EXHIBIT 10.4
CONFIDENTIAL SEPARATION
AGREEMENT AND RELEASE
This Confidential Separation Agreement and Release (the "Agreement") is
made between Charles L. Elsey ("Employee") and Domistyle, Inc. (the "Company"),
herein collectively referred to as the "Parties". This Agreement will become
effective as of April 30, 2004 (the "Effective Date").
RECITALS
WHEREAS, Employee has been employed by the Company as President of
Domistyle, Inc.
WHEREAS, Employee and the Company have mutually agreed to end Employee's
employment with the Company; and
WHEREAS, the Parties desire to settle fully and finally, in the manner set
forth herein, all differences between them that have arisen, or which may arise,
prior to, or at the time of, the execution of this Agreement, including but not
limited to, any and all claims and controversies arising out of the employment
relationship, including the termination thereof, between Employee and the
Company.
NOW, THEREFORE, in consideration of the recitals and the mutual promises,
covenants and agreements set forth herein, the Parties covenant and agree as
follows:
1. Termination of Employment. Employee and the Company agree that
Employee's employment with the Company and any of its affiliates
including, without limitation, in any position as an officer of the
Company and any of its affiliates is terminated effective as of
April 30, 2004 (the "Separation Date"). Effective as of the
Separation Date, all benefits under all Company plans, programs
and/or arrangements shall terminate, except as otherwise provided in
this Agreement.
2. General Release. Employee, for and on behalf of himself, and
Employee's spouse, family, agents, assigns, successors, heirs,
executors, administrators, affiliates, associates, and legal
representatives does hereby IRREVOCABLY AND UNCONDITIONALLY RELEASE,
RELINQUISH, QUITCLAIM, ACQUIT, AND FOREVER DISCHARGE the Company,
its predecessors, successors, past and present parent companies,
subsidiary companies, affiliates, associates, partnerships, and its
respective current and former owners, partners, assigns, successors,
employees, agents, heirs, executors, administrators, legal
representatives, officers, directors, shareholders and attorneys and
insurers of said corporations, firms, associations, partnerships,
and entities (hereinafter the "Releasees"), of and from any and all
complaints, claims, grievances, liabilities, suits, demands, causes
of action, obligations, promises, agreements, rights, damages, costs
(including court costs and attorney's fees), losses, expenses and
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 1
compensation of any nature whatsoever, KNOWN OR UNKNOWN, past,
present or future, fixed or contingent, liquidated or unliquidated,
ACCRUED OR CONTINGENT, including, but not limited to, any and all
known or unknown claims, which have resulted or may result from any
alleged acts or omissions, arising out of Employee's hiring, terms
and conditions of employment, employment benefits, treatment during
employment, and separation from employment, including but not
limited to any bonus plans, stock option plans or other compensation
arrangements and expressly including, but not limited to, any and
all claims or causes of action based on, related to or arising out
of any alleged discrimination, harassment or retaliation based on
age, race, sex, national origin, color, religion, citizenship
status, disability, or handicap under any municipal, local, state,
or federal law, common or statutory; including but not limited to
Title VII of the Civil Rights Act of 1964 (as amended) or any
similar law; the Age Discrimination in Employment Act (as amended)
or any similar law; the Americans with Disabilities Act (as
amended), the Federal Rehabilitation Act or any similar law; the
Family and Medical Leave Act; the Workers Adjustment and Retraining
Notification Act; the Fair Labor Standards Act or any similar law;
the Older Workers Benefit Protection Act and any similar law; the
Employee Retirement Income Security Act or any similar law; wages,
compensation, or benefits of employment; retirement benefits or
compensation; severance pay or benefits; future compensation,
including bonuses or profit sharing; wrongful discharge from
employment; negligence; intentional torts; personal injury; mental
anguish or emotional distress; exemplary damages; alleged
retaliation related to workers' compensation claims under chapter
451 or the Texas Labor Code or any similar law or relating to
so-called "whistle-blowers" law; the Texas Payday Act or any similar
law; defamation, libel or slander; fraud; or breach of contract
including, without limitation, any and all claims or causes of
action based on, related to or arising out of that certain offer of
employment letter, dated as of August 29, 2003, that certain
Employment Agreement, dated as of September 9, 2003, or any other
agreement relating to employment, written or oral, any of which
existed or may have existed prior to, or contemporaneously with the
execution of this Agreement.
