Exhibit 10.11
SEVERANCE AGREEMENT
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Agreement between NetLive Communications, Inc., a Delaware
Corporation having a place of business at 000 Xxxxxxxx, Xxxxx 000, Xxx
Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxxxx Xxxxx ("Employee"),
an individual residing at 00 Xxxxxx Xxxxxx, Xxxxxxxxx 0, Xxxxxxx, Xxx
Xxxxxx 00000;
Whereas, the Company and Employee previously entered into an
Employment Agreement, effective as of September 1, 1995, pursuant to
which Employee has served as president and chief executive officer of
the Company; and
Whereas, the Employee has agreed to resign from the Company
as its president, its chief executive officer and a member of the
Board of Directors and to serve as a consultant to the Company for a
period of time following his resignation in consideration of which the
Company has agreed to provide Employee with a severance package and to
remunerate Employee with respect to the consulting services Employee
is to provide;
Now, therefore, in consideration of the foregoing and the
mutual promises and covenants herein contained, it is agreed as
follows:
1. Resignation: Employee hereby resigns from the positions of chief
executive officer, president and member of the Board of Directors, as
well as any other position with the Company, effective immediately
upon the Company's Board of Directors ratification of this Agreement
(the "Termination Date"). Attached hereto as Exhibit A is a form of
resignation letter which the Employee will execute simultaneously with
the execution of this Agreement.
2. Severance and Consulting: Upon resignation, the Company shall pay
Employee the sum of $147,500.00. For a period commencing on the
Termination Date and ending September 1, 1997, Employee shall continue
to serve the Company as a consultant, pursuant to the terms of the
Consulting Agreement (a copy of which is attached hereto as Exhibit B)
into which the Company and Employee shall enter simultaneously with
the execution of this Agreement. Among other things, the Consulting
Agreement provides that the Employee shall be remunerated at the rate
of $500.00 per month.
3. Options: For purposes of the vesting of outstanding options to
purchase the Company's common stock held by Employee, the Termination
Date shall be deemed to be September 1, 1997, and any unvested options
held by Employee shall vest as scheduled until that time. In addition,
the Company hereby waives the application of Section 11(a), (d) and
(f) of the Company's 1996 Stock Option Plan and the first sentence of
Paragraph 7 of each of the Option Agreements between the Company and
the Employee pursuant to such Plan. Employee hereby waives application
of Section 6 of the Stock Option Plan. Employee acknowledges that this
paragraph may have the effect of disqualifying certain options held by
Employee as "incentive" options, as that term is used in the Internal
Revenue Code, Section 422. Employee shall have no right to any
additional options other than those already issued and vested and
those issued and
scheduled to vest prior to September 1, 1997. To the extent inconsistent, the
terms of this paragraph shall supersede the terms of any existing option
agreements between Employee and the Company and the applicable terms of the
Company's 1996 Stock Option Plan.
4. Benefits: The Company will maintain Employee's coverage under the Company's
medical, dental and disability plans available to its executives until
September 1, 1998, except that to the extent such plans do not permit further
coverage of Employee following the Termination Date. In such event, the
Company will pay the cost of Employee's COBRA premiums through the period
ending September 1, 1998.
5. Confidentiality and Non-Competition: Employee acknowledges that he remains
subject to Section 5 of the Employment Agreement, pertaining to
confidentiality, following the Termination Date. As required by Section 5 of
the Employment Agreement, Employee agrees that for a period of two years
following the Termination Date, Employee shall not directly or indirectly
compete with the Company in any business in which the Company is presently
engaged, including, but not limited to, the area of Internet voiceconferencing
or videoconferencing. Employee agrees that for a period of one year following
the Termination Date, Employee will not employ nor be employed by, directly or
indirectly, any person who is employed by the Company as of the date of this
Agreement or as of the Termination Date.
6. Releases: The terms of this Agreement shall satisfy any obligations the
Company may have to the Employee pursuant to the Employment Agreement or
otherwise. Upon execution of this Agreement, both the Company and the Employee
shall execute general releases in favor of the other in the forms attached
hereto as Exhibits C and D.
7. Representations:
(a) Company hereby represents and warrants that it has been duly authorized
to enter into this Agreement and that the Agreement is a binding
obligation upon the Company, except that this Agreement shall not bind
either the Company or Employee until ratified by the Company's Board of
Directors. The Company shall use its best efforts to obtain such
ratification.
