SEPARATION AGREEMENT AND RELEASE
Between
MR. ANTHONY CATALDO
and
MANAGEMENT TECHNOLOGIES, INC.
WHEREAS, the parties desire to resolve a dispute concerning
the Employment Agreement (as hereafter defined), and
WHEREAS, the parties desire to change their relationship.
NOW, THEREFORE, in consideration of the foregoing and the
mutual promises contained herein, the parties agree as follows:
1. Resignation. Effective July 13, 1995, Anthony J. Cataldo
(`Cataldo'') hereby resigns from his position as Chairman and
Chief Executive Officer of Management Technologies, Inc.,
(`MTI''), as well as from any other position(s) held by him at
MTI or any of its affiliated or subordinate companies, in order
to start his own business. His last day of active employment
will be July 13, 1995. The payments, the loan and/or benefits
provided for in this Separation Agreement and Release
(`Agreement'') shall not be payable in the event that Cataldo
revokes this Agreement as provided in Paragraph 12 hereof.
2. Recission of Employment Agreement. The employment agreement
between MTI and Cataldo dated December 31, 1991 (Exh. `A''
attached hereto), and the Amendment and Extension Agreement dated
August 1, 1994 (Exh `B'' attached hereto) (together ``Employment
Agreement') are hereby rescinded and declared to be null and
void, effective July 13, 1995. Cataldo hereby relinquishes any
and all remuneration and benefits of whatever kind or nature
whatsoever, provided for in the Employment Agreement, including
all stock options and warrants, whether or not vested.
3. Loan. In consideration for this Separation Agreement and
Release (the `Agreement''), MTI shall provide Cataldo with an
interest-free loan in the amount of $280,000.00, for the sole
purpose of acquiring MTI shares directly from MTI upon the
following terms:
a. Such shares shall be sold to Cataldo at the average of
the closing market
asked prices on the twenty (20) trading days preceding
July 13, 1995, MTI will use its best efforts to
register the shares sold to Cataldo herein without cost
or expense to Cataldo within sixty (60) days from the
date hereof. MTI represents that it will, if
possible, file said Registration Statement for the
shares purchased herein. Cataldo agrees to co-operate
with MTI with respect to said Resignation.
b. Simultaneously with his purchase of any such shares,
Cataldo will pledge
each and all of them as collateral security for the
repayment of the loan pursuant to a Pledge-Escrow
Agreement, which shall be entered into by the parties
in a mutually agreeable form. It shall provide, inter
alta, that the Pledge-Escrow Agent shall remit the
entire proceeds of all sales of MTI shares directly to
MTI until the $280,000.00 loan has been fully
satisfied. The loan at all times shall be fully
secured by the pledged MTI shares.
c. In the event that the loan is not fully paid by
December 31, 1996, it shall
be canceled and Cataldo shall have no right to any of
the remaining shares securing the said loan. There
shall be no personal recourse against Cataldo for the
repayment of the loan.
d. Cataldo and MTI shall execute all documents which are
required to
effectuate the loan, including the Pledge-Escrow
Agreement.
e. In the event that any payment provided for in Paragraph
`4.a.'' shall not be
made when due and such default continues without cause
for a period of seven (7) days after a written notice
to MTI of such default is received, the loan will be
canceled, the pledge of shares will be terminated and
the Pledge-Escrow Agent will release the shares to
Cataldo.
4. Consulting agreement. The parties agree to enter into a
Consulting Agreement which shall provide for MTI's retention of
Cataldo, on a non-exclusive basis, to locate and introduce
businesses to MTI which MTI might have an interest in acquiring,
as well as individuals and companies which might have an interest
in making a substantial investment in MTI, The Consulting
Agreement shall include, inter alia, the following provisions:
a. MTI will pay Cataldo a consulting fee in the gross
amount of Three
Hundred Thousand Dollars ($300,000.00), in equal
monthly payments of Twenty-Five Thousand Dollars
($25,000.00) for twelve (12) months commencing on the
fifteenth (15th) day following MTI's receipt of a fully
executed copy of this Agreement. No consulting fee or
other benefits shall be payable in the event that
Cataldo revokes this Agreement as provided in Paragraph
12 hereof. MTI agrees to deposit with the firm of
Baratta & Goldstein twelve (12) checks in the sum of
Twenty-Five Thousand Dollars ($25,000.00) each with an
irrevocable letter of instruction to release the first
check on the fifteenth and subsequently each check on
the fifteenth (15) day of each month to Cataldo. The
escrow agents will not have any liability or
responsibility other than to release each check, as
provided for herein.
