EXHIBIT 10.119
SEPARATION, RELEASE AND WAIVER AGREEMENT
This Separation, Release and Waiver Agreement ("Agreement") made as of
the 30th day of September, 1997 (the "Effective Date"), by and between C.
Michael Alston, having an address at 9706 Mill Race Estates Drive, Vienna, VA
22182 ("Alston"), and ENVIROTEST SYSTEMS CORP., a Delaware corporation, with
principal offices at 246 Sobrante Way, Sunnyvale, California, 94086, all
affiliates and parents, including but not limited to, ENVIROTEST
TECHNOLOGIES, INC. (hereinafter collectively referred to as the "Company").
WHEREAS, Alston desires to provide for his separation from the Company
over a period not to exceed one year.
NOW THEREFORE, in consideration of the mutual promises of each party to
the other, it is hereby agreed as follows:
1. In consideration of the execution of this Agreement, and the release
and waiver contained in Paragraph 3 herein, the Company agrees that:
a. Prior to July 31, 1998 or sooner by further agreement of the
parties (the "Separation Date"), Company will pay to Alston
salary at the annual rate of two hundred twenty thousand five
hundred dollars ($220,500.00) payable biweekly in accordance
with the Company's customary payroll for so long as Alston
shall remain in the employ of the Company, provided that
Alston shall have fully complied with the provisions of
Section 2. b. hereof. The Company will deduct taxes and make
other deductions required for wages by state and federal law.
b. On the Separation Date, the Company will pay Alston for earned
and unused accrued vacation time in accordance with current
Company policy; provided that no change in Company policy
shall reduce the amount of accrued and unused vacation payable
to Alston on the Effective Date.
c. Alston and his dependents will receive family medical, dental,
disability and life insurance coverage and executive medical
reimbursement identical to those provided by the Company to
its vice presidents, at Company expense, through the
Separation Date. Pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, from and after the Separation
Date, Alston will continue to be eligible for coverage under
the Company's group medical, dental and life plans for as long
as
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C. Michael Alston Page 2
permitted by applicable law, but he will be personally
responsible for the payment of all premiums due under such
plans. Alston may at any time convert his group medical and
dental benefits to an individual policy. The Company will
provide Alston with all necessary forms to convert such
policies and will give Alston notice of the amount necessary
to continue premiums on the group medical plans and notice of
his option to convert the plans into individual plans.
d. In the event of Alston's death prior to the Separation Date,
all remaining compensation and benefits described in
paragraphs 1.a. and 1.b. will be provided to Alston's wife,
Brenda Cole-Alston, if she survives him. If not, all payment
obligations under those paragraphs will be made to Alston's
estate.
e. Alston has vested one hundred percent (100%) under the
Envirotest Systems Corp. 401(k) Savings Plan Account and his
rights under the account will be left intact subject to the
terms of the Plan.
f. Pursuant to action taken by the Compensation Committee of the
Board of Directors of the Company, Alston has been granted
incentive stock options to purchase 141,000 shares of Class A
Common Stock of Envirotest Systems Corp. under the Envirotest
Systems Corp. Stock Option Plan. Of the 141,000 shares subject
to option, 86,000 shares are subject to a Stock Option
Agreement dated July 26, 1995 (the "July Agreement"), and
55,000 shares are subject to a Stock Option Agreement dated
October 24, 1996 (the "October Agreement"). Each of the July
Agreement and the October Agreement and all Options covered by
each such Agreement that have not been exercised shall
terminate ten years from its respective Date of Grant. Under
the July Agreement, options to purchase 57,333 shares have
become exercisable and options to purchase an additional
28,667 shares will become exercisable on July 26, 1998.
Under the October Agreement, options to purchase 18,333 shares
will become exercisable on October 24, 1997. The Company,
following all required action of the Compensation Committee of
the Company, hereby agrees that each of paragraph 4. (b) of the
July Agreement and paragraph 3. (b) of the October Agreement
is hereby deleted in its entirety. Alston hereby agrees that
options to purchase an aggregate of 36,667 shares which become
exercisable in equal installments on October 24, 1998 and
October 24, 1999, under the October
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C. Michael Alston Page 3
Agreement, are hereby canceled. The Company hereby represents
and covenants that except as modified by this paragraph each
of the July Agreement and October Agreement is valid and
enforceable against the Company in accordance with its terms.