By the signature below, Employee does hereby acknowledge that upon
payment of all the consideration recited herein this is final, full
and complete satisfaction, settlement and discharge of any and all
liability of the Releasees, if any, to Employee whatsoever by reason
of any manner, cause or thing in any way connected with or arising
out of the Employee's employment and/or termination of employment
and that Employee shall not receive any further sums of money or
other property, for severance or compensation including but not
limited to employment contracts, stock options, bonuses, health
insurance, life insurance, disability insurance, vehicle allowances,
and any similar obligations, except as set forth in this Agreement,
from the Company.
3. Covenant Not to Sue. Employee, for himself and on behalf of
Employee's attorneys, spouse, family, heirs, assigns, successors,
executors, and administrators, agrees to refrain from instituting,
prosecuting, filing, or
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 2
processing, or assisting with the institution, prosecution, filing
or processing, of any litigation, administrative proceeding, or
other claim against the Company and/or any of the Releasees based
upon any of the claims released in Section 2 of this Agreement and
represents that no other person or entity has initiated or will
initiate any such proceedings on his behalf. A violation by Employee
of this Section 3 will result in indemnification obligations under
Section 9, below. EMPLOYEE AGREES, WARRANTS, AND REPRESENTS TO THE
COMPANY THAT EMPLOYEE HAS FULL EXPRESS AUTHORITY TO SETTLE ALL
CLAIMS AND DEMANDS THAT ARE THE SUBJECT OF SECTION 2 OF THIS
AGREEMENT AND THAT EMPLOYEE HAS NOT GIVEN OR MADE ANY ASSIGNMENT TO
ANYONE, INCLUDING EMPLOYEE'S SPOUSE, FAMILY OR LEGAL COUNSEL, OF ANY
CLAIMS AGAINST ANY PERSON OR ENTITY ASSOCIATED WITH THE COMPANY OR
ANY RELEASEES.
4. Non-Disclosure of Agreement. As a material and essential
consideration to payment of the sums made pursuant to this
Agreement, Employee agrees to keep the terms, amount, and facts of
this Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, and not to
communicate or otherwise disclose the terms, amount, or facts of
this Agreement to any employee of the Company (past, present, or
future), or to any other person, except (a) to Employee's spouse,
attorneys, accountants, financial advisors, and future employers,
provided that such individuals are advised of and agree to maintain
the confidentiality of such matters and (b) as may be required by
law or compulsory process. In the event that Employee is required or
compelled by law or compulsory process to disclose the existence and
or contents of this Agreement, Employee will use best efforts to
provide the Company with written notice, at least seven (7) days in
advance of any such disclosure.
5. Return and Non-Disclosure of Proprietary or Confidential
Information. Employee acknowledges that during the term of
employment with the Company, Employee had access to customer lists,
trade secrets and other confidential information not ordinarily
available to the general public. Employee agrees that such special
knowledge received is included in the Company's proprietary
confidential information. Employee agrees that this confidential
information is valuable to the Company and that its protection and
maintenance constitutes a legitimate interest to be protected by the
enforcement of the covenants contained in this Agreement.
Employee acknowledges that the Confidential Information (as defined
below) relating to the business of the Company, or any of its
affiliates, which has been obtained during Employee's employment
with the Company, is the property of the Company. Employee agrees
not to disclose or use at any time, any Confidential Information,
without the prior written consent of the Company. Employee agrees to
destroy or deliver to the Company, after his termination from
employment, all memoranda, notes, plans, records, reports, drawings,
sketches, specifications, diskettes, tapes and other storage media,
documentation and other materials (and copies thereof), whether in
written, printed or digital format,
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 3
containing Confidential Information, no matter where such material
is located and no matter what form the material may be in, which
Employee may then possess or have under his control. If requested by
the Company, Employee shall provide to the Company written
confirmation that all such materials have been delivered to the
Company or have been destroyed. Employee shall take all appropriate
steps to safeguard Confidential Information and to protect it
against disclosure, misuse, espionage, loss and theft. Company shall
be authorized to disclose to any future employer of Employee that
Employee's use or disclosure of the Company's Confidential
Information is governed by this Agreement and, at the Company's
election, furnish such new employer with a copy of this Agreement or
relevant portion thereof.
