1
Exhibit 10
SEPARATION AGREEMENT
AGREEMENT made as of the 1st day of May, 1997 by and between
NORTON XXXXXXXXXX OF XXXXXX, INC., a New York corporation (the "Company"), and
XXX XXXXXXXXX ("Xxxxxxxxx).
W I T N E S S E T H:
WHEREAS, Xxxxxxxxx and the Company are parties to a certain
Consulting Agreement dated January 19, 1996 with a termination date of October
31, 1997 (the "Consulting Agreement");
WHEREAS, the Board of Directors approved an extension to the
Consulting Agreement from October 31, 1997 to and including October 31, 1999;
and
WHEREAS, the parties have agreed to terminate the Consulting
Agreement effective as of April 30, 1997, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereto, intending to be
legally bound, hereby agree as follows:
1. Termination of Consulting Agreement. The Consulting
Agreement shall terminate on April 30, 1997 (the "Termination Date"). The
Company shall pay Xxxxxxxxx $550,000 (the "Separation Payment") which shall be
payable in one lump sum after seven days following the execution of this
Agreement. Xxxxxxxxx acknowledges and agrees that the Separation Payment exceeds
any benefit to which Xxxxxxxxx is otherwise entitled and shall constitute
consideration for the release set forth in Section 6.1 of this Agreement (the
"Release") and for the agreements set forth in Sections 7 and 8 of this
Agreement. Xxxxxxxxx also acknowledges and agrees that he owes the Company
$50,000 in respect of a loan made by the Company to him on December 1, 1996,
together with accrued interest of $1,241.67 through the date hereof, and that
the Company shall deduct $51,241.67 from the Separation Payment in payment of
such loan.
2. Medical Insurance. For the period commencing on the
termination of the Consulting Agreement until the death of Xxxxxxxxx, the
Company agrees, at its expense, to provide Xxxxxxxxx and Xxxxxxxxx'x wife and
his children under age 20 or under age 24 if
2
such children are full-time students with coverage under the medical plans of
the Company on the same terms and conditions (including the same Company-paid
portions) that coverage is generally available to employees of the Company. In
the event that the Company is unable to provide the coverage set forth in the
preceding sentence during any month as a result of (a) a change of law or
regulation which restricts the provision of coverage for persons who are not
employees the Company, (b) the failure by the Company's insurance carrier or
plan to provide coverage for persons who are not employees of the Company or (C)
a change in the cost of such coverage such that the cost to the Company to
provide such coverage for any monthly period exceeds the amount set forth on
Exhibit A hereto under the column labeled "Monthly Premium", the Company shall
not be obligated to provide such coverage under its medical plans and shall
reimburse Xxxxxxxxx for any premiums paid by Xxxxxxxxx for comparable medical
coverage. Such reimbursement shall not exceed the amount set forth on Exhibit A
hereto under the column labeled "Monthly Premium" for any monthly period.
3. Split Dollar Insurance. Notwithstanding Section 8 of the
Split Dollar Agreement (the "Split Dollar Agreement") dated as of March 8, 1994
by and among the Company, Xxxxxxxxx and Xxxxxxx Xxxxxxxxx, as trustee of a trust
established under a trust agreement between Xxx Xxxxxxxxx, as settlor, and
Xxxxxxx Xxxxxxxxx, as trustees, the Company agrees to continue to pay premiums
on the Policy (as defined in the Split Dollar Agreement) until payment of the
twentieth annual Policy premium, subject to the other terms and provisions of
the Split Dollar Agreement.
4. Loan Forgiveness. In the event that, at any time prior to
November 1, 1999, the Company agrees to forgive certain loans made to each of
Xxxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx and Xxxxxx Xxxxxx pursuant
to each of their respective Third Amended and Restated Non-Negotiable Limited
Recourse Promissory Notes dated March 27, 1995 and payable to the Company, the
Company shall forgive the loan (the "Loan") made to Xxxxxxxxx pursuant to his
Third Amended and Restated Non-Negotiable Limited Recourse Promissory Note dated
March 27, 1995 (the "Note") and payable to the Company.
