Exhibit 10.1
RESIGNATION AND GENERAL RELEASE AGREEMENT
This Resignation and General Release Agreement (AGREEMENT), is dated as
of this 2nd day of October, 2002 by and between R. Luke Stefanko, an individual
(LUKE), and Point.360, a California corporation (COMPANY).
In consideration of the covenants undertaken and the releases contained
in this Agreement, Luke and the Company agree as follows:
1. Luke shall resign in all capacities as an officer, director and as an
employee of the Company and each of its subsidiaries and affiliates, such
resignations to be effective as of the end of business on the date hereof.
2. Luke shall use his best efforts to facilitate the transition of
existing relationships managed by him to the Company. Luke shall return to the
Company, and shall not take or copy in any form or manner, lists of customers,
prices, marketing plans and similar confidential and proprietary materials or
information. Luke represents to the Company that all documents pertaining to the
Company, but exclusive of personal items, in his possession whether located on
the Company's premises, at his home or elsewhere, have been returned to the
Company and that he has not retained copies in any form. This representation
applies to all forms of written materials, including but not limited to
schematics, diagrams, formulations, tapes, descriptions of inventions and
products, operator manuals, maintenance manuals, training manuals, software
manuals, software code, technical memoranda, financial information, marketing
plans, identities of customers and vendors, contract terms and information
obtained in confidence from customers and vendors. Luke hereby acknowledges that
all of the aforesaid information and materials constitute TRADE SECRETS of the
Company and are confidential and he reaffirms his obligation not to disclose any
confidential or trade secret information to any third party and not to use the
information for any purpose whatsoever except as expressly authorized in writing
by an authorized representative of the Company.
3. Luke, on behalf of himself, his descendants, dependents, heirs,
executors, administrators, assigns, and successors, and each of them, hereby
covenants not to sue and fully releases and discharges the Company, its
directors, officers, agents, attorneys, advisors, insurers, employees,
stockholders, representatives, assigns and successors, past and present, and
each of them (hereinafter together and collectively referred to as COMPANY
RELEASEES) with respect to and from any and all claims, wages, demands, rights,
liens, agreements, contracts, covenants, actions, suits, causes of action,
obligations, debts, costs, expenses, attorneys' fees, damages, judgments, orders
and liabilities of whatever kind or nature in law, equity or otherwise, whether
now known or unknown, suspected or unsuspected, and whether or not concealed or
hidden, which Luke now owns or holds or has at any time heretofore owned or held
as against said Company Releasees, arising out of or in any way connected with
his employment or other relationships with the Company or his resignation from
employment or any other transactions, occurrences, acts or omissions or any
loss, damage or injury whatever, known or unknown, suspected or unsuspected,
resulting from any act or omission by or on the part of said Company Releasees,
or any of them, committed or omitted prior to the date of this Agreement.
Notwithstanding the foregoing, this Release shall not apply to the Company's
obligations under the Agreement pursuant to which the Company purchased
Woodholly Productions.
4. The Company, on behalf of itself, its administrators, assigns, and
successors, and each of them (hereinafter collectively referred to as the
COMPANY RELEASORS) hereby covenants not to sue and fully releases and discharges
Luke and his agents, attorneys, advisors, insurers, representatives, assigns and
successors, heirs, executors and administrators past and present, and each of
them (hereinafter collectively referred to as RELEASEES), with respect to and
from any and all claims, wages, demands, rights, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys' fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now known or
unknown, suspected or unsuspected, and whether or not concealed or hidden, which
any Company Releasor now owns or holds or has at any time heretofore owned or
held as against said Releasees and each of them, arising out
of or in any way connected with the Company's employment of Luke or Company's
other relationships with Releasees, Luke's resignation from employment, or any
other transactions, occurrences, acts or omissions or any loss, damage or injury
whatever, known or unknown, suspected or unsuspected, resulting from any act or
omission by or on the part of said Releasees, committed or omitted prior to the
date of this Agreement. Notwithstanding the foregoing, this Release shall not
apply to (i) Luke's obligation to repay the Company by December 31, 2002 all
remaining principal and interest on Luke's note to the Company dated August 28,
2000 (the STEFANKO NOTE), in the principal amount of $850,000; (ii) the
obligations of Luke and any other Releasee under this Agreement, or the
Consulting Agreement or Noncompetition Agreement executed in connection herewith
or (iii) any conduct of Luke or any other Releasee constituting fraud,
intentional misconduct or gross negligence against the Company or its
subsidiaries or with respect to Luke's performance of his duties while an
officer and/or employee of the Company and its subsidiaries.
5. It is the intention of the parties in executing this instrument that
the same shall be effective as a bar to each and every claim, demand and cause
of action hereinabove specified. In furtherance of this intention, each party
hereby expressly WAIVES any and all rights and benefits conferred upon such
party by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and
expressly consents that this Agreement shall be given full force and effect
according to each and all of its express terms and provisions, including those
related to unknown and unsuspected claims, demands and causes of action, if any,
as well as those relating to any other claims, demands and causes of action
hereinabove specified. SECTION 1542 provides:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASES, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
6. Each party acknowledges that such party may hereafter discover claims
or facts in addition to or different from those which such party now knows or
believes to exist with respect to the subject matter of this Agreement and
which, if known or suspected at the time of executing this Agreement, may have
materially affected this Agreement. Nevertheless, such party hereby waives any
right, claim or cause of action that might arise as a result of such different
or additional claims or facts. Each party acknowledges that such party
understands the significance and consequences of such release and such specific
waiver of SECTION 1542.
