EXHIBIT 10.33
SEVERANCE AGREEMENT AND GENERAL
RELEASE
This Severance
Agreement and Release of All Claims (hereinafter “
Agreement ”) is made and entered into by and between
THREE-FIVE SYSTEMS, INC. , a Delaware corporation
(hereinafter referred to as “ Employer ”), and
JEFFREY D. BUCHANAN (hereinafter referred to as “
Employee ”).
RECITALS
WHEREAS , Employee has been employed by Employer as its
Executive Vice President, Chief Financial Officer, Secretary, and
Treasurer, and has served as a Director of Employer’s Board
of Directors.
WHEREAS , Employee has executed the resignation letter
attached hereto as Exhibit A , indicating
Employee’s employment and any other duties with Employer and
its subsidiaries have terminated effective February 1, 2005
(“ Cessation Date ”); and
WHEREAS , the parties, in order to settle and compromise
fully and finally any and all claims and potential claims arising
out of Employee’s employment and the cessation thereof, have
agreed to resolve these matters on the terms and conditions set
forth herein.
AGREEMENT
NOW, THEREFORE , in consideration of the mutual promises and
covenants contained herein, the parties agree as
follows:
1.
Recitals . The recitals set forth above are true, accurate,
and correct, and are incorporated in this Agreement by this
reference and made a material part of this Agreement.
2.
Consideration .
A.
Severance Payments . In consideration for Employee’s
execution of and compliance with this Agreement, Employer agrees
tender to Employee severance in the amount of One Hundred and
Sixty-Five Thousand Dollars and 00/100 ($165,000.00) (“
Severance Pay ”), which represents nine months of
(gross) base pay. Said Severance Pay shall be payable to
Employee in nine equal installments of $18,333.33, minus statutory
deductions, payable on the first day of each month during the
Severance Period. The period commencing on Cessation Date and
ending on October 1, 2005 shall be referred to as the “
Severance Period ”. The parties agree that the first
installment shall be tendered to Employee on February 1, 2005
provided that Employee has executed and delivered this Agreement,
and provided Employee has not revoked this Agreement under
Section 11 hereto.
B.
Stock Options . The parties hereto acknowledge that, as of
the date of this Agreement, Employee holds the options to purchase
common stock of Employer (the “ Options ”), as
set forth on Exhibit B-1 . The Options set forth on
Exhibit B-2 shall be exercised by Employee within
90 days following the Cessation Date or cancelled pursuant to
their terms. As further and additional consideration for
Employee’s execution of and compliance with this Agreement,
and notwithstanding any provision of Employer’s stock option
plans or any stock option agreement with Employee covering such
Options to the contrary, Employer shall extend the expiration date
of the Options set forth on Exhibit B-3 to, and
Employee shall have the right to exercise such Options set forth on
Exhibit B-3 until, the earlier of
(a) February 1, 2010; or (b) the expiration date of
the respective Option pursuant to the stock option agreement
covering such Option. All other Options set forth on
Exhibit B-1 that are not set forth on Exhibits B-2
or B-3 shall be cancelled as of the Cessation Date.
C.
COBRA Premium Reimbursement . As further and additional
consideration for Employee’s execution of and compliance with
this Agreement, Employer shall reimburse the cost of the premium
for continuation of group health insurance coverage for Employee,
his spouse and dependents, to the extent they were plan
participants as of Employee’s Cessation Date, should
Employee, his spouse and dependents (collectively referred to as
Employee’s Qualified Beneficiaries) elect continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act
of 1987, as amended, (COBRA) until January 31, 2006, or until
Employee and Employee’s Qualified Beneficiaries are covered
under another health insurance plan, whichever is earlier. Employee
shall be responsible for timely payment to continue any insurance
benefits under this Section 2C . Employer shall
reimburse Employee upon Employee’s submission of proof of
payment. Employee understands, acknowledges, and agrees that in no
event shall Employee continue to pay the premium for continued
group health insurance coverage for Employee and/or his Qualified
Beneficiaries any time after January 31, 2006 and, thereafter.
Commencing with coverage for the month of February 2006,
Employee and his Qualified Beneficiaries shall be fully and solely
financially responsible for the payment of premiums for the
continuation of group health insurance coverage for themselves
under COBRA. Further, Employee acknowledges and agrees that, if
Employee is eligible for such coverage, he has received a COBRA
notice advising Employee of Employee’s rights to continuation
coverage for group health insurance.
D.
Executive Outplacement Services . Employer shall provide to
Employee nine months of executive outplacement services, commencing
on the Cessation Date. The provider of these services shall be
selected by Employer and any changes to the agreed upon services
with the provider must be approved in advance by Employer’s
Vice President of Human Resources.
3.
Adequate Consideration . Employee acknowledges and agrees
that the consideration to Employee set forth in
Section 2 (including Subparagraphs) of this Agreement
is in addition to anything of value to which Employee is, as a
matter of law, otherwise entitled. Employee represents and agrees
that he is not entitled to and shall not receive any further
compensation, including salary, bonuses, vacation pay, or employee
benefits after the Cessation Date, provided Employee is not waiving
any rights to vested employee benefits, if any, as provided in
applicable benefit plans.
4.
Release . In consideration of his receipt of the severance
package set forth in Section 2 of this Agreement, Employee
hereby fully, forever, irrevocably, and unconditionally releases
and discharges Employer, including Employer’s past and
present officers, directors, stockholders, subsidiaries,
affiliates, agents, employees, representatives, lawyers,
administrators, spouses, and all persons acting by, through, under,
or in concert with them (collectively, the “ Released
Parties ”), from any and all claims or damages which he
may have against them, or any of them, which could have arisen out
of any act or omission occurring from the beginning of time to the
effective date of this Agreement, whether now known or unknown,
asserted or unasserted. This release includes, but is not limited
to, any and all claims under Title VII of the Civil Rights Act of
1964, as amended; the Age Discrimination in Employment Act of 1967,
as amended; the Americans with Disabilities Act; the Fair Labor
Standards Act, as amended; the Family Medical Leave Act; COBRA,
ERISA; the Arizona Civil Rights Act; Arizona Employment Protection
Act; Arizona Wage Payment Statute; or under any other provision or
theory o
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