5. Registration Rights.
5.1 NOTICE TO XXXXXXXXX. In the event that, at any time or
from time to time, Norton XxXxxxxxxx, Inc., a Delaware corporation (the
"Parent"), proposes to register any shares of common stock (the "Common Stock"),
under the Securities Act of 1933 (the "Securities Act") other than pursuant to a
registration statement on Forms S-4 or S-8, or any successor to such Forms, for
the purpose of the sale or
3
other transfer of such shares of Common Stock by either Xxxxxxx Xxxxxxxxx or
Norton Xxxxxxxx or both (the "Registration Shares"), the Parent shall deliver to
Xxxxxxxxx at least twenty (20) days prior to the filing of the registration
statement with respect to the Registration Shares, a written notice (a
"Registration Notice") of its intention so to register the Registration Shares.
5.2 NOTICE TO THE PARENT. In the event that a Registration
Notice shall have been so delivered, Xxxxxxxxx, at his election, may deliver to
the Parent a written notice (a "Response") (I) specifying the number of shares
of Common Stock (together with the Registration Shares, the "Supplemental
Registration Shares") proposed to be sold or otherwise transferred by Xxxxxxxxx,
(ii) describing the proposed manner of sale or other transfer thereof and (iii)
requesting the registration thereof under the Securities Act; provided, however,
that a Response shall be so delivered by Xxxxxxxxx not more than fifteen (15)
days after the date of delivery to Xxxxxxxxx of a Registration Notice.
5.3 REGISTRATION OF SECURITIES. From and after receipt of a
Response, the Parent shall use its reasonable best efforts to cause the
Supplemental Registration Shares specified in such Response to be registered
under the Securities Act and to effect and to comply with all such
qualifications, compliances and requirements as may be necessary to permit the
sale or other transfer of such Supplemental Registration Shares, in the manner
described in such Response, without limitation, qualifications under the
applicable Blue Sky or other state securities laws (provided that the Parent
shall not be required in connection therewith to qualify as a foreign
corporation or to execute general consent to service of process in any state);
provided, however, that if (I) in the case of an underwritten public offering of
securities, the managing underwriter shall advise the Parent in writing that the
inclusion of some or all of such Supplemental Registration Shares would, in such
managing underwriter's opinion, materially interfere with the proposed
distribution of any securities to be issued by the Parent in respect of which
registration was originally to be effected or would materially interfere with
the proposed distribution of all the Supplemental Registration Shares, then the
Parent may, upon written notice to Xxxxxxxxx, allocate the Supplemental
Registration Shares to be included in the registration statement (if and to the
extent such allocation is certified by the managing underwriter as necessary to
eliminate such interference) pro rata among such holders on the basis of the
number of shares of Common Stock at the time owned by such holders or (ii) any
firm of counsel representing the Parent in connection with such registration
shall advise the Parent and Xxxxxxxxx in writing that in its opinion one or more
of the steps
4
contemplated hereby is not necessary to permit the sale of the Registration
Shares in a transaction constituting a public offering within the meaning of the
Securities Act, then the Parent shall not be required to take any action with
respect to such step or steps.
6. Release.
6.1 In consideration of the Separation Payment and the other
benefits set forth in Sections 2, 3, 4 and 5 of this Agreement, Xxxxxxxxx for
himself and his heirs, administrators, successors and assigns releases the
Company, the Parent, any of their subsidiary and affiliate corporations and
entities, and its and their respective officers, directors and employees
(collectively, the "Releasees"), from all claims, actions, causes of action,
suits, debts, dues, sums of money, accounts, covenants, contracts,
controversies, agreements, promises, damages, judgments, executions and demands
whatsoever, in law or equity, including, without limitation, all claims related
to the Consulting Agreement and the termination thereof, and all claims and
rights under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act of 1967, the New York State Human Rights Law, the New York
City Human Rights Law, the Americans with Disabilities Act, the Civil Rights Act
of 1866 (42 U.S.C. Section 1981), the Civil Rights Act of 1991, the Equal Pay
Act, the Family and Medical Leave Act, the Fair Labor Standards Act and the
Employee Retirement Income Security Act of 1974, all as amended, including, but
not limited to, the right to the payment of wages, vacation, pension benefits or
any other employee benefits, or any other rights arising under federal, state or
local laws prohibiting discrimination and/or harassment on the basis of race,
color, creed, religion, sex, pregnancy, marital status, sexual orientation,
national origin, age, physical or mental handicap or disability,
alienage/citizenship status or any other basis prohibited by law, which
Xxxxxxxxx ever had, now has or hereafter can, shall or may have against the
Company, the Parent, the Releasees or any of them arising out of the Consulting
Agreement, Xxxxxxxxx'x consultancy and/or employment with the Company and the
termination thereof from the beginning of the world to the date of this
Agreement, except for (I) any liability or claim arising out of this Agreement,
including the Release, and (ii) any liability or claim related to the Loan and
the Note (each, as defined in Section 4 of this Agreement) and to the Pledge
Agreement dated as of November 5, 1993, as amended (the "Pledge Agreement").