For purpose of this Agreement, "Confidential Information" shall mean
trade secrets, confidential or proprietary information and all other
knowledge, know-how, information, documents or materials owned,
developed or possessed by the Company or any of its affiliates,
whether in tangible or intangible form, pertaining to the business
of the Company or any of its affiliates, or any customer thereof,
known or intended to be known only to employees of the Company or of
any of its affiliates or other persons in a confidential
relationship with the Company, or the confidentiality of which the
Company takes reasonable measure to protect, including, but not
limited to manufacturing processes, research and development data,
project data, assignments of individual employees, testing and
evaluation procedures, cost data and techniques, data bases,
designs, models, operation procedures, knowledge of the organization
(including pricing and sales policies, techniques and concepts),
trade shows (including prices, costs, sales or content), details of
joint venture or sponsorship agreements, knowledge of strategic or
marketing plans for future products, events, processes, techniques,
contracts, financial information or measures, business methods,
future business plans, package design, retail design, field
marketing outsourcing, displayers and customers (including
identities and contact information of displayers and customers and
prospective displayers and customers, and identities and contact
information of individual contacts at business entities, which are
customers), suppliers, vendors, business relationships and other
information owned, developed or possessed by the Company; provided
however, that Confidential Information shall not include (i)
information (other than the identities of displayers and customers)
that is in the public domain through no fault of Employee; (ii)
information approved for release by written authorization of the
Company; or (iii) information that may be required by law or an
order of any court, agency or proceeding to be publicly disclosed;
(iv) information that is commonly known in the manufacturing and
sales industries and information that has been learned by and/or
developed by employee during his career.
6. Non-Solicitation and Non-Competition.
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(a) The Employee acknowledges that: (i) the Company's business is
international in scope and its products are marketed
throughout the United States and the world; (ii) the Company
competes with other businesses both within the United States
and internationally; and (iii) the provisions of this Section
6 are reasonable and necessary to protect the Company's
business.
(b) In consideration of the acknowledgments by the Employee, and
in consideration of the compensation and benefits to be paid
or provided to the Employee by the Company under this
Agreement, the Employee agrees that he will not, directly or
indirectly:
(i) during the Post-Employment Period (as defined below),
engage in, invest in, own, manage, operate, finance,
control, or participate in the ownership, management,
operation, financing or control of, be employed by, or
render services to, any business whose products or
services compete with the Company, anywhere within the
United States or within foreign countries in which the
Company conducts business;
(ii) whether for the Employee's own account or for the
account of any other person or entity, at any time
during the Post-Employment Period, solicit business of
the same or similar type being carried on by the Company
or its affiliates, from any retail or wholesale customer
of the Company or its affiliates in existence at any
time during the year prior to the Effective Date,
whether or not the Employee had personal contact with
such customer during and by reason of the Employee's
employment with the Company;
(iii) whether for the Employee's own account or the account of
any other person or entity, at any time during the one
year period following effective date, solicit, employ,
or otherwise engage as an employee, independent
contractor, or otherwise, any person who is or was at
the time of such solicitation, employment or engagement
an employee, displayer, consultant or independent
contractor of the Company or its affiliates or in any
manner induce or attempt to induce any employee of the
Company or its affiliates to terminate his/her
employment with the Company, or its affiliates or in any
manner induce or attempt to induce any displayer of the
Company or its affiliates to terminate his/her
relationship with the Company or its affiliates; or
(c) If any covenant in this Section 6 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be
considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic
area, or all of them, as a court of competent jurisdiction may
determine to be reasonable, not arbitrary,
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 5
and not against public policy, will be effective, binding, and
enforceable against the Employee.
(d) The period of time applicable to any covenant in this Section
6 will be extended by the duration of any violation by the
Employee of such covenant.
(e) The Employee will, while the covenant under this Section 6 is
in effect, give written notice to the Company, within ten (10)
days after accepting any other employment or consulting
arrangement, of the identity of the Employee's new employer or
contractor and all of the material duties and services to be
provided by Employee in such employment or retention, which
shall not require disclosure by Employee of any terms of
compensation. The Company may notify such new employer that
the Employee is bound by this Agreement and, at the Company's
election, furnish such new employer with a copy of this
Agreement or relevant portion thereof.
(f) The term "Post-Employment Period" means the three (3) month
period following the Effective Date.
7. Severance Benefit Terms. Contingent upon receipt of Employee's
signature on this Agreement, the Company agrees to:
Pay Severance Payment to you in six semi-monthly installments,
the total of which shall not exceed $66,250.02. Such payments
shall be made pursuant to the Company's current normal
semi-monthly payroll cycle. The first payment would be May 15,
2004, and the final payment would be July 31, 2004. No
interest or other charge shall apply to any such installments
that are made by the Company.
Also, Employee shall be paid for all accrued vacation.
No further or additional severance payments shall be due to
Employee.
