EXHIBIT 10.35
EMPLOYMENT SEPARATION AGREEMENT
AND MUTUAL RELEASE OF CLAIMS
THIS AGREEMENT is made as of the 19th day of August, 2002, by and
between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Executive") and ▇.▇. ▇▇▇▇▇ Corporation, an Ohio
corporation (the "Company").
W I T N E S S E T H:
WHEREAS, Executive is currently employed by the Company as its
President and Chief Operating Officer pursuant to an Employment Agreement dated
February 19, 2001 between the Company and Executive (the "Employment
Agreement"), and is also a director of the Company; and
WHEREAS, Executive and the Company desire to formalize the terms of
Executive's separation of employment from the Company and his ceasing to be an
officer and director of the Company and its subsidiaries.
NOW, THEREFORE, in consideration of the promises and the agreements and
mutual covenants and promises contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
1. TERMINATION OF EMPLOYMENT; RESIGNATION AS DIRECTOR. Effective August
19, 2002 (the "Date of Termination"), Executive shall cease to be an employee
and officer of the Company and each of its subsidiaries. In addition, Executive
hereby tenders his resignation as a member of the Board of Directors of the
Company and each of its subsidiaries, effective as of the Date of Termination.
Following the Date of Termination, Executive shall have no employment or other
work-related responsibilities to the Company. Executive's employment with the
Company will be deemed to have been terminated by the Company without Cause, as
that term is defined in the Employment Agreement, except that Executive will
only be entitled to the payments and benefits provided in this Agreement.
2. TERMINATION OF THE EMPLOYMENT AGREEMENT. Executive and the Company
agree that the Employment Agreement shall terminate and be null and void
effective as of the Date of Termination, except that pursuant to and in
accordance with Section 5.03[2] of the Employment Agreement, all unvested
Options (as defined in the Employment Agreement) held by Executive will become
fully vested as of the Date of Termination, and all Options, including Options
vested prior to the Date of Termination and Options vesting as of the Date of
Termination, will be exercisable to the extent permitted under the terms of the
option plans under which they were granted and the individual option agreements
under which they were issued.
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3. CONSIDERATION FOR AGREEMENT. Executive agrees and acknowledges that
the payments and benefits set forth herein will be paid and/or provided by the
Company no sooner than eight days after execution of this Agreement, provided
Executive does not exercise his right of revocation set forth in Paragraph 12 of
this Agreement.
4. PAYMENTS TO EXECUTIVE. Unless the Company exercises its Mitigation
Rights as set forth in Paragraph 6 of this Agreement, the Company shall pay the
Executive nine payments of Thirty Seven Thousand, Five Hundred Dollars ($37,500)
each. The first of these nine payments shall be made eight days after the
execution of this Agreement (provided the Executive does not exercise his right
of revocation set forth in Paragraph 12) and the following eight payments will
be made on the first day of each successive month for the next eight months,
beginning on October 1, 2002 (the "Payment Period"). The parties agree and
acknowledge that payments provided for in this Paragraph shall not be deemed
severance payments and the Company shall issue a 1099 Form for the payments made
to Executive.
5. NON-COMPETE AND NON-SOLICITATION PROVISIONS. In consideration for
the payments made in Paragraph 4 of this Agreement and other good and valuable
consideration set forth herein and subject to the provisions of Paragraph 6 of
this Agreement, Executive, for a period of twelve months from the Date of
Termination (the "Non-Compete Period"), agrees to the following:
(a) Executive will not directly or indirectly engage in,
assist or have an active interest in (whether as
proprietor, partner, investor, shareholder, officer,
director or any type of principal whatsoever) or
enter the employment of or act as agent for or
adviser or consultant to any person or entity engaged
in (or is about to become engaged in) the
manufacturing and/or wholesaling of [1] slippers or
[2] any other product that then comprises more than
ten percent of the Company's gross revenues for its
most recently completed fiscal year or the annualized
gross revenues for its current fiscal year. However,
the restrictions described in this Paragraph 5(a)
will not be applied to: [1] prevent Executive from
obtaining subsequent employment (of any kind) with a
diversified retailer (e.g., Macys, Sears ▇▇▇▇▇▇▇
and/or Nine West Group, etc.); or [2] prevent
Executive from purchasing, for investment purposes
only, any stock or other corporate security that is
listed on a national securities exchange or quoted in
any national market system, so long as such stock or
other corporate security owned by Executive does not
represent more than five percent of the market value
or voting power of the total stock or other corporate
securities of that class;
(b) Executive will not, on his own behalf or on behalf of
any other person, partnership, association,
corporation or other entity, solicit or in any manner
attempt to influence or induce any employee of the
Company or its subsidiaries to leave the employment
of the
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Company or its subsidiaries nor will Executive use or
disclose to any person, partnership, association,
corporation or other entity any information obtained
while an employee of the Company concerning the names
and addresses of the employees of the Company or its
subsidiaries.