Xxxxxxxxx agrees never directly or indirectly to commence or prosecute, or
assist in the filing, commencement or prosecution of any action, proceeding or
charge against the Company, the Parent or any of the Releasees with respect to
the matters hereby released.
5
6.2 The Company has advised Xxxxxxxxx to consult with an
attorney of his choosing prior to the signing of this Agreement, including the
Release, and Xxxxxxxxx hereby represents to the Company that he has been offered
such an opportunity to consult with an attorney prior to this Agreement,
including the execution of this Agreement, including the Release. Xxxxxxxxx
acknowledges that he was offered the opportunity to consider the waiver of
claims under the Age Discrimination in Employment Act of 1967 for a period of
twenty-one (21) days from the time that he received this Agreement, including
the Release, and was advised to review it with an attorney of his choice.
Xxxxxxxxx is further advised that he has seven (7) days after he signs this
Agreement to revoke the waiver of any claims under the Age Discrimination in
Employment Act of 1967 by notifying the Company in writing. The release of any
claims under the Age Discrimination in Employment Act of 1967 will not become
effective or enforceable until the seven (7) day period has expired.
6.3 Xxxxxxxxx expressly represents and warrants that he has
carefully read and fully understands that the Release is a general release of
all claims, including all claims under the Age Discrimination in Employment Act
of 1967, that he has had a full opportunity to review this Release with an
attorney and that he has executed this Release voluntarily, without duress,
coercion or undue influence and with such advice from his attorney as
appropriate.
6.4 The Company, the Parent and each of the Releasees release
and discharge Xxxxxxxxx and his heirs, executors, administrators, assigns or
agents from any and all claims arising in connection with the Consulting
Agreement and the termination thereof, which the Company and/or the Releasees
ever had, now have or hereafter can, shall or may have against Xxxxxxxxx for,
upon, or by reason of any matter, cause or thing whatsoever from the beginning
of the world to the date of this Agreement, except for (I) any liability or
claim arising out of this Agreement, including the Release, and (ii) any
liability or claim related to the Loan and the Note (each, as defined in Section
4 of this Agreement) and the Pledge Agreement (as defined in Section 6.1 of this
Agreement).
7. Confidential Information.
7.1 Xxxxxxxxx shall at all times treat as confidential, not
disclose, publish or otherwise make available to the public or to any
individual, firm or corporation any confidential material (as hereinafter
defined). Xxxxxxxxx agrees that all confidential material, together with all
notes and records of Xxxxxxxxx relating thereto, and all copies or facsimiles
thereof in the possession of Xxxxxxxxx, are the exclusive property of the
Company, and as of the
6
Termination Date, Xxxxxxxxx shall have returned such material to the Company.
7.2 For the purposes hereof, the term "confidential material"
shall mean all information acquired by Xxxxxxxxx in the course of Xxxxxxxxx'x
services with the Company, the Parent or any of their subsidiaries (including,
without limitation, Norty's, Inc., a Delaware Corporation) (collectively, the
"Company Group") in any way concerning the products, projects, activities,
business or affairs of the Company or any member of the Company Group or the
customers of the Company or any member of the Company Group, including, without
limitation, all information concerning trade secrets and the preparation of raw
material for, manufacture of, and/or finishing processes utilized in the
production of, the products or projects of the Company or any member of the
Company Group and/or any improvements therein, all sales and financial
information concerning the Company or any member of the Company Group, all
customer and supplier lists, all information concerning projects in research and
development or marketing plans for any such products or projects, and all
information in any way concerning the products, projects, activities, business
or affairs of customers of the Company or any member of the Company Group which
is furnished to Xxxxxxxxx by the Company or any of its employees (current or
former), agents or customers, as such; provided, however, that the term
"confidential material" shall not include information which (a) becomes
generally available to the public other than as a result of a disclosure by
Xxxxxxxxx, (b) was available to Xxxxxxxxx on a non-confidential basis prior to
his consultancy with the Company or (C) becomes available to Xxxxxxxxx on a
non-confidential basis from a source other than the Company or any of its
agents, franchisees, creditors, suppliers, lessors, lessees or customers
provided that such source is not bound by a confidentiality agreement with the
Company or any of such agents or customers.
