EXHIBIT 10.25
[*] = information redacted pursuant to a confidential treatment request. Such
omitted information has been filed separately with the Securities and Exchange
Commission.
AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS
This Agreement and General Release of All Claims agreement (the "Release") is
entered into between Xxxx X. Xxxxxxxxx ("Employee" or "I") and Palm, Inc.
("Palm") who wish to end their employment relationship in a manner that fully
and finally settles any and all differences between them that may have arisen
out of Employee's employment with Palm and the termination of that employment.
CONSIDERATION
This Release is given in consideration of the following promises from
Palm:
Employee shall continue as a full time Palm employee and perform all
assigned duties until November 9, 2001 at which time Employee's employment will
terminate, Employee will cease to be an officer of Palm, and Employee will cease
to be a member of the Board of Directors of Palm. Employee's last date of
employment shall be the "Termination Date."
In consideration for this Release, Palm will provide to Employee:
(1) the sum of $1,400,000 (an amount equivalent to 200% of annual
salary);
(2) Any shares covered by Palm stock options that are unvested and
unexpired on the Termination Date, except for options that vest solely
upon the achievement of a performance objective or objectives or options
that have their vesting accelerate upon the achievement of a performance
objective or objectives, will become fully vested and exercisable upon the
expiration of the Revocation Period (defined below) if the shares
otherwise would have vested (solely by virtue of Employee's continued
employment with Palm and not, directly or indirectly, due to a change of
control of Palm) during the two-year period commencing on the Termination
Date. Any other unvested options will be forfeited on the Termination
Date;
(3) Any shares of restricted stock that Employee purchased from Palm
that remain subject to a right of repurchase by Palm on the Termination
Date will vest and Palm's right of repurchase will terminate, except for
shares that are scheduled to vest and have Palm's right of repurchase
terminate solely upon the achievement of a performance objective or
objectives;
(4) A lump sum payment equal to the amount it would have cost Palm
to provide Employee and his dependents, if dependent coverage is in effect
on the payment date, with health, dental and vision benefits coverage at
the same level (and with Palm paying the same level of premiums) as in
effect on the day immediately preceding the Termination Date during the 24
month period following the Termination Date under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), whether or not
Employee elects COBRA coverage;
(5) Ownership of the four personal computers (including peripherals)
that Palm previously installed in Employee's homes, plus an additional
amount such that the value of the four personal computers (including
peripherals) retained by Employee, after deduction of any
U.S. federal, state and for local income or payroll tax resulting equals
the value of the four computers (including peripherals);
(6) Payment of reasonable costs (the "Payment for Moving Costs") for
moving Employee's personal property and two automobiles from California to
Employee's home in Dover, Massachusetts pursuant to arrangements approved
by Palm's Vice President of Human Resources or his delegate, plus an
additional amount such that the net amount retained by Employee, after
deduction of any U.S. federal, state and for local income or payroll tax
equals to the Payment for Moving Costs; and
(7) (a) any unpaid base salary due for periods prior to the
Termination Date, (b) all of Employee's accrued and unused vacation
through the Termination Date, (c) all of Employee's accrued amounts
deducted through payroll that have not been used to purchase shares under
Palm's employee stock purchase plan, and (d) following Employee's
submission of proper expense reports, the total unreimbursed amount of all
expenses incurred by Employee in his duties of employment with Palm that
are reimbursable in accordance with Palm's existing policies.
The above payments and benefits, less deductions authorized or required by
law, will be paid in a lump sum, single payment on or about ten (10) days after
the Termination Date or ten (10) days after expiration of any revocation period
applicable to this Release, whichever is later. Notwithstanding the preceding
sentence, the payments described in 7 (a) through (c) will be made promptly upon
termination of employment and within the period of time mandated by law.
Employee will not be required to seek other employment or otherwise mitigate the
value of the payments and benefits contemplated by this Release, nor shall any
such payments and benefits be reduced by any earnings or benefits that Employee
may receive from other employment. If Employee dies, any payments or benefits
then or thereafter due hereunder will be paid to his designated beneficiary or
beneficiaries or, if none are designated or non survive Employee, his estate.
