Exhibit 10.23
SEPARATION AGREEMENT AND MUTUAL GENERAL RELEASE
BETWEEN
XXXXXXXX XXXX
AND
POLAROID CORPORATION
This Separation Agreement and Mutual General Release (the "Agreement")
is made and entered into as of December 17, 1998, by and between XXXXXXXX XXXX
(the "Officer") and POLAROID CORPORATION (the "Company").
RECITALS
A. The Company employs the Officer as an Executive Vice President.
B. The Officer and the Company have mutually agreed to terminate the
employment relationship.
C. The Officer and the Company desire to specify the terms of the Officer's
separation from the Company and to resolve fully and finally any and all
claims, disputes, or disagreements that the Officer and the Company may
have against each other.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Resignation. Upon mutual agreement, the Officer's employment with the
Company will terminate on or before January 15, 1999 (the "Separation
Date").
2. Annual Bonus Payment. The Officer will receive his 1998 bonus from the
Polaroid Incentive Plan for Executives if a bonus is paid to active
employees, at the rate paid to other similarly situated executives. This
payment would be made at the time the bonus is paid for active employees.
3. Severance Payment.
a. The Company shall pay the Officer a Severance Amount equal to two (2)
times his annual base pay of $340,000, which shall begin on the day
following the Officer's Separation Date and continue for a period of
twenty-four (24) months thereafter.
b. The Severance Amount shall be paid in a stream of payments based on
the Officer's monthly base rate of pay in accordance with the
Company's regular biweekly payroll schedule beginning shortly after
his Separation Date.
c. The Officer shall receive his previously accrued unused vacation pay
as soon as practicable after his Separation Date; and,
d. Notwithstanding the foregoing, no payment shall be due for at least
one (1) week after the execution of this Agreement by both parties.
4. Outplacement Counseling. Outplacement services through a contractor of the
Officer's choice at a rate to be negotiated and agreed upon by Polaroid
will be reimbursed by the Company until December 31, 1999, or until the
Officer finds Employment, whichever occurs sooner.
5. Miscellaneous Adjustments. The Company shall have the right to deduct from
all cash payments referred to in this Agreement all amounts required by
applicable law to be withheld and to apply any such payments to pay any
amounts which the Officer may owe as of his Separation Date (including, but
not limited to, items such as company store and corporate credit card
obligations, garnishments or liens).
6. Options. All options awarded on or before May 1, 1998, which have been
granted to the Officer, shall fully vest upon the Officer's Separation
Date. Consistent with a Supplemental Option Agreement which shall be
executed herewith and govern the terms of this acceleration, the Officer
shall have three (3) years from his Separation Date, or ten (10) years from
the date an Option was originally granted, whichever is shorter, within
which to exercise his Options (attached as Exhibit A).
7. Performance Shares. A pro-rata portion of the Officer's Performance Awards
which have been awarded will remain viable and will be awarded at the time
such awards are made to active employees similarly situated. For this
purpose, the pro-rata portion shall be based on the period the Officer was
an employee during the performance period of each award divided by the
total period of the Performance Award. These Performance Award
distributions, as adjusted for the pro-rata period, shall be based on the
Company's actual performance during the performance period for such award
(two (2) and three (3) year periods respectively). No future performance
awards shall be granted after the date of this Agreement.
8. Medical and Dental Benefits. The Company shall continue to provide the
Officer the subsidized medical and dental insurance that is currently being
provided to the Officer from the Officer's Separation Date for a period of
twenty four (24) months or until the Officer becomes eligible for
substantially similar insurance from another employer, whichever occurs
first.
These benefits will be provided under the Consolidated Omnibus Budget
Reconciliation Act of 1986 (COBRA) at the same cost active employees
similarly situated pay for such benefits. However, the Officer will only be
entitled to the subsidized benefit for the twenty-four (24) months
following his Separation Date, or until he becomes eligible for
substantially similar insurance from another employer, whichever occurs
first. If either of these events occurs, the Company's obligation to
provide subsidized medical and dental insurance under this paragraph
ceases. The Officer shall be provided the right to continue COBRA by paying
the full unsubsidized premium for the benefits, plus two percent (2%) for
any remaining COBRA period (the COBRA period is normally eighteen (18)
months from a separation date).
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9. Financial Planning. In addition to the payments set forth above, and upon
proper documentation that the expense has been incurred, the Company agrees
to reimburse the Officer the amount of $5,000 for financial planning
expenses that he incurs if such expenses are submitted for work performed
prior to December 31, 1999.
