Exhibit 10.10
SETTLEMENT AGREEMENT
This SETTLEMENT AGREEMENT ("Agreement"), dated as of May [15],
1998, is made and entered into between WTD Industries, Inc., an Oregon
corporation (the "Company"), and Xxxxx X. Xxxxx ("Xxxxx").
RECITALS:
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X. Xxxxx serves as a director and as President of the
Company.
X. Xxxxx and the Company are involved in a number of
disputes, including without limitation claims by Xxxxx against the Company for
breach of contract, breach of fiduciary duty and interference with contract.
X. Xxxxx has agreed to resign as a director of the Company
and to resign from all positions with the Company and its subsidiaries and
affiliates.
D. The Board of Directors of the Company has resolved to
accept Xxxxx'x resignation as provided in this Agreement and has offered Xxxxx
certain incentives in connection with the resolution of the disputes between the
parties.
X. Xxxxx has elected to accept such incentives on the terms
and conditions set forth in this Agreement.
THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the parties hereto agree as follows:
AGREEMENT:
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1. Resignation. Xxxxx shall resign as a director of the
Company and all committees of the Board of Directors, and shall resign from all
positions with the Company, its subsidiaries and affiliates, and from all
positions in which Xxxxx was serving as director, officer, employee or agent at
the request of the Company, including service with respect to employee benefit
plans. Such resignations shall be voluntary resignations and shall be submitted
to the Board of Directors by Xxxxx in a writing of even date herewith in the
form of Exhibit A to this Agreement. Such resignations shall be effective upon
acceptance by the Board of Directors of the
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Company subsequent to the date of this Agreement and on or before July 15, 1998
(the date of such acceptance being the "Termination Date"). The Board of
Directors shall notify Xxxxx in writing of the acceptance of his resignation.
2. Duties of Xxxxx Pending Acceptance of Resignation. From
and after the date of this Agreement and continuing until the Termination Date,
Xxxxx shall devote all of his business time, attention, skill and efforts
exclusively to the business and affairs of the Company in his capacity as
President and shall receive his current salary and his current benefits as in
effect on the date of this Agreement to and including July 15, 1998. During such
time, Xxxxx shall assist in the transition of the duties of the President and of
operations to successor management and shall devote particular attention to
resolution of creditor and auditor matters. The Company and Xxxxx agree to
cooperate in the preparation of a mutually acceptable press release announcing
Xxxxx'x departure from the Company.
3. Effect of Resignation.
(a) On the Termination Date, Xxxxx shall repay to
the Company all amounts borrowed from the Company, if any, and
Xxxxx shall be reimbursed by the Company for all travel and
other expenses upon presentation of appropriate receipts
therefor and be paid for all vacation time accrued but not taken
as of the Termination Date in accordance with the Company's
standard policies for salaried corporate officers.
(b) On the Termination Date, Xxxxx shall surrender
to the Company all Company property in Xxxxx'x possession or
under Xxxxx'x custody or control, including but not limited to
all keys, electronic access cards, business records, memoranda,
letters, books, papers, reports, accountings and data, whether
in written or electronic form, all automobiles and all other
personal property, all of which shall remain the property of the
Company (other than Xxxxx'x laptop computer and printer, office
furniture, and one secretarial desk and computer) and Xxxxx
shall thereafter not enter upon any Company premises other than
as an invitee. All life insurance, disability insurance, club
memberships, or other perquisites or benefits of whatever kind
or nature, other than as provided in
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Sections 4(c) and 4(d) below, shall cease to be provided at
Company expense on the Termination Date, but Xxxxx may enjoy the
benefit thereof through the next succeeding renewal date to the
extent such benefits have been prepaid by the Company.
4. Settlement Payment. In consideration of the
covenants and releases contained herein, the Company agrees to pay Xxxxx as
follows:
(a) The Company shall pay Xxxxx $300,000 in cash
upon the execution of this Agreement by Xxxxx;
(b) The Company shall pay Xxxxx $100,000 in cash on
the Termination Date;
(c) The Board of Directors shall authorize and
direct the appropriate officer of the Company to enter into
amendments to the stock option agreements between the Company
and Xxxxx to extend the exercise period of all stock options
held by Xxxxx on the Termination Date under the Company's
Amended and Restated 1986 Stock Option Plan and 1996 Stock
Option Plan to and including the second anniversary of the
Termination Date; and
(d) The Company shall continue to furnish to Xxxxx
all group health care benefits as are provided by the Company to
Xxxxx on the date of this Agreement (or such group health care
benefits as are provided by any successor plan adopted by the
Company) by paying Xxxxx'x COBRA premiums for the period from
the Termination Date to and including the first anniversary of
the Termination Date.
The Company shall withhold all taxes on all salary payments through the
Termination Date in accordance with all applicable federal, state and local
laws. Xxxxx shall be responsible for all taxes, if any, on all settlement
payments set forth in Sections 4(a) and 4(b) above. Attached as Exhibit B to
this Agreement and incorporated by reference is a copy of a letter from Xxxxx'x
accountant representing that, because of Xxxxx'x present tax circumstances,
Xxxxx'x receipt of
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these payments from the Company will not result in Xxxxx'x having to pay any
taxes to any federal or state taxing authorities. Xxxxx agrees that he will
defend, indemnify and hold harmless all the persons and entities released in
Section 6 below from any claims relating to any tax liability arising out of any
payments made under Section 4 of this Agreement.