Limitations On Other Benefits Or Compensation. Employee understands
and agrees that he will receive no other wage, accrued vacation,
back pay, bonus, severance, or other payment or benefit from the
Company (other than those set forth in this paragraph).
8. No Admission. This Agreement is not an admission of wrongdoing or
liability by either Employee or the Company. The Parties hereto
recognize that, by entering into this Agreement, the Company does
not admit any violation of any local, state, or federal law, common
or statutory. The Parties further recognize that this Agreement has
been entered into in release and compromise of any claims that might
be asserted by Employee, in connection with Employee's employment
with
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 6
the Company, or the termination thereof, and to avoid the expense
and burden of any litigation related thereto.
9. Breach by Employee. The Parties acknowledge and agree that in the
event it is proven that Employee materially breaches any provision
of this Agreement: (a) the Company may suspend payments under this
Agreement and/or rescind the Agreement; (b) Employee will indemnify
and hold the Company harmless from and against any and all resulting
damages or loss incurred by the Company in any action where the
Company prevails (including attorneys' fees and expenses); (c) In
any action where the Company prevails, Employee will immediately
repay to the Company in full any payment made to him under the
provisions of this Agreement; and (d) the Company will be entitled
to recover from Employee any payment not repaid to the Company, as
required by subpart (c) of this paragraph, as well as any and all
other resulting actual or consequential damages. The Company may
also pursue any other available remedies for any breach of this
Agreement.
One or more waivers of a breach of any covenant, term, or provision
of this Agreement by any of the Parties shall not be construed as a
waiver of a subsequent breach of the same covenant term, or
provision, nor shall it be considered a waiver of any other existing
or subsequent breach of a different covenant, term, or provision.
10. Severability. If any provision or term of this Agreement is held to
be illegal, invalid, or unenforceable, such provision or term shall
be fully severable; this Agreement shall be construed and enforced
as if such illegal, or unenforceable provision had never comprised
part of this Agreement; and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement. However, the Parties agree that
all payments made under the Agreement shall remain full and final
and the occurrence of any event of inapplicability, invalidity,
illegality, unenforceability, or modification made to this Agreement
shall in no way (a) entitle the Employee to any additional payment,
compensation, or cost from the Company or create any liability for
the Company to the Employee under this Agreement, or (b) revise,
reinstate, or otherwise restore any claims or causes of action being
released hereby. The Parties further agree that the occurrence of
any such inapplicability, invalidity, illegality, unenforceability,
or modification will not operate to reduce the consideration paid to
the Employee under this Agreement. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision or term there shall be
added automatically as a part of this Agreement another provision or
term as similar to the illegal, invalid, or unenforceable
provisions, as may be possible and that is legal, valid, and
enforceable.
11. Remedies. The Parties agree that should one party sue the other
party for a breach of any provision of this Agreement, the
prevailing party shall be entitled to recover its attorneys' fees
and costs of court. The parties hereby agree that each
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 7
party shall have the right to sue for specific performance of this
Agreement, and for declaratory and injunctive relief.
12. Entire Agreement. This Agreement constitutes the entire Agreement of
the Parties, and supersedes all prior and contemporaneous
negotiations and agreements, oral or written. All such prior and
contemporaneous negotiations and agreements are deemed incorporated
and merged into this Agreement and are deemed to have been abandoned
if not so incorporated. No representations, oral or written, are
being relied upon by either party in executing this Agreement other
than the express representations of this Agreement. This Agreement
cannot be changed or terminated without the express written consent
of the parties.
13. Reference. The Parties acknowledge and agree that Employee will
direct any request for employment references from the Company to
Patricia L. Sinclair, Associate Vice President of Human Resources of
the Company, and that the Company will not be obligated to respond
to any such requests, or to any other inquiries from prospective
employers of Employee, except to disclose only a neutral reference
that discloses only Employee's job title and dates of employment.
14. Re-Employment. Employee waives and releases forever any right or
rights he might have to seek re-employment, or reinstatement with
the Company or any of the other Releasees.
15. Mutual Covenant of Non-Disparagement. Employee agrees that he shall
not, directly or indirectly, in any way disparage the Company or its
affiliates or any of the shareholders, partners, members, or other
holders of equity in the Company or its current and former officers,
directors, and employees, or make to, or solicit from, any third
party (including, but not limited to, any communications with the
press or other media), any comments, statements, and the like that
may be considered to be derogatory or detrimental to the good name
or business reputation of the Company. The Company or its affiliates
or any of the shareholders, partners, members, or other holders of
equity in the Company or its current and former officers, directors,
and employees shall not make any comments, statements, and the like
that may be considered to be derogatory or detrimental to the good
name or business reputation of the Employee.
