SEPARATION AND GENERAL RELEASE AGREEMENT
Exhibit 10.1
SEPARATION AND GENERAL RELEASE AGREEMENT
This Separation and General Release Agreement (the “Agreement”) is being entered into by and between Local Corporation (“Employer” or the “Company”) and Xxxxx Xxxxxx (“Employee”) (collectively the “Parties”) as of the date of Employee’s execution of this Agreement (the “Date of this Agreement”).
WHEREAS, the Parties previously entered into that certain Third Amended and Restated Employment Agreement (the “Employment Agreement”) dated December 15, 2011;
WHEREAS, the Parties have agreed to end the employment relationship and this Agreement shall serve as Employer’s notice to Employee that Employer is terminating the employment of Employee without Cause pursuant to Section 5.2(b) of the Employment Agreement; and
WHEREAS, Employee is entitled to receive severance and other benefits pursuant to Section 5.2(c) of the Employment Agreement, provided Employee signs this Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the terms and conditions set forth below, the Parties agree as follows:
1. Acknowledgment. Employee hereby acknowledges receipt of this Agreement on January 10, 2014 (the “Acknowledgment Date”). Employee hereby acknowledges that Employer is terminating the employment of Employee without Cause pursuant to Section 5.2(b) of the Employment Agreement effective as of the Acknowledgement Date. Employee understands that should he agree to this Agreement, including all exhibits attached thereto, he would give up any right or claim to compensation or benefits of employment with the Company beyond the Acknowledgment Date, except as set forth in this Agreement. On the Acknowledgment Date, Employee will be paid all unpaid, earned wages, including without limitation, any accrued, unused vacation pay, except that Employee’s earned 2H 2013 bonus, if any, will be paid in accordance with the normal payment policies of the Company when and if declared by the Board of Directors of the Company.
2. Compensation to Employee for General Release. Provided that Employee delivers a signed copy of this Agreement to the Company within twenty-one (21) days after his receipt of this Agreement, and does not revoke this Agreement within seven (7) days after he signs it, the Company will pay to Employee, pursuant to Section 5.2(c) of the Employment Agreement, an amount equal to $753,652 less any downward adjustments to Bonuses actually paid to Employee, as subsequently determined by the Board of Directors of the Company and plus any upward adjustments to Bonuses actually paid to Employee, as subsequently determined by the Board of Directors of the Company, which represents the Employee’s current Annual Salary and one times (1x) all Bonuses received by Employee in the immediately preceding twelve (12) months, which amount shall be payable and allocated in accordance with Exhibit A attached hereto (the “Severance Payment”) and if Employee elects to continue his health care insurance coverage under COBRA, the Company will pay Employee’s health insurance premium for Employee and any covered dependants for the first twelve (12) months following the Acknowledgment Date (the “Benefit Continuation”), as such premiums are incurred by Employee. Employee will continue to serve on the Employer’s Board of Directors and as such, Employee’s stock options will continue to vest and be
exercisable in accordance with their terms through the one (1) year period after which Employee’s service to the Board of Directors terminates. Employee understands that the Severance Payment and Benefit Continuation represent the Company’s sole financial obligation to Employee under this Agreement and the Employment Agreement.
3. Cooperation; Consulting; Return of Property.
a. Employee will make himself available at reasonable times upon reasonable request of the Company to the extent reasonably needed by the Company to (i) complete documentation or provide information relating to the period during which Employee was employed by the Company, and (ii) provide certain transitional services, as directed by the Board, including up to three (3) days in the office in the two (2) week period immediately following the Acknowledgement Date.
b. In addition to the foregoing, Employee will enter into that certain consulting agreement attached hereto as Exhibit B (the “Consulting Agreement”). Employee understands, acknowledges and agrees that the payment schedule for the Severance Payment attached hereto as Exhibit A represents a material deviation from the payment schedule for the Severance Payment provided for in the Employment Agreement and that such modified payment schedule represents full and complete consideration for entering into the Consulting Agreement for no additional cash consideration, except as outlined therein. Further, the Parties agree that in the event the Employee shall materially fail to meet Employee’s obligations under the Consulting Agreement, then any portion of the Severance Payment that remains due and owing to Employee shall be forfeited by Employee as a reasonable reimbursement by the Employee to the Company for material failure to provide the services set forth in the Consulting Agreement.
c. Employee shall return all Company property as of the Acknowledgement Date, including without limitation, all computers, credit cards, phones, except that Employee shall be permitted to retain the tablet and cell phone (including cell phone number) previously issued to Employee.
