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SEPARATION AGREEMENT
This Separation Agreement (this "Agreement" ) is made and
entered into as of the 24th day of January, 2007, by and between
Integrity Mutual Funds, Inc., a North Dakota corporation (the
"Company" ) and Robert E. Walstad, an individual residing at
Minot, North Dakota ( "Employee" ).
WITNESSETH
Whereas, Employee and the Company entered into an employment
agreement dated October 1, 2001 (the "Employment Agreement"
);
Whereas, Employee has elected to retire from his employment with
the Company and terminate the Employment Agreement on February 1,
2007;
Whereas, in accordance with the exhibits accompanying this
Agreement, Employee hereby resigns as Chairman of the Board of
Directors, director and Chief Executive Officer of the Company and
as director, President and Treasurer of Integrity Money Management,
Inc. and Integrity Fund Services, Inc. and accepts his position as
Chairman Emeritus of the Company; and
Whereas, the Company and Employee desire, pursuant to this
Agreement, to set forth their respective obligations to one another
and to settle all matters or claims relating to Employee's
employment with and separation from the Company which Employee may
have against the Company and its subsidiaries and affiliates,
including, without limitation, all matters or claims relating to
salary, wages, bonuses, accrued vacation pay, employee benefits,
fringe benefits, separation and expense reimbursement;
Now, Therefore, in consideration of the mutual covenants and
premises set forth herein and the Separation Payment (hereinafter
defined), and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged and confessed, the
parties hereto hereby agree as follows:
1. Separation
Payment and Stock Options. (a) The Company agrees to pay
Employee, and Employee agrees to accept, Two Hundred Seventy Four
Thousand Five Hundred Dollars ($274,500) (the "Separation
Payment" ) in full and final settlement and satisfaction of any
Claims (hereinafter defined) which Employee may have against
Employee Releasees (hereinafter defined). The Separation
Payment shall be paid by the Company to Employee in equal,
bi-weekly payments (less required withholding deductions including
federal and state taxes and FICA) commencing on the first regularly
scheduled pay date of the Company after the date of this Agreement
and continuing until the Separation Payment is paid in full on or
before August 16, 2009 (the "Termination Date"
).
(b) The Company acknowledges
that the stock options and warrants to purchase shares of the
Company's common stock granted to Employee prior to the date of
this Agreement shall continue in effect as if Employee's employment
has not terminated.
(c) The Company shall pay to
the Employee the Employee's vested balance in the Company's
Employee Stock Ownership Plan on the Termination Date, or as soon
as practicable thereafter.
(d) On February 1, 2007,
Employee shall receive options to purchase 60,000 shares of the
common stock of the Company at a strike price equal to the higher
of the highest asking price or highest trading price (as determined
by NASDAQ Electronic Bulletin Board quotation) of the Company's
common stock on September 1, 2006. On September 1, 2007,
Employee shall receive options to purchase 60,000 shares of the
common stock of the Company at a strike price equal to the higher
of the highest asking price or highest trading price (as determined
by NASDAQ Electronic Bulletin Board quotation) of the Company's
common stock on September 1, 2007, or the next business day if
NASDAQ is closed on such day.
(e) In the event of any
reclassification, increase or decrease in the number of the issued
shares of common stock of the Company by reason of a split,
reverse-split, sale or spin-off of any business unit of the
Company, then Employee's proportionate interest in such options and
warrants shall be maintained as before the occurrence of such event
so that (i) as to the number of outstanding unexercised warrants or
options granted to Employee, there shall be a corresponding
proportional adjustment as to the class and number of shares
covered by each option and warrant and (ii) as to the exercise
price under each such option and warrant, there shall be a
corresponding proportional adjustment in the total exercise price
applicable to said options and warrants.
2.
Benefits. (a) The Company shall provide to
Employee from the date of this Agreement to and including the
Termination Date coverage of group health, dental and vision
insurance afforded to other employees of the Company. If
Employee secures full-time employment elsewhere or becomes
self-employed and obtains insurance coverage, Employee shall
immediately notify the Company in which event such insurance
coverage by the Company shall terminate to the extent permitted
under applicable law.
(b) Employee shall be
entitled to participate in the Company's 401(k) Plan and to any
applicable Company matching contributions thereunder prior to the
Termination Date.
(c) Employee shall be
entitled to 90% of all commissions collected by Employee as an
agent to Capital Financial Services, Inc., a wholly-owned
subsidiary of the Company, to and including the Termination
Date. The Company shall pay the costs of an error and
omissions insurance policy to cover Employee to and including the
Termination Date relating to his business activities transacted
through Capital Financial Services, Inc.
(d) The Company shall pay to
the Employee within sixty (60) days of this Agreement compensation
for any accrued vacation unused by the Employee prior to the date
of this Agreement.
3. General
Release. (a) Employee, on behalf of himself and his
spouse, dependents, agents, heirs, executors, administrators,
personal representatives and assigns, and to the fullest extent
permitted by applicable law, hereby releases and forever discharges
the Company, its subsidiaries and affiliates and their respective
shareholders, their past and present officers, directors, agents
and employees (hereinafter referred to collectively as the
"Employee Releasees" ) from any and all claims, demands,
liabilities, obligations, damages, debts, causes of action, suits
and disputes of any nature whatsoever, whether known or unknown,
suspected or unsuspected, fixed or contingent (hereinafter referred
to collectively as the "Claims" ), which, as of the date
hereof or any time prior thereto, Employee has had or may have had
against any of the Employee Releasees with respect to any and all
matters whatsoever, including, without limitation, any and all
Claims related to (i) the Employment Agreement, (ii) salary, wages,
bonuses, accrued vacation pay, employee benefits, separation or
other compensation of any nature whatsoever or (iii) Employee's
employment with the Company, or the termination thereof, or arising
under or based upon, directly or indirectly, in whole or in part,
Title VII of the Civil Rights Act of 1964 as amended, the Civil
Rights Act of 1991 as amended, the Americans with Disabilities Act
of 1990 as amended, the Family and Medical Leave Act of 1993 as
amended, the Human Rights Act as amended, the Age Discrimination in
Employment Act of 1967, as modified by the Older Workers Benefit
Protection Act of 1990 as amended, Section 1981 of the Civil
Rights Act of 1870 as amended, the Fair Labor Standards Act of 1938
as amended, the Equal Pay Act of 1963 as amended, the North Dakota
Equal Pay Act as amended, the Employee Retirement Income Security
Act of 1974 as amended, the Rehabilitation Act of 1973 as amended,
the Equal Employment Opportunity Act of 1972 as amended and any
state or local equal employment opportunity or age discrimination
law, wage payment law or workers' compensation law, or any other
federal, state or local law, statute, ordinance, decision, order,
policy or regulation establishing or relating to claims or rights
of employees, including, without limitation, any and all claims
alleging interference with the attainment of any rights under any
insurance, pension, profit sharing or other employee benefit plan,
any and all claims in tort or contract and any and all claims
alleging breach of an express or implied, or oral or written,
contract, policy manual or employee handbook, or alleging
misrepresentation, defamation, interference with contract, duress,
intentional or negligent infliction of emotional distress,
negligence or wrongful discharge, provided, however, that
Employee is not releasing any Employee Releasees in respect of
Claims for breach of this
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