(b) Employee hereby represents and warrants that during his employment and/or
association with the Company he has not committed, participated in or has
any knowledge of any violations of applicable law relating to the Company
or its assets.
8. Publicity: Subject to the parties' respective obligations under the federal
securities and other applicable laws, neither party shall disparage the other
and any press release or other publication of information pertaining to this
Agreement or Employee's resignation shall be subject to the approval of the
other party, which approval shall not be unreasonably withheld.
9. Legal and Tax Advice: Employee has consulted counsel with respect to the
terms of this Agreement and has consulted with his personal tax advisor
regarding the tax implications of the modification of the terms of Employee's
existing option agreements with the Company. To the
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extent that the payments in paragraph 3 are determined to be subject to any
taxes or other state or federal withholdings, the Employee will be solely
responsible for payment of such taxes or withholdings. The Employee agrees to
indemnify, defend and hold the Company harmless from any and all claims,
demands, damages, losses, suits, judgments, liabilities, settlements, expenses
and costs that the Company may incur, suffer, or be subject to as a result of
or in connection with the Company's failure to withhold taxes or other
required state or federal withholdings from the payments made under paragraph
3.
10. Interpretation: To the extent there are any inconsistencies between the
terms of this Agreement and any other agreement between Employee and the
Company, the terms of this Agreement shall govern.
11. Choice of Law: This agreement shall be governed under New York law without
regard to principles of conflicts of law. Any disputes shall be resolved in
the state or federal courts located in New York County.
12. Cooperation in Litigation: Employee agrees to cooperate fully with the
Company in the Company's defense of any future or present claims, causes
of actions, suits, debts, obligations, promises and demands asserted
against the Company arising out of or relating to any of the Company's
affairs at any time in the past through the time of execution of this
Agreement. The Company agrees to compensate Employee for his time
expended in such cooperation at his regular hourly rate of $100 per hour.
13 Covenant Not To Xxx:
(a) The Employee, his successors and assigns (the "Employee" being used
collectively for the purposes of this Paragraph 13) hereby irrevocably and
unconditionally covenants not to xxx, directly or indirectly, the Company, its
officers, directors, shareholders, employees, agents, and affiliates (the
"Company" being used collectively for the purposes of this Paragraph 13) or to
assist others in doing so (except as compelled by subpoena or applicable law),
of, from or with respect to any and all claims, rights, damages, demands,
causes or liabilities of any nature whatsoever, contingent or fixed, whether
due or to become due, that the Employee has had, now has or may have at any
future time by reason of any cause, matter or thing whatsoever, directly or
indirectly, related to any action taken or omitted to be taken by the Company
on or prior to the date hereof; provided, however, that the following shall be
preserved and excluded from the foregoing covenant: (i) any rights of Employee
under this Agreement or any agreement executed simultaneous herewith; and (ii)
any claims, causes of actions, suits, debts, obligations, promises and demands
of any kind, whether legal or equitable, which the Employee may have against
NetLive Communications, Inc., arising at any time in the past through the time
of execution of this Release arising out of any events or conditions that were
not known or should not have been known through the exercise of reasonable
diligence, at the time of execution of this Release, by Xxxxxxxx Xxxxx.
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(b) The Company hereby irrevocably and unconditionally covenants not to xxx,
directly or indirectly, the Employee and his successors and assigns, or to
assist others in doing so (except as compelled by subpoena or applicable law),
of, from or with respect to any and all claims, rights, damages, demands,
causes or liabilities of any nature whatsoever, contingent or fixed, whether
due or to become due, that the Company has had, now has or may have at any
future time by reason of any cause, matter or thing whatsoever, directly or
indirectly, related to any action taken or omitted to be taken by the Employee
on or prior to the date hereof; provided, however, that the following shall be
preserved and excluded from the foregoing covenant: (i) any rights of the
Company under the Agreement or any agreement executed simultaneous herewith;
and (ii) any claims, causes of actions, suits, debts, obligations, promises
and demands of any kind, whether legal or equitable, which NetLive
Communications, Inc. may have against Employee, arising at any time in the
past through the time of execution of this Release arising out of any events
or conditions that were not known or should not have been known through the
exercise of reasonable diligence, at the time of execution of this Release, to
any officer or member of the Board of Directors of NetLive Communications,
Inc. other than Xxxxxxxx Xxxxx.
