CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE
This SEPARATION AGREEMENT AND RELEASE (the "Agreement") is entered into
by Xxxxxxxx X. Xxxxx (the "Employee"), and ML Direct, Inc., a Delaware
company, (the "Company"). The Company, and all companies affiliated with,
and subsidiaries of, the Company, are collectively referred to herein as
"Affiliates".
WHEREAS, the Company and Employee mutually desire to terminate the
Employment Agreement dated April 15, 1996; and
WHEREAS, the Company and Employee terminated the employment relationship
effective September 12, 1997, (the "Separation Date"); and
WHEREAS, the Company and the Employee wish to resolve all matters
relating to the Employee's separation from service;
NOW, THEREFORE, in exchange for mutual consideration, and intending to be
legally bound, the parties hereby agree as follows:
1. Waiver. The Employee hereby waives any and all claims which the Employee
might have against the Company and/or Affiliates for salary payments,
vacation pay, incentives, bonuses, expense reimbursement, severance pay or
benefits, or other remuneration or employee benefits of any kind; except (i)
for accrued and unpaid salary pursuant to Section 3(a) of the Employment
Agreement up to September 12, 1997, receipt of which is hereby acknowledged
by Employee, (ii) stock options to purchase up to 200,000 shares of the
Company's common stock pursuant to Section 3(b) of the Employment Agreement,
receipt of a duly executed stock option agreement acceptable to Employee is
hereby acknowledged, and (iii) to the extent that the Employee and any
eligible dependents have healthcare coverage under Company-maintained benefit
plans in force on the Separation Date, the right of the Employee and any
covered dependents to purchase health benefit continuation coverage under the
federal law commonly known as COBRA.
2. No Disparagement; Representations. Except as may be required by law, the
parties shall not disclose the fact that the Employee and the Company entered
into this Agreement, or any of the terms and conditions of said Agreement.
No person officially charged with, and acting pursuant to, the authority to
speak to the media or the public on behalf of the Company shall at any time
make any voluntary statement, or make any untrue statement while under any
compulsory legal process, which is calculated to, or which foreseeably will,
damage the reputation of the Employee. The Employee shall not at any time
make any voluntary statement of any kind, or make any untrue statement while
under any compulsory legal process, which is calculated to, or which
foreseeably will, damage the business or reputation of the Company, and/or
Affiliates, or its directors, officers, employees, agents, consultants or
advisors. Employee represents and warrants that to his actual knowledge and
except to the Company's actual knowledge, the Company is not a party to nor
threatened with any litigation or judicial, administrative or arbitration
proceeding, arising out of the
operations of the Business, as "Business" is defined in the Asset Purchase
Agreement between the Company, Star Shoppe Direct, Inc., and Employee dated
the date hereof, which if decided adversely to the Company would have a
material adverse effect on the Company.
3. Termination of Employment Agreement. Except as otherwise specifically
provided herein, the parties mutually agree that Employment Agreement
terminated on, and none of the provisions of the Employment Agreement will
have any force or effect as of, the Separation Date.
4. Reciprocal Releases.
a. Except for claims arising under this Agreement and/or the Asset
Purchase Agreement (and the agreements and instruments executed in connection
therewith), the Employee, as his free and voluntary act, hereby releases and
discharges the Company and Affiliates and their successors and assigns, and
the active and former directors, officers, employees, agents, consultants and
advisors of each of them, of and from any and all obligations, claims,
demands, judgments, or causes of action of any kind whatsoever, known or
unknown, in tort, contract, by statute or on any basis, for equitable relief,
compensatory, punitive or other damages, expenses (including attorney' fees),
reimbursements of costs of any kind, including but not limited to, any and
all claims, demands, rights and/or causes of action, including those which
might arise out of allegations relating to a claimed breach of an alleged
oral or written employment contract, or relating to purported employment
discrimination or civil rights violations, which the Employee might have or
assert against any of said entities or persons by reason of any matter, cause
or thing whatsoever known or unknown to Employee, and which occurred or did
not occur prior to the time of execution of this Agreement.
b. Except for claims arising under this Agreement and/or the Asset
Purchase Agreement (and the agreements and instruments executed in connection
therewith), the Company, on behalf of itself and its officers, directors,
employees and agents (in their capacities as such), hereby releases and
discharges the Employee, and his heirs and assigns, of and from any and all
obligations, claims, demands, judgments or causes of action of any kind
whatsoever, known or unknown in tort, contract, by statute or on any other
basis, for equitable relief, compensatory, punitive, or other damages,
expenses (including attorney's fees), reimbursements or costs of any kind,
including but not limited to, any and all claims, demands, rights and/or
causes of action, including breach of fiduciary duty, breach of the duty of
confidentiality, tortuous interference with contract or prospective economic
advantage, defamation, libel, civil conspiracy, false light invasion of
privacy, actions which might arise out of allegations relating to a claimed
breach of an alleged oral or written employment contract, or relating to
purported employment discrimination or civil rights violations, which the
Company or its officers, directors, employees or agents, might have or assert
against the Employee by reason of any event which is known or unknown to the
Company, and which occurred or did not occur prior to the time of execution
of this Agreement.