b. In the event that any payment provided for in Paragraph
`4.a.'' shall not be
made when due and such default continues for a period
of seven (7) days after a written notice to MTI of such
default is received, Cataldo shall have the right to
accelerate payment of all amounts then remaining unpaid
hereunder, and MTI shall be obligated to pay all costs
and expenses, including reasonable attorneys' fees,
incurred by Cataldo in connection with the enforcement
of MTI's obligations hereunder.
c. Any fees earned by Cataldo under the Consulting
Agreement shall be
subject to an offset of $300,000.00 MTI and Cataldo
will set the fees for each transaction or financing on
an ad hoc basis. Cataldo understands he does not have
any authority to bind MTI without its specific written
consent.
d. No confidential or proprietary information of any kind,
nature or
description may be distributed by Cataldo to any
company or person unless publicly released by MTI or
with the prior written consent of MTI and subject to a
written confidentiality covenant approved by MTI.
5. Health insurance premiums. As additional consideration for
his Agreement and for the waivers and releases set forth in
Paragraph 14, if Cataldo elects to continue his group health
insurance coverage under COBRA, MTI will pay the premiums for the
initial three (3) months.
6,7. Salary, expenses and vacation pay. For salary earned
through July 13, 1995 and expenses due and owing to him and for
the balance of his vacation time, and expenses, Cataldo will be
paid the gross amount of $20,000 said sum will be paid by them
until 7/30/95.
8. Office use. Cataldo shall be permitted to use an office and
telephone until July 31, 1995 at MTI's discretion.
9. Board of Directors. Cataldo agrees to serve as a non-
employee member of MTI's Board of Directors throughout the
remainder of his term and thereafter, if re-elected.
10. Greater benefits. It is understood and acknowledged that
the rights and claims Cataldo herein waives are in exchange for
the loan, consulting agreement and other valuable consideration
provided under this Agreement to which he otherwise would not be
entitled, and which are greater than benefits normally given by
MTI to terminated employees. Accordingly, no such loan,
Consulting Agreement or any better benefits set forth herein will
be provided or payable in the event the Agreement is revoked as
provided in Paragraph `12'' below.
11. Waiver of reinstatement/re-employment. Cataldo expressly
waives any and all rights he may have to reinstatement or to
employment at MTI. Cataldo will not apply for, or accept,
employment with MTI or any of its subsidiaries or affiliates at
any time in the future.
12. Acknowledgments. Cataldo acknowledges that, by letter dated
6th, 1995, Mr. Keith Williams advised him to consult with an
attorney for the purpose of determining whether he should sign
this Agreement; that he, in fact, has consulted with Leon
Braunstein, Esq. of Braunstein & Co., for this purpose; that he
has been given at least twenty-one (21) days inwhich to consider
whether to sign this Agreement; that he may revoke the Agreement
within seven (7) days following its execution; and that the
Agreement does not become effective until expiration of the seven
(7) day revocation period. He further acknowledges that he fully
understands its terms and contents and that he has executed this
agreement freely and voluntarily, without duress, coercion or
undue influence.
13. Release. In consideration of the receipt of the promises
and benefits provided for in this Agreement, to which they
otherwise would not be entitled, and with the intention of
binding themselves, their heirs, families, legal representatives
and assigns, Cataldo and MTI hereby promise to forever refrain
form institution, maintaining, or in any way aiding and
proceeding upon, and FULLY AND FOREVER RELEASE AND DISCHARGE each
other and their successors and assigns, officers, directors,
shareholders, agents and employees (collectively `Releases''),
from any and all claims, demands, debts, damages, injuries
contracts (express or implied, including the Employment
Agreement), actions, or rights of actions of whatever kind or
nature whatsoever, whether known or unknown, which they had, now
have or hereafter may have against Releases by reason of or
arising our of any matter from the beginning of the world to the
day of the date of this Agreement. LIMITED TO, any and all claims
in connection with Cataldo's Employment Agreement and the
termination thereof, except any claims to enforce this Agreement.