8. Non-Competition. Xxxxxxxxx agrees, for the benefit of the
Company, that he will not for a period of three (3) years commencing on the
Termination Date, (a) engage, directly or indirectly, whether as principal,
agent, distributor, representative, consultant, employee, partner, stockholder,
limited partner or other investor (other than an investment of not more than (I)
five percent (5%) of the stock or equity of any corporation the capital stock of
which is publicly traded or (ii) five percent (5%) of the ownership interest of
any limited partnership or other entity) or otherwise, anywhere in the United
States, in any activity or business venture which is in competition with the
business then conducted by the Company or the Company Group, (b) solicit or
entice or endeavor to
7
solicit or entice away from any member of the Company Group any person who was
an officer, employee or consultant of any member of the Company Group, either
for his own account or for any individual, firm or corporation, whether or not
such person would commit any breach of his contract of employment by reason of
leaving the service of a member of the Company Group, and Xxxxxxxxx agrees not
to employ, directly or indirectly, any person who was an officer or employee of
any member of the Company Group or who by reason of such position at any time is
or may be likely to be in possession of any confidential information or trade
secrets relating to the businesses or products of any member of the Company
Group or (C) solicit or entice or endeavor to solicit or entice away from any
member of the Company Group any customer or prospective customer of any member
of the Company Group, either for his own account or for any individual, firm or
corporation.
9. Equitable Relief. In the event of a breach or threatened
breach by Xxxxxxxxx of any of the provisions of Sections 7 or 8 of this
Agreement, Xxxxxxxxx hereby consents and agrees that the Company shall be
entitled to pre-judgment injunctive relief or similar equitable relief
restraining Xxxxxxxxx from committing or continuing any such breach or
threatened breach or granting specific performance of any act required to be
performed by Xxxxxxxxx under any of such provisions, without the necessity of
showing any actual damage or that money damages would not afford an adequate
remedy and without the necessity of posting any bond or other security. The
parties hereto hereby consent to the jurisdiction of the Federal courts located
in the Southern District of New York and the state courts located in such
District for any proceedings under this Section 9. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies at law or
in equity which it may have.
10. Successors and Assigns. Xxxxxxxxx may not assign this
Agreement or any part thereof without the prior written consent of a majority of
the Board of Directors of the Company; provided, however, that nothing herein
shall preclude one or more beneficiaries of Xxxxxxxxx from receiving any
benefits set forth in Sections 4 and 5 of this Agreement following the
occurrence of his legal incompetency or his death and shall not preclude the
legal representative of his estate from receiving such benefits or from
assigning any right hereunder to the person or persons entitled thereto under
his will or, in the case of intestacy, to the person or persons entitled thereto
under the laws of the intestacy applicable to his estate. The term
"beneficiaries", as used in this Agreement, shall mean the legal representative
of Xxxxxxxxx (in the event of his incompetency) or Xxxxxxxxx'x estate.
8
11. Governing Law. This Agreement shall be deemed a contract
made under, and for all purposes shall be construed in accordance with, the laws
of the State of New York applicable to contracts to be performed entirely within
such State.
12. Entire Agreement. This Agreement contains all the
understandings and representations between the parties hereto pertaining to the
subject matter hereof and supersedes all undertakings and agreements, whether
oral or in writing, if there be any, previously entered into by them with
respect thereto.
13. Modification and Amendment; Waiver. The provisions of this
Agreement may be modified, amended or waived, but only upon the written consent
of the party against whom enforcement of such modification, amendment or waiver
is sought and then such modification, amendment or waiver shall be effective
only to the extent set forth in such writing. No delay or failure on the part of
any party hereto in exercising any right, power or remedy hereunder shall effect
or operate as a waiver thereof, nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy.
14. Notices. All notices, requests or instructions hereunder
shall be in writing and delivered personally, sent by telecopier or sent by
registered or certified mail, postage prepaid, return receipt requested, as
follows:
If to the Company:
Norton XxXxxxxxxx of Xxxxxx, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to Xxxxxxxxx:
Xxx Xxxxxxxxx
00 Xxxxx Xxxx
Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices,
9
requests or instructions given in accordance herewith shall be deemed received
on the date of delivery, if hand delivered or telecopied, and two business days
after the date of mailing, if mailed.