2. a. Except as specifically provided in this Paragraph 2, the
Employment Agreement between Envirotest Systems Corp. and Alston dated
January 1, 1996 (the "Employment Agreement") and all amendments thereto are
terminated as of the close of business on the Effective Date. Alston also
hereby resigns his positions as Vice President and General Counsel of
Envirotest Systems Corp. and all other offices or employment he may hold or
have with the Company, effective on the Effective Date. The Company and
Alston specifically agree, however, that all of the provisions of Paragraph 9
of the Employment Agreement remain in full force and effect.
b. Alston agrees that for a period of one (1) year from and after
Separation Date, he shall not, without the prior written approval of the
Company, directly or indirectly through any other person, firm or
corporation, engage or participate or make any financial investment in, or
become employed by or render advisory or other services to or for any person,
firm or corporation, or in connection with, any business enterprise which is,
directly or indirectly, in competition with any business operation or
activity in which the Company or any of its subsidiaries is currently
engaged. Nothing herein contained, however, shall restrict Alston from making
any investments in any company the stock of which is listed on a national
securities exchange or actively traded in the over-the-counter market, so
long as such investment does not give Alston the right to control or
influence the policy decisions of any business or enterprise which is,
directly or indirectly, in competition with any business operation or
activity in which the Company or any of its subsidiaries is currently engaged.
3. By signing this Agreement, and accepting the consideration
specified above, Alston knowingly and voluntarily agrees as follows:
a. Alston hereby waives, releases and forever discharges the
Company, its shareholders, officers, directors, agents,
employees, and all affiliates of the foregoing personally as
individuals and as shareholders, officers, directors, agents,
employees, and affiliates, and their successors and assigns
(severally and collectively "Releasees") from, and covenants
not to sue or charge them individually, jointly or severally,
on, any and all claims or causes of action arising out of his
employment by the Company, under any local, state, or federal
law or regulation, including without limitation, those arising
under the Age Discrimination in Employment Act of
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C. Michael Alston Page 4
1967 (ADEA); Title VII of the Civil Rights Act of 1964, as
amended; the Older Workers Protection Act of 1990; the Labor
Management Relation Act; and the California Civil Rights Act,
or under common law tort or contract theory, whether in law or
equity, known or unknown, asserted or unasserted, suspected or
unsuspected, which Alston, or his heirs, has, ever had, or now
has against Releasees. The Company waives, releases and forever
discharges Alston, his spouse and his heirs (severally and
collectively the "Alston Releasees") from, and covenants not
to sue or charge the Alston Releasees on any and all claims or
causes of action arising out of Alston's employment by the
Company pursuant to the Employment Agreement, under any local,
state or federal law or regulations or any common law tort or
contract theory, whether in law or equity, known or unknown,
asserted or unasserted, suspected or unsuspected, which the
Company, or its successors, has, ever had, or now has against
the Alston Releasees. Alston represents and acknowledges that
he has been provided a reasonable opportunity to consult with
an attorney regarding the nature and effect of this Release
and Waiver, and has been advised to do so by the Company.
b. Alston understands and agrees that following the Separation
Date no other payments or compensation are due him except as
described in this Agreement. Effective no later than the
Separation Date, Alston will not be an officer or employee of
the Company.
c. Alston agrees and acknowledges that he has received all share
certificates and stock option agreements due him, and that he
will not receive an additional grant of stock options for
services rendered during the Company's 1997 or 1998 fiscal
years or otherwise.
d. Alston agrees, that in order to provide a smooth transition,
Alston shall fully brief Company employees, designated by the
Company, on all matters handled by Alston in his capacity as
an officer and employee of the Company. At the request of the
Company Alston shall from time to time respond to questions on
such matters by the designated employees of the Company.
e. Prior to the Separation Date, Alston agrees faithfully and to
the best of his ability to perform such reasonable duties and
special projects as shall be assigned to him from time to time
by the Chairman, and the Executive Vice President and Chief
Operating
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C. Michael Alston Page 5
Officer of the Company, including but not limited to (i)
completion of the equitable adjustment settlement in British
Columbia, and (ii) participation in proposal preparation in
support of the Company's marketing effort. Alston's obligations
under this paragraph shall terminate upon the earlier of the
Separation Date and a Change of Control (as such term is
defined in the October Agreement) of the Company, whereupon
all cash payments due to Alston under paragraphs 1.a. and 1.b.
shall become due and payable immediately.