4. Release by Employee.
a. General Release. In exchange for the Severance Payment, including any reduction thereto pursuant to Section 3 hereof, the Benefit Continuation and the other consideration set forth in this Agreement, Employee does hereby release and forever discharge the “Company Releasees” herein, consisting of Employer, its parent, subsidiary and affiliate corporations, and each of their respective past and present parents, subsidiaries, affiliates, associates, owners, members, stockholders, predecessors, successors, assigns, employees, agents, directors, officers, partners, representatives, lawyers, and all persons acting by, through, under, or in concert with them, or any of them, of and from any and all manner of claims or causes of action, in law or in equity, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), that Employee now has or may hereafter have against the Company Releasees by reason of any and all acts, omissions, events or facts occurring or existing prior to the
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Date of this Agreement. The Claims released hereunder include, without limitation, any alleged breach of any express or implied employment agreement; any alleged torts or other alleged legal restrictions relating to the Employee’s employment and the termination thereof; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, 42 USC Section 2000, et seq.; Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; Civil Rights Act of 1866, and Civil Rights Act of 1991; 42 USC Section 1981, et seq.; Age Discrimination in Employment Act, as amended, 29 USC Section 621, et seq.; Equal Pay Act, as amended, 29 USC Section 206(d); regulations of the Office of Federal Contract Compliance, 41 CFR Section 60, et seq.; The Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; and the California Fair Employment and Housing Act, California Government Code Section 12940, et seq, as well as all Florida and Connecticut state laws of a similar nature. This release shall not apply to the Company’s obligations hereunder, to any vested retirement plan benefits, Employee’s rights under Labor Code Section 2802 with respect to claims asserted against him, or his rights as a stockholder of the Company.
b. Unknown Claims.
Employee acknowledges that Employee is familiar with the provisions of California civil code section 1542, which provides as follows:
“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.”
Employee being aware of said code section, hereby expressly waives any rights Employee may have thereunder, as well as under any other statutes or common law principles of similar effect.
c. Older Worker’s Benefit Protection Act.
Employee agrees and expressly acknowledges that this Agreement includes a waiver and release of all claims which he has or may have under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. § 621, et seq. (“ADEA”). The following terms and conditions apply to and are part of the waiver and release of the ADEA claims under this Agreement:
(1) This Section, and this Agreement are written in a manner calculated to be understood by him.
(2) The waiver and release of claims under the ADEA contained in this Agreement does not cover rights or claims that may arise after the Date of this Agreement.
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(3) This Agreement provides for consideration in addition to anything of value to which he is already entitled.
(4) Employee has been advised to consult an attorney before signing this Agreement.
(5) Employee has been granted twenty-one (21) days after he is presented with this Agreement to decide whether or not to sign this Agreement. If he executes this Agreement prior to the expiration of such period, he does so voluntarily and after having had the opportunity to consult with an attorney, and hereby waives the remainder of the twenty-one (21) day period.
(6) Employee has the right to revoke this general release within seven (7) days of signing this Agreement. In the event this general release is revoked, this Agreement will be null and void in its entirety, and he will not receive the Payment or the Benefit Continuation.
If he wishes to revoke this agreement, Employee shall deliver written notice stating his intent to revoke this Agreement to Xxxxx Xxxxxx, General Counsel at the offices of Employer on or before 5:00 p.m. on the seventh (7th) day after the Date of this Agreement.
d. No Assignment. Employee represents and warrants to the Company Releasees that there has been no assignment or other transfer of any interest in any Claim that the Employee may have against the Company Releasees, or any of them. Employee agrees to indemnify and hold harmless the Company Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any person asserting such assignment or transfer of any right or claims under any such assignment or transfer from Employee.
e. No Actions. Employee represents and warrants that he is not presently aware of any injury for which he may be eligible for workers’ compensation benefits. Employee agrees that if Employee hereafter commences, joins in, or in any manner seeks relief through any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against the Company Releasees any of the Claims released hereunder, then Employee will pay to the Company Releasees against whom such claim(s) is asserted, in addition to any other damages caused thereby, all attorneys’ fees incurred by such Company Releasees in defending or otherwise responding to said suit or Claim. Provided, however, that Employee shall not be obligated to pay the Company Releasees’ attorney’s fees to the extent such fees are attributable to claims under the Age Discrimination in Employment Act or a challenge to the validity of the release of claims under the Age Discrimination in Employment Act.
5. Non-Disparagement/Litigation Assistance. Employee agrees to refrain from any disparagement, defamation, or slander of the Company, its subsidiaries, employees, investors, officers, directors, shareholders, agents, or partners, and Employee agrees to refrain from any tortious or wrongful interference with Company’s contracts and relationships.
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Employer agrees to refrain from any disparagement, defamation, or slander of Employee. Employee agrees not to assist in the prosecution of litigation against Company, its officers, directors, or employees, except as compelled by legal process, and Employee further agrees not to commence, maintain, prosecute or participate in (except as may be required by law, pursuant to court order, or in response to a valid subpoena) any action, charge, complaint, or proceeding of any kind (on his own behalf and/or on behalf of any other person or entity and/or on behalf of or as a member of any alleged class of persons) in any court, or before any administrative or investigative body or agency (whether public, quasi-public or private) against Company, its officers, directors, or employees, with respect to any act, omission, transaction or occurrence arising out of employment or this Agreement. This provision will not apply to conduct as to which this provision would be unlawful.