6. MITIGATION RIGHTS. If Executive secures full-time employment with
another employer in any capacity during the Payment Period ("Full-Time
Employment"), the Executive shall notify, in writing, the Company's Chief
Executive Officer no later than ten days after Full-Time Employment is secured
of the following: (1) the Executive's starting date of Full-Time Employment; (2)
the name of the employer; (3) the location where Executive will be primarily
employed; and (4) the Executive's monthly rate of compensation to be received
through the Full-Time Employment (the "Notice"). If Executive secures Full-Time
Employment during the Payment Period, the Company shall have the right to elect
to reduce any remaining payments due and owing under Paragraph 4 of this
Agreement by the gross monthly compensation earned by the Executive in the
Full-Time Employment if the Company notifies the Executive within ten days of
the later of the Company's receipt of the Notice or the Executive's first day of
Full-Time Employment as disclosed by Executive in the Notice of its desire to
exercise its rights under this Paragraph 6 ("Mitigation Rights"). If the Company
exercises its Mitigation Rights, the Non-Compete Period shall terminate ninety
days after the Executive's first day of Full-Time Employment as disclosed by
Executive in the Notice. If the Company does not exercise its Mitigation Rights
or if the Executive does not secure Full-Time Employment, neither the
Non-Compete Period nor the Payment Period shall be altered by this Paragraph 6.
The parties acknowledge that the Executive intends to diligently seek Full-Time
Employment during the Payment Period; however, this Agreement does not obligate
Executive to either seek or obtain Full-Time Employment.
7. ADDITIONAL CONSIDERATION. In consideration of the Employee's
promises and covenants set forth herein, the Company further agrees:
(a) To provide to Executive and his eligible dependents,
at the Company's expense during the Payment Period,
all medical, dental, prescription drug and
hospitalization insurance coverages and benefits
provided by the Company to its executive officers.
The Company's obligations under this Paragraph 7(a)
shall cease if the Company exercises its Mitigation
Rights. Upon the termination of such Company provided
coverage, the Executive shall have the right to
extend coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1986, 29 U.S.C. Sections
1161, et seq. ("COBRA") for up to 18 months and the
Employee agrees that this Agreement satisfies the
notice requirements of COBRA provided, that the
Company delivers to Executive a COBRA election form
in a timely manner following the termination of such
coverage;
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(b) To pay or reimburse Executive for all reasonable
costs and expenses incurred in packing and moving his
personal property from Ohio and in paying the
remaining monthly payments owing under a lease for
his current residence in Central Ohio; provided that
the maximum amount of costs and expenses which the
Company shall be obligated to pay or reimburse under
this Paragraph 7(b) shall not exceed $5,000; and
(c) To pay Executive all accrued wages and vacation and
to reimburse Executive's reasonable business expenses
incurred prior to the Date of Termination pursuant to
the Company's normal practices and procedures.
8. PAYMENT OF EXECUTIVE'S TAXES. Executive agrees that he is solely and
legally responsible to pay any all applicable income taxes on the payments and
benefits provided pursuant to this Agreement and further agrees to indemnify and
hold harmless the Company (and its officers, directors, shareholders, employees,
agents, affiliates, subsidiaries, divisions, successors and assigns) from any
claim or liability for any taxes, penalties or interest for which he is
responsible as a result of his failure to pay any applicable income taxes on the
payments and benefits provided to him pursuant to this Agreement.