7. Luke acknowledges that by reason of his positions with the Company he
had access to lists of customers, prices, marketing plans, and similar
confidential or proprietary materials or information respecting the Company's
business affairs. Luke represents that he will hold all information confidential
and that he will not use such confidential information and relationships for any
competitive business (which term herein includes a partnership, firm,
corporation or any other entity) without the prior written consent of Company,
subject to the terms and provisions of that certain Non-Competition Agreement
entered into simultaneously with the execution of this Agreement by Luke and the
Company. Each of the parties to this Agreement acknowledges that it or he is not
aware of any claims against the other party hereto, except for the Company's
rights under the Stefanko Note.
8. Each of the parties hereto agrees that the terms and conditions of
this Agreement shall remain confidential as between the parties and shall not be
disclosed to any other person except for their respective attorneys, tax
advisors, bankers or other professional advisors or except as otherwise required
by law and legal process or in the event of public disclosure of such matters by
the Company. Without limiting the generality of the foregoing, neither of the
parties hereto will respond to or in any way participate in or contribute to any
public discussion, notice or other publicity concerning, or in any way relating
to, execution of this Agreement or the events (including any negotiations) which
led to its execution. Without limiting the generality of the foregoing, each of
the parties hereto specifically agrees that such party shall not disclose
information regarding this Agreement to any current or former employee of the
Company; provided, however, that the Company shall disclose information
regarding this Agreement to those employees of the Company who are currently
aware of this Agreement, and any current or future employees of the Company who
may need to be involved, in the course of their employment, in enforcing claims
under this Agreement or in otherwise administering this Agreement.
9. Each party hereto warrants and represents that such party has not
heretofore assigned or transferred to any person not a party to this Agreement
any released matter or any part or portion thereof.
10. Luke and the Company each acknowledge that any employment or
contractual relationship between them has terminated, and that they have no
further employment or contractual relationship except as may arise out of this
Agreement, or the Noncompetition Agreement or Consulting Agreement executed in
connection herewith, or after the date of this Agreement. Notwithstanding the
foregoing, the parties agree that Luke and the Company intend to enter into a
consulting agreement in substantially the form attached hereto as EXHIBIT A. In
addition, the Company shall continue to provide Luke his current health care
coverage and auto insurance coverage through December 31, 2002.
11. If any provision of this Agreement or the application thereof is
held invalid, the invalidity shall not affect other provisions or applications
of the Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
12. This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with, and governed by,
the laws of the State of California.
13. This Agreement may be executed in counterparts.
14. Any dispute or controversy between Luke and the Company or any
Company Releasee in any way arising out of, related to, or connected with this
Agreement or the subject matter hereof, shall be resolved through final and
binding arbitration in Los Angeles, California, pursuant to ss.ss. 1282-1284.2
of the California Civil Procedure Code (the CCP). The arbitration shall be
before a single arbitrator of the American Arbitration Association (unless,
pursuant to applicable federal employment law, rules or regulations a panel is
required, in which case such arbitration shall be before a panel mutually
agreeable to the parties thereto) who shall be mutually agreeable to the parties
thereto, and the arbitration shall be governed by the rules applicable thereto
promulgated by the American Arbitration Association. Notwithstanding anything in
the aforementioned sections of the CCP to the contrary, the parties shall be
permitted to conduct unlimited discovery (as if the subject matter of the
arbitration were pending before a superior court of the State of California in a
civil action which was not classified as a limited civil case) in accordance
with Chapter 2 of the CCP commencing with ss. 1985, and Article 3 of the CCP
commencing with ss. 2016 of Chapter 3 of Title 3 of Part IV. By this Agreement
the parties have provided, in accord with CCP ss. 1283.1, that CCP ss. 1283.05
is applicable to this Agreement, except that the limitations on depositions set
forth in CCP ss. 1283.05, subdivision (e) do not apply to discovery in the event
of an arbitrated dispute under this Agreement.
15. If any party hereto brings an action or proceeding hereunder to
enforce the terms hereof, the prevailing party shall be entitled to recover from
the other party all of such prevailing party's attorneys' fees, costs and
expenses incurred in such action or proceeding.
16. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
17. The Company shall promptly reimburse Luke for his reasonable
attorney's fees incurred in connection with Luke's resignation and consulting
arrangements, up to a maximum of $5,000.
18. All parties agree to cooperate fully and to execute any and all
supplementary documents and to take all additional actions that may be necessary
or appropriate to give full force to the basic terms and intent of this
Agreement and which are not inconsistent with its terms.
19. Neither this Agreement nor any rights or obligations hereunder are
assignable except by an agreement in writing signed by each of the parties
hereto. This Agreement shall be binding upon and inure to the benefit of each
party and its or his successors and such permitted assigns.
20. The waiver by any party of a breach of any provision of this
Agreement by any other party shall not operate or be construed as a waiver of
any subsequent breach by such party.
21. Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter.
I have read the foregoing Agreement and I accept and agree to the
provisions it contains and hereby execute it voluntarily with full understanding
of its consequences.
EXECUTED as of this 2nd day of October 2002 in Los Angeles County,
California.
/s/ R. Luke Stefanko
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R. Luke Stefanko
EXECUTED as of this 2nd day of October 2002 in Los Angeles, California.
POINT.360
By: /s/ Haig S. Bagerdjian
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Haig S. Bagerdjian
Chairman of the Board
By: /s/ Alan Steel
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Alan Steel
Chief Financial Officer
ENDORSEMENT
I, R. Luke Stefanko, had decided to sign the Agreement prior to the
expiration of the 21-day period required by certain laws.
EXECUTED as of this 2nd day of October 2002, in Los Angeles County,
California.
/s/ R. Luke Stefanko
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R. Luke Stefanko
EXHIBIT A
CONSULTING AGREEMENT
See Exhibit 10.2 to this Form 8-K.