16. Statement of Understanding. You received this Agreement on April 13,
2004.
By executing this Agreement, Employee acknowledges that (a) Employee
has been advised by the Company in writing to consult with an
attorney regarding the terms of the Agreement; (b) Employee has been
given the opportunity to have at least twenty-one (21) days from the
date above on which Employee received this Agreement to consider
this Agreement and that Employee has considered the Agreement during
said time period. Employee understands and agrees that he may waive
the twenty-one (21) day review period and execute this Agreement at
any time after its receipt, and that any such execution prior to the
expiration of the
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 8
twenty-one (21) days shall be a knowing waiver by Employee of such
twenty-one (21) day review period; (c) Employee has consulted with
an attorney of his own choosing regarding the terms of the
Agreement; (d) any and all questions regarding the terms of this
Agreement have been asked and answered to Employee's complete
satisfaction; (e) Employee has read this Agreement and fully
understands its terms and their import; (f) except as provided by
this Agreement, Employee has no contractual right or claim to the
benefits described herein; (g) the consideration provided for herein
is good and valuable; (h) Employee is entering into this Agreement
voluntarily, of his own free will, and without any coercion, undue
influence, threat, or intimidation of any kind or type whatsoever;
and (i) Employee is no longer an employee of the Company and its
subsidiaries effective on the Separation Date.
17. Revocation Period. Either Party may revoke this Agreement within
seven (7) days of the date of its execution by Employee (the
"Revocation Period"), by written notice to the other Party. Employee
understands that he has no right to receive payments and benefits
described in this Agreement if he revokes this Agreement. Employee
further understands that if the Company does not receive from
Employee written revocation of this Agreement prior to the
expiration of the Revocation Period, this Agreement will become
effective, and Employee will have forever waived his right and
ability to revoke it, and he and the Company will be fully bound by
all of its terms and conditions.
18. Controlling Law and Venue. This Agreement shall be subject to and
construed in accordance with the laws of the State of Texas.
Exclusive venue shall be in Dallas County, Texas for any disputes
arising out of the interpretation or enforcement of any of the terms
of this Agreement.
19. Binding Effect. This Agreement is binding on and inures to the
benefit of the Company, its successors and assigns, and on Employee
and Employee's successors, heirs, assigns and beneficiaries.
20. Cooperation and Further Assurances. In order to assist with the
transition following the termination of his employment with the
Company, Employee agrees to make himself available to assist with
such transition through and including July 31, 2004, subject to
Employee's availability and in such manner as may be reasonably
requested by the Company. The Parties agree to execute and deliver
such other and further documents and take such other action as may
be reasonably necessary to more completely, fully and/or correctly
evidence or effect the intents and purposes of this Agreement.
21. LEGAL COUNSEL. EMPLOYEE UNDERSTANDS THAT HE IS WAIVING IMPORTANT
LEGAL RIGHTS BY SIGNING THIS AGREEMENT AND, FURTHER, THAT EMPLOYEE
HAS CONSULTED WITH AN ATTORNEY OF HIS CHOOSING BEFORE SIGNING THIS
AGREEMENT.
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 9
READ CAREFULLY BEFORE SIGNING. THIS DOCUMENT INCLUDES A RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS.
IN WITNESS WHEREOF, the undersigned have executed this Agreement freely and
voluntarily intending to be legally bound by it.
ACCEPTED AND AGREED TO BY:
EMPLOYEE
/s/ Charles L. Elsey
- -------------------------------
April 15, 2004
Date
Address for Notice:
___________________________
___________________________
STATE OF Texas )
)
COUNTY OF Dallas )
BEFORE ME, the undersigned, a Notary Public, on this day personally
appeared Charles Elsey known to me to be the person whose name is subscribed to
the foregoing instrument and acknowledged to me that he executed the same for
the purposes and consideration therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this 15th day of April.
/s/ Christopher Lee Reed
--------------------------------------
Notary Public, State of Texas
[SEAL] My commission expires: March 1, 2008
CONFIDENTIAL SEPARATION AGREEMENT AND RELEASE - Page 10
HOME INTERIORS AND GIFTS, INC.
By: /s/ Patricia L. Sinclair
----------------------------
Name: Patricia L. Sinclair
Title: AVP Human Resources
April 15, 2004
Date
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