9. NON-DISPARAGEMENT. Executive agrees to refrain from making any
statements in respect of the Company or any of its subsidiaries, their
respective officers or directors, or any business or services engaged in or
performed by any of them, which would detract from their commercial, personal or
professional reputations. The Company and its officers and directors agree to
refrain from making any public statements in respect of Executive which would
detract from Executive's personal or professional reputation. Notwithstanding
the foregoing, nothing in Paragraph 9 shall prevent the Company or any person
from responding to incorrect, disparaging, or derogatory public statements or
from making any truthful statements to enforce the terms of this Agreement.
10. GENERAL RELEASE BY EXECUTIVE. Executive, for himself and for his
heirs, executors, administrators and assigns, does hereby knowingly and
voluntarily, fully and forever, release, acquit and discharge the Company, its
subsidiaries and their respective successors, assigns, officers, directors,
shareholders, agents, attorneys and employees and the respective heirs,
executors, administrators, successors and assigns thereof (collectively, the
"Company Parties") from any and all claims, demands, damages, expenses,
liabilities, judgments, actions and causes of action, including claims for
attorneys' fees, which Executive now has or may in the future have arising under
any federal, state or local statutory or common law or agreement or contract,
whether in law or in equity, whether in any federal or state court or arbitral
body or before any administrative agency of any federal, state, county or
municipal government, relating directly or indirectly to, or resulting directly
or indirectly from, (i) Executive's employment with or service as an officer of
the Company or any subsidiary of the
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Company and the termination of his employment and service as an officer with the
Company or any subsidiary; (ii) all claims relating to or arising out of the
terms and conditions of any such employment or the terms and conditions of the
Employment Agreement, (iii) all alleged wrongful terminations, breaches of
contract and/or personal injury claims of any description; or (iv) any other
matters relating to Executive's past or present relationship with any of the
Company Parties, including but not limited to all claims under Title VII of the
Civil Rights Act of 1964, all claims under the Fair Labor Standards Act, all
claims under the Equal Pay Act, all claims under Ohio Revised Code Sections
4112.01 through 4112.99, all claims under the Worker Adjustment and Retraining
Notice Act (WARN), all claims under the Americans with Disabilities Act, all
claims under the Family and Medical Leave Act, all claims under the Occupational
Safety and Health Act, and all claims arising under the Age Discrimination in
Employment Act of 1967 and the Older Workers' Benefit Protection Act, all as
amended. Notwithstanding the foregoing, Executive does not release any of the
following claims or rights:
(a) Any right to enforce this Agreement or the option
agreements between Executive and the Company;
(b) All rights of Executive under and pursuant to the
terms of Company employee benefit plans in which he
is or was a participant and has vested rights
thereunder, including rights under the Stock Option
Agreement dated as of February 19, 2001 pursuant to
which he received an option to purchase 88,767 common
shares of the Company, the Stock Option Agreement
dated as of February 19, 2001 pursuant to which he
received an option to purchase 1,325 common shares of
the Company, the Stock Option Agreement dated as of
February 19, 2001 pursuant to which he received an
option to purchase 100,000 common shares of the
Company, and the Stock Option Agreement dated
December 26, 2001 pursuant to which he received an
option to purchase 150,000 common shares of the
Company; and
(c) Any right to indemnification in accordance with the
articles of incorporation, code of regulations, or
other corporate governance document of the Company or
its subsidiaries or any applicable insurance policy
with respect to any liability Executive has or might
have incurred as an employee, officer, or director of
the Company or its subsidiaries
11. GENERAL RELEASE BY THE COMPANY. The Company does hereby on behalf
of itself, its successors, subsidiaries and assigns, knowingly and voluntarily,
fully and forever release, acquit and discharge Executive and his heirs,
executors, administrators, successors and assigns from any and all claims,
demands, damages, expenses, liabilities, judgments, actions and causes of
action, including claims for attorneys' fees, which the Company now has or may
in the future have arising under any federal, state or local
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statutory or common law or agreement or contract, whether in law or in equity,
whether in any federal or state court or arbitral body or before any
administrative agency of any federal, state, county or municipal government,
relating directly or indirectly to, or resulting directly or indirectly from,
(i) Executive's service as an employee or officer of the Company or any
subsidiary of the Company or the separation of Executive's employment with the
Company or any subsidiary of the Company; (ii) all claims relating to or arising
out of the terms and conditions of any such employment or service as an officer;
(iii) all alleged wrongful conduct, breaches of contract and/or personal injury
claims of any description; or (iv) any other matters relating to Executive's
past or present relationship with the Company. Notwithstanding the foregoing,
the Company does not release any of the following rights or claims:
(a) Any right to enforce this Agreement;
(b) Any right to enforce the terms and conditions of any
employee benefit plan in which Executive is or was a
participant, including the stock option agreements
referred to in Paragraph 10 above; and
(c) Any defenses the Company or its subsidiaries have or
may have under the indemnification and/or insurance
policies set forth in Clause (c) of Paragraph 10 of
this Agreement.