6. No Admission. The Parties further understand and agree that neither the payment of money nor the execution of this release shall constitute or be construed as an admission of any liability whatsoever by the Company Releasees.
7. Severability. The provisions of this Agreement are severable, and if any part of it is found to be unenforceable, the other Sections (or portions thereof) shall remain fully valid and enforceable.
8. Confidentiality. The terms of this Agreement are intended to be confidential by the parties. Employer would not enter into this Agreement but for Employee’s promise to maintain the confidentiality of the terms of and existence of this Agreement. Employee may not disclose the terms of this Agreement to any person, except that Employee may disclose the terms of this Agreement as may be required by law or to his immediate family, attorneys, tax and financial advisors, provided that such individuals agree to be bound by the confidentiality provisions of this Agreement. Company will be required to disclose the terms of this Agreement, including a copy of this agreement, with the Securities and Exchange Commission on Form 8-K.
9. Arbitration/Waiver of Jury Trial. The Parties hereby agree to submit any claim or dispute between Employee and the Company or any of the Company Releasees, including any dispute arising out of or relating to the terms of this Agreement, Employee’s employment or the termination thereof to binding arbitration by a single neutral arbitrator experienced in employment law. Subject to the terms of this Section, the arbitration proceedings shall be governed by the rules of the Judicial Arbitration and Mediation Services (“JAMS”) applicable to employment disputes as they may be in effect from time to time, and shall take place in Orange County, California. The arbitrator shall be appointed by agreement of the Parties hereto or, if no agreement can be reached, by JAMS pursuant to its rules. The decision of the arbitrator shall be rendered in writing and be final and binding on all Parties to this Agreement, and judgment thereon may be entered in any court having jurisdiction. All fees and costs payable to the Arbitrator or JAMS shall be paid by the Parties in accordance with JAMS rules; provided, however, that Employee shall not be required to pay any amount to the Arbitrator or JAMS that would be unique to arbitration or exceed the costs Employee would incur in pursuing the same claim(s) and action(s) in a court of competent jurisdiction. Any shortfall shall be paid by the Company. Each party shall bear his or its own attorneys’ fees, expert witness fees, witness expenses and other costs; provided, however, that the Arbitrator
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may award such costs, fees or expenses in accordance with applicable law. This arbitration procedure is intended to be the sole and exclusive method of resolving any dispute between Employee, the Company and/or the Company Releasees, including without limitation any claim for breach of this Agreement or otherwise arising out of or relating to this Agreement or Employee’s employment, and the Parties hereby waive any rights to a jury trial.
10. Withholding. All compensation or benefits payable to Employee pursuant to the terms of this Agreement shall be subject to deduction of all required federal and state withholding taxes and any other employment taxes the Company may be required to collect or withhold.
11. Choice of Law and Venue. The Parties acknowledge and agree that this Agreement shall be interpreted in accordance with California law. To the extent any actions arising out of relating to this Agreement or Employee’s Employment with Employer must be filed in a court, rather than arbitration, such actions shall be filed in either the Superior Court of the State of California for the County of Orange, or the Federal District Court for the Central District of California.
12. Sole and Entire Agreement, No Oral Modification. This Agreement represents the sole and entire agreement among the Parties and supersedes all prior agreements, negotiations, and discussions between the Parties hereto and/or their respective counsel, excluding any agreements concerning confidentiality, trade secret information, or assignment of intellectual property rights. Any agreement amending or superseding this Agreement must be in writing, signed by duly authorized representatives of the Parties, specifically references this Agreement; and state the intent of the Parties to amend or supersede this Agreement. Except as expressly modified by the terms of this Agreement, any and all outstanding stock options granted to Employee by the Company shall remain subject to the terms and conditions of the relevant stock option agreements evidencing such options and the relevant plan under which such options were granted. Employee understands and agrees that nothing set forth in this Agreement or the Consulting Agreement shall be deemed to modify, amend or otherwise alter those obligations of the Employment Agreement that by their nature are intended to continue in full force and effect as provided for therein, including without limitation (i) the obligations of invention disclosure and assignment, non-disclosure and non-competition pursuant to Section 6 of the Employment Agreement, and (ii) the additional severance obligations in the event that a Change of Control (as defined in the Employment Agreement) should occur within one hundred twenty (120) days of the Acknowledgement Date, provided that the Parties agree that a definitive agreement signed by all applicable parties within such time frame shall be the minimum criteria necessary to trigger such additional severance obligations.
[Signature Page Follows]
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In Witness Whereof, the Parties have executed this Agreement as of the set opposite their names below.
| Local Corporation | ||||||
| Date: January 10, 2014 |
By: | /s/ Xxxxxxxxx X. Xxxxx | ||||
| Title: | Chairman | |||||
| Employee | ||||||
| Date: January 10, 2014 | /s/ Xxxxx Xxxxxx | |||||
| Xxxxx Xxxxxx | ||||||
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