Employee shall be entitled to exercise any vested Palm options in
accordance with the terms of the applicable stock option plan, option agreements
and Palm's securities trading policy. A schedule listing each outstanding Palm
stock option and award of restricted stock held by Employee as of the
Termination Date and (a) the number of shares covered by each option and grant
of restricted stock, (b) the exercise price of each option, (c) the date on
which each stock option or award of restricted stock was granted, and (d) the
applicable vesting schedule and the extent to which the options and restricted
stock are vested and exercisable as of the Termination Date, and (e) the extent
to which the options are scheduled to vest upon the expiration of the Revocation
Period (defined below) is attached hereto as Exhibit A.
Employee understands that the payments and benefits described in 1 through
6 above are payments and benefits for which he is not eligible or entitled
unless he executes, and subsequently does not revoke, this Release.
RELEASE BY EMPLOYEE
In consideration of the additional benefits described above, I (Employee),
on behalf of my heirs, spouse and assigns, hereby completely release and forever
discharge Palm, Inc., its past and present affiliates, agents, officers,
directors, shareholders, employees, attorneys, insurers, successors and assigns
(collectively referred to as "Palm") from any and all claims, of any and every
kind, nature and character, known or unknown, foreseen or unforeseen, based on
any act or omission occurring prior to the effective
2
date of this Release, including but not limited to any claims arising out of my
offer of employment, my employment or termination of my employment with Palm. I
expressly agree and consent to the termination of my employment on the
Termination Date in exchange for the compensation described above. Accordingly,
this Release shall not take effect until my Termination Date, or upon execution
of this Release, whichever is later. The matters released include, but are not
limited to, any claims under federal, state or local laws, including claims
arising under, Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1866, the Civil Rights Act of 1991, the Employee Retirement and Income
Security Act of 1974, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1967 ("ADEA") as amended, including but not
limited by, the Older Workers' Benefit Protection Act ("OWBPA") and any common
law tort or contract or statutory claims, and any claims for attorneys' fees and
costs. The only exceptions are any claims I may have (i) for unemployment
compensation, (ii) workers compensation, (iii) under Palm's health plans
(including the right to elect COBRA coverage for myself and/or my covered
dependents), Palm's tax-qualified retirement plan and, to the extent such items
survive the Termination Date, Palm's restricted stock and stock option plans,
(iv) any rights I may have as a vested shareholder, (v) for indemnification in
accordance with the "Palm, Inc. Indemnification Agreement" dated January 25,
2000 and Palm's certificate of incorporation and bylaws, and (vi) to enforce my
rights under this Release and to assert any affirmative defenses in connection
with claims brought against me (collectively, the "Non-Released Claims").
I understand and agree that this Release extinguishes all claims, whether
known or unknown, foreseen or unforeseen, except for those claims expressly
described above. I expressly waive any rights or benefits under Section 1542 of
the California Civil Code, or any other equivalent statute. California Civil
Code Section 1542 provides as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor."
I fully understand that if any fact with respect to any matter covered by this
Release is found hereafter to be other than or different from the facts now
believed by me to be true, I expressly accept and assume that this Release shall
be and remain effective, notwithstanding such difference in the facts.
I expressly warrant and agree that I will not, at any time in the future,
file or maintain any lawsuit, claim or action of any kind whatsoever against
Palm or any of its agents, affiliates, employees, successors, shareholders,
directors and assigns based on claims released in this Release (other than the
Non-Released Claims), nor will I cause or knowingly permit any such lawsuit,
claim or action to be filed or maintained on my behalf in any federal, state or
municipal court, administrative agency or other tribunal, arising out of any
claim released in this Release with the exception of any claim that I may have
as to the validity of this Release under the ADEA as amended by the OWBPA. If I
have previously filed any such claim, I agree to take all reasonable steps to
cause them to be withdrawn without delay. In the event I bring a lawsuit in
contravention of this covenant not to xxx, I shall be required to repay Palm the
consideration described above, regardless of the outcome of the legal action.