12. ADDITIONAL AGREEMENTS OF EXECUTIVE. Executive agrees that the
payments and benefits to be provided to him under this Agreement are not to be
construed as an admission of any obligation or liability on the part of the
Company. The Company denies any liability in this matter. Exclusively as this
Agreement pertains to Executive's release of claims under the Age Discrimination
in Employment Act, Executive, pursuant to and in compliance with rights afforded
him under the Older Workers Benefit Protection Act: (i) is advised that he does
not waive rights or claims that arise after the date on which this Agreement is
signed by him and the Company; (ii) is advised to consult with an attorney prior
to executing this Agreement; (iii) is given a period 21 days from the receipt of
this Agreement within which to consider it; and (iv) is given a period of seven
days following the signing of this Agreement in which to revoke it. A revocation
of this Agreement shall be effective only on the delivery of a written
revocation to the Company within the seven-day time period set forth above. This
Agreement shall not become effective or enforceable until this seven-day
revocation period has expired. Employee's knowing and voluntary execution of
this Agreement is an express acknowledgment and agreement that he has had the
opportunity to review this Agreement with his attorney; that he has received
consideration under this Agreement in addition to anything of value to which he
was otherwise already entitled; that he was afforded a 21-day period of time to
consider it before executing it; that he was given a seven-day period in which
to revoke this Agreement after it was signed; and that he agrees this Agreement
is written in a manner that enables him to fully understand its content and
meaning. Executive agrees that he has read this Agreement in its entirety and
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that his agreement to all of its provisions is made freely, voluntarily, and
with full knowledge and understanding of its contents.
13. ARBITRATION. Except for claims and actions brought pursuant to and
governed by Paragraph 16 of this Agreement, Executive and Company agree that
arbitration will be the exclusive means of resolving all disputes or questions
arising out of or relating to this Agreement. Any arbitration may be initiated
by either the Executive or the Company by written notice to the other specifying
the subject of the requested arbitration. The arbitration shall be conducted as
follows:
(a) The arbitration will take place in Columbus, Ohio (or another
location mutually agreed upon by the Company and Executive)
and will be conducted in accordance with the rules of the
American Arbitration Association in effect when the
arbitration begins. Any determination or award made or
approved by the arbitrator will be final and binding on the
Company and Executive. Judgment upon any award made in any
arbitration may be entered and enforced in any court having
competent jurisdiction.
(b) The costs of arbitration (including legal and other
professional fees incurred) will be borne solely by the party
who incurs such costs regardless of the result of the
arbitration.
14. ASSISTANCE IN LITIGATION. Subject to the Executive's reasonable
business commitments, Executive agrees that he will make himself reasonably
available upon reasonable notice to cooperate with and assist the Company in the
prosecution of and defense of claims, actions, assertions, lawsuits, and
arbitrations of and defense of any claims, actions, assertions, lawsuits, and
arbitrations that are currently pending or that may arise in the future.