15. Severability. Should any provision of this Agreement be
held by a court of competent jurisdiction to be enforceable only if modified,
such holding shall not affect the validity of the remainder of this Agreement,
the balance of which shall continue to be binding upon the parties hereto with
any such modification to become a part hereof and treated as though originally
set forth in this Agreement. The parties further agree that any such court is
expressly authorized to modify any such unenforceable provision of this
Agreement in lieu of severing such unenforceable provision from this Agreement
in its entirety, whether by rewriting the offending provision, deleting any or
all of the offending provision, adding additional language to this Agreement, or
by making such other modifications as it deems warranted to carry out the intent
and agreement of the parties as embodied herein to the maximum extent permitted
by law. The parties expressly agree that this Agreement as so modified by the
court shall be binding upon and enforceable against each of them. In any event,
should one or more of the provisions of this Agreement be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, and if such
provision or provisions are not modified as provided above, this Agreement shall
be construed as if such invalid, illegal or unenforceable provisions had never
been set forth herein.
16. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
17. Expenses. Each of the parties hereto shall bear his or its
own costs and expenses, including attorneys' fees and disbursements, incurred in
connection with this Agreement and the transactions contemplated hereby.
18. Titles. Titles of the sections of this Agreement are
intended solely for convenience and no provision of this Agreement is to be
construed by reference to the title of any section.
19. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
10
* * *
11
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written.
NORTON XXXXXXXXXX OF XXXXXX, INC.
By:/s/ Xxxxxxx Xxxxxxxxx
---------------------------------
Title: Chief Executive Officer
/s/ Xxx Xxxxxxxxx
---------------------------------
Xxx Xxxxxxxxx
12
EXHIBIT A
MEDICAL INSURANCE PREMIUMS TO XXX XXXXXXXXX
IF COMPANY IS UNABLE TO PROVIDE COVERAGE
FISCAL PERIOD
-------------------------------
BEGINNING ENDED ANNUAL MONTHLY
MAY 1: APRIL 30: PREMIUM PREMIUM
--------- --------- ---------- ---------
1997 1998 $6,500.00 $541.67
1998 1999 6,825.00 568.75
1999 2000 7,166.25 597.19
2000 2001 7,524.56 627.05
2001 2002 7,900.79 658.40
2002 2003 8,295.83 691.32
2003 2004 8,710.62 725.89
2004 2005 9,146.15 762.18
2005 2006 9,603.46 800.29
2006 2007 10,083.63 840.30
2007 2008 10,587.82 882.32
2008 2009 11,117.21 926.43
2009 2010 11,673.07 972.76
2010 2011 12,256.72 1,021.39
2011 2012 12,869.56 1,072.46
2012 2013 13,513.03 1,126.09
2013 2014 14,188.68 1,182.39
2014 2015 14,898.12 1,241.51
2015 2016 15,643.03 1,303.59
2016 2017 16,425.18 1,368.76
2017 2018 17,246.44 1,437.20
2018 2019 18,108.76 1,509.06
2019 2020 19,014.19 1,584.52
2020 2021 19,964.90 1,663.74
2021 2022 20,963.15 1,746.93
2022 2023 22,011.31 1,834.28
2023 2024 23,111.87 1,925.99
2024 2025 24,267.47 2,022.29
2025 2026 25,480.84 2,123.40
2026 2027 26,754.88 2,229.57
2027 2028 28,092.63 2,341.05
2028 2029 29,497.26 2,458.10
2029 2030 30,972.12 2,581.01
2030 2031 32,520.73 2,710.06
13
FISCAL PERIOD
-------------------------------
BEGINNING ENDED ANNUAL MONTHLY
MAY 1: APRIL 30: PREMIUM PREMIUM
--------- --------- ---------- ---------
2031 2032 34,146.76 2,845.56
2032 2033 35,854.10 2,987.84
2033 2034 37,646.80 3,137.23
2034 2035 39,529.15 3,294.10
2035 2036 41,505.60 3,458.80
2036 2037 43,580.88 3,631.74
2037 2038 45,759.93 3,813.33
2038 2039 48,047.92 4,003.99
2039 2040 50,450.32 4,204.19
2040 2041 52,972.84 4,414.40
2041 2042 55,621.48 4,635.12
2042 2043 58,402.55 4,866.88
2043 2044 61,322.68 5,110.22
2044 2045 64,388.81 5,365.73
2045 2046 67,608.25 5,634.02
2046 2047 70,988.67 5,915.72
2047 2048 74,538.10 6,211.51
2048 2049 78,265.00 6,522.08
2049 2050 82,178.25 6,848.19
2050 2051 86,287.17 7,190.60
