SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit 10.5
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (this “Agreement”) is hereby entered into by and
between Xxxxx X. Xxxxxxxx, an individual (the “Executive”), and DDi Corp., a Delaware corporation,
on behalf of itself and all of its subsidiaries (collectively, “the Company”).
Recitals
A. The Executive has been employed by the Company pursuant to an Offer Letter by and between
the Company and the Executive dated September 29, 2006 (the “Offer Letter”), serving as Senior Vice
President — Sales of the Company; and
B. The Executive and the Company have entered into a Severance Agreement dated October 10,
2005 (the “Severance Agreement”); and
C. The Executive’s employment with the Company and any of its parents, direct or indirect
subsidiaries, affiliates, divisions or related entities (collectively referred to herein as “the
Company and its Related Entities”) will be ended on the terms and conditions set forth in this
Agreement.
Agreement
In consideration of the mutual promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereby agree
as follows:
1. Effective Date. Except as otherwise provided herein, this Agreement shall be
effective on the eighth day after it has been executed by both of the parties (the “Effective
Date”).
2. End of Employment. The Executive’s employment with the Company and its Related
Entities has ended or will end, effective as of 5:00 P.M. Pacific Time, on March 31, 2006 (the
“Termination Date”).
3. Continuation of Benefits After the Termination Date. Except as expressly provided
in this Agreement or in the plan documents governing the Company’s employee benefit plans, after
the Termination Date, the Executive will no longer be eligible for, receive, accrue, or participate
in any other benefits or benefit plans provided by the Company and its Related Entities, including,
without limitation, medical, dental and life insurance benefits, and the Company’s 401(k)
retirement plan; provided, however, that nothing in this Agreement shall waive the Executive’s
right to any vested amounts in the Company’s 401(k) retirement plan, which amounts shall be handled
as provided in the plan.
4. COBRA Benefits. The Company shall provide reimbursement of insurance premiums
payable to continue Executive’s group health for the first twelve (12) months following the
Termination Date, including coverage pursuant to the provisions of
COBRA, if applicable, as long as the Executive has not revoked this Agreement as provided in
Section 15(c), below, and the Company’s counsel has received a signed original of this Agreement.
5. Normal Salary Through Termination Date. Within one business day after the
Termination Date, the Company shall pay the Executive the prorated portion of her salary earned
through the Termination Date.
6. Severance Payments. In return for the Executive’s promises in this Agreement, the
Company will provide Executive with a severance payment in the gross amount of $225,000, which is
equal to twelve (12) months of salary (“Severance Payment”), less deductions required by law. The
foregoing amount shall be paid as salary continuation on regularly scheduled payroll dates for the
duration of the 12 month period following the Termination Date (the “Severance Period”), as long as
the Executive has not revoked this Agreement as provided in Section 15(c), below, and the Company’s
counsel has received a signed original of this Agreement. The payments shall be made, at the option
of the Executive, by checks mailed to the Executive or direct deposit to an account specified by
her.
7. Stock Options. Any outstanding unvested stock options and restricted stock
previously granted to Executive shall be forefeited as of the Termination Date in accordance with
the terms of the Company’s 2005 Stock Incentive Plan.
8. Effect of Subsequent Employment. If the Executive accepts employment any time prior
to the expiration of the Severance Period, the Company’s obligation to pay premiums for insurance
coverage under COBRA or otherwise will be extinguished as of the date the Executive becomes
eligible for coverage under the group health plan of the Executive’s new employer.
9. Acknowledgement of Total Compensation and Indebtedness. The Executive acknowledges
and agrees that the cash payments under Sections 5 and 6 of this Agreement extinguish any and all
obligations for monies, or other compensation or benefits that the Executive claims or could claim
to have earned or claims or could claim is owed to her as a result of her employment by the Company
and its Related Entities through the Termination Date, under the Offer Letter, the Severance
Agreement or otherwise.
10. Tax Consequences. The Executive acknowledges that (a) the Company has not made any
representations to her about, and that she has not relied upon any statement in this Agreement with
respect to, any individual tax consequences that may arise by virtue of any payment provided under
this Agreement and/or her exercise of any stock options, including, but not limited to, the
applicability of Section 409A of the Internal Revenue Code, and (b) she has or will consult with
her own tax advisors as to any such tax consequences.
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11. Status of Related Agreements and Future Employment.
(a) Agreements Between the Executive and the Company. The Executive and the Company
agree that, in addition to this Agreement, the Offer Letter and the Severance Agreement are the
only other executed agreement between the Company and the Executive relating to the Executive’s
employment.
(b) Offer Letter and Severance Agreement. The parties agree that the Offer Letter and
the Severance Agreement shall be terminated as of the Termination Date.