Without limiting the generality of the foregoing, Cataldo agrees
that by entering into this Agreement he knowingly and voluntarily
waives all rights he has or may have (or the right of anyone on
his behalf) to prosecute, initiate or commence any legal
proceeding or action under the Age Discrimination in Employment
Act of 1967m 29 U.S.C. ' 621 et seq., Title VII of the Civil
Rights Act of 1964, 42 U.S.C. ' 2000e et seq., 42 U.S.C. ' 1981,
The Employee Retirement Income Security Act of 1974, 20 U.S.C. '
1001 et seq., the Family and Medical Leave Act, 29 U.S.C. ' 2601
et seq., the Americans With Disabilities Act of 1990, 42 U.S.C. '
12101 et seq., under any and all other federal, state and local
equal employment, fair employment and civil or human rights laws
(whether statutory, regulatory or decisional(, under the
statutory, regulatory or common law of any jurisdiction,
including, but not limited to, any and all tort claims (e.g.
defamation, intentional infliction of emotional distress,
negligent hiring or retention, wrongful termination, conversion,
interference with contract, abusive discharge), and under any and
all federal, state or local laws relating to benefits, labour or
employment standards or retaliation (e.g. whistleblowing). Nor
will he voluntarily participate or assist others in any suit or
proceeding against Releases, or any of them, involving claims of
the kind waived herein.
If, prior to the date of execution of this Agreement,
Cataldo filed a charge(s) or complaint(s) against MTI and/or its
officers, directors, employees, representatives and agents,
relating to any matter released or waived herein, he agrees to
withdraw or discontinue same and execute all documents necessary
to effectuate said withdrawal.
MTI and Cataldo agree that the Release is specifically
limited to the Employment Agreement and Amendment to the
Employment Agreement stated in Exhibit `B''.
14. Not an MTI agent or representative. Cataldo agrees that he
will not hold himself out as an employee, agent or representative
of MTI or any of its subsidiaries or affiliates in connection
with any matter. In the even that he is a speaker, panelist or
participant or is called upon to otherwise participate in any
meeting, seminar, conference or forum in which matters related to
MTI are discussed (e.g., trade association meeting, investor
meetings, etc.), he agrees to disclaim expressly that he is an
employee, agent or representative of MTI or any of its
subsidiaries or affiliates in connection with any discussion
concerning MTI's business activities.
15. Duty to co-operate. Cataldo shall provide his full co-
operation to MTI and its counsel in the event MTI and/or its
successors and assigns, officers, directors, shareholders, agents
or employees commence suit against a third party(ies) or a re
named defendants or respondents in any legal proceeding, whether
before a court or administrative tribunal or in arbitration.
16. Public relations. The parties will jointly issue the press
release attached hereto on Exhibit `C''. Further, Cataldo will
submit the statement attached as Exhibit `D'' to the Securities
and Exchange Commission.
17. No disclosure. Cataldo understands that in connection with
his employment by MTI he has been privy to and acquired certain
proprietary or business confidential information and trade or
business secrets not readily available in the marketplace or to
the public. Such information may include, but is not limited to,
MTI's operations, business and strategic plans, financial and
accounting matters, sales, trading and marketing data and
strategies, the identity of customers, and the terms, conditions
and status of customers and their accounts. Cataldo agrees he
will not disclose to any third parties, directly or indirectly
(except to the extent required by judicial process or as
authorised in writing by MTI), any such confidential or
proprietary information.
18. Non-removal/return of MTI property. Cataldo agrees not to
remove any documents, equipment or property belonging to MTI, its
employees, customers or others doing business with it. He
further agrees to return, on or before July 13, 1995, all
equipment and property belonging to MTI which is now in his
possession or control, including copies of any and all documents
containing information of a proprietary or confidential nature.