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5. No Litigation
a. Except with respect to either: (1) a claim that the Company is in
violation of a provision of this Agreement, or (2) a claim alleging an
offending act or omission which occurs after the date of this Agreement, the
Employee promises not to initiate a lawsuit or to bring a claim against the
Company and/or its Affiliates, or their successors or assigns, or the
directors, officers, employees, agents, consultants or advisors or of any of
them, in any court, government agency, or otherwise, relating to the
Employee's employment or any other matters, including, but not limited to,
any claim under any federal, state or local statute, ordinance, or rule of
law. Except with respect to an alleged offending act or omission as
described in clause "(2)" of this paragraph, the Employee agrees not to
request, or to directly or indirectly cause, any governmental agency or other
person to commence any investigation or bring any action against any company
or person named in the previous sentence, and, except as provided in the
first phrase of this sentence, the Employee waives any remedy or recovery in
any action which may be brought on the Employee's behalf by any government
agency or other person.
b. Except with respect to either: (1) a claim that the Employee is in
violation of a provision of this Agreement, or (2) a claim alleging an
offending act or omission which occurs after the date of this Agreement, the
Company, on behalf of itself and its officers, promises not to initiate a
lawsuit or to bring a claim against the Employee, his heirs or assigns, in
any court, government agency, or otherwise, relating to the Employee's
employment or any other matters, including, but not limited to, any claim
under any federal, state or local statute, ordinance, or rule of law. Except
with respect to an alleged offending act or omission as described in clause
"(2)" of this paragraph, the Company, on behalf of itself and its officers,
agrees not to request, or to directly or indirectly cause, any governmental
agency or other person to commence any investigation or bring any action
against the Employee, and except as provided in the first phrase of this
sentence, the Company, on behalf of itself and its officers, waives any
remedy or recovery in any action which may be brought on the Company's behalf
by any government agency or other person.
6. Cooperation and Indemnification in the Event of Third-Party Litigation.
a. In the event that any third-party (including, without limitation,
any private party or governmental entity) asserts a claim or legal cause of
action, initiates a governmental review, or initiates a legal proceeding
(civil or criminal), with respect to any event or matters with which the
Employee was formerly involved as an employee of the Company, the Company
shall indemnify the Employee to the same extent, and subject to the same
terms, conditions and limitations, as would be applicable under the
certificate of incorporation or by-laws of the Company or applicable laws to
an individual who is a present or former employee or representative of the
Company or as covered by any directors and officers insurance in effect
during Employee's employment; provided, however, that no indemnification
shall apply with respect to legal costs, other costs or damages relating to
conduct of the Employee which was outside the scope of his duties as an
employee of the Company
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or was in violation of law or Company policy. At the outset of any
litigation involving the Employee, the Company, to the extent practicable,
shall advise the Employee in writing whether it then has reason to believe
the Employee acted unlawfully or outside the scope of his duties of the
Company, and if so, the factual and legal basis for its belief; provided that
such notification shall be for information purposes only and shall not be
actionable on the part of the Employee. In consideration for such
indemnification, the Employee agrees to make himself available and to
cooperate in the defense and in the preparation of the legal response to any
such matter.
b. Subject to the scope of the indemnification of paragraph "a", in the
event of a civil action commenced by a private party or government agency
proceeding which implicates the Employee in connection with his conduct
during his period of service with the Company, the Company reserves the
discretion to retain counsel to jointly represent the Company and the
Employee and the Company shall control the action or proceeding, unless and
until such counsel determines that the interests of the Company and the
Employee pose a conflict of interest for such counsel under the applicable
code of professional conduct. In the event that separate counsel is retained
for the Employee, the Company will reimburse the reasonable attorney's fees
of counsel of the Employee's choice reasonably acceptable to the Company, and
such reimbursement will be paid as services are rendered, subject to a right
of the Company to recover the amount of such payments from the Employee in
the event, and to the extent, that a court or agency finds that the relevant
actions of the Employee were unlawful or outside the scope of his duties or
are otherwise not subject to indemnification as provided in Section 6a herein.
7. Terms are Severable. Should any provision of this Agreement be declared
or be determined by any court of competent jurisdiction to be illegal or
invalid, the validity of the remaining parts, terms or provisions shall not
be affected thereby, and said illegal or invalid part, term or provision,
unless otherwise provided herein, shall be deemed not to be a part of this
Agreement.
8. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York.
9. Entire Agreement. This Agreement sets forth the entire understanding of
the Company and the Employee and supersedes all prior agreements,
arrangements, and communications, whether oral or written, pertaining to the
subject matter hereof. This Agreement shall not be modified or amended
except by written agreement of the Employee and the Company.
[Signatures on following page]
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THE UNDERSIGNED, intending to be legally bound, have executed this
Confidential Separation Agreement and Release as of this __ day of
_______________, 1997.
THE COMPANY THE EMPLOYEE
By:___________________________ By:___________________________
Title
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