I expressly warrant that I have not assigned any claim I may have against
Palm to any other person or entity.
I further acknowledge that during my employment, I may have obtained
confidential, proprietary and trade secret information, including information
relating to Palm products, plans, designs and other valuable confidential
information. I agree not to disclose any such confidential information unless
3
required by subpoena or court order, and that I will first give Palm written
notice of such subpoena or court order with reasonable advance notice to permit
Palm, Inc. to oppose such subpoena or court order if it chooses to do so.
Immediately following the Termination Date, I will destroy or return to Palm any
Palm confidential, proprietary or trade secret information that I possess in
hard copy or in electronic form (including, but not limited to, confidential,
proprietary or trade secret information on the computers described in 5 above).
I agree that for a period of one (1) year after the Termination Date I
shall not, directly or indirectly, induce or attempt to induce any employee,
agent or consultant of Palm or any subsidiary to terminate his or his
association with Palm or any affiliates. Palm and I agree that the provisions of
this paragraph contain restrictions that are not greater than necessary to
protect the interests of Palm. In the event of the breach or threatened breach
by me of this paragraph, Palm, in addition to all other remedies available to it
at law or in equity, will be entitled to seek injunctive relief and/or specific
performance to enforce this paragraph.
Prior to execution of this Release, I have apprised myself of sufficient
relevant information in order that I might intelligently exercise my own
judgment regarding such execution. Palm has informed me in writing to consult an
attorney before signing this Agreement if I wish. Palm has also given me at
least 45 days in which to consider this Release, if I wish. I also understand
that for a period of seven (7) days after I sign this Release (the "Revocation
Period") I may revoke this Release Agreement and that the Release shall not
become effective until my Termination Date or seven (7) days from my signature,
whichever is later. I have read this Release and understand all of its terms. I
understand and agree that this Release may not be modified or amended during the
Revocation Period without my written consent. I further acknowledge and agree
that this Release is executed voluntarily and with full knowledge of its legal
significance. I also understand and agree that if any suit is brought to enforce
the provisions of this Release, with the exception of a claim brought by me as
to the validity of this Release under the ADEA as amended by the OWBPA, the
prevailing party shall be entitled to its costs, expenses, and attorneys' fees
as well as any and all other remedies specifically authorized under the law.
[*] Further, I agree that until Palm discloses the terms of the Release as
required by law, I will not voluntarily disclose or allow anyone else to
disclose to the media or otherwise either the existence, reason for or contents
of this Release without Palm's prior written consent, unless required to do so
by law. Notwithstanding this provision, I am authorized to disclose this Release
to my spouse, attorneys and tax advisors on a "need to know" basis, on the
condition that they agree to hold the terms of the Release, including the
settlement payments, in strictest confidence and to make appropriate disclosures
as required by law, provided that I notify Palm in writing of such legal
obligations to disclose at least five (5) business days in advance of
disclosure. [*]
[*] Employee acknowledges that Palm will be required by law to disclose
the terms of the Release. [*]
[*]
This Release (and the plans and agreements referenced herein) constitutes
the entire agreement between Palm and myself with respect to any matters
referred to in this Release. This Release supersedes any and all of the other
agreements between myself and Palm, except for (1) any confidentiality,
assignment of inventions, or similar agreement(s) entered into by me (such as
the Conflicts, Confidential Information and Assignment of Inventions Agreement),
and (2) the "Palm, Inc. Indemnification Agreement" dated January 25, 2000, all
of which remain in full force and effect until terminated according to the terms
set forth therein, if any. No other consideration, agreements, representations,
oral statements, understandings or course of conduct that are not expressly set
forth in
4
this Release should be implied or are binding. I am not relying upon any other
agreement, representation, statement, omission, understanding or course of
conduct which is not expressly set forth in this Release. I understand and agree
that this Release shall not be deemed or construed at any time or for any
purposes as an admission of any liability or wrongdoing by either Palm or
myself. I also agree that if any provision of this Agreement is deemed invalid,
the remaining provisions will still be given full force and effect. The terms
and conditions of this Agreement and release will be interpreted and construed
in accordance with the laws of California (except with respect to its conflict
of laws provisions).