5. Certain Agreements of the Company and Xxxxx.
(a) Confidential Information. Xxxxx acknowledges
that all information pertaining to affairs, business, or
customers of the Company or any of its subsidiaries or
affiliates, as such information may exist on the Termination
Date, is confidential information and is a unique and valuable
asset of the Company. Xxxxx shall not, until such information
becomes public by lawful means, divulge to any person, firm,
association, corporation or governmental agency, any information
concerning the affairs, business, or customers of the Company
(except such information as is required by law to be divulged to
a government agency or pursuant to lawful process), or make use
of any such information for his own purposes or for the benefit
of any person, firm, association or corporation. All records,
memoranda, letters, books, papers, reports, accountings,
experience or other data, and other records and documents
relating to the Company, whether made by Xxxxx or otherwise
coming into his possession, are confidential information and
are, shall be, and shall remain the property of the Company. No
copies thereof shall be made which are not retained by the
Company, and Xxxxx agrees on demand of the Company to deliver
the same to the Company.
(b) Non-Solicitation. Xxxxx shall not, until the
first anniversary of the Termination Date, induce or solicit,
directly or indirectly, any employee of the Company, its
subsidiaries or affiliates to leave his/her employment, nor
shall Xxxxx at any time interfere with the relationship between
the Company, its subsidiaries or affiliates and its or their
employees.
(c) Non-Disparagement. The Company and Xxxxx shall
not make any malicious, disparaging or false statements or
remarks about each other and shall refrain from making any
negative statements to third parties regarding each other
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or any statements which could be construed as having or causing
a diminishing effect on the Company's or Xxxxx'x respective
reputations, goodwill or business.
6. Release. Xxxxx and the Company hereby mutually release
each other and their respective subsidiaries, affiliates, officers, directors,
shareholders, employees, insurers, attorneys, agents, heirs, successors and
assigns, from any and all liability, damages, suits, demands, claims and causes
of action of any kind whatsoever, whether known or unknown, liquidated or
unliquidated, contingent or fixed, direct or indirect, whether in tort, contract
or based on statute, which they now have, ever had or may hereafter have or
claim to have, which are or may be based in whole or in part upon, or may be due
to or arise out of, or are or may be related to any action, transaction,
agreement, occurrence or event on or prior to the date of this Agreement,
including, but not limited to, claims relating to Xxxxx'x employment or
association with the Company or the termination thereof, except that the Company
does not release Xxxxx from any claims arising out of any criminal act, if any,
committed by Xxxxx during his employment with the Company (the parties know of
no such criminal act at this time). This release specifically includes, but is
not limited to, all claims for relief or remedy under any state or federal laws,
including, but not limited to, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Post-Civil War Civil Rights Act (42 U.S.C. xx.xx.
1981 - 1988), the Equal Pay Act, the Age Discrimination in Employment Act
("ADEA"), the Rehabilitation Act of 1973, the Vietnam Era Veteran's Readjustment
Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, Executive Order 11246, all as amended, the
civil rights, employment and labor laws of the State of Oregon, and the law of
any other state. This release does not apply to claims under the ADEA that may
arise after the date of this Agreement. Similarly, it does not apply to Xxxxx'x
stock options, any existing officer or director indemnification agreement with
the Company, his rights under any applicable officers and directors liability
insurance, or the obligations of Xxxxx Xxxxx and Quinault Corporation contained
in the agreement among Xxxxx, the Company, Xxxxx Xxxxx and Quinault Coporation
dated June 10, 1997 (except for the obligation under Section 3 thereof, which
Xxxxx does release), or to the obligations to be performed under this Agreement.
In accordance with the Older Workers' Benefit Protection Act
("Act"), Xxxxx acknowledges that he has been advised to consult and has in fact
consulted an attorney prior to executing this Agreement, that he is aware of,
and waives, all rights and claims he may be entitled
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to under the ADEA (other than those rights or claims that may arise after this
Agreement is executed) and the Act and that he will receive additional
compensation to which he would not otherwise be entitled as consideration for
executing this Agreement. Xxxxx acknowledges that he has been given a period of
at least 21 days to consider the offer contained in this Agreement. Xxxxx
further acknowledges that he has a period of seven days immediately following
the execution of this Agreement in which he may revoke it by giving written
notice to the Company and by returning to the Company any payments made under
this Agreement either by returning the unnegotiated check(s) or, in the
alternative, by delivering a cashier's check or money order in a sum equal to
the total dollar amount of such check(s). In the event Xxxxx does not revoke
this Agreement, it shall become effective on the eighth day following execution
by Xxxxx.
7. Covenant Not to Xxx. Xxxxx and the Company agree that
they will not, for themselves or on behalf of any other person or entity, bring,
commence, institute, maintain, prosecute or voluntarily aid any action at law or
in equity or otherwise prosecute or xxx any of the parties released by this
Agreement, either affirmatively or by way of cross-complaint, defense or
counterclaim, or in any other manner with respect to the claims released herein.
8. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oregon.
9. Entire Agreement. This Agreement is an integrated
agreement which constitutes the entire agreement between the parties with
respect to its subject matter and supersedes all prior agreements,
representations, or understandings, written or oral, with respect to the subject
matter. The parties further acknowledge that the terms of this Agreement are
contractual and not mere recitals.
10. Severability. In the event any provisions of this
Agreement is found to be unenforceable, the parties intend that the remainder of
the Agreement be given full force and effect.
11. Fees and Expenses. In any action to enforce or for
breach of any of the terms of this Agreement, the prevailing party shall be
entitled to an award of all reasonable attorney fees and costs, including fees
and costs at trial or on appeal of any such action.
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12. Section Headings. The section headings contained herein
are for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement.
WTD Industries, Inc.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President-Administration,
General Counsel, and Secretary
Dated: May 22, 1998
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/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Dated: May 22, 1998
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