4. In consideration of this Agreement and to induce the Company to
enter into such Agreement, Alston hereby makes the following representations
to and agreements with the Company:
a. Except as required by legal proceeding, Alston agrees that he
will not make any statements or disclose any information which
in the Company's reasonable judgment are inimical to the
interest of the Company or are derogatory about the Company,
its management, directors, products, or services.
b. Alston will not disclose or cause or allow to be disclosed any
of the terms, conditions, amounts or any other details of this
Agreement; PROVIDED, HOWEVER, that nothing shall preclude
Alston from making such disclosure as may be required by
applicable law or as may be necessary in the course of
prosecuting or defending litigation concerning this Agreement;
and PROVIDED FURTHER that nothing shall preclude Alston from
fully disclosing to the preparer of this tax returns the
nature and source of his taxable income, nor from fully
disclosing to his attorney the terms of this Agreement as
provided in Paragraph 4(a) above. Notwithstanding the
foregoing, this paragraph shall no longer be applicable
following the Company's public disclosure of the terms of this
Agreement.
5. Alston shall continue to be entitled to the use of his Company car
and other Company equipment presently in Alston's possession, and the Company
will continue to pay all lease, insurance and maintenance costs thereon,
through the Separation Date. Upon the written request of Alston delivered on
or prior to the Separation Date, the Company will assign and Alston will
assume lease payments and expenses including insurance, for Alston's Company
car, subsequent to the Separation Date. Alston will return all other Company
property including the Company car, if applicable, presently in his
possession no later than the Separation Date.
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C. Michael Alston Page 6
6. Alston represents and acknowledges that in executing this Agreement,
he does not rely and has not relied upon any representation or statement not
set forth herein made by any of the Company's employees, agents,
representatives, or attorneys with regard to the subject matter, basis or
effect of this Agreement or otherwise.
7. The obligations of the parties hereto are severable and divisible;
and, in the event any consideration flowing from Alston or the Company as
described herein is determined to be unlawful or unenforceable, the remainder
of this Agreement shall be enforceable.
8. Neither the negotiation nor the execution of this Agreement shall
constitute an acknowledgment or admission of any kind by the Company that it,
or any of the Releasees, jointly or severally, has violated any federal,
state or local law or regulation, or breached any common law or other
obligation or duty to Alston.
9. Except as otherwise provided in Paragraph 13 of this Agreement, any
dispute arising between the Company and Alston with respect to the
performance or interpretation of this Agreement shall be submitted to
arbitration in San Francisco, California, for resolution in accordance with
the rules of the American Arbitration Association, modified to provide that
the decision by the arbitrators shall be binding on the parties, shall be
furnished in writing, separately and specifically stating the findings of
fact and conclusions of law on which the decision is based, and shall be
rendered within ninety (90) days following impanelment of the arbitrators.
The cost of arbitration will initially be borne by the party requesting
arbitration. Following a decision by the arbitrators, the cost of arbitration
will be divided as directed by the arbitrators.
10. This Agreement shall be subject to and governed by the laws of the
State of California.
11. The terms and conditions contained herein constitute the entire
agreement between the parties and supersede all previous communications,
either oral or written, between the parties with respect to the subject matter
of this Agreement, and no agreement or understanding varying or extending the
same shall be binding upon either party unless in writing and signed by or on
behalf of such party.
12. Alston acknowledges that the services rendered by him to the
Company were of a special, unique and extraordinary character and, in
connection with such services, he has had access to confidential information
vital to the Company's business. By reason of this, Alston consents and
agrees that if he violates any of the provisions of this Agreement with
respect to non-competition or non-solicitation, or confidentiality, the
Company would sustain irreparable harm and, therefore, in addition to any
other remedies which the Company may have under this Agreement or otherwise,
the Company shall be entitled to apply to any court of competent jurisdiction
for equitable
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C. Michael Alston Page 7
relief, including without limitation an injunction restraining Alston from
committing or continuing any such violation of this Agreement, and Alston
shall not object to any such application. In addition, the Company may elect
to seek other remedies relating to breaches of Sections 2(a) or 2(b), in any
court of competent jurisdiction in lieu of arbitration of such claims.
13. Alston states that he has read the foregoing Agreement, fully
understands its content and effect, and without duress or coercion, knowingly
and voluntarily assents to its terms. He agrees that he has been given a
fair, reasonable and sufficient time to fully consider all terms.
14. This Agreement may be executed in two or more counterparts, each
of which shall be considered an original, but all of which taken together
shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement as of the day and year first above written.
ENVIROTEST SYSTEMS CORP.
By /s/ Richard Webb
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Its EVP & COO
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ENVIROTEST TECHNOLOGIES, INC.
By /s/ Richard Webb
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Its EVP & COO
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/s/ C. Michael Alston
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C. Michael Alston
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C. Michael Alston Page 8
Brenda Cole-Alston, as wife of C. Michael Alston, hereby acknowledges
that she has read the foregoing agreement and agrees to be bound by its terms.
/s/ Brenda Cole-Alston
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Brenda Cole-Alston
Dated: ________________________