Exhibit 10.48
RETIREMENT AND CONSULTING AGREEMENT AND MUTUAL RELEASES
This Retirement and Consulting Agreement and Mutual Releases (the
"Agreement"), entered into as of the 28th day of May, 1999, by and between
Compositech Ltd., a Delaware corporation (the "Company"), and Xxxx X. Xxxxxx
("Xx. Xxxxxx");
W I T N E S S E T H:
THAT WHEREAS, Xx. Xxxxxx has been employed by the Company since its
inception;
WHEREAS, the Company and Xx. Xxxxxx had an employment agreement which
expired December 31, 1998 (the "Employment Contract");
WHEREAS, Xx. Xxxxxx has announced that he will retire from the Company
effective May 28, 1999 (the "Retirement Date");
WHEREAS, the parties have had negotiations concerning, and have now agreed
upon, the terms of Xx. Xxxxxx'x retirement from the Company;
NOW, THEREFORE, Xx. Xxxxxx and the Company, in consideration of the mutual
covenants and undertakings set forth herein, agree as follows:
1. Commencing as of the Retirement Date, the Company agrees to pay Xx.
Xxxxxx all monies owed Xx. Xxxxxx and his Individual Retirement Account by the
Company in the amount of $150,000 (the "Loans") all deferred compensation owed
to Xx. Xxxxxx in the amount of $239,807 (the "Deferred Compensation") and a
severance payment of $100,000 (the "Severance Payment" and together with the
Loans and the Deferred Compensation, the "Total Payment Amount"). In addition,
from the Effective Date (as defined below) until the Total Payment Amount has
been paid in full, Xx. Xxxxxx shall receive proportionally any benefits
regarding payment of deferred compensation granted to the executive officers as
a class to which the Company owes deferred compensation as of the date of this
Agreement, which shall include, but not be limited to, any accelerated payments
made by the Company (the "Deferred Compensation Benefits"). Until the Loans plus
all interest accrued thereon have been satisfied in
full, Xx. Xxxxxx or his Individual Retirement Accounts, as the case may be,
shall retain their respective interests in the collateral related thereto and
shall receive periodic interest payments in accordance with the terms thereof.
Payments with respect to Total Payment Amount shall be made each month in
accordance with the Company's usual payroll practices at a rate of $50,000 per
year. Monthly payments will initially pay back the Loans followed in order by
the Severance Payment and the Deferred Compensation and shall continue until the
Total Payment Amount and any Deferred Compensation Benefits are paid in full to
Xx. Xxxxxx. All monthly payments made pursuant to this paragraph 1 other than
payments made to pay back the Loans shall be subject to applicable withholding
and payroll taxes. The first payment shall be made at the end of the month in
which this Agreement has become final, pursuant to paragraph 14 (the "Effective
Date").
2. Commencing as of June 1, 1999, the Company agrees to engage Xx. Xxxxxx
as an independent consultant to the Company for a period of one year, which term
shall be automatically renewed for additional one year terms unless written
notice of termination of the consulting relationship is given by either party at
least sixty (60) days prior to the end of the then current term, to provide the
Company with services (the "Consulting Services") primarily to assist in the
completion of the Taiwan joint venture agreements. As payment for the Consulting
Services, Xx. Xxxxxx will receive $500 for each day he performs at least 8 hours
of Consulting Services prorated for partial days (subject to a minimum of $1,000
a month regardless of days worked). Xx. Xxxxxx will also be reimbursed for any
expenses he incurs in performing Consulting Services under this Agreement.
3. The option to purchase 36,500 shares of common stock, par value $.01 of
the Company (the "Common Stock"), granted to Xx. Xxxxxx in an Award Agreement -
NQSO dated December 31, 1995 and the option to purchase 22,827 shares of Common
Stock granted to Xx. Xxxxxx in an Award Agreement-NQSO dated March 10, 1999
shall remain outstanding and shall vest in accordance with their terms.
4. The Company shall indemnify Xx. Xxxxxx for threatened or pending legal
proceedings that arise out of his service as an officer or director of the
Company as provided in
Article Eighth, Section B of the Restated Certificate of Incorporation of the
Company, as may be amended from time to time.
5. Xx. Xxxxxx agrees to keep strictly confidential and not to disclose to
anyone, directly or indirectly, all information relating to the Company which is
not currently available to the public (collectively, the "Confidential
Information"), except that Xx. Xxxxxx may during interviews with prospective
employers or legal or arbitration proceedings, describe his employment at the
Company (subject to the non-disparagement provisions set forth in paragraph 6).
Confidential Information shall not include information which is (i) obtained by
Xx. Xxxxxx outside the scope of his employment with the Company or duties as a
director of the Company; (ii) obtained from a third party, not in violation of
any confidentiality obligation of such third party; or (iii) required to be
disclosed by law or court order; provided, that notice is promptly delivered to
the Company in order to provide it an opportunity to seek a protective order or
similar order with respect to such information and Xx. Xxxxxx thereafter
discloses the minimum information required to be disclosed in order to comply
with the request. Xx. Xxxxxx acknowledges that these confidentiality obligations
include the obligation not to communicate any Confidential Information to any
person or entity in any manner. If asked any question regarding any Confidential
Information, Xx. Xxxxxx will respond only that he does not want to discuss the
matter. The Company agrees that all requests for references from the Company in
respect of Xx. Xxxxxx shall be responded to by Xx. Xxxxx Xxxxxx or Xx. Xxxxxx X.
