exv10w1



 




Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

THIS SEPARATION AGREEMENT AND RELEASE (“Agreement”) is entered into between Home Solutions of America, Inc., its
related and affiliated entities (“HSA” or the “Company”), and Rick J. O’Brien (“O’Brien”), and is intended to be a full
and final resolution of all matters involving O’Brien’s employment with HSA. Specifically, the parties to this
Agreement agree to the following:



1. Termination of Employment. Pursuant to Section 4.01(c)(ii) of the Amended and Restated
Employment Agreement entered into as of September 8, 2006, between O’Brien and HSA (the “Employment Agreement”),
O’Brien shall voluntarily resign from all of his positions of employment with HSA effective as of April 15, 2007 (the
“Employment Termination Date”). Prior to the Employment Termination Date, O’Brien will continue to fulfill his
obligations under Section 1.03 of the Employment Agreement, which shall include but not be limited to drafting,
reviewing and commenting on, and providing such information as may be requested by the Company in connection with, the
Form 10-K for the fiscal year ended December 31, 2006, and the proxy statement for the 2007 annual meeting of
shareholders. Prior to the Employment Termination Date, all of the terms of the Employment Agreement shall continue to
be in effect. Execution of this Agreement by O’Brien shall be deemed to be written notice to HSA on such date of
O’Brien’s voluntary termination of employment.



2. Continuing Cooperation. Following the Employment Termination Date, O’Brien shall in good faith
cooperate with, and promptly respond to, all reasonable requests by the Company for assistance in regard to (a) HSA’s
involvement in pending and future litigation; and (b) miscellaneous corporate matters overseen by O’Brien during his
tenure at HSA or of which O’Brien has knowledge. HSA shall provide O’Brien with reasonable advance notice in regard to
any request it makes to him for assistance and shall compensate him for reasonable out-of-pocket expenses he incurs in
providing the assistance.



3. Bonus. If HSA’s performance for its fiscal year 2006, as verified by HSA’s audited financial
statements for the year, exceeds (a) the Level I Objective Criteria or (b) both the Level I and Level II Objective
Criteria, as established by HSA’s Executive Compensation Plan, then HSA will pay to O’Brien a bonus of $150,000 payable
in cash, if only the Level I Objective Criteria is achieved, or if both the Level I and Level II Objective Criteria are
achieved, a Level I Bonus of $150,000 and a Level II Bonus of $100,000 for an aggregate bonus of $250,000 payable in
cash (in either such case, the “Bonus Payment”). The Bonus Payment, if due, will be paid to O’Brien at the later of
the same date as the Company pays corresponding bonuses under HSA’s Executive Compensation Plan to other employees or
upon the effective date of this Agreement as provided for in Section 10(e) of this Agreement. The parties acknowledge
that no bonus (in cash, stock, or otherwise) other than the Bonus Payment, if owed to O’Brien pursuant to this
Section 3, is or shall be due to O’Brien under this Agreement, the Employment Agreement or any other agreement
or arrangement between O’Brien and HSA.



1

 


1








 



4. Liability Insurance. After the Employment Termination Date, the Company will continue to provide
O’Brien with indemnification and advancement of expenses as provided for by the articles and bylaws of the Company in
regard to claims and lawsuits pending as of the Employment Termination Date and claims and lawsuits arising after the
Employment Termination Date relating to matters occurring before or on the Employment Termination Date. After the
Employment Termination Date, HSA will maintain liability insurance that will cover O’Brien on the same basis as he was
covered immediately prior to the Employment Termination Date under HSA’s directors and officers liability insurance
policy in regard to covered claims made against O’Brien, regardless of whether a claim is asserted or a claim relates
to a matter which occurred prior to or after the Employment Termination Date.



5. Stock Options. This Agreement shall not modify or amend the terms of the Stock Option Agreement
between O’Brien and HSA dated December 13, 2005, or the terms and conditions of the stock option grant made pursuant
thereto under HSA’s 1998 Stock Option Plan, all of which shall continue in effect until terminated pursuant to the
terms of the Stock Option Agreement.



6. Benefits. All of O’Brien’s employment benefits from HSA will terminate as of the Employment
Termination Date, except where provided for in this Agreement, by HSA’s policies, or by an applicable statute.



7. Return of HSA Property. Except as authorized by HSA’s Chief Executive Officer, as of the Employment
Termination Date O’Brien will return to HSA all Company-owned or leased property or documents in his possession or
under his control.



