WAIVER AND RELEASE
AGREEMENT
This Waiver and Release Agreement (the
“Agreement”) is entered into on this 11th day of June
2009 by and between David Borshell (“Employee”) and
Image Entertainment, Inc. (the “Company”).
WHEREAS, Employee was employed by the Company in
the role of President, pursuant to an Employment Letter Agreement,
dated April 1, 2008, as amended on December 22, 2008 (the
“Employment Agreement”);
WHEREAS, the Company notified Employee of its
decision to terminate Employee’s employment with the Company
without cause effective March 12, 2009;
WHEREAS, Employee and the Company desire to
settle fully and finally all differences that may exist between
them, including, but in no way limited to, issues related to
Employee’s employment and/or termination of employment from
the Company;
NOW, THEREFORE, in consideration of the mutual
covenants and promises herein contained and other good and valuable
consideration, receipt of which is hereby acknowledged, it is
hereby agreed by and between the parties as follows:
1. Separation of Employment .
Employee’s last day of employment with the Company was
March 12, 2009 (the “Termination Date”). As of the
Termination Date, Employee has not been employed by the Company in
any capacity, nor has Employee served the Company as an officer.
Moreover, as of the Termination Date, the Employment Agreement has
terminated and is of no further force or effect.
2. Separation Pay and Benefits . In
consideration for the promises set forth in this Agreement, and
pursuant to the specific terms set forth in Section 3, below,
the Company shall provide the following separation pay and benefits
(the “Separation Pay and Benefits”) to
Employee:
(a) A lump sum amount of One Hundred Eleven
Thousand, One Hundred and Fifty-Three Dollars and 84/100 cents
($111,153.84), which is equal to Employee’s base salary from
March 13, 2009 through June 30, 2009. This payment shall
be made by the Company to Employee on the eighth (8th) day
following Employee’s execution of this Agreement, provided
that Employee has not revoked this Agreement;
(b) All alleged unpaid vacation pay in the
total amount of Nine Thousand, Eight Hundred and Twenty-Four
Dollars and 19/100 cents ($9,824.19). This payment shall be made by
the Company to Employee on the eighth (8th) day following
Employee’s execution of this Agreement, provided that
Employee has not revoked this Agreement;
(c) Base salary continuation payments, in
the amount of $35,416.67 per month, for the ten (10) month period
beginning July 1, 2009 and ending April 30, 2010, in
accordance with the Company’s regular payroll
practices;
(d) Reimbursement for the out of pocket
expenses Employee has incurred for COBRA continuation payments made
for the months of April, May and June 2009 for medical and
dental insurance continuation coverage for himself and his
dependents. This payment shall be made by the Company to Employee
within ten (10) days of Employee’s submission to the
Company of documentation demonstrating the out of pocket expenses
incurred by Employee; and
(e) The full amount of COBRA continuation
coverage for Employee’s and his dependents’ medical and
dental insurance for twelve (12) months, beginning on
July 1, 2009 and ending June 30, 2010; provided that
Employee is eligible for COBRA and properly elects such
continuation coverage. Such payment shall be made directly by the
Company to the applicable insurance provider.
3. Withholdings . The payments set
forth in Section 2(a), (b), and (c) shall be subject to
all applicable federal, state and local withholdings. All of the
payments made to Employee set forth in Section 2 shall be
delivered to Employee by the Company via personal delivery or
overnight mail, to Employee’s last known address of record,
on the date(s) described above. In addition, the parties hereby
agree that it is their intention that all payments or benefits
provided under this Agreement comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”)
and this Agreement shall be interpreted accordingly. Employee
hereby is advised to seek independent advice from Employee’s
tax advisor(s) with respect to the application of Section 409A
of the Code to any payments under this Agreement. Notwithstanding
the foregoing, the Company does not guarantee the tax treatment of
any payments or benefits under this Agreement, including without
limitation under the Code, federal, state or local laws.
4. Warranty . Employee acknowledges
and agrees that the Separation Pay and Benefits provided to
Employee under the terms of this Agreement are in addition to
anything of value to which Employee is otherwise entitled and that
Employee would not receive the Separation Pay and Benefits except
for Employee’s decision to sign this Agreement and to fulfill
the promises set forth herein. Employee further acknowledges that,
other than the Separation Pay and Benefits, he has received all
wages, accrued but unused vacation pay, equity interests and other
benefits due him as a result of his employment with and termination
from the Company.
5. Release of Known and Unknown Claims
By Employee . In exchange for the Separation Pay and Benefits
set forth in Section 2 above, and in consideration of the
further agreements and promises set forth herein, Employee agrees
unconditionally and forever to release and discharge the Company
including the Company’s current and former officers,
directors, shareholders, employees, representatives, attorneys and
agents, as well as all of their predecessors, parents,
subsidiaries, affiliates, successors in interest and assigns
(collectively, the “Releasees”) from any and all
claims, actions, causes of action, demands, rights, or damages of
any kind or nature which Employee may now have, or ever have,
whether known or unknown, including any claims, causes of action or
demands of any nature arising out of or in any way relating to
Employee’s employment with, or termination from the Company
on or before the date Employee signs this Agreement.
2
This release specifically includes, but is not
limited to, any claims for fraud; breach of contract; breach of
implied covenant of good faith and fair dealing; inducement of
breach; interference with contract; wrongful or unlawful discharge
or demotion; violation of public policy; assault and battery;
invasion of privacy; intentional or negligent infliction of
emotional distress; intentional or negligent misrepresentation;
conspiracy; failure to pay wages, benefits, vacation pay, severance
pay, attorneys’ fees, or other compensation of any sort;
wrongful termination; retaliation; wrongful demotion;
discrimination or harassment on any basis protected by federal,
state or local law including, but not limited to age, race, color,
sex, gender identity, national origin, ancestry, religion,
disability, handicap, medical condition, marital status, and sexual
orientation; any claim under Title VII of the Civil Rights Act of
1964, as amended, the Americans with Disabilities Act, the Age
Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act, the California Fair Employment and Housing
Act, or Section 1981 of Title 42 of the United States Code;
violation of any safety and health laws, statutes or regulations;
or any other wrongful conduct, based upon events occurring prior to
the date of execution of this Agreement.
Employee further agrees knowingly to waive the
provisions and protections of Section 1542 of the California
Civil Code, which reads:
A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
The parties intend this release by Employee to
be a full and comprehensive general release waiving and releasing
all claims, demands, and causes of action, known or unknown, to the
fullest extent permitted by law. Nothing in this Agreement is
intended to nor shall it be interpreted to release any claim under
California Labor Code Section 2802 or any other claim which,
by law, may not be released.
6. Additional Representations and
Warranties By Employee . Employee represents that Employee has
no pending complaints or charges against the Releasees, or any of
them, with any state or federal court, or any local, state or
federal agency, division, or departmen
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