Dated: June 12, 1997
NetLive Communications, Inc.
By:
/s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx
Chairman of the Board
/s/ Xxxxxxxx Xxxxx
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Xxxxxxxx Xxxxx, Individually
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Exhibit A
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00 Xxxxxx Xxxxxx, Xxx. 0
Xxxxxxx, Xxx Xxxxxx 00000
June 12, 1997
Board of Directors
NetLive Communications, Inc.
000 Xxxxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Pursuant to the Severance Agreement between NetLive
Communications, Inc. (the "Company") and me, dated June 12, 1997, I
hereby resign from the positions of chief executive officer,
president, chief financial officer, treasurer and member of the Board
of Directors and from all other positions I hold with the Company
immediately upon ratification of the Agreement between the Company and
myself dated June 12, 1997. I hereby acknowledge that the Board of
Directors, the Company or anyone else is not obligated to nominate me
at any time in the future for a position on the Board of Directors.
Very truly yours,
/s/ Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxx
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Exhibit B
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CONSULTING AGREEMENT
Agreement, dated and effective June 12, 1997, by and between NetLive
Communications, Inc., a Delaware Corporation having a place of business at 000
Xxxxxxxx, Xxxxx 000, Xxx Xxxx, Xxx Xxxx 00000 (the "Corporation"), and Xxxxxxxx
Xxxxx, an individual residing at 00 Xxxxxx Xxxxxx, Xxxxxxxxx 0, Xxxxxxx, XX
00000 (the "Consultant").
W I T N E S S E T H:
WHEREAS, the Corporation desires to engage the Consultant to consult
to the Corporation and the Consultant desires to consult for the Corporation
pursuant to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and convenants herein contained, it is agreed as follows:
1. ENGAGEMENT; DUTIES .
(a) The Corporation engages the Consultant, and the Consultant hereby
accepts engagement by the Corporation, and Consultant hereby accepts such
retention by the Corporation to undertake such services as the Corporation
shall reasonably request in connection with the Corporation's business,
including, but not limited to, providing the Corporation with financial,
strategic and general organizational and business advice as the corporation
shall reasonably request.
(b) The Consultant shall provide advisory services to the Corporation
from a location of the Consultant's choice.
(c) The Consultant shall devote such of his time and efforts as shall
be necessary to the proper provision of advisory services under this Agreement.
The Consultant may engage in any other business ventures and activities,
provided that such other ventures and activities will not result in violation
of the provisions of Section 5 hereof, or the Severance Agreement between the
Consultant and the Company, executed simultaneously herewith.
2. TERMS
The Consultant's engagement hereunder shall be for a term of four and
a half months commencing on June 12, 1997 and continuing through September 1,
1997.
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3. COMPENSATION
(a) As compensation for the performance of his duties on behalf of the
Corporation, the Consultant shall be compensated as follows:
(i) The Corporation shall pay the Consultant a non-cancelable,
non-refundable retainer ("Retainer") at the rate of $500 per month. The first
payment of $250 (representing the pro rata portion of the payment for the month
of June) shall be payable on the signing of this agreement, and all remaining
payments shall be payable on the first day of each month, in advance.
The Corporation is retaining the Consultant as an independent
contractor and as such will not withhold any amounts payable hereunder for
taxes. The Consultant shall be responsible for payment of income, social
security and other government taxes as an independent entity.
(b) The Corporation shall reimburse the Consultant for all normal,
usual and necessary expenses incurred by the Consultant in furtherance of the
business and affairs of the Corporation against receipt by the Corporation of
appropriate vouchers or other proof of the Consultant's expenditures and
otherwise in accordance with such Expense Reimbursement Policy as may from time
to time be adopted by the Board of Directors of the Corporation.
4. REPRESENTATIONS AND WARRANTIES BY
THE CONSULTANT AND CORPORATION
The Consultant hereby represents and warrants to the Corporation as
follows:
(a) Neither the execution and delivery of this Agreement nor the
performance by the Consultant of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default under (whether immediately, upon the giving of
notice or lapse of time or both) any prior employment agreement, contract, or
other instrument to which the Consultant is a party or by which he is bound.