5
EMPLOYEE'S ACCEPTANCE OF RELEASE
I HAVE CAREFULLY READ AND FULLY UNDERSTAND AND VOLUNTARILY AGREE TO ALL
THE TERMS OF THE RELEASE IN EXCHANGE FOR THE ADDITIONAL BENEFITS TO WHICH I
WOULD OTHERWISE NOT BE ENTITLED. FACSIMILE SIGNATURES EXECUTED IN COUNTERPART
WILL HAVE THE SAME FORCE AND EFFECT AS AN ORIGINAL SIGNATURE.
Dated: November 8, 2001 /s/ Xxxx X. Xxxxxxxxx
----------------------------------------
Xxxx X. Xxxxxxxxx, Employee
Agreed for Palm, Inc.
Dated: November 8, 2001 /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx
Chairman, Compensation Committee
6
Palm, Inc. PERSONNEL SUMMARY
EXHIBIT A
REVISED to Reflect 100% Vest of Restricted Stock Dated 3/1/2000
Xxxx Xxxxxxxxx XX 00000
Page: 1
File: Persnl
Date: 11/08/2001
OPTIONS AND AWARDS STATUS AS OF 11/9/2001
Option Option
Number Date Plan/Type Shares Price Exercised Vested
Options S0000002 03/01/2000 P99/NQ 1,500,000 $38.00 0 375,000
EI10 05/11/2000 P99/NQ 500,000 $25.31 0 177,083
EI1460 07/11/2000 P99/NQ 500,000 $29.44 0 156,250
EI000009 04/19/2001 P99/NQ 500,000 $7.70 0 83,333
P0000001 08/06/2001 P99/NQ 498,575 $5.24 0 0
RT001155 08/06/2001 P99/NQ 398,860 $5.24 0 0
Subtotal Options 11/9/2001 3,897,435 0 791,666
Restricted Awards R0000006 03/01/2000 RSP 25,000 $0.00 6,250
R0000126 08/06/2001 RSP 15,000 $0.00 0
Subtotal Awards 11/9/2001 40,000 6,250
OPTIONS AND AWARDS STATUS AS OF 11/9/2001
Option Option
Number Date Plan/Type Cancelled Unvested Outstanding Exercisable
Options S0000002 03/01/2000 P99/NQ 0 1,125,000 1,500,000 375,000
EI10 05/11/2000 P99/NQ 0 322,917 500,000 177,083
EI1460 07/11/2000 P99/NQ 0 343,750 500,000 156,250
EI000009 04/19/2001 P99/NQ 0 416,667 500,000 83,333
P0000001 08/06/2001 P99/NQ 0 498,575 498,575 0
RT001155 08/06/2001 P99/NQ 0 398,860 398,860 0
Subtotal Options 11/9/2001 0 3,105,769 3,897,435 791,666
Restricted Awards R0000006 03/01/2000 RSP 18,750 18,750
R0000126 08/06/2001 RSP 15,000 15,000
Subtotal Awards 11/9/2001 33,750 33,750
OPTIONS AND AWARDS STATUS AS OF 11/9/2003
Option Option
Number Date Plan/Type Shares Price Exercised Vested
Options S0000002 03/01/2000 P99/NQ 1,500,000 $38.00 0 1,125,000
EI10 05/11/2000 P99/NQ 500,000 $25.31 0 427,083
EI1460 07/11/2000 P99/NQ 500,000 $29.44 0 406,250
EI000009 04/19/2001 P99/NQ 500,000 $7.70 0 500,000
P0000001 08/06/2001 P99/NQ 498,575 $5.24 0 0
RT001155 08/06/2001 P99/NQ 398,860 $5.24 0 398,860
Subtotal Options 11/9/2003 3,897,435 0 2,857,193
Restricted Awards R0000006 03/01/2000 RSP 25,000 $0.00 25,000
R0000126 08/06/2001 RSP 15,000 $0.00 0
Subtotal Awards 11/9/2003 40,000 25,000
OPTIONS AND AWARDS STATUS AS OF 11/9/2003
Option Option
Number Date Plan/Type Cancelled Unvested Outstanding Exercisable
Options S0000002 03/01/2000 P99/NQ 0 375,000 1,500,000 1,125,000
EI10 05/11/2000 P99/NQ 0 72,917 500,000 427,083
EI1460 07/11/2000 P99/NQ 0 93,750 500,000 406,250
EI000009 04/19/2001 P99/NQ 0 0 500,000 500,000
P0000001 08/06/2001 P99/NQ 0 498,575 498,575 0
RT001155 08/06/2001 P99/NQ 0 0 398,860 398,860
Subtotal Options 11/9/2003 0 1,040,242 3,897,435 2,857,193
Restricted Awards R0000006 03/01/2000 RSP 0 0
R0000126 08/06/2001 RSP 15,000 15,000
Subtotal Awards 11/9/2003 15,000 15,000
EXHIBIT B
---------