12. Release by the Executive. Except as otherwise expressly provided in this
Agreement, the Executive, for herself and her heirs, executors, administrators, assigns,
affiliates, successors and agents (collectively, the “Executive’s Affiliates”) hereby fully and
without limitation releases and forever discharges the Company and its Related Entities, and each
of their respective agents, representatives, shareholders, owners, officers, directors, employees,
consultants, attorneys, auditors, accountants, investigators, affiliates, successors and assigns
(collectively, the “Company Releasees”), both individually and collectively, from any and all
rights, claims, demands, liabilities, actions, causes of action, damages, losses, costs, expenses
and compensation, of whatever nature whatsoever, known or unknown, fixed or contingent, which the
Executive or any of the Executive’s Affiliates has or may have or may claim to have against the
Company Releasees by reason of any matter, cause, or thing whatsoever, from the beginning of time
to the Effective Date (“Claims”), including, without limiting the generality of the foregoing, any
Claims arising out of, based upon, or relating to the recruitment, hiring, employment, relocation,
remuneration, investigation, or termination of the Executive by any of the Company Releasees, the
Executive’s tenure as an employee and/or an officer of any of the Company Releasees, any agreement
or compensation arrangement between the Executive and any of the Company Releasees (including,
without limitation, the Offer Letter and the Severance Agreement), or any act or occurrence in
connection with any actual, existing, proposed, prospective or claimed ownership interest of any
nature of the Executive or the Executive’s Affiliates in equity capital or rights in equity capital
or other securities of any of the Company Releasees, to the maximum extent permitted by law. The
Executive specifically and expressly releases any Claims arising out of or based on: the California
Fair Employment and Housing Act, as amended; Title VII of the Civil Rights Act of 1964, as amended;
the Americans With Disabilities Act; the National Labor Relations Act, as amended; the Equal Pay
Act; ERISA; any provision of the California Labor Code; the California common law on fraud,
misrepresentation, negligence, defamation, infliction of emotional distress or other tort, breach
of contract or covenant, violation of public policy or wrongful termination; state or federal wage
and hour laws; or any other state or federal law, rule, or regulation dealing with the employment
relationship or operating a publicly held business. Nothing contained in this Section 12 or any
other provision of this Agreement shall release or waive any right that Executive has to
indemnification and/or reimbursement of expenses by the Company with respect to which Executive may
be eligible as provided in the Company’s Certificate of Incorporation, Bylaws and any applicable
directors and officers liability insurance.
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13. Waiver of Civil Code Section 1542.
(a) The Executive understands and agrees that the release provided herein extends to all
Claims released above whether known or unknown, suspected or unsuspected. The Executive expressly
waives and relinquishes any and all rights she may have under California Civil Code Section 1542,
which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR
HER SETTLEMENT WITH THE DEBTOR.”
(b) The Executive expressly waives and releases any rights and benefits which she has or may
have under any similar law or rule of any other jurisdiction. It is the intention of each party
through this Agreement to fully, finally and forever settle and release the Claims as set forth
above. In furtherance of such intention, the release herein given shall be and remain in effect as
a full and complete release of such matters notwithstanding the discovery of any additional Claims
or facts relating thereto.
14. Release of Federal Age Discrimination Claims by the Executive. The Executive
hereby knowingly and voluntarily waives and releases all rights and claims, known or unknown,
arising under the Age Discrimination In Employment Act of 1967, as amended, which she might
otherwise have had against the Company or any of the Company Releasees regarding any actions which
occurred prior to the Effective Date.
15. Rights Under the Older Workers Benefit Protection Act. In accordance with the
Older Workers Benefit Protection Act of 1990, the Executive hereby is advised of the following:
(a) The Executive has the right to consult with an attorney before signing this Agreement and
is encouraged by the Company to do so;
(b) The Executive has twenty-one (21) days from her receipt of this Agreement to consider it;
and
(c) The Executive has seven (7) days after signing this Agreement to revoke Sections 9, 12 and
14 of this Agreement (which must be revoked in their entirety and as a group), and such Sections of
this Agreement (as a group) will not be effective until that revocation period has expired without
exercise. The Executive agrees that in order to exercise her right to revoke this Agreement within
such seven (7) day period, she must do so in a signed writing delivered to the Company’s General
Counsel before the close of business on the seventh calendar day after she signs this Agreement.
16. Confidentiality of Agreement. After the execution of this Agreement by the
Executive, neither the Executive, her attorney, nor any person acting by, through, under or in
concert with them, shall disclose any of the terms of or amount paid under
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this Agreement (other than to state that the Company has filed this Agreement and/or
agreements related thereto as public documents) or the negotiation thereof to any individual or
entity; provided, however, that the foregoing shall not prevent such disclosures by Executive to
her attorney, tax advisors and/or immediate family members, or as may be required by law.
17. No Filings. The Executive represents that she has not filed any lawsuits, claims,
charges or complaints against the Company Releasees with any local, state or federal agency or
court from the beginning of time to the date of execution of this Agreement; that she will not do
so at any time hereafter based upon events prior to the date of execution of this Agreement; that
she will not induce, encourage, solicit or assist any other person or entity to file or pursue any
proceeding of any kind against the Company Releasees or voluntarily appear or invite a subpoena to
testify in any such legal proceeding; and that, if any such agency or court ever assumes
jurisdiction over any such lawsuit, claim, charge or complaint and/or purports to bring any legal
proceeding, in whole or in part, on behalf of the Executive based upon events occurring prior to
the execution of this Agreement, the Executive will request such agency or court to withdraw from
and/or to dismiss the lawsuit, claim, charge or complaint with prejudice. This Section 17 shall not
prohibit the Executive from challenging the validity of the ADEA release in Section 14 of this
Agreement. It shall not be a breach of this Section 17 for Executive to testify truthfully in any
judicial or administrative proceeding.
18. Confidential and Proprietary Information. The Executive acknowledges that certain
information, observations and data obtained by her during the course of or related to her
employment with the Company and its Related Entities are the sole property of the Company and its
Related Entities and is confidential and proprietary information of the Company (together
“Confidential Information”), including but not limited to information or plans concerning the
Company’s customer relationships; personnel; sales, marketing and financial operations and methods;
trade secrets, formulae, devices; secret inventions; processes; and other compilations of
information, records, and specifications. The Executive represents and warrants that she has
returned all files, customer lists, financial information and other property of the Company and its
Related Entities that were in the Executive’s possession or control without retaining copies
thereof. The Executive further represents and warrants that she does not have in her possession or
control any files, customer lists, financial information or other property of the Company and its
Related Entities. The Executive agrees that she will not disclose to any person or use any such
information, