EXHIBIT 10.37
Separation Agreement
SEPARATION AND GENERAL RELEASE AGREEMENT
THIS SEPARATION AND GENERAL RELEASE AGREEMENT (the "Agreement") is made
as of this 31st day of May, 2001, by and between Xxxxxxx Xxxxxx ("Employee"),
and Standard Automotive Corporation ("SAC"), a Delaware Corporation.
WHEREAS, Employee was employed by SAC in the position of Director,
consultant, and various capacities;
WHEREAS, Employee's employment with SAC will be terminated effective
March 31, 2001, (the "Termination Date") in connection with a restructuring;
WHEREAS, SAC is providing Employee with twelve (12) months of severance
compensation, company medical insurance for one (1) year from the Termination
Date, and other valuable considerations;
WHEREAS, SAC wishes to be protected from competition by Employee for a
eighteen (18) month period, on terms and conditions set forth herein; and
WHEREAS, Employee and SAC wish to settle and resolve all disputes and
all claims or potential claims and demands whatsoever that Employee may have
against SAC on the terms set forth herein, and for that reason have entered into
this Agreement;
NOW THEREFORE, for good and valuable consideration, Employee and SAC
hereby agree as follows:
1. Payment to Employee. In consideration for the covenants undertaken
and the release given herein by Employee, SAC agrees to pay Employee, subject to
the provisions in Paragraph 14, twelve (12) months salary, in the amount of Six
Thousand Dollars and No Cents ($6,000.00), less standard income and payroll tax
withholding and deductions, paid in accordance with SAC's normal practices for
payroll payments. SAC's obligation to make such payments will cease if Employee
does not sign this Agreement within the time period provided below in Paragraph
6.
Additionally SAC will pay the Employee a one-time payment of Twenty
Thousand Dollars and No Cents ($20,000.00) on or before June 30, 2001. With this
payment the Employee and SAC hereby agree that any and all oral and/or written
agreements by and between the parties are terminated as of March 31, 2001.
2. Health Care Benefits and COBRA: In Further consideration of the
covenants undertaken and the release given herein by Employee, Employee will
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Separation Agreement
continue to be enrolled for health care benefits for the twelve (12) Month
Period, subject to the provisions in Paragraph 14. At the end of this period,
SAC will provide Employee with a COBRA notice and election and Employee can
elect Cobra coverage for the period permitted by law at Employee's expense.
Employee acknowledges that SAC's obligation to continue Employee's health care
coverage during the twelve (12) Month Period or to provide COBRA coverage shall
cease (1) once Employee is eligible for other group health care coverage, (2)
Employee fails to pay the required contribution within the applicable time
limits established by SAC, or (3) one or more of the health care coverage
programs are terminated, unless another program is established as its
replacement.
3. No Other Payments of Benefits. Except as provided above, Employee's
coverage under or participation in all other SAC benefit, compensation, and
insurance plans and programs shall terminate as of the date of Employee's
Termination. The parties recognize and agree that Employee is entitled to no
other benefits, compensation, payments, or insurance coverage of any kind or
nature from SAC, including, without limitation, salary, bonus, severance pay,
incentive pay, vacation pay, disability insurance, life insurance, pension, or
any other employee or fringe benefits of SAC except as expressly provided in
this Agreement. The parties further recognize and agree, however, that nothing
in this Paragraph or this Agreement affects Employee's entitlement to 401 (k)
and pension contributions accruing on or before the Termination Date.
4. Employee's Cooperation. In consideration for the covenants
undertaken herein by SAC, Employee agrees to cooperate with SAC as reasonable
requested to assist in making a management transition.