MEDIA CONTACT:
Xxxxxxx Xxxxxx
408.878.2592
Xxxxxxx.Xxxxxx@xxxx.xxxx.xxx
Palm CEO Xxxx Xxxxxxxxx Resigns;
Chairman Xxxx Xxxxxxxx to Serve as CEO
Palm Platform Separation in Final Phase;
Company Confirms Previous Q2 Revenue Guidance
SANTA CLARA, Calif., Nov. 8 /PRNewswire/ -- Palm, Inc. (Nasdaq: PALM) today
announced that Xxxx Xxxxxxxxx has decided to resign as chief executive officer.
Xxxx Xxxxxxxx, Palm chairman of the board, will serve in his place until a
permanent successor is named. A search has begun for a new CEO of Palm, Inc. The
company also announced that it is in the final stages of its internal separation
into two businesses.
"We thank Xxxx for his industry vision, for keeping Palm(TM) handhelds and the
Palm OS(R) the most popular choice among individuals and businesses around the
world, and for setting the stage for future new OS and solutions growth," said
Benhamou. "We wish him success in his future endeavors."
"With Palm's transition into two individual businesses almost complete, my role
has changed, and it no longer matches my aspirations," Xxxxxxxxx said. "I leave
confident that our separation and solutions strategies, combined with the new
leadership at the helm of both businesses, will result in increased shareholder
value. It has been an honor to lead Palm."
Xxxxxxxxx did not announce his future plans.
Benhamou will chair an Executive Council that will help him lead the company
until a new CEO is named. The council comprises Xxxxx Xxxxx, Platform Solutions
Group chief executive officer; Xxxx Xxxxxxx, Palm executive vice president and
chief operating officer of the Solutions Group; and Xxxx Xxxxxx, Palm senior
vice president and chief financial officer.
Palm is made of two business groups: The Solutions Group is responsible for
designing and delivering the popular Palm family of products, including the Palm
m100 and Palm m500 series handhelds and the Palm VIIx handheld, the industry's
only fully featured handheld with integrated wireless capability, as well as
hardware add-ons, software and accessories.
The Platform Solutions Group is responsible for developing the Palm operating
system and licensing it to a growing number of companies working to make
handheld computing pervasive. By the end of calendar year 2001, the Platform
Solutions Group is expected to become an internal subsidiary of Palm, a move
that increases focus and drives innovation in both of Palm's businesses. More
than 175,000 software developers have registered to develop software that runs
on the Palm OS platform, and more than 12,000 software titles are available
commercially today.
Financial Update
----------------
"While the economic slowdown persists, and consumer confidence has fallen
following the Sept. 11 terrorist attacks, we are encouraged that sell-through
has rebounded to levels above that of the summer months," Benhamou said.
The company confirmed that the second fiscal quarter remains on track with the
revenue guidance provided on Sept. 20, 2001.
"We also are pleased that recent market research reports from Gartner and
Jupiter Media Metrics reconfirm the strength of the Palm brand with both
consumers and enterprises," said Benhamou.