8. Confidential Information; Non-competition. After the Employment Termination Date, O’Brien shall
continue to comply with all of his obligations and duties in regard to (a) HSA’s Confidential Information as set out in
Section 5.03 of the Employment Agreement and (b) the non-competition and non-interference covenants and
agreements of O’Brien as set out in Section 6 of the Employment Agreement. After the Employment Termination
Date, O’Brien will not access HSA’s computer systems, download files or information from HSA’s computer systems or in
any way interfere, disrupt, modify or change any computer program used by HSA or any data stored on HSA’s computer
systems.



9. Release. O’Brien, on behalf of himself and his heirs, executors or administrators, hereby releases,
discharges and agrees not to sue or file any charges or claims against HSA, its directors, officers, shareholders,
employees, agents, insurers, or employee benefit plans under any local, state, or federal law, for any type of claim,
demand or action whatsoever arising out of or connected with his employment with HSA. This release does not affect
O’Brien’s right to benefits under the terms of any employee benefit plan in which he participated while employed by HSA
or under applicable law or his right to enforce the terms of this Agreement.



10. Waiver of Age Discrimination Claim. Pursuant to the Age Discrimination in Employment Act of 1967 (29
U.S.C. §626), O’Brien acknowledges:



(a) He has been encouraged to have this Agreement reviewed by an attorney;



2

 


2








 



(b) He is releasing all claims relating to his employment and separation from employment under the Age
Discrimination in Employment Act of 1967;



(c) He is not waiving any rights or claims that may arise after the date this Agreement is signed;



(d) He has a minimum of twenty-one days from the date he receives this Agreement to consider this
Agreement;



(e) For a period of seven days following the date O’Brien signs this Agreement, O’Brien may revoke this
Agreement and this Agreement shall not become effective or enforceable until the revocation period expires.
In order for the revocation to be effective it must be in writing and delivered to HSA’s Chief Financial
Officer in Dallas, Texas;



(f) By executing this Agreement, O’Brien represents that he fully understands all provisions of the
Agreement and understands the consequences of executing this Agreement.



11. No Harm. O’Brien will not engage in any conduct or take any action, written or oral, that is intended
to reflect negatively on or harm the reputation or business interest of HSA. O’Brien agrees not to interfere with
HSA’s operations or its relationships with its employees, vendors and customers. The Company’s senior management will
not engage in any conduct or take any action, written or oral, that is intended to reflect negatively on or harm the
business interests of O’Brien. However, nothing in this Section shall limit either party from complying with its or
his legal obligations, including without limitation in regard to reporting O’Brien’s resignation from his employment
with HSA or from responding to requests from public agencies or subpoenas for information regarding O’Brien and/or his
resignation.



12. Public Disclosure of this Agreement. It is the express intent of the parties that this Agreement and
its terms and conditions be disclosed as required by law, including, without limitation, the applicable provisions of
the federal securities laws.



13. Entire Agreement/Modification. This Agreement sets forth the entire agreement between the parties
relating to the subjects of this Agreement and fully supersedes any and all prior agreements or understandings between
the parties regarding the subjects in this Agreement. No change or modification of this Agreement shall be valid or
binding upon the parties unless such change or modification is in writing and signed by the parties.



14. Severability. The parties intend all provisions of this Agreement to be enforced to the fullest
extent permitted by law. Accordingly, should a Court determine that the scope of any provision of this Agreement is
too broad to be enforced as written, the parties intend that the court reform the provision to such narrower scope as
it determines to be reasonable and enforceable.



15. Governing Law. This Agreement shall be governed by, enforced under and construed in accordance with
the laws of the State of Texas.



3

 


3








 



16. Acknowledgment. By signing below, the parties certify and represent that they have carefully read and
considered this Agreement and fully understand the extent and impact of its provisions. The parties acknowledge they
have signed this Agreement voluntarily. The terms and provisions set out in this Agreement represent a full and final
resolution of O’Brien’s employment relationship with HSA.



	 	 	 
	RICK J. O’BRIEN:
	 	HOME SOLUTIONS OF AMERICA, INC.
	 
	 	

	/s/ Rick J. O’Brien
	 	By: /s/ Frank J. Fradella
	 
	 	 
	Rick J. O’Brien
	 	Name: Frank J. Fradella
	 
	 	Its: Chief Executive Officer
	 
	 	 
	March 2, 2007
	 	March 2, 2007
	 
	 	 
	Date signed
	 	Date signed




4

 


4