SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit
10.1
SEPARATION AGREEMENT AND
GENERAL RELEASE
This
Separation Agreement and General Release (the “Agreement”) is entered into
effective as of the 5th day of May, 2009, by and between Hypercom Corporation, a
Delaware corporation (“Company”), and Xxxxxx X. Xxxxxxxx
(“Employee”).
A. Employee
presently is employed by Company as Vice President of Finance.
B. Company
and Employee have decided to terminate their relationship.
NOW THEREFORE, in
consideration of the premises and the mutual promises hereinafter set forth,
Company and Employee agree as follows:
1. Resignation. By
the execution of this Agreement, Employee submits, and Company accepts,
Employee’s resignation from his position as Vice President of Finance, effective
as of May 5, 2009 (the “Resignation Date”). As of the Resignation
Date, Employee also will be deemed to automatically resign, without any further
action by Employee, from any other position or office he held with Company, as
well as any position or office he held with any Affiliate (as defined below) or
other entity by reason of his association with Company.
2. Severance
Benefits. If Employee executes this Agreement within the
21-day period referenced in Section 11, does not revoke this Agreement
within the 7-day Revocation Period referenced in Section 11 and
continuously fulfills his obligations under this Agreement, Employee will be
entitled to receive the following severance benefits from Company:
(a) Salary
Continuation Payments. Employee shall receive an amount equal
to nine months of his current Base Salary of $213,990, to be paid in the form of
salary continuation at the normal payroll intervals of the Company, subject to
applicable withholding requirements, commencing on the first payroll cycle
following the expiration of the Revocation Period set forth in
Section 11.
(b) Paid Time
Off Balance. Employee shall receive an amount equal to the
cash equivalent value of his unused Paid Time Off balance as of the Resignation
Date, to be paid, subject to applicable withholding requirements, on the first
payroll cycle following the expiration of the Revocation Period set forth in
Section 11.
(c) COBRA
Payments. For a period of six months after the Resignation
Date, the Company will pay the premium for the COBRA benefits available to
Employee under the Company’s group health plan as of the Resignation Date,
provided that Employee is not eligible for health insurance coverage from
another employer during such period.
(d) Employee
Stock Options. Notwithstanding the terms of any award or
granting agreement or other instrument, Employee shall have ninety (90) days
from the Resignation Date to exercise any and all employee stock options granted
to Employee that are vested as of the Resignation Date.
(e) Employee
Restricted Stock Awards. Notwithstanding the terms of any
award or granting agreement or other instrument, Employee’s April 15, 2009
Restricted Stock Award of 10,000 shares of the Company’s common stock shall vest
in full as of the Resignation Date.
(f) Outplacement
Services. Company shall provide third party outplacement
services to Employee at its expense during the six month period commencing on
the expiration of the Revocation Period set forth in Section 11, in amount
not to exceed $8,500; provided, that if Employee does not utilize the Company
provided outplacement services during such period, Employee shall have no
further right to outplacement services or the value thereof under this
Agreement.
3. Consultation.
During the six month period beginning on the Resignation Date, Employee shall
make himself reasonably available and shall promptly respond to mail, telephone
and email inquiries from the Company, including from the Chief Financial Officer
and such other Company employees as he may designate for that purpose from time
to time, regarding matters related to Employee’s duties while an employee of the
Company.
4. Release
of Company. In consideration of the promises and payments set
forth in this Agreement, Employee hereby releases and forever discharges Company
and/or any of its “Affiliates” from any and all claims, complaints, causes of
action, and demands of any kind, whether known or unknown, which Employee has,
ever has had, or may have arising out of or related to Employee’s employment or
resignation from employment with Company, or otherwise, excepting those arising
out of this Agreement, Employee’s rights under all insurance policies providing
benefits to Employee, and, except as modified by this Agreement, Employee’s
rights under any option or restricted stock agreement entered into between
Company and Employee pursuant to the Hypercom Corporation Long-Term Incentive
Plan, the 2000 Broad-Based Stock Incentive Plan, or any other plan or program
pursuant to which Employee may have been granted options or restricted shares in
the past.
This
Release is a FULL
WAIVER AND RELEASE and includes, without limitation, any right, claim,
demand or cause of action arising under Title VII of the Civil Rights Act
of 1964, as amended; the Americans with Disabilities Act; the Family and Medical
Leave Act; the Employee Retirement Income Security Act of 1974 (“ERISA”); the
Older Workers Benefit Protection Act; the Fair Labor Standards Act; the Age
Discrimination in Employment Act; the Rehabilitation Act of 1973; the Workers
Adjustment & Retraining Notification Act (“WARN”); the Consolidated Omnibus
Budget Reconciliation Act; the Fair Labor Standards Act; and any applicable
state civil rights act and/or any other federal, state, or local law or
regulation. This Release also includes any contract or tort causes of
action arising from or in any way related to Employee’s employment relationship
with Company and/or any Affiliates.