5. Comprehensive And General Release by Employee. In consideration for
the covenants undertaken herein by SAC, Employee hereby releases, discharges,
and covenants not to xxx SAC, its direct or indirect parents, subsidiaries,
affiliates, and related companies, and its and their past and present directors,
officers, employees, attorneys, representatives, members, insurers, agents,
successors, and assigns (individually and collectively the "SAC RELEASEES") from
and with respect to any and all actual or potential actions, claims, and demands
whatsoever, whether known or unknown, suspected or unsuspected, in law or
equity, which against the SAC Releasees or any of then Employee ever had, now
has, or hereafter can, shall, or may have for, upon, or by reason of any matter,
cause, or thing whatsoever from the beginning of the world to the date of this
Agreement, including without limitation any and all claims: (a) arising out of
or in any way relating to Employee's employment with SAC or his/her separation
from that employment; (b) arising out of or in any way relating to any
transactions, occurrences, acts, statements, disclosures, or omissions occurring
prior to the date of this Agreement; (c) arising out of or in any way relating
to any claims under common law; (d) arising out of or in any way relating to any
claims under any federal, state, or local statute, regulation,
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Separation Agreement
ordinance, or other law prohibiting discrimination on the basis of age, sex,
race, color, religion, disability, or national origin, including Title VII of
the civil Rights Act of 1964, as amended, the Age Discrimination in Employment
Act of 1967, as amended, and of the New York and New York City General Laws; or
(e) for salary, bonuses, commissions, severance pay, vacation pay, travel
privileges, disability, life insurance, medical insurance, or any other fringe
benefit of or from SAC. IT IS THE EXPRESS INTENT OF THE PARTIES THAT THE RELEASE
PROVIDED HEREIN BY EMPLOYEE BE A GENERAL, FULL, AND COMPREHENSIVE RELEASE, TO
THE FULLEST EXTENT PERMITTED BY LAW, AS TO EACH AND ALL THE SAC RELEASEES.
6. ADEA Waiver: The parties recognize and agree that SAC shall have no
obligation to provide the Separation Package called for herein and that this
Agreement shall not become effective until such time as Employee has had a
period of twenty one (21) days to reflect on this Agreement before executing it
and an additional period of seven (7) days after executing the Agreement to
revoke it. The parties further recognize and agree that this provision is
intended to ensure an effective waiver of any claims by Employee under the
Federal Age Discrimination Act, as amended by the Older Workers Benefit
Protection Act of 1990. By his/her signature below, Employee warrants and
represents that he/she has been given twenty one (21) days prior to his/her
execution of this Agreement to reflect on this Agreement and all material
changes thereto, that in the event he/she executes this Agreement before that
full twenty one (21) days he/she does so knowingly and voluntarily and with the
intention of waiving any remaining time in that twenty one (21) day reflection
period, that he/she understands all of the terms of this Agreement, that he/she
has been encouraged to consult with an attorney prior to executing this
Agreement, and that he/she knowingly and voluntarily enters into this Agreement
in all respects. The parties further agree that Employee is not entitled to any
payment or compensation of any kind of nature whatsoever in the event that
he/she revokes this Agreement or elects not to enter into this Agreement.
Employee further acknowledges that any payment or compensation made prior to
revocation must be returned in full to SAC. The parties further intend and agree
that this Agreement, if executed and not revoked within seven (7) days after
that execution, shall constitute an effective waiver of any claim of any age
discrimination claims and of any other claim of whatever kind or nature by
Employee against any of the RELEASEEES as defined in this Agreement.
7. Length of Offer. Employee shall have 21 days from the day this
Agreement is delivered to Employee to consider whether to accept this separation
offer, and this Agreement is delivered to Employee to consider whether to accept
this separation offer, and this offer shall expire if SAC has not received
Employee's executed Agreement by the end of this period. This Agreement was
delivered to Employee on Thursday, May 31, 2001.
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Separation Agreement
8. Non-Disclosure of Confidential Information. Employee acknowledges
that SAC and its affiliates have exclusive proprietary rights to all of their
respective sales, financial, pricing, production, distribution, contractual, and
marketing information, and all products, formulas, designs, practices,
techniques, trade secrets, research, customer lists, computer programs and other
computer-related data, and technical requirements of customers, unless such
information is in the public domain (collectively "Confidential Information").