According to Jupiter Research's report published Sept. 26, 2001, "Palm remains
the runaway platform of choice for companies developing mobile applications. 83
percent of such companies said that they planned to support Palm-based PDAs."
According to a Gartner Dataquest press release issued Nov. 5, 2001, Palm
continues to be the No. 1 vendor in the PDA market worldwide and in the United
States.
Gartner Dataquest's recently published October 2001 report states that devices
based on the Palm OS comprised about 52 percent of worldwide PDA shipments in
the third quarter of 2001, up from 49 percent in the second quarter of 2001.
Platform Separation Background
------------------------------
On July 27, 2001, Palm announced plans to separate its platform business from
its hardware solutions business. Under the new structure, the Platform Solutions
Group would operate independently but would continue to leverage Palm's
infrastructure and staff services. Palm believes the separate subsidiary
structure for the platform translates into greater clarity of mission, increased
ability to serve licensees and, over time, to increased shareholder value.
Palm expects to begin reporting revenues and operating results separately for
the two businesses for its third fiscal quarter ending March 1, 2002.
On Aug. 27, 2001, Palm named Xxxxx to be chief executive officer of the platform
business, and since then, the company has been working to identify and separate
the activities and support services necessary to run both businesses. Xxxxx had
been at AT&T, where he was the company's chief
-2-
technology officer and president of AT&T Labs. He has been a member of the Palm
board of directors since February 2000.
About Palm, Inc.
----------------
Palm, Inc. is a pioneer in the field of mobile and wireless Internet solutions
and a leading provider of handheld computers, according to IDC (December 2000).
Based on the Palm OS(R) platform, Palm's handheld solutions allow people to
carry and access their most critical information wherever they go. Palm(TM)
handhelds address the needs of individuals, enterprises and educational
institutions through thousands of application solutions.
The Palm OS platform is also the foundation for products from Palm's licensees
and strategic partners, such as Acer, Xxxxxxxx Xxxxx, HandEra (formerly TRG),
Handspring, IBM, Kyocera, Samsung, Sony and Symbol Technologies. Platform
licensees also include AlphaSmart, Garmin and Nokia. The Palm Economy is a
growing global community of industry-leading licensees, world-class OEM
customers, and approximately 175,000 innovative developers and solution
providers that have registered to develop solutions based on the Palm OS
platform. Palm went public on March 2, 2000. Its stock is traded on the Nasdaq
national market under the symbol PALM. More information is available at
xxxx://xxx.xxxx.xxx.
Safe Harbor Statement
---------------------
This press release contains forward-looking statements within the meaning of the
federal securities laws, including statements regarding the economy,
competition, Palm's device and OS leadership, Palm's intentions and expectations
regarding the separation of its businesses, including the expected timing of the
separation and the effect of the separation on Palm's business, licensees and
shareholder value, Palm's expectations regarding the effect of this change in
leadership on shareholder value; Palm's expectations regarding revenues for the
second quarter of fiscal year 2002; Palm's intentions and expectations regarding
financial reporting of its separated businesses, Palm's intentions and
expectations regarding delivering shareholder value. These statements are
subject to risks and uncertainties that could cause actual results and events to
differ materially, including possible fluctuations in the demand for Palm's
products and services, possible fluctuations in economic conditions affecting
the markets for Palm's products and services, Palm's ability to compete with
existing and new competitors and possible future price-cutting or other actions
by Palm's competitors, possible difficulty in adjusting to a leadership change,
and possible risks related to the separation of the businesses. A detailed
discussion of other risks and uncertainties that could cause actual results and
events to differ materially from such forward-looking statements is included in
Palm's most recent filings with the Securities and Exchange Commission,
including Palm's quarterly report on Form 10-Q for the fiscal quarter ended
August 31, 2001, as amended, and Palm's Registration Statement on Form S-4 filed
on Sept. 10, 2001, as amended. Palm undertakes no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of this press release.
Palm OS is a registered trademark and Palm is a trademark of Palm, Inc.
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