This
Release specifically excludes any claims by Employee for payment of Employee’s
base salary and benefits through the Resignation Date. Employee
acknowledges that he is not entitled to receive any bonus compensation for all
or any portion of the Company’s fiscal year ending December 31,
2009.
Notwithstanding
any provision herein to the contrary, Employee does not release any claims or
rights Employee may have under any “employee benefit plan” (as that term is
defined in regulations issued pursuant to ERISA) sponsored by Company or any
Affiliate.
For
purposes of this Agreement, the term “Affiliate” means and
includes: (a) any subsidiary, brother-sister or other
organization that is treated as a single employer with Company pursuant to
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986; and
(b) any officer, owner, director, employee, representative, or insurer of
Company or any organization referred to in clause (a); and (c) the
successors and assigns of any organization or individual described in clauses
(a) or (b).
5. Confidentiality,
Non-Solicitation & Non-Compete Agreements. In
consideration of the promises and payments set forth in this Agreement, Employee
hereby agrees as follows:
(a) Confidentiality.
At all times hereafter, Employee will
not, directly or indirectly, disclose, utilize, or authorize any disclosure of
Confidential Information (as defined below) to any third person, except as
expressly permitted in writing by the Company’s General Counsel.
For purposes of this Agreement, “Confidential Information”
includes, but is not limited to, the following information relating to the
Company or entrusted to the Company by its Business Associates (as defined
below):
(i) customer
lists, employee lists, consultant lists, vendor information, and customer
information as compiled by the Company, including customer orders, product
usage, product volumes, pricing, customer technology, sale and contract terms,
contract expiration dates, and other compiled customer and vendor
information;
(ii)
internal practices and procedures, compensation and payroll information, and
personnel data;
(iii)
financial condition and financial results of operations;
(iv)
manufacturing and supply of materials information, including sources and
costs;
(v)
information relating to designs, formula, developmental or experimental work,
know-how, products, processes, computer programs, source codes, data bases,
designs, schematics, inventions, creations, original works of authorship, or
other subject matter relating to research and development, strategic planning,
manufacturing, engineering, purchasing, finance, marketing, promotion,
distribution, licensing, and selling activities; and
(vi) any
and all information, whether in oral or written form, having independent
economic value to the Company that is not generally known to, and not readily
ascertainable by proper means by a person who can obtain economic value from its
disclosure or use.
Excluded
from this definition is information that (i) is in or enters the public domain
without breach of this Agreement; (ii) is received from a third party without
restriction on disclosure and without breach of a nondisclosure obligation; or
(iii) is required to be disclosed by order of a court or other governmental
agency; provided that the Company shall first be given reasonable notice and
opportunity to obtain a protective order against disclosure of such
information.
(b)
Nonsolicitation.
(i) During
the Time Period (as defined below), Employee, whether personally or on behalf of
any person or entity, will not:
(A) directly or indirectly solicit,
accept business from, call upon, handle, deliver products or render services to
any customer of the Company with whom Employee, alone or in conjunction with
others, has corresponded, talked, solicited, or otherwise entered into or
pursued a business relationship within the twelve (12) month period immediately
preceding the Resignation Date for the purpose of selling such customer the
same, similar, or related services or products provided by or on behalf of the
Company; or
(B) directly or indirectly solicit,
encourage, induce, or convince any Business Associate to end, reduce, or
change his/her/its relationship with the Company.
(ii) For
the purpose of this Agreement:
(A)
“Time Period” means the
period commencing on the Resignation Date and ending twelve (12) months
thereafter; and
(B)
“Business Associate”
means any individual or entity doing business with or rendering services to the
Company within the twelve (12) month period immediately preceding the
Resignation Date, including customers, employees, investors, independent
contractors, vendors, suppliers, manufacturers or joint venture
partners.
(c) Non-Competition.
(i) During
the Time Period (as defined above), Employee, whether personally or on behalf of
any person or entity, will not engage in a Competitive Activity (as defined
below) within the Territory (as defined below).
(ii) For
purposes of this paragraph:
(A) “Competitive Activity” means
engaging in or planning to engage in any business activity which is in
competition with the products or services being developed, manufactured, offered
or sold by the Company at the time of Employee’s separation, including without
limitation, working as a officer, director, partner, consultant, advisor, or
independent contractor with VeriFone, Ingenico, CAM Commerce Solutions,
Cybernet, ExaDigm, Gemalto, Micros Systems, PAR Technology, Radiant Systems,
Retalix, RDM Corp., TSYS, Motorola, or Way Systems; and
(B)
“Territory” means any
country in which the Company does business as of the Employee’s separation
date.
6. Return of
Company Property. Employee shall deliver to the Company no
later than 5:00 p.m., Phoenix time, on the Resignation Date, Employee's laptop
computer, cellular telephone, BlackBerry®, all
access cards and keys, and any other Company property in Employee’s possession
or control. The foregoing notwithstanding, the Company's obligation to pay any
amounts to Employee under any provision of this Agreement shall be contingent
upon Employee's compliance with this Section 6.
7. Mutual
Non-Disparagement. The parties agree
that they will not, at any time, make any comments about each other that are, or
could be interpreted to be, disparaging or derogatory or that portray the other
party in a negative light. Specifically, Employee agrees, among other
things, that he will not make any disparaging, derogatory or negative comments
about Company officers, directors, stockholders, employees, products, services,
policies or practices. Company’s obligation pursuant to this Section
is limited to comments made by members of Company’s Board of Directors or
Company’s officers. If either party breaches the commitments
contained in this Section, that party will be liable to the other for any
resulting harm incurred.
8. Employee
Benefit Plans. Employee acknowledges and agrees that,
effective as of the Resignation Date, he no longer will be eligible to
participate in any employee benefit plans offered by
Company. Employee also specifically acknowledges that after the
Resignation Date he will not be entitled to make any additional deferrals of
compensation pursuant to the Company 401(k) Plan or any other Company benefit
plan that permits or requires contributions by plan
participants. However, employee may avail himself of any rights to
which he may be entitled to continue health insurance coverage pursuant to the
provisions of COBRA following the Resignation Date.
9. Unpaid
Salary and Expenses. Any unpaid salary earned by Employee
prior to the Resignation Date and any claims for expenses incurred by Employee
on behalf of Company prior to the Resignation Date, will be paid to Employee
promptly following the Resignation Date.
10. Cooperation. If
Employee has knowledge or is alleged to have knowledge of any matters which are
the subject of any pending, threatened or future litigation, arbitration,
administrative or similar proceeding involving Company, Employee will make
himself available to testify if and as required by the
Company. Employee also will make himself reasonably available to the
attorneys representing Company in connection with any such proceeding for such
purposes as they may deem necessary, including but not limited to the review of
documents, discussion of the case and preparation for any matter related to the
proceeding. Company will pay Employee a flat rate of $400 per eight
hour day that Employee provides services to the Company under this
Section. This Agreement is not intended to and shall not be construed
so as to in any way limit or affect the testimony which Employee gives in any
such litigation; it is understood and agreed that Employee will at all times
testify fully, truthfully and accurately, whether in deposition, trial or
otherwise.
11. Period to
Consider and Revocation Period. By his signature below,
Employee affirms that he has been given at least 21 days during which to
consider the execution of this Agreement. Employee may revoke this
Agreement at any time within 7 days following his execution of this
Agreement (the “Revocation Period”) by executing the Revocation form attached
hereto as Exhibit
A. To be effective, the signed Revocation form must be
received by Xxx Xxxxx, Vice President, Global Human Resources, of the Company,
within the 7-day revocation period (the “Revocation Period”). This
Agreement shall not become effective or enforceable until the Revocation Period
has expired.
12. Employee
Counsel. Employee acknowledges that he has been advised to
consult with an attorney of his choosing before executing this Agreement and
that he has done so if desired.
13. Payroll
Taxes. Any amounts due pursuant to this Agreement will be
subject to all applicable federal, social security and state payroll withholding
taxes.
14. Governing
Law. This Agreement is to be construed and interpreted in
accordance with the laws of the State of Arizona, except as those laws may be
preempted by federal law.
15. Severability. If
any part or parts of this Agreement are found to be unenforceable, the remaining
portions of the Agreement shall remain in full force and effect.
16. Entire
Agreement. Employee represents that he has carefully read and
fully understands all of the provisions of this Agreement, which sets forth the
entire agreement between Company and Employee with regard to Employee’s
employment with Company and the termination of the relationship between Employee
and the Company. Employee acknowledges that he has not relied upon
any representation made by Company or any representative of Company, except as
set forth in this Agreement.
17. Impact on
Other Agreements. Following the execution of this Agreement,
all agreements previously entered into between Employee and Company relating to
Employee’s employment by and services to Company are terminated other than the
following: (a) this Agreement; (b) Employee’s rights under insurance
policies providing Employee benefits; (c) any option agreement or restricted
stock agreement entered into between Company and Employee pursuant to the
Hypercom Corporation Long-Term Incentive Plan or any other plan or program
pursuant to which Employee may have been granted options or restricted shares in
the past, except as modified by this Agreement.
HYPERCOM
CORPORATION
By /s/ Xxx Xxxxx (5/19/09)
Xxx
Xxxxx, Vice President, Global Human Resources
/s/ Xxxxxx X. Xxxxxxxx (5-19-09)
Xxxxxx X. Xxxxxxxx
EXHIBIT
A
I hereby
revoke my acceptance of the foregoing Agreement within seven (7) days of my
initial execution of the Agreement. I acknowledge that by revoking
this Agreement it is no longer effective or enforceable and I will not receive
any benefits described in the Agreement.
_____________________________
Xxxxxx X.
Xxxxxxxx
_____________________________
Date