Employee agrees to sign all rights he/she might otherwise possess in any
Confidential Information to SAC. Employee further agrees that he/she will not at
any time in the future, directly or indirectly, use, communicate, disclose,
disseminate, publish, or otherwise put in the public domain or before any
private entity, and Confidential Information or any other information of a
secret, proprietary, confidential, or generally undisclosed nature relating to
SAC or its affiliates, or their programs, operations, and activities, unless
compelled by process of law, following the provision of prompt notice to SAC.
9. Return of Confidential Information. Employee acknowledges that all
documents, records, notebooks, notes memoranda, computer records or source
documentation, and other repositories of Confidential Information or any other
information of a secret, proprietary or confidential nature relating to SAC or
its affiliates or to any of their programs, operations, and activities made or
compiled by him/her at any time or made available to him/her prior to or during
the term of his/her employment with SAC, including any and all copies thereof,
are the property of SAC. Employee agrees to deliver and return all such
repositories of Confidential Information, and all copies thereof, to SAC within
ten (10) days after the Termination Date. If Employee discovers Confidential
Information that he/she in good faith overlooked and did not return during the
first ten (10) days after his/her Termination Date, SAC agrees to allow him/her
to deliver and return such newly discovered Confidential documents within ten
(10) days of discovery.
10. Non-Solicitation. In further consideration of the covenants
undertaken herein by SAC, Employee hereby agrees that for a period of twenty
four (24) months following the Termination date, he/she will not solicit, or
cause other persons to solicit, directly or indirectly, employees of SAC or its
affiliates to discontinue their employment relationship with SAC or its
affiliates, he/she will not interfere with the contractual relationships or
relationships under negotiation of SAC or its affiliates, he/she will not induce
or attempt to induce any clients of SAC or its affiliates to discontinue their
relationship with SAC or its affiliates, and he/she will not disparage SAC, its
affiliates, or its executives.
11. Non-Competition. Employee acknowledges that the services he/she has
provided to SAC are unique. Employee also acknowledges that his/her employment
and his/her position with SAC gave him/her access to confidential and highly
sensitive non-public trade secret information of substantial importance and
value to SAC and its affiliates, including but not limited to trade secrets,
computer programs, marketing information, techniques, distribution, price
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Separation Agreement
information, customer lists, and research and development data. In recognition
of these facts, and in further consideration of the covenants undertaken herein
and the payments to be made hereunder by SAC, Employee hereby agrees that for a
period of twenty-four (24) months following the Termination Date, he/she will
not, directly or indirectly, without the prior written consent of SAC, be
employed, provide consultative service with or without pay, manage, join,
participate in, or be connected as a majority stockholder, partner, or otherwise
with, any business involving the truck body and trailer industry, shipping
container chassis industry, refuse body or refuse trailer industry, aerospace or
aircraft parts industries, precision manufactured components for the nuclear
industry, or environmental consulting businesses. Furthermore, employee agrees
not to work for any business or organization that competes directly or
indirectly with any of SAC's operating companies in existence on the termination
date. SAC agrees the employee may work for the "IPC LOI companies" as long as
they do not compete directly or indirectly with SAC during the eighteen (18)
month non-compete period following the Termination Date.
12. Commitment Not To Apply: In consideration for the covenants
undertaken herein by SAC, Employee agrees that he/she will not now or at any
time in the future apply for employment or re-employment with SAC, any of its
direct or indirect subsidiaries, or any of its franchised dealers. SAC reserves
the right to waive this restriction, but any such waiver must be in writing and
signed by the President and Chief Executive Officer.
13. Equitable Relief. Employee acknowledges that irreparable harm would
result to SAC if the provisions of Paragraphs 8 through 11, or any of them, were
breached by Employee and that any remedy at law for such breach or breaches
would be inadequate. Accordingly, in the event of the breach or threatened
breach by Employee of any of Paragraphs 8 through 11 hereof, SAC shall be
entitled to injunctive relief in addition to any other remedies it may have
under the terms of this Agreement or under the law, including, without
limitation, recovery of attorneys fees and costs, to the extent allowed by law,
for enforcement of this Agreement.