Xxxxx in their capacity as officers and directors of the Company, and that any
letter of reference provided by such persons shall be substantially in the form
set forth as Exhibit A to this Agreement. In the absence of Xx. Xxxxxx or Xx.
Xxxxx as an officer or director of the Company, the Company and Xx. Xxxxxx shall
mutually agree on a designated official of the Company to provide such reference
letter and respond to reference inquiries in respect of Xx. Xxxxxx. Any public
announcement of the retirement of Xx. Xxxxxx from the Company shall be subject
to the prior written approval of Xx. Xxxxxx.
6. Xx. Xxxxxx and the Company agree that neither will, directly or
indirectly, on his or its own or through another individual acting on his or its
behalf or at his or its request or with his or its authorization and knowledge,
orally or in writing or through any other medium of communication, disparage to
any other person or entity the other and, in the case of the Company, any of its
respective officers, directors, employees, products or services.
7. Xx. Xxxxxx hereby acknowledges and agrees that all personal property and
equipment furnished to Xx. Xxxxxx in the course of or incident to Xx. Xxxxxx'x
employment, except a laptop computer currently in Xx. Xxxxxx possession which
the Company has agreed to allow Xx Xxxxxx to retain, belong exclusively to the
Company and shall be returned to the Company by personal delivery to Xx. Xxxxxx
X. Xxxxx, Executive Vice President and Treasurer of the Company. Xx. Xxxxxx
shall return all originals of any documents relating to that Company in his
possession but may retain copies of documents which are necessary for the
performance of his duties as a director of the Company.
8. In connection with the pledge by Xx. Xxxxxx of 599,990 shares of Common
Stock (the "Pledged Shares") to Credit Bancorp Limited ("CBL") in connection
with the CBL Insured Credit Facility Agreement, dated December 17, 1998 (the
"CBL Facility"), the Company shall issue to Xx. Xxxxxx a warrant to purchase
40,213 shares of Common Stock, which shall be exercisable for a period of five
years commencing on December 29, 1999, which is the closing date of the initial
loan under the CBL Facility (the "Closing Date") and terminating on the fifth
anniversary of the Closing Date at an exercise price of $1.134 per share.
9. Subject to the provisions of the Securities Act of 1933, as amended, the
Securities and Exchange Act of 1934, as amended, and the Delaware General
Corporation Law, the Company shall indemnify Xx. Xxxxxx for any loss, including,
without limitation, any net tax liability incurred as a result of the sale of
the Pledged Shares (as defined below) by CBL, in connection with the pledge by
Xx. Xxxxxx of 599,990 shares of Common Stock (the "Pledged Shares") to CBL in
connection with the CBL Facility. The Company may satisfy its obligation to
indemnify Xx. Xxxxxx for the loss of the Pledged Shares, by issuing Xx. Xxxxxx
the number of
shares of Common Stock equal to the number of Pledged Shares lost by Xx. Xxxxxx
(the "Replacement Shares"). In addition, at the request of Xx. Xxxxxx, or his
heirs, executors, administrators or legal representatives, the Company agrees to
use its best efforts to register the offer and sale of any Replacements Shares
pursuant to the Securities Act of 1933, as amended.
10. With respect to the loan outstanding under the CBL Facility which is
collateralized in part by the Pledged Shares (the "CBL Loan"), the Company
further agrees that:
(i) It will use its best efforts to repay the CBL Loan or the
portions thereof related to the Pledged Shares, on the earliest
possible date that the Board of Directors of the Company
determines that sufficient funds, which are not contractually
restricted, are available for repayment of the CBL Loan.
(ii) If the CBL Loan or the portion thereof related to the Pledged
Shares is repaid prior to the December 30, 1999 termination of
the CBL Facility, it will use its best efforts to have the
Pledged Shares returned to Xx. Xxxxxx as soon as practicable
after such termination. In any event, it will return the Pledged
Shares to Xx. Xxxxxx as soon as practicable after the December
30, 1999 termination of the CBL facility.
(iii) It shall promptly remit to Xx. Xxxxxx his pro rata share of all
dividends received from CBL or its trustee pursuant to the terms
of the CBL Facility.
(iv) It shall use its best efforts to cause CBL to divide the CBL Loan
into two separate loans one of which will represent the portion
of the CBL Loan which is collateralized by the Pledged Shares.
11. In the event that Xx. Xxxxxx determines it is in his best interest to
repay the portion of the CBL Loan collateralized by the Pledged Shares, the
amounts repaid shall be considered a loan to the Company on the same terms as
the CBL Loan including an interest rate
of LIBOR plus 1% and a maturity date of December 29, 1999. The Company shall use
its best efforts to repay the amounts loaned to it by Xx. Xxxxxx pursuant to
this paragraph 11 on the earliest possible date that the Board of Directors of
the Company determines that sufficient funds, which are not contractually
restricted, are available to repay such amounts.