(b) The Consultant has the full right, power and legal capacity to
enter and deliver this Agreement and to perform his duties and other
obligations hereunder. This Agreement constitutes the legal, valid and binding
obligation of the Consultant enforceable against him in accordance with its
terms. No approvals or consents of any persons or entities are required for the
Consultant to execute and deliver this Agreement or perform his duties and
other obligations hereunder.
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The Corporation hereby represents and warrants to the Consultant as
follows:
(a) The Corporation is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with all requisite corporate
power and authority to own its properties and conduct its business in the
manner presently contemplated.
(b) The Corporation has full power and authority to enter into this
Agreement and to incur and perform its obligations hereunder.
(c) The execution, delivery and performance by the Corporation of this
Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of the
Corporation, or any agreement or instrument to which the Corporation is a party
or by which the Corporation of any of its properties may be bound or affected.
(d) The Corporation does not now contemplate and will not in the
future require the performance by the Consultant of acts that would conflict
with his obligations to any former employer or under applicable law.
Specifically, the Corporation acknowledges that the Consultant's duties will
not include the solicitation of Consultants or customers of any former employer
or consulting assignment, disclosure to the Corporation of any trade secrets of
a former employer or consulting assignment, or the use by the Consultant in the
course of his employment of any documents provided to the Consultant by a
former employer or inventions developed by the Consultant during any former
engagement.
5. CONFIDENTIAL INFORMATION
The Consultant agrees that during the course of his engagement or at
any time after termination, he will not disclose or make accessible to any
other person, the Corporation's products, services and technology, both current
and under development, promotion and marketing programs, lists, trade secrets
and other confidential and proprietary business information of the Corporation
or any of its clients. The Consultant agrees: (i) not to use any such
information for himself or others; and (ii) not to take any such material or
reproductions thereof from the Corporation's facilities at any time during his
engagement by the Corporation, except as required in the Consultant's duties to
the Corporation. The Consultant agrees immediately to return all such material
and reproductions thereof in his possession to the Corporation upon request and
in any event upon termination of engagement. The foregoing notwithstanding, the
parties acknowledge and agree that the confidential and proprietary information
of the Corporation and/or its clients shall not include (a) information already
in the public domain or hereafter disclosed to the public; (b) general
knowledge about the Internet software and content development industry obtained
through the Consultant's academic and professional experience, including but
not limited to knowledge of (i) the business of other companies in the field,
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(ii) general business methods and structures useful in operating Internet or
computer related companies, (iii) the status of patents and other technology in
the field other than those of the Company; or (c) any inventions, discoveries,
improvements, ideas, writings, computer programs, or other work product of the
Consultant made or developed by the Consultant before his engagement or prior
employment by the Corporation.
Except with prior written authorization by the Corporation, the
Consultant agrees not to disclose or publish any of the confidential, technical
or business information or material of the Corporation, its clients or any
other party to whom the Corporation owes an obligation of confidence, at any
time during or after his engagement with the Corporation.
6. NOTICES
Any notice or other communication under this Agreement shall be in
writing and shall be deemed to have been given: when delivered personally
against receipt therefor; one (1) day after being sent by Federal Express or
similar overnight delivery; or three (3) days after being mailed registered or
certified mail, postage prepaid, return receipt requested, or one (1) day after
being sent by telecopier (with mechanical telecopier confirmation of receipt),
to either party at the address set forth above, or to such other address as
such party shall give by notice hereunder to the other party.
7. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a court of
competent jurisdiction to be invalid, illegal or incapable of being enforced in
whole or in part, the remaining conditions and provisions or portions thereof
shall nevertheless remain in full force and effect and enforceable to the
extent they are valid, legal and enforceable, and no provision shall be deemed
dependent upon any other covenant or provision unless so expressed herein.
8. ENTIRE AGREEMENT: MODIFICATION
This Agreement contains the entire agreement of the parties relating
to the subject matter hereof, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein. No modification of this Agreement shall be
valid unless made in writing and signed by the parties hereto.
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9. BINDING EFFECT
The rights, benefits, duties and obligations under this Agreement
shall inure to, and be binding upon, the Corporation, its successors and
assigns, and upon the Consultant and his legal representatives. This Agreement
constitutes a personal service agreement, and the performance of the
Consultant's obligations hereunder may not be transferred or assigned by the
Consultant.