14. Repayment Upon Breach. Employee agrees that, in the event a court
of law issues a final determination that Employee breaches any of the provisions
of Paragraphs 8 through 11, SAC shall cease providing any of the payments or
continued benefits provided for in Paragraphs 1 and 2, and that he/she will
immediately repay to SAC the payments previously made by SAC referred to in
Paragraphs 1 and 2. Employee agrees that this amount, in total, will be due and
owing as set forth above, and that, if not immediately paid in full to SAC upon
demand, any outstanding amount will incur 10% interest compounded annually,
until paid in full. The prevailing party shall further be entitled to recovery
of attorney's fees and costs, to the extent allowed by law, for enforcement of
this Agreement.
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Separation Agreement
15. Confidentiality: Employee and SAC agree to keep all aspects of this
Agreement confidential. Notwithstanding the foregoing, Employee and SAC may
disclose the terms of this Agreement to the Internal Revenue Service, to their
attorneys and financial advisors, provided that such persons are advised of the
confidential nature of this Agreement and agree to maintain any information
provided to them regarding this Agreement in strict confidence.
16. No Admission: While this Agreement resolves all issues between
Employee and SAC relating to any alleged violation of any state, federal, or
local law, regulation, or ordinance, this Agreement does not constitute an
adjudication or finding on the merits and it is not, and shall not be construed
as, an admission by Employee or SAC of any violation of any policies,
procedures, state, federal, or local laws, regulations, or ordinances. Neither
this Agreement nor anything in this Agreement shall be construed to be
admissible in any proceeding as evidence of or an admission by Employee or SAC
of any violation of any policies, procedures, state, federal, or local laws,
regulations, or ordinances, or of any wrongdoing by SAC; provided, however, that
this Agreement shall be admissible in any proceeding to enforce its terms.
17. Complete Agreement: This Agreement is an integrated document and
constitutes and contains the complete understanding and agreement of the parties
with respect to the subject matter addressed herein and supersedes and replaces
all prior negotiations and agreements of any kind or nature between Employee and
SAC, whether written or oral.
18. Severability: If any of the provisions, terms, or clauses of this
Agreement are held invalid, illegal, unenforceable, or ineffective, such
provisions, terms, and clauses shall be deemed severable such that all other
provisions, terms, and clauses of this Agreement shall remain valid and binding
upon the parties.
19. Governing Law: This Agreement is deemed to have been executed and
delivered within the State of New York, and the rights and obligations of the
parties hereunder shall be governed by, and construed and enforced in accordance
with, the laws of the State of New York without regard to principles of conflict
of laws.
20. Currency: It is agreed and understood by the parties hereto that
all payments referenced herein shall be made in U.S. dollars.
21. Counterparts: This Agreement may be executed in counterparts and
each counterpart when executed shall have the effect of a signed original.
Photographic copies of such signed counterparts may be sued in lieu of the
original for any purpose.
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Separation Agreement
22. Certification: BY THEIR AUTHORIZED SIGNATURES BELOW, THE PARTIES TO
THIS AGREEMENT CERTIFY THAT THEY AGREE TO ALL OF THE TERMS OF THIS AGREEMENT,
THAT THEY HAVE HAD AN OPPORTUNITY TO DISCUSS THOSE TERMS WITH ATTORNEYS OR
ADVISORS OF THEIR OWN CHOOSING, AND THAT THEY HAVE SIGNED THIS AGREEMENT
VOLUNTARILY AND WITH FULL UNDERSTANDING OF ITS LEGAL CONSEQUENCES.
23. Requirement that SAC Board of Directors Approve this Agreement: SAC
and the Employee agree a majority of SAC's Board of Directors must review and
approve this agreement for the agreement to be valid. SAC will seek its Board of
Directors concurrence at it Thursday, May 31, 2001 meeting.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Agreement to be executed and delivered at New York, NY as of
the date first written above.
EMPLOYEE Standard Automotive Corporation
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxx X. X'Xxxxxxx III
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6/5/2001
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