10. Officer's General Release. In exchange for the severance benefits just
described, except as otherwise provided below, which the Officer
acknowledges are in excess of what would otherwise have been due him, the
Officer agrees to and hereby does release all claims the Officer may have
against the Company, the Company's employee benefit plans (including any
trusts, or insurance contracts forming part of any such plans), and its
directors, trustees, officers, shareholders, employees, agents,
administrators, successors and assigns, including, but not limited to, any
claims arising out of or in connection with the Officer's employment by the
Company or the termination of the Officer's employment. This release
includes a waiver of any claims that the Officer may have under the Age
Discrimination in Employment Act of 1967, as amended (29 U.S.C. [Section]
621), except for any claims under that Act which may arise after the
Effective Date of this Agreement.
This release includes (but is not limited to) any pending grievances or
claims internal or otherwise and any claims which might be brought under or
on the basis of:
o any employment relations law;
o any state, federal or local law, regulation or executive order
prohibiting discrimination on account of age, race, color, sex, sexual
orientation, national origin, religion, handicap or veteran status,
including, without limitation, the Age Discrimination in Employment
Act of 1967, as amended (29 U.S.C. [Section] 621);
o common law, including, without limitation, claims arising from any
contract or tort law;
o any public policy, law or equity claims for expenses, attorneys' fees,
or other monetary or equitable relief; and
o any other claim arising out of the Officer's employment with the
Company or termination of the Officer's employment with the Company,
from his first date of employment to the Effective Date of this
Agreement.
This release will not preclude claims arising from workers compensation
laws, for vested accrued benefits under the Polaroid Pension Plan or the
Polaroid Retirement Savings Plan as determined by the plan administrators
of such Plans.
This Agreement is an important and binding legal document, and the Company
therefore encourages the Officer to consider its terms carefully and to
seek the advice of an attorney before the Officer signs it.
By signing this Agreement, the Officer acknowledges that he has been given
a period of at least twenty-one (21) days to consider the terms of this
Agreement. If the Officer chooses to sign this Agreement before the end of
the twenty-one (21) day period that the Company has set, he expressly
waives any right to the balance of that period.
11. General Covenants.
a. The Officer shall not commit any act, or in any way assist others to
commit any action, intended to injure the Company nor shall the
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Officer divulge (except as required by law) any confidential
information or make available to any others any documents, files, or
other papers concerning the Company, or its financial affairs.
b. The Officer, on behalf of himself and his spouse, attorneys acting on
his behalf, agents, and representatives, agrees not to engage in any
public criticism regarding his employment or the business affairs of
Polaroid, nor to make any negative, detrimental, or derogatory
comments concerning the Company or its parents, partners, owners, and
affiliates, and their owners, stockholders, directors, officers,
employees, partners, trusts, agents, attorneys, and representatives,
past and present; the Company agrees to make no public criticism
regarding the Officer or his employment with the Company.
c. The Officer shall not disclose the terms of this Agreement unless
required to do so by law; provided, however, that the terms of this
Agreement may be disclosed in confidence to the following: to the
Officer's immediate family, attorneys, and tax or financial
consultants. Before disclosing the terms of this Agreement to anyone
as permitted under this paragraph, the Officer shall first obtain an
agreement from the person receiving the information that he or she
will not disclose the terms of the Agreement to any other person. The
unauthorized disclosure of the terms of this Agreement by any person
shall constitute a violation of this paragraph by the party who
initially disclosed the terms of this Agreement.
12. Mutual Agreement. The parties understand and agree that nothing contained
in this Agreement shall constitute or be construed in any way as an
admission of any liability whatsoever by either the Officer or the Company.
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13. Non-Competition and Confidentiality.
a. Non-Competition. During the period in which the Officer is employed by
the Company or any of its subsidiaries and for a period of twenty-four
(24) months following the Separation Date, the Officer shall not
engage in any activity or become associated with any entity or
venture, whether as a principal, partner, employee, consultant,
shareholder (other than as a holder of not in excess of one percent
(1%) of the outstanding voting shares of any publicly traded company)
or otherwise, that is in competition in any geographic area with the
business of the Company. The intent of this Section is not to prevent
the Officer from working, but to protect the Company and give the
Company the opportunity to evaluate situations in certain potentially
sensitive areas. Accordingly, the foregoing limitation on the
Officer's activities shall not apply to the extent the Company
consents to such activities.