10. NON-WAIVER
The failure of either party to insist upon the strict performance of
any of the terms, conditions and provisions of this Agreement shall not be
construed as a waiver or relinquishment of future compliance therewith, and said
terms, conditions and provisions shall remain in full force and effect. No
waiver of any term or condition of this Agreement on the part of either party
shall be effective for any purpose whatsoever unless such waiver is in writing
and signed by such party.
11. GOVERNING LAW
This Agreement shall be governed under New York law without regard to
principles of conflicts of law. Any disputes shall be resolved in the state or
federal courts located in New York County.
12. HEADINGS
The headings of paragraphs are inserted for convenience and shall not
affect any interpretation of this Agreement.
13. ATTORNEYS FEES, COSTS
In the event a party breaches this Agreement, the breaching party
shall pay all costs and attorneys' fees incurred by the other party in
connection with such breach, whether or not any litigation is commenced.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
NETLIVE COMMUNICATIONS, INC.
By: /s/Xxxxxxx Xxxxxxxxxx
-----------------------
Xxxxxxx Xxxxxxxxxx
Chairman of the Board
Dated: June 12, 1997
XXXXXXXX XXXXX
/s/Xxxxxxxx Xxxxx
-----------------------
Xxxxxxxx Xxxxx, Individually
Dated: June 12, 1997
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Exhibit C
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RELEASE
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Xxxxxxxx Xxxxx, including his successors and assigns
(collectively, the "Employee"), hereby releases NetLive,
Communications, Inc. ("NetLive"), including its officers, directors,
shareholders, employees, agents and affiliates (collectively, the
"Company"), from any and all claims, causes of actions, suits, debts,
obligations, promises and demands of any kind, whether legal or
equitable, which the Employee may have against the Company, arising at
any time in the past through the time of execution of this Release;
provided, however, that the following shall be preserved and excluded
from the foregoing Release: (i) any rights of Xxxxxxxx Xxxxx under the
Severance Agreement between NetLive and Xxxxxxxx Xxxxx dated June 12,
1997 or any agreement executed simultaneous therewith; and (ii) any
claims, causes of actions, suits, debts, obligations, promises and
demands of any kind, whether legal or equitable, which the Employee
may have against NetLive, arising at any time in the past through the
time of execution of this Release arising out of any events or
conditions that were not known or should not have been known through
the exercise of reasonable diligence, at the time of execution of this
Release, by Xxxxxxxx Xxxxx.
/s/ Xxxxxxxx Xxxxx
----------------------
Xxxxxxxx Xxxxx
Sworn to before me this
12th day of June, 1997
/s/ Xxxxxxx X. Xxxxxxx XXXXXXX X. XXXXXXX
---------------------- Notary Public, State of New York
Notary Public No. 00-0000000
Qualified in Nassau County
Commission Expires March 30, 1998
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Exhibit D
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RELEASE
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NetLive, Communications, Inc. ("NetLive"), including
its officers, directors, shareholders, employees, agents and
affiliates (collectively, the "Company"), hereby releases Xxxxxxxx
Xxxxx, including his successors and assigns (collectively, the
"Employee") from any and all claims, causes of actions, suits, debts,
obligations, promises and demands of any kind, whether legal or
equitable, which the Company may have against Employee, arising at any
time in the past through the time of execution of this Release;
provided, however, that the following shall be preserved and excluded
from the foregoing Release: (i) any rights of NetLive under the
Severance Agreement between NetLive and Xxxxxxxx Xxxxx dated June 12,
1997 or any agreement executed simultaneous therewith; and (ii) any
claims, causes of actions, suits, debts, obligations, promises and
demands of any kind, whether legal or equitable, which NetLive may
have against Employee, arising at any time in the past through the
time of execution of this Release arising out of any events or
conditions that were not known or should not have been known through
the exercise of reasonable diligence, at the time of execution of this
Release, by any NetLive officer or member of the NetLive Board of
Directors other than Xxxxxxxx Xxxxx
NetLive Communications, Inc.
By:
/s/ Xxxxxxx Xxxxxxxxxx
---------------------------
Xxxxxxx Xxxxxxxxxx
Sworn to before me this
12th day of June, 1997
/s/ Xxxxxxx X. Xxxxxxx XXXXXXX X. XXXXXXX
---------------------- Notary Public, State of New York
Notary Public No. 00-0000000
Qualified in Nassau County
Commission Expires March 30, 1998
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