Executive's assistance to the Company shall include, but not be limited to,
agreeing to speak informally with the Company and the Company's counsel on the
matters, providing any documentation and information to the Company that may be
relevant to the matters, only speaking or providing documentation and
information to third parties as required by law or with the consent of the
Company, and testifying on behalf of the Company. The Company agrees to
reimburse the Executive for reasonable expenses actually incurred in connection
with such assistance, including, but not limited to, reimbursement of lost wages
incurred as a result of this Paragraph. If Executive's assistance required under
this Paragraph exceeds ten days in any thirty day period, the parties will agree
upon an hourly rate of compensation for all hours of assistance except for hours
of testimony. The parties agree and understand that Executive's obligations
under this Paragraph shall cease two years from the Date of Termination.
15. TRADE SECRETS. Executive understands and agrees that due to his
position with the Company, Executive has received confidential and proprietary
information relating to the business affairs of the Company and its subsidiaries
("Trade Secrets"), including, but not limited to, technical information, product
information and formulae, processes, business and marketing plans, strategies,
customer information and other
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information concerning the Company's and the Company's subsidiaries' products,
promotions, development, financing, expansion plans, business policies and
practices, salaries and benefits and other forms of information considered by
the Company and its subsidiaries to be proprietary and confidential and in the
nature of trade secrets. Executive agrees that he will keep Trade Secrets
confidential and will not disclose such information, either directly or
indirectly, to any third person or entity without the Company's prior written
consent or use such information for his benefit or the benefit of any third
person without the Company's prior written consent. This confidentiality
restriction has no temporal, geographical or territorial restrictions; provided,
however, that if, in the written opinion of counsel, Executive is legally
compelled to disclose Trade Secrets to any tribunal, disclosure of only those
Trade Secrets that that counsel advises in writing are legally required to be
disclosed will not be considered a violation of this Paragraph but only if
Executive gives the Company reasonable advance notice that such disclosure will
be required.
16. REMEDIES AVAILABLE AS TO NON-COMPETE, NON-SOLICITATION AND TRADE
SECRETS OBLIGATION. The Parties recognize that the Company will have no adequate
remedy at law for breach by Executive of the restrictions imposed by Paragraphs
5 and 15 of this Agreement and that the Company and its subsidiaries could
suffer substantial and irreparable damage if Executive breaches any of these
restrictions. For this reason, Executive agrees that, if Executive breaches any
of the restrictions imposed under Paragraphs 5 and 15 of this Agreement, the
Company and its subsidiaries, in addition to the right to seek monetary damages,
may seek a temporary and/or permanent injunction to restrain any breach or
threatened breach of these restrictions or a decree of specific performance,
mandamus, or other appropriate remedy to enforce compliance with the
restrictions imposed under this article. Further, the parties agree that any
court of competent jurisdiction situated in Franklin County, Ohio, shall have
exclusive jurisdiction and venue relating to any suit or other legal proceedings
concerning the breach of Paragraphs 5 and 15 of this Agreement.
17. RETURN OF COMPANY PROPERTY. Within fifteen business days after the
Executive's Date of Termination, Executive shall promptly return to the Company
all property other than personal property, including keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data, formulae or any other
tangible property or document and any and all copies, duplicates or
reproductions thereof that have been produced by, received by or otherwise been
submitted to Executive in the course of his employment with the Company. For
purposes of this Paragraph, "personal property" includes Executive's rolodex if
Executive provides the Company with a copy of all non-personal information
contained in the rolodex within this fifteen business day period.
18. MISCELLANEOUS. This Agreement sets forth the entire agreement
between the parties hereto and fully supersedes any and all prior agreements or
understandings, whether oral or written, between the parties hereto, except as
and to the extent specifically set forth herein. It shall be interpreted and
enforced under the laws of the State of Ohio. If for any reason any portion of
this Agreement is deemed invalid or unenforceable, all remaining parts shall
remain binding and in full force and effect. This
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Agreement is binding upon and shall inure to the benefit of the party's
successors and assigns.
19. EXECUTION. This Agreement may be executed in multiple counterparts,
each of which shall constitute an original, and all of which shall constitute a
single Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above mentioned.
The Company: Executive:
▇.▇. ▇▇▇▇▇ CORPORATION /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇, Chairman and CEO
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