b. Confidentiality. Without the prior written consent of the Company,
except to the extent required by an order of a court having competent
jurisdiction or under subpoena from an appropriate government agency,
the Officer shall comply with the Confidentiality Agreement the
Officer executed when hired and shall not disclose any trade secrets,
customer lists, drawings, designs, information regarding product
development, marketing plans, sales plans, manufacturing plans,
management organization information (including data and other
information relating to members of the Board and management),
operating policies or manuals, business plans, financial records or
other financial, commercial, business or technical information
relating to the Company or any of its subsidiaries or information
designated as confidential or proprietary that the Company or any of
its subsidiaries may receive belonging to suppliers, customers or
others, who do business with the Company or any of its subsidiaries
(collectively, "Confidential Information") to any third person unless
such Confidential Information has been previously disclosed to the
public by the Company or is in the public domain (other than by reason
of the Officer's breach of this Section 13).
c. Company Property. Promptly following the Officer's Separation Date,
the Officer shall return to the Company all property of the Company,
and all copies thereof in the Officer's possession or under his
control.
d. Non-Solicitation of Employees. During the period in which the Officer
is employed by the Company and any of its Subsidiaries and for a
period of twenty-four (24) months following the Officer's Separation
Date, the Officer shall not directly or indirectly induce any employee
of the Company or any of its subsidiaries to terminate employment with
such entity, and shall not directly or indirectly, either individually
or as owner, agent, employee, consultant or otherwise, employ or offer
employment to any person who is employed by the Company or a
subsidiary.
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e. Non-Solicitation of Customers. During the period in which the Officer
is employed by the Company or any of its subsidiaries and for a period
of twenty-four (24) months following the Officer's Separation Date, he
shall not solicit customers of the Company for any venture or business
opportunity, which could directly or indirectly be considered in
competition with the Company's business, as reasonably determined by
the Company in its sole discretion.
f. Injunctive Relief with Respect to Covenants. The Officer acknowledges
and agrees that his covenants and obligations with respect to
non-competition, non-solicitation, confidentiality and Company
property relate to special, unique and extraordinary matters,
including his own skills, and that a violation of any of the terms of
such covenants and obligations will cause the Company irreparable
injury for which adequate remedies are not available at law.
Therefore, in the event of a breach or threatened breach, the Officer
agrees that the Company shall be entitled to an injunction,
restraining order, or such other equitable relief (without the
requirement to post bond) restraining the Officer from committing any
violation of the covenants and obligations contained in this
Agreement. These injunctive remedies are cumulative and are in
addition to any other rights and remedies the Company may have at law
or in equity.
The Officer agrees that restraints imposed upon him pursuant to this
section are necessary for the reasonable and proper protection of the
Company and its subsidiaries and affiliates and that each and every
one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The parties further agree that, in
the event that any provision of this Agreement shall be determined by
any court of competent jurisdiction to be unenforceable by reason of
its being extended over too great a time, too large a geographic area
or too great a range of activities, such provision shall be deemed to
be modified to permit its enforcement to the maximum extent permitted
by law.
The Officer agrees and convenants that he will not assert any claim in
any forum of any type (whether by complaint, counterclaim, cross-claim
or otherwise) or before any tribunal pursuant in which he seeks to
have declared unenforceable, in whole or in part, any of the
restraints imposed upon him by this section or to limit their
enforceability in any way. The Officer further agrees that, should he
file any such claim: (a) he will reimburse the Company for its
reasonable costs and attorneys fees should the Company succeed in
enforcing any such restraint in whole or in part; and (b) he will
repay to the Company any severance paid him under this Agreement
should the Company fail to enforce any such covenant in its entirety.
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Notwithstanding the foregoing, the immediately preceding paragraph
shall not apply when (a) the Officer has obtained written consent from
the appropriate Company designee that a certain job or venture is not
in violation of the Section 13, or (b) if an Arbitrator concludes that
the activity that the Officer has undertaken does not violate the
terms of this Section 13 as it exists when signed.
14. Entire Agreement. This Agreement represents the sole and entire agreement
between the parties and supersedes all prior agreements, negotiations, and
discussions between the parties with respect to the Officer's employment
and termination of employment with the Company and any and all other
subject matters covered by this Agreement. Any amendment to this Agreement
must be in writing signed by the parties or their duly authorized
representatives and must state the intention of the parties to amend this
Agreement.
15. Binding Terms. This Agreement shall be binding upon the Officer and his
spouse, heirs, administrators, representatives, executors, successors, and
assigns and shall inure to the benefit of the Company and its parents,
partners, owners, and affiliates, and their owners, stockholders,
directors, officers, employees, partners, trusts, agents, attorneys,
representatives, successors, and assigns. Each provision of this Agreement
shall continue according to its terms. If no term is stated, then such
provision shall remain in effect indefinitely.
16. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts. In the
event that any part of this Agreement is found to be void or unenforceable,
all other provisions of the Agreement shall remain in full force and
effect.
17. Disputes. Subject to Section 13(f), all claims, disputes, questions, or
controversies arising out of or relating to this Agreement, including
without limitation the construction or application of any of the terms,
provisions, or conditions of this Agreement, shall, on written request of
either party served upon the other, be submitted to final and binding
arbitration. Such arbitration shall be compelled and enforced by any court
of competent jurisdiction and shall be conducted according to the Model
Employment Arbitration Procedures of the American Arbitration Association
("AAA"), except as otherwise provided herein. The arbitration shall be
conducted before AAA or such other arbitration service as the parties may,
by mutual agreement, select. The arbitrator shall be appointed by agreement
of the parties hereto or, if no agreement can be reached, by AAA pursuant
to its rules. Judgment on the award that the arbitrator renders may be
entered in any court having jurisdiction over the parties. The arbitration
shall be conducted in Boston, Massachusetts.
18. Representation and Voluntary Execution.
a. The Officer represents and acknowledges that he has been advised in
writing to consult an attorney, that he has had an adequate
opportunity to consult and discuss all aspects of this Agreement with
an attorney and that he has carefully read and fully understands all
of its provisions.
b. The Officer represents and acknowledges that he has had an adequate
opportunity to make whatever investigation he or his counsel may deem
necessary or desirable in connection with the subject matters of this
Agreement.
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c. The Officer represents and acknowledges that his decision to enter
into this Agreement has been made voluntarily, knowingly, and without
coercion of any kind.
19. Execution. This Agreement may be executed in one or more counterparts, each
of which shall be an original but all of which, together, shall be deemed
to constitute a single document.
If the terms of this Agreement are acceptable to the Officer, please sign
and return it as soon as possible. The Officer may revoke this Agreement at any
time during the seven (7) day period immediately following the date of his
signing. If he does not revoke this Agreement, then on the eighth (8th) day
following the date of his signing (that eighth day being the "Effective Date" of
this Agreement), this Agreement shall take effect as a legally binding agreement
between the Officer and the Company.
IN WITNESS WHEREOF, the parties hereto have each executed this Agreement as
of the date first above written.
XXXXXXXX XXXX POLAROID CORPORATION
/s/ XXXXXXXX XXXX By: /s/ XXXXXX X. XXXXXX, XX.
-------------------- ---------------------------
Name: XXXXXX X. XXXXXX, Xx.
Title: Senior Vice President, Human Resources
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ATTACHMENT A
POLAROID STOCK INCENTIVE PLAN
SUPPLEMENT TO THE STOCK INCENTIVE AGREEMENT(S)
This Supplemental Agreement is evidence the modifications to the Stock
Incentive Agreement(s) under the original Stock Incentive Plan and the 1993
Polaroid Stock Incentive Plan entered into between XXXXXXXX XXXX and POLAROID
CORPORATION. The following provisions supersede corresponding provisions of the
Stock Incentive Agreement(s) under the original Stock Incentive Plan and the
1993 Stock Incentive Plan. Provisions of the original option agreement(s), which
are not specifically modified here, remain in full force and effect.
IF YOUR EMPLOYMENT TERMINATES:
Notwithstanding anything to the contrary in the Plan or Agreement,
because your employment with Polaroid or one of its subsidiaries is being
terminated, all options awarded on or before May 1, 1998 under the above
referenced Plans shall become fully vested upon your Separation Date. In
addition, you will have three (3) years from the date of your termination
or ten (10) years from the date of the original grant, whichever is
earlier, in which to exercise all options.
If, however, for any reason your employment is not terminated under your
Severance Agreement and Mutual General Release, this Supplemental Agreement
shall become null and void and the provision captioned "If YOUR EMPLOYMENT
TERMINATES" in your original option agreement(s) shall control.
POLAROID CORPORATION
By: /s/ XXXXXX X. XXXXXX, XX.
---------------------
Officer
By signing below, you acknowledge that nothing in this Supplement, original
Agreement(s), or the Plan(s) confers upon you any rights to continued employment
or limits the right of Polaroid or its subsidiaries to modify the terms of your
employment.
I understand and agree to comply with the terms of this Supplement, the
original Agreement(s), and the Plans.
January 29, 1999 /s/ XXXXXXXX XXXX
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Date Xxxxxxxx Xxxx
Signature