12. Xx. Xxxxxx accepts the payments and benefits provided to him under this
Agreement in full payment and satisfaction of all of his claims, rights and
interests as against the Company. In consideration for the payments and benefits
provided for by this Agreement, Xx. Xxxxxx hereby releases and forever
discharges the Company, and its officers, directors, employees, representatives
and agents, from all claims and liabilities of any nature that he now has, ever
has had or will ever have based on, by reason of or arising out of any event,
occurrence, action, inaction, transaction or thing of any kind or nature
occurring prior to or on the effective date of this Agreement ("Claims").
Without limiting the generality of the above, Xx. Xxxxxx specifically releases
and discharges any and all Claims at common law, in contract (including but not
limited to under the Employment Contract), tort, or pursuant to statute,
including but not limited to any and all Claims arising under Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Equal
Pay Act, the Rehabilitation Act, the Americans with Disabilities Act, the New
York State Human Rights Law, the New York City Human Rights Law, and the New
York Labor Law, and all similar laws, rules and regulations under New York law
or any other state the Company does business in, and all applicable amendments,
or any other law, statute, ordinance, rule, regulation, decision or order
pertaining to employment or pertaining to discrimination on the basis of sex,
age, alienage, race, color, creed, sex, national origin, religion, physical or
mental disability, marital status, citizenship, sexual orientation or non-work
activities. Notwithstanding anything contained in this paragraph 12 to the
contrary, Xx. Xxxxxx shall be entitled to the rights and benefits provided in
paragraph 4 of this Agreement
13. Xx. Xxxxxx represents and warrants that he has not heretofore assigned
or transferred, or purported to have assigned or transferred to any entity or
person, any Claims or cause of action released in paragraph 12, or any amount of
money related thereto.
14. Pursuant to the Older Workers Benefit Protection Act and the Age
Discrimination in Employment Act, the Company hereby advises Xx. Xxxxxx that he
should consult an attorney regarding this Agreement, that he is entitled to
twenty-one (21) days from the date of his receipt of this Agreement to consider
it and that he may have seven (7) days from the date he signs this Agreement to
revoke it. At the conclusion of that seven (7) day period, this Agreement will
become final and Xx. Xxxxxx'x right to revoke this Agreement will have expired.
15. Xx. Xxxxxx and the Company each acknowledge that they are entering into
this Agreement knowingly and voluntarily and with the advice of counsel.
16. This Agreement may not be amended or canceled, nor may any of its
provisions be waived, except in a suitable writing signed by the parties.
17. Except as expressly provided otherwise herein, any dispute, controversy
or claim arising out of or in relation to or in connection with this Agreement
shall be exclusively and finally settled by arbitration. The arbitration
proceeding shall be held in New York County and shall be governed by the
Commercial Arbitration Rules of the American Arbitration Association (the "AAA")
as amended from time to time.
A single arbitrator shall be appointed by mutual agreement of the parties.
If the parties cannot reach agreement on an arbitrator within forty-five (45)
days of the submission of a notice of arbitration, the appointing authority for
the implementation of such procedure shall be the AAA, who shall appoint an
independent arbitrator who does not have any financial or conflicting interest
in the dispute, controversy or claim.
The decision of the arbitrators shall be final and binding upon the
parties. Judgment upon the award rendered may be entered in any court having
jurisdiction over the person or the assets of the party owing the judgment or
application may be made to such court for a judicial acceptance of the award and
an order of enforcement, as the case may be. Unless otherwise determined by the
arbitrator, each party involved in the arbitration shall bear the expense of its
own counsel, experts and presentation of proof, and the expense of the
arbitrator and the AAA (if any) shall be divided equally among the parties to
the arbitration.
18. This Agreement constitutes the entire agreement between the Company and
Xx. Xxxxxx concerning its subject matter, supersedes any and all prior oral or
written agreements or understandings between those parties regarding the same
subject matter, including but not limited to the Employment Contract and may not
be modified except by the written consent of the affected parties.
19. This Agreement shall be binding upon all of Xx. Xxxxxx'x and the
Company's heirs, executors, administrators, legal representatives, successors
and assigns, as applicable.
20. Each of the parties hereto, without further consideration, hereby
covenants and agrees to execute such documents, and to take such further action,
as may be necessary to further the purposes of this Agreement and to otherwise
act in good faith and deal fairly hereunder.
21. In the event that any provision of this Agreement, as applied to any
party or to any circumstance, shall be adjudged by a court to be void,
unenforceable or inoperative as a matter of law, then the same shall in no way
affect any other provision of this Agreement, the application of such provision
in any other circumstance or with respect to any other party, or the validity or
enforceability of this Agreement as a whole.
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
COMPOSITECH LTD.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: ExecutiveVice President, Secretary and
Treasurer
