by Medicare, or (ii) the date the qualified beneficiary becomes covered under
medical and/or dental insurance benefit plans of another employer; provided, however, if the other
group health plan’s preexisting condition exclusion or limitation applies to a condition of the
qualified beneficiary, COBRA coverage can be terminated early only after the other plan’s exclusion
or limitation is satisfied.
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28. Waiver of Breach. The waiver of breach of any provision of this Agreement shall
not operate or be construed as a waiver of any subsequent breach. Each and every right, remedy and
power hereby granted to any Party or allowed it by law shall be cumulative and not exclusive of any
other.
29. Counterparts. This Agreement may be executed in any number of counterparts and by
facsimile, each which shall be deemed an original, and all of which shall be deemed to be one and
the same document when taken together.
30. Arbitration. Notwithstanding anything in this Agreement, the Employment Agreement
and the Stock Option Agreement to the contrary, except as provided in Paragraph 1(f) of this
Agreement, any dispute, controversy or claim arising out of or relating to this Agreement, the
Employment Agreement and the Stock Option Agreement, whether arising in contract, tort or otherwise
shall be resolved at arbitration in accordance with the rules of the American Arbitration
Association by an arbitration panel sitting in the State of Florida, except for any equitable or
injunctive relief sought under this Agreement which shall be brought in a court of competent
jurisdiction in the State of Florida. The parties agree that any arbitration award rendered on any
claim submitted to arbitration shall be final and binding upon the parties and not subject to
appeal and that judgment may be entered upon any arbitration award by any circuit court located in
Florida or by any other court of competent jurisdiction.
31. Application of Internal Revenue Code Section 409A. The Parties agree that Xxxxxxx
is a “specified employee” within the meaning of section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”) and the Regulations thereunder. Notwithstanding anything to the contrary
in this Agreement, any payments and benefits due hereunder that may constitute nonqualified
deferred compensation under section 409A of the Code will be accumulated and may not be paid to
Xxxxxxx until the Payment Date (hereinafter defined) provided, that the aggregate amount of the
payments so delayed shall be paid in a lump sum, on the first business day following the Payment
Date. For purposes of this Agreement, the “Payment Date” means the earlier of: (i) the first
(1st) business day following the six-month anniversary of the termination of Xxxxxxx’x
employment, and (ii) the fifth (5th) business day following Arcadia’s receipt of notice
of Xxxxxxx’x death.
32. Notices. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other communication hereunder
shall be deemed duly given if (and then two business days after) it is sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient
as set forth below:
| If to Arcadia: | Arcadia Resources, Inc. | |||
| 000 Xxxxx Xxxxxx X. | ||||
| Xxxxx 0 | ||||
| Xxxxxx, XX 00000 | ||||
| Attn: Chief Executive Officer | ||||
| With a Copy to: | Xxxxxx Xxxxx | |||
| Xxx Xxxxxxxx LLP |
11
| 0000 Xxxxxxxx Xxx. | ||||
| 00xx Xxxxx | ||||
| Xxxxx, XX 00000-0000 | ||||
| If to Xxxxxxx: | Xxxx X. Xxxxxxx, XX | |||
| 0000 Xxxxx Xxxxx Xxxxx | ||||
| Xxxxxx, XX 00000 | ||||
| With a Copy to: | Xxxxx X. Xxxxxxxxxxx | |||
| Barris, Sott, Denn & Driker, P.L.L.C. | ||||
| 000 X. Xxxx Xx., 00xx Xxxxx | ||||
| Xxxxxxx, XX 00000-0000 |
Any Party may send any notice, request, demand, claim, or other communication hereunder to the
intended recipient at the address set forth above using any other means (including personal
delivery, expedited courier, messenger service, telecopy, telex, ordinary mail, or electronic
mail), but no such notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands, claims, and other communications hereunder
are to be delivered by giving the other Parties notice in the manner herein set forth.
IN WITNESS WHEREOF, this Agreement is entered into and shall be effective as of the date first
written above.
| Date: July 12, 2007 | /s/ Xxxx X. Xxxxxxx, XX | ||||
| Xxxx X. Xxxxxxx, XX | |||||
| Received By: Date: July 12, 2007 |
ARCADIA RESOURCES, INC., a Nevada corporation |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxxxx | ||||
| Its: President and Chief Executive Officer | |||||
12
EXHIBIT A
| 10. | Covenant-Not-To-Compete. Xxxxxxx covenants and agrees that for the one (1) year period following the execution of the Severance and Release Agreement to which this Exhibit is attached (“Restricted Period”), Xxxxxxx shall not within North America (“Restricted Area”), directly or indirectly, through intermediaries or other persons or entities, either as owner, shareholder, director, officer, agent, consultant, representative, investor, partner, executive, or on behalf of any other person or entity, or in any other capacity whatsoever (i) engage in, assist or provide services to any business or enterprise that is competitive with any business conducted by the Corporation or its affiliates, (ii) contact for any business purpose, solicit or attempt to solicit any supplier, customer, agent, representative or executive of the Corporation or its affiliates for the purpose of disrupting any relationship or agreement between the Corporation or its affiliates and any of its customers, executives, agents, representatives or others doing business with the Corporation or its affiliates, or (iii) compete with the Corporation or its affiliates. In addition, notwithstanding the foregoing, Xxxxxxx shall be permitted to own, directly or indirectly, up to five percent (5%) of the issued and outstanding voting securities of any class of any publicly traded corporation even if such companies conduct businesses that are in competition with the Corporation’s business. |
EXHIBIT E
SCHEDULE OF PAYMENTS
The payment of all amounts set forth below is subject to the provisions of Paragraph 30 of the
Agreement.
| Payment | Payment Date | |
$15,000 reimbursement of attorney
fees (Paragraph 1a)
|
July 23, 2007 | |
Direct payment by Arcadia of COBRA
premium payments (currently $966.13
per month) for 18 month period
beginning on the Effective Date
(Paragraph 1a)
|
As required under policy; Arcadia to provide Xxxxxxx of proof of timely payment | |
Severance payments for the period of
July 12, 2007 through July 11, 2008
in equal installments of $7,215.58
(aggregate amount of $187,605)
beginning on the first payroll date
for the period beginning on or about
July 12, 2007 (Paragraph 1c)
|
Normal bi-weekly payroll dates during the period of July 12, 2007 through July 11, 2008 | |
Severance payments for period of
July 12, 2008 through September 24,
2009 in equal installments of
$5,769.23 based on an annual rate of
$150,000 (aggregate amount of
$200,000) beginning on the first
payroll date for the period
beginning July 12, 2008 (Paragraph
1c)
|
Normal bi-weekly payroll dates during the period of July 12, 2008 through September 24, 2009 | |
$187,605 for execution of release,
payable in equal monthly
installments of $15,633.75 beginning
August 1, 2007 until fully paid
(Paragraph 1h) *
|
6 installment payments on January 14, 2008, to wit, $93,802.50, and remaining 6 installments on the first day of each succeeding month beginning on February 1, 2008 |
| * | Payment of nonqualified deferred compensation delayed for a period of 6-months from the date of Xxxxxxx=s separation from service in order to comply with the required payment delay applicable to Aspecified employees@ under section 409A of the Code. If upon further review of the foregoing payment is subsequently determined, to the satisfaction of Xxxxxxx, that these payments are not nonqualified deferred compensation, such amounts shall be payable to Xxxxxxx as otherwise provided in this Agreement. |
