SEVERANCE AGREEMENT
This Severance Agreement (hereinafter "Agreement") is made and entered into
effective as of the 12th day of January, 2001, by and between FutureOne, Inc., a
Nevada corporation and its affiliates, subsidiaries and related entities
(hereinafter referred to as the "Company"), and Xxxx X. Xxxx (hereinafter
referred to as "Xxxx"). The Company and Xxxx shall hereinafter be referred to
collectively as the "Parties."
WHEREAS, Xxxx and the Company entered into an Employment Agreement, dated as of
July 27, 1998 (as such agreement has been amended, the "Employment Agreement"),
pursuant to which the Company agreed to retain Xxxx, and Xxxx agreed to serve,
as the President and Chief Executive Officer of the Company.
WHEREAS, Xxxx serves as President and Chief Executive Officer of the Company and
as a member of the Company's Board of Directors.
WHEREAS, Xxxx wishes to resign from active employment with the Company and, in
connection therewith, the Company and Xxxx wish to terminate the Employment
Agreement with the Company effective January 12, 2001 ("Separation Date"); and
Xxxx wishes to resign from the Board of Directors of the Company effective on
the Separation Date.
NOW, THEREFORE, for and in consideration of the mutual agreements herein
described and agreed to be performed, the Parties agree as follows:
A. CONSIDERATION PAID BY THE COMPANY TO XXXX
1. MONETARY PAYMENTS AND OTHER CONSIDERATION. The Company agrees to provide
Xxxx with the payments and other items of valuable consideration listed
below:
(a) The Company shall pay to Xxxx a total separation compensation of $90,000
payable in twelve (12) equal monthly installments of $5,000 each beginning
February 1, 2001 and twelve (12) equal monthly installments of $2,500 each
beginning February 1, 2002. All amounts payable pursuant to this Section
A.1.(a) shall be considered as wages and may be made in accordance with the
Company's regular payroll payment dates in effect from time to time.
(b) Within thirty (30) days following the date of this Agreement, the Company
shall pay to Xxxx the $10,000 in outstanding Board of Director fees owed to
Xxxx.
(c) All accrued salary payable to Xxxx as of the Separation Date shall be paid
on the next regular scheduled pay day of the Company.
(d) By January 17, 2001 the Company shall pay to Xxxx all amounts due Xxxx for
expense incurred by Xxxx prior to the date of this Agreement as submitted
to the Company on expense reports or incurred by Xxxx on personnel credit
cards.
(e) The Company shall pay the premiums for health and dental insurance coverage
as currently provided by the Company or under COBRA, which coverage shall
be no less than Xxxx'x insurance coverage immediately preceding the date of
this Agreement. Such insurance coverage shall be provided by the Company
for Xxxx'x continued benefit and the benefit of his eligible beneficiaries,
until January 8, 2003.
(f) The Company shall concurrently with the signing of this Agreement issue a
Warrant dated October 1, 2000 for 1,000,000 fully vested warrants to
purchase Common Stock of the Company at $.15 per share. Such Warrant shall
include all of the same terms and conditions as the Warrant Agreement of
October 1, 2000 for 2,000,000 shares, except that it shall be fully vested
as of the Separation Date and be at a price of $.15 per share. In exchange
for the issuance of this Warrant, Xxxx hereby agrees to cancel and
surrender the options and warrants specified in Section B 1 (a) below.
B. CONSIDERATION PROVIDED BY XXXX TO THE COMPANY
1. OTHER CONSIDERATION Xxxx agrees to provide the Company with items of
valuable consideration listed below:
(a) In exchange for the 1,000,000 warrants to be issued to Xxxx per Section A 1
(f) above, Xxxx hereby agrees that the Stock Option grant of 245,000 shares
issued to him July 18, 1999, the Warrant Agreement for 205,406 shares
issued to him as of September 30, 1998 and the Warrant Agreement for
2,000,000 shares issued to him October 1, 2000 shall be canceled and of no
further force and effect as of the Termination Date.
(b) Xxxx hereby agrees that for a period of six months, beginning February 1,
2001, he will provide services to the Company, as specifically requested by
the President or CFO. The Parties further agree that such services will be
limited to 40 hours per month, unless specifically waived by. Xxxx. The
Company may also request that such services be provided at any of the
Company's offices and the Company shall reimburse or pay directly all of
the out of pocket expenses incurred by Xxxx in performing such services,
including but not limited to travel, long distance telephone, supplies,
etc. Xxxx agrees that all such out of pocket expenditures shall be
reasonable in the normal course of business.
1. MUTUAL RELEASE. The Company hereby knowingly, voluntarily, and irrevocably
releases and discharges Xxxx, his heirs, personal representatives and assigns
from any and all claims, demands, liabilities, judgements, damages, expenses, or
causes of action of any kind or nature whatsoever, arising or accruing on or
prior to the date hereof, which the Company may have had or may now or hereafter
have or assert, whether now known or unknown; provided, however, the claims
which are waived, released and discharged pursuant to this Agreement do not
include any claims related to or arising out of, either directly or indirectly,
acts or omissions of Xxxx which constitute willful misconduct, fraud, bad faith,
intentional violations of fiduciary duties, or gross negligence.
2. Xxxx, together with his heirs, personal representative and assigns, hereby
knowingly, voluntarily, and irrevocably releases and discharges the Company, its
officers, directors, employees, successors and assigns, from any and all claims,
demands, liabilities, judgments, damages, expenses, or causes of action of any
kind or nature whatsoever arising on or accruing on or prior to the date hereof
which Xxxx may have had or may now or hereafter have assert, whether now known
or unknown. This release, however, shall not include any of the obligations to
pay Xxxx for items accruing prior to the Separation Date as specified in Section
A 1 and any claims against Xxxx related to lease obligations of the Company that
Xxxx has personally guaranteed.
D. COMPANY PROPERTY AND RETURN OF PROPERTY. Xxxx shall return all Company
property, including, without limitation, equipment, handbooks or manuals,
building or office access cards, and keys immediately upon request of the
Company. Xxxx shall retain and is hereby given title to the Nokia cell phone and
IBM Thinkpad now in his possession.
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E. PROPRIETARY INFORMATION. All tangible material containing Proprietary
Information, whether created by Xxxx or others, which shall come into his
custody or possession, shall be and are the exclusive property of the Company to
be used by Xxxx only in the performance of his post Agreement services for the
Company. All such materials or copies thereof and all tangible property of the
Company in the custody or possession of Xxxx shall be delivered to the Company
on January 8, 2001. After such delivery, Xxxx shall not retain any such
materials or copies thereof or any such tangible property, except as permitted
by the Company to perform the services required of him under this Agreement.
Xxxx agrees that his obligation not to disclose or to use information and
materials of the types set forth above, and his obligation to return materials
and tangible property, set forth above, also extends to such types of
information, materials and tangible property of customers of the Company or
suppliers to the Company or other third parties who may have disclosed or
entrusted the same to the Company or to Xxxx.
For purposes of this Agreement, "Proprietary Information" means and includes the
following: the identity of clients or customers or potential clients or
customers of the Company or its affiliates; any written, typed or printed lists,
or other materials identifying the clients or customers of the Company or its
affiliates; any financial or other information supplied by clients or customers
of the Company or its affiliates; any and all data or information involving the
Company, its affiliates, programs, methods, or contacts employed by the Company
or its affiliates in the conduct of their business; any lists, documents,
manuals, records, forms, or other material used by the Company or its affiliates
in the conduct of their business; and any other secret or confidential
information concerning the Company's or its affiliates' business or affairs. The
terms "list," "document" or other equivalents, as used in this paragraph are not
limited to a physical writing or compilation but also include any and all
information whatsoever regarding the subject matter of the "list" or "document,"
whether or not such compilation has been reduced to writing. "Proprietary
Information" shall not include any information which: (i) is or becomes publicly
available through no act or failure of Xxxx; (ii) was or is rightfully learned
by Xxxx from a source other than the Company before being received from the
Company; or (iii) becomes independently available to Xxxx as a matter of right
from a third party. If only a portion of the Proprietary Information is or
becomes publicly available, then only that portion shall not be Proprietary
Information hereunder.
F. CONFIDENTIAL MATERIAL. In the course of Xxxx'x employment by the Company,
Xxxx agrees that he had access to secret or confidential technical and
commercial information, business plans and strategies, financial information,
financial forecasts, business records, information regarding key business
relationships, records, data, specifications, systems, methods, plans, designs,
policies, inventions, material and other knowledge ("Confidential Material"),
whether or not copyrighted, owned by the Company. Xxxx recognizes and
acknowledges that the Confidential Material is valuable, special and unique to
the Company's business. All such Confidential Material shall be and remain the
property of the Company. Xxxx hereby affirms that during the course of his
employment with the Company he has not disclosed any Confidential Information to
any third party except in good faith and in the course of fulfilling his
assigned responsibilities. Xxxx shall not, directly or indirectly, either during
the term of the Agreement or at any time thereafter, disclose or disseminate to
anyone or make use of, for any purpose whatsoever, any Confidential Material.
Xxxx shall not be deemed to have breached this Section F if Xxxx shall be
specifically compelled by lawful order of any judicial, legislative, or
administrative authority or body to disclose any Confidential Material or else
face civil or criminal penalty or sanction. The term "Confidential Material"
does not include information which (i) is currently or becomes generally
available to the public other than as a result of a disclosure by Xxxx or (ii)
becomes available to Xxxx on a nonconfidential basis from a source other than
the Company or its representatives provided that such source is not bound, to
Xxxx'x knowledge after due inquiry, by a confidentiality agreement with respect
to such information.
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G. NON-COMPETE - NO COMPETITION. Xxxx agrees that for the period of two (2) year
commencing on the Separation Date, unless the Company breaches one or more of
its payment obligations or any provision of this Agreement that contains an
obligation of the Company to Xxxx, this Agreement in which case this Section G
shall no longer be in effect, he shall not engage in, plan for, organize, work
for, or assist, directly or indirectly, any business with operations in Arizona
or Colorado that is competitive, directly or indirectly, with the Company's
business, nor solicit participants in or customers of the Company's products and
services, nor use Xxxx'x knowledge of the Company or its business in any manner
that competes, directly or indirectly, with, or otherwise may adversely affect,
the Company. Xxxx expressly understands that the Company has a legitimate
business purpose in requiring Xxxx to abide by all of the restrictions described
in this paragraph. Xxxx acknowledges that the services he rendered, and may
render, to the Company, the information exchanged between all parties in
connection with rendering those services, and Xxxx'x and the Company's
relationships with the Company's customers, consultants, employees, vendors,
banks, accountants, and any other Company product or service participants,
purchasers and suppliers are each of a unique and valuable character. Xxxx
acknowledges that any competition by Xxxx for a two (2) year period following
the Separation Date would materially and unfairly harm the Company's ability to
carry out its business
H. RESIGNATIONS. Xxxx hereby resigns as an officer, director and employee of the
Company and its affiliates effective January 8, 2001. The Company hereby accepts
Xxxx'x voluntary resignation from employment effective January 8, 2001.
I. TERMINATION OF EMPLOYMENT. The Company and Xxxx hereby agree that the
Employment Agreement is terminated as of the date hereof and Xxxx agrees that
the Company has no obligation or liability thereunder and that the Company has
fully performed and fulfilled its obligations thereunder.
J. DIRECTORS' AND OFFICERS' INSURANCE; INDEMNIFICATION. To the extent that the
Company maintains an insurance policy or policies providing liability insurance
for officers or directors of the Company or fiduciaries of any other
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise which such person serves at the request of the Company, the Company
shall cause Xxxx to be covered by such policy or policies in accordance with the
terms thereof to the maximum extent of the coverage available to all of the
directors and officers of the Company under such policy or policies. In the
event that (i) Xxxx is made a party to, or threatened to be made a party to, any
threatened or pending action, suit or proceeding brought by any third party,
whether civil, criminal, administrative or investigative, by reason of the fact
that he was an officer, director, employee, agent or guarntor of the Company or
an affiliate of the Company or was serving at the request of the Company as a
director, officer, employee or agent of any other corporation, partnership,
joint venture, trust or other enterprise, and (ii) the Company provides
indemnification and/or defends and holds harmless with respect to such action,
suit or proceeding to any other person who is or was an officer, director,
employee or agent of the Company or an affiliate of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of any other corporation, partnership, joint venture, trust or other enterprise,
and (iii) the indemnification and/or defense and holding harmless provided to
such other person is more favorable than the indemnification and/or
reimbursement of expenses to which Xxxx would be entitled but for this Section
J, then the Company shall provide indemnification and/or reimbursement of
expenses (as the case may be) to Xxxx in the same amount, at the same time, and
on the same terms and conditions as such indemnification and/or reimbursement of
expenses are provided by the Company to such other person or could be provided
to such other person by statute or under the by-laws of the Company.
K. ENTIRE AGREEMENT. This Agreement constitutes the sole and entire agreement of
the Parties with respect to the subject matter hereof, and there are no
agreements of any nature whatsoever between the Parties hereto regarding the
subject matter hereof. The Parties expressly acknowledge and agree that certain
Employment Agreement, upon execution of this Agreement, be of no further force
or effect. No provision of this Agreement shall be amended, waived or modified
except by an instrument in writing, signed by the Parties hereto.
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L. ENFORCEABILITY. This Agreement may be enforced in any jurisdiction within or
outside the United States and this Agreement shall constitute a severable and
enforceable agreement in each of such jurisdictions, notwithstanding any
contrary choice of law or venue provisions set forth herein. In the event that
any portion of this Agreement is found to be invalid, illegal or unenforceable
for any reason whatsoever, that portion shall be considered to be severable and
the remainder of this Agreement shall continue to be in full force and effect.
The parties shall negotiate in good faith to preserve each Parties anticipated
benefits hereunder.
M. GOVERNING LAW. This Agreement shall be governed in all respects, whether as
to validity, construction, capacity, performance, or otherwise, by the laws of
the State of Colorado, without regard to conflict of law principles. The parties
hereto hereby consent to personal jurisdiction in any court of appropriate
subject matter jurisdiction in which the Company's principal executive officers
are situated.
N. REMEDIES. In the event of default or breach set forth in the above paragraphs
are intended to be non-exclusive, and either party may, in addition to such
remedies, seek any additional remedies available either in law or in equity
O. ARBITRATION. Any dispute or controversy arising under or in connection with
this Agreement shall be settled by arbitration in Colorado Springs, Colorado in
accordance with the rules of the American Arbitration Association. Judgement may
be entered on the arbitrator's award in any court having jurisdiction over this
Agreement. The nonprevailing party shall pay the fees, costs, and expenses of
the arbitration proceeding (including reasonable attorneys' fees).
P. BINDING; ASSIGNMENT. The Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto. No party hereto may
assign or transfer its rights or delegate its duties or obligations hereunder
without the prior written consent of the other party; and any document,
instrument or act for which consent has not been obtained purporting to effect
any such assignment, transfer or delegation shall be void.
Q. CONSTRUCTION. The parties agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not apply
in the interpretation of this Agreement or any amendments or exhibits hereto.
R. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
and each such counterpart will be deemed to be an original, and all such
counterparts shall constitute one and the same instrument.
-SIGNATURE PAGE FOLLOWS-
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
get forth below.
DATED as of the 12th day of January, 2001
FUTUREONE, INC. (A NEVADA CORPORATION)
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxxx - President/CEO
XXXX X. XXXX
/s/ Xxxx X. Xxxx
----------------------------------------
Notary Public
State of Colorado )
County of El Paso )
Sworn and subscribed to me this ____ day of ________ 2001 by Xxxxxx X. Xxxxxxxx,
President/CEO of FutureOne, Inc. known to me to be the individual subscribed by
said name in and who executed the foregoing instrument and acknowledged that
they executed same for the uses and purposes therein set forth.
________________________________ My Commission Expires ____________
Notary Public
State of Colorado )
County of El Paso )
Sworn and subscribed to me this ____ day of ________ 2001 by Xxxx X. Xxxx and
known to me to be the individual subscribed by said name in and who executed the
foregoing instrument and acknowledged that they executed same for the uses and
purposes therein set forth.
________________________________ My Commission Expires ____________
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