He will also return, or before July 13, 1995, all credit card
representing corporate charge accounts, as well as any MTI keys,
passes, identification cards, or badges, letter heads and
visiting cards. Cataldo will purchase all furniture in his
office, and his secretarial furniture for the sum of $500, in
addition to the PC and Fax Machine for an additional $500.
19. No admission.
a. Cataldo acknowledges this Agreement is not intended,
and should not be
construed, as evidence of any wrongdoing on the part of
MTI or as any admission or evidence of liability under
any federal, state or local laws or regulations of any
nature whatsoever.
b. MTI acknowledges this Agreement is not intended, and
should not be
construed, as evidence of any wrongdoing on the part of
Cataldo or as any admission or evidence of liability
under any federal, state or local laws or regulations
of any nature whatsoever.
20. Confidentiality. Cataldo agrees that neither he nor any of
his agents or representatives shall publish, publicize or
disseminate, or cause to be published, publicised or
disseminated, any information data or documents which pertain to
or arise out of this Agreement including, but not limited to, the
terms thereof and any consideration received by him for entered
into same. Further, except as required for enforcement purposes,
Cataldo agrees not to discuss or make any statements with regard
to the terms of this Agreement, or matters relating thereto, to
the public at large or customers, employees or former employees
of MTI.
21. Successors and assigns. The provisions of this Agreement
shall inure to the benefit of and be binding upon the Releases'
successors, assigns, heirs, executors and administrators.
22. Separability. Except with respect to the Release provided
in Paragraph `13'' hereof, if any provision or part of provision
of this Agreement is found to be in violation of law or otherwise
unenforceable in any respect, the remaining provisions or part of
a provision shall remain unaffected and the Agreement shall be
reformed and construed to the maximum extent possible as if such
provision or part of a provision held to be in violation of law
or otherwise unenforceable had never been contained herein.
23. Complete agreement. It is understood this Agreement
contains the entire understanding between MTI and Cataldo and
that in executing this Agreement he is not relying upon any
representations or statements made by or on behalf of MTI not set
forth herein, The Agreement may not be changed except by an
instrument in writing signed by both parties.
24. New York law. The interpretation and application of the
terms of this Agreement shall be governed by the federal laws of
the United States and the laws of the State of New York, without
giving effect to the principles of conflict laws.
25. IN SIGNING THIS AGREEMENT, CATALDO ACKNOWLEDGES THE
FOLLOWING:
a. THAT HE HAS READ AND UNDERSTANDS THIS AGREEMENT AND HAS
BEEN ADVISED TO CONSULT WITH, AND DID CONSULT WITH AN
ATTORNEY PRIOR TO SIGNING THIS AGREEMENT;
b. THAT HE SIGNS THIS AGREEMENT VOLUNTARILY AND UNDERSTANDS
THAT THIS AGREEMENT CONTAINS A FULL AND FINAL RELEASE OF ALL
CLAIMS THAT HE HAS OR MAY HAVE AGAINST RELEASES WITH REGARD
TO THE EMPLOYMENT AGREEMENT UP TO THE PRESENT, SUBJECT TO
THE EXPECTATION SET FORTH IN PARAGRAPH 13 OF THIS AGREEMENT;
c. THAT HE HAS BEEN GIVEN A PERIOD OF AT LEAST TWENTY-ONE (21)
CALENDAR DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT; AND
d. THAT THIS AGREEMENT IS NOT MADE IN CONNECTION WITH AN EXIT
INCENTIVE OR OTHER EMPLOYMENT TERMINATION PROGRAM OFFERED
TO A GROUP OR CLASS OF EMPLOYEES.
IN WITNESS WHEREOF, this Agreement was executed this 6 day of
July, 1995
July 7, 1995 By: /s/ S. Keith Williams
------------ ---------------------
Date Name: S.K. Williams
Title: President
ANTHONY CATALDO
July 6, 1995 /s/ Anthony J. Cataldo