SEPARATION AGREEMENT
This Separation Agreement ("Separation Agreement") is made by and
between Xxxxxx Interactive Inc. ("Xxxxxx"), a Delaware corporation with offices
at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, and Xxxxx X. Xxxxx ("Clemm"),
an individual with an address of 0 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
WHEREAS, Clemm has been employed by Xxxxxx as its Vice Chairman,
and
WHEREAS, Clemm and Xxxxxx entered into a Confidentiality and Non-
Competition Agreement dated as of September 1, 1999 (the "Non-Compete
Agreement"), and
WHEREAS, Clemm is the grantee of certain options to purchase
shares of Common Stock of Xxxxxx pursuant to a Non-Qualified Stock Option
Agreement Pursuant to the Xxxxxx Black International Ltd. 1997 Incentive and
Non-Qualified Stock Option Plan dated October 20, 1997 (the "Option Agreement"),
and
WHEREAS, Clemm and Xxxxxx have agreed that Clemm shall resign
from employment by Xxxxxx under the terms set forth in this Separation
Agreement, which terms include among others payments in excess of those to which
Clemm is otherwise entitled and certain additional obligations of Clemm, and
WHEREAS, the parties desire to set forth their mutual agreements
in writing,
NOW THEREFORE, in consideration of the mutual promises and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Resignation. Clemm hereby resigns from his position as an
officer, Vice Chairman, and as an employee of Xxxxxx, effective as of 12:01
a.m., April 1, 2002.
2. Board of Directors. Clemm's resignation under Section 1 hereof
does not apply to his position as a member of the Board of Directors of Xxxxxx,
and he shall continue as a member of the Board of Directors of Xxxxxx until the
earlier of (i) the expiration of his elected term of office as a director, or
(ii) his resignation as a director, or (iii) removal as a director pursuant to
Delaware law and the Certificate of Incorporation and Bylaws of Xxxxxx.
Commencing April 1, 2002, Clemm shall be entitled to the same compensation and
other benefits for services as a director applicable to other non-employee
directors of Xxxxxx.
3. Option Agreement. The terms of the Option Agreement shall
remain unchanged and in full force and effect. Clemm acknowledges that, among
other terms, such Option Agreement provides that the options granted thereby may
not be exercised after the date of termination of the contractual relationship
giving rise to his services on behalf of Xxxxxx, and thus under the terms of the
contractual relationship created by the Non-Compete Agreement, may not be
exercised after March 31, 2003, the expiration of the one-year non-compete
period provided in that agreement.
4. Cashless Exercise. In the event that Clemm chooses to exercise
all or part of his options under the Option Agreement, at Clemm's request Xxxxxx
shall permit Clemm to exercise such options on a cashless basis by receiving
shares of Xxxxxx common stock equal to the net value (as determined below) of
the shares for which the option is exercised under the Option Agreement. Upon
receipt of Clemm's timely written notice of such election, Xxxxxx shall issue to
Clemm a number of shares of Xxxxxx common stock computed using the following
formula:
X = Y(A-B)
----------
A
Where: X = the number of shares to be issued to Clemm
pursuant to the exercise
Y = the number of shares for which the option is
exercised
A = the closing price of one share of Xxxxxx common
stock on the Nasdaq National Market as of the
last business day immediately preceding Clemm's
written notice of exercise of the options B = the
per share exercise price set by the Option
Agreement
Such cashless exercise shall be permitted only if at the time of exercise Clemm
owns and has held for more than six months the number of shares of Xxxxxx common
stock with a market value equal to the aggregate exercise price of the options
being exercised (being Y minus X under the above formula).
5. Non-Compete Agreement. The Non-Compete Agreement shall remain
unchanged and in full force and effect except as expressly modified by this
Separation Agreement. In the event of any inconsistency between the Non-Compete
Agreement and this Separation Agreement, the terms of this Separation Agreement
shall control. For the avoidance of doubt, it is the intention of the parties
that the provisions of the Non-Compete Agreement relating to confidential
information, confidentiality, and ownership of intellectual property are not
inconsistent with the terms of this Separation Agreement and shall survive.
6. Compensation.
------------
(a) Section 6 of the Non-Compete Agreement provides for certain
compensation after employment. Section 6 of the Non-Compete Agreement is hereby
deleted, it being the intention of the parties that the only compensation
(including benefits) to which Clemm is entitled upon his resignation is that set
forth in this Separation Agreement.
(b) Subject to, and in sole consideration of, Clemm's compliance
with the Non-Compete Agreement and the non-competition terms of this Separation
Agreement, Xxxxxx shall provide to Clemm, his designee or estate:
(i) $23,750 on the last day of each calendar month, commencing
April 30, 2002 and continuing through and including March
31, 2004, and
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(ii) health and dental insurance benefits comparable to those
then provided to executive employees of Xxxxxx, subject to
the same co-pay, deductibles, and the like applicable to
such executive employees, commencing April 1, 2002 and
continuing through and including March 31, 2004.
(c) In addition, pursuant to company policy Xxxxxx shall pay
Clemm all of his vacation time accrued and unused through and including March
31, 2002, as well as reimbursement for ordinary and customary business expenses
incurred through and including March 31, 2002. Xxxxxx shall have no continuing
obligation for any other payments or benefits for periods after March 31, 2002
except as set forth herein.
7. Non-Compete.
-----------
(a) Through and including March 31, 2004, Clemm shall not
directly or indirectly in any manner, including without limitation as an
officer, director, employee, consultant, agent, partner, equity owner (except as
passive owner of less than 5% of the shares of publicly traded stock of a
corporation or other entity), compete with Xxxxxx. Without limitation, Clemm
shall not solicit, accept business or opportunities from, or otherwise deal with
any of the clients or customers of Xxxxxx as of the time of his termination
(including any client to whom Xxxxxx has sold services or products in the two
years prior to termination and any prospective client or customer who has been
targeted or approached by Xxxxxx within such time) with respect to any services
or products competitive with those of Xxxxxx, or otherwise in any manner
directly or indirectly competitive with Xxxxxx in any line of business carried
on or planned by Xxxxxx during Executive's employment. It is not the intention
of the foregoing to prevent Clemm from entering into employment or consulting
arrangements with any person or entity that either is not involved in activities
related to market research, or whose market research related activities are not
a line of business but rather are limited to the conduct of research relating
exclusively to that particular person's or entity's customers, products, and the
market for them.
(b) Clemm acknowledges that damages for any breach of this
agreement will be difficult, if not impossible, to calculate and that legal
remedies for breach of this provision will be inadequate. Therefore, Xxxxxx
shall be entitled to obtain injunctive relief to enforce this provision in
addition to any other remedy at law or equity including termination of payments
hereunder.
8. Announcement. Xxxxxx will consult, and make good faith efforts
to jointly agree, with Clemm regarding the wording of an announcement concerning
Clemm's resignation of his employment with Xxxxxx and his continuation as a
member of the Xxxxxx Board of Directors.
9. Release. In consideration of the benefits provided under this
Separation Agreement, Clemm releases Xxxxxx and its employees, officers,
directors, attorneys, affiliates, subsidiaries, successors and assigns, from any
and all claims, causes of action, and/or liabilities of any kind or nature
whatsoever, known or unknown, at law, in equity, or otherwise, that may have
occurred at any time up to the date that this Separation Agreement is executed
by Clemm, including, but not limited to, any and all possible claims arising
from his employment relationship or during his employment with Xxxxxx or as a
result of the parties' agreement to end
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the employment relationship, and hereby agrees not to assert such claims or
causes of action for monetary damages. Such release includes, but is not limited
to, any and all claims arising under any federal, state or local laws, rules or
regulations, including, but not limited to, claims under the Age Discrimination
in Employment Act, Older Workers' Benefit Protection Act, Equal Pay Act, Title
VII of the Civil Rights Act of 1964, as amended, Fair Labor Standards Act,
Americans with Disabilities Act, the Employee Retirement Income Security Act
(ERISA), Family and Medical Leave Act (FMLA), New York State Human Rights Law,
New York Labor Law and any other provisions relating to employment or pay or
benefit practices, or relating to discrimination on the basis of race, creed,
color, age, sex, national origin, disability, or arrest record. Clemm waives his
right to file any charge or complaint on his own behalf and/or to participate in
any charge or complaint which may be made by any other person or organization on
his behalf before any federal, state or local court or administrative agency
against Xxxxxx. Nothing, however, shall be construed as a condition precedent,
penalty, or other limitation on Clemm's right to file a charge or complaint
with, or participate in any investigation or proceeding conducted by the EEOC or
the New York State Division of Human Rights. Should any such charge or complaint
be filed, however, Clemm agrees that, unless otherwise expressly permitted by
law or regulation, he will not accept any relief or recovery therefrom.
Moreover, Clemm confirms that no charge, complaint or action exists in any forum
or form. This release is intended to be as complete and broad as may be
permitted under law, and it shall not be affected by the full or partial
invalidity of any other provision of this Separation Agreement. In the event
that Clemm brings a claim which is determined to be covered by the terms of this
release, he understands and agrees that, unless otherwise expressly prohibited
by law or regulation, he will be required to reimburse the defending parties for
their reasonable attorneys' fees in connection with their defense of any such
claim.
10. Representation/Attorney Fees.
----------------------------
(a) Clemm acknowledges that Xxxxxx advised him to consult with an
attorney before entering into this Separation Agreement, and that he was
represented by legal counsel in the negotiation and drafting of this Separation
Agreement.
(b) Xxxxxx shall reimburse Clemm for $2,000 of his attorney fees
incurred in connection with this Separation Agreement.
11. Nondisparagement.
----------------
(a) Clemm acknowledges that Xxxxxx'x reputation is important in
the continued success of its business, and agrees that he will not discuss or
comment in such a manner as may adversely impact the reputation or public
perception, or otherwise disparage, Xxxxxx or its officers, employees, or
directors in any manner.
(b) Xxxxxx acknowledges that Clemm's reputation is important to
his continued success. Xxxxxx agrees that it and its affiliates, subsidiaries,
successors and assigns, will not, and that it will use all reasonable efforts to
cause its officers, employees, directors, and attorneys, not to, defame,
disparage, or otherwise discuss or comment about Clemm in such a manner as may
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adversely impact his reputation, it being understood that they shall be free to
communicate that Clemm has resigned for personal reasons or to pursue other
interests.
12. Revocation. Clemm acknowledges that he has twenty-one days to
consider this Separation Agreement, its language, meaning, and effect. In the
event that Clemm executes this Separation Agreement prior to the end of such
twenty-one day period, he shall have the balance of the twenty-one day period
plus eight additional days (cumulatively involving the period ending on April
13, 2002) to revoke this Agreement. If Clemm chooses to revoke this Agreement,
he shall exercise such option by delivering written notice of the desire to so
revoke to the Chairman of the Board of Directors of Xxxxxx.
13. Successors and Assigns. This Separation Agreement shall inure
to the benefit of, and shall be binding upon, the respective heirs, legal
representatives, successors, and assigns of the parties hereto.
14. Governing Law. This Separation Agreement shall be construed
under and governed by the laws of the State of New York, without reference to
principles of conflicts of laws. The parties hereto consent to exclusive venue
in the courts of the State of New York sitting in Monroe County, or in the
United States Xxxxxxxx Xxxxx, Xxxxxxx Xxxxxxxx xx Xxx Xxxx with respect to any
dispute regarding the subject matter hereof.
15. Entire Agreement/Waivers. This Separation Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and shall not be modified or amended except in writing signed by
both of the parties. No waiver of any breach of this Separation Agreement shall
be a waiver of any preceding or succeeding breach, and no waiver of any right
under this Separation Agreement shall be construed as a waiver of any other
right. Xxxxxx and Xxxxx shall not be required to give notice to enforce strict
adherence to all terms of this Separation Agreement.
16. Severability. If one or more of the provisions in this
Agreement are deemed unenforceable by law, then the remaining provisions will
continue in full force and effect.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties have executed this Separation
Agreement as of March 15, 2002.
XXXXXX INTERACTIVE INC.
By:/s/
---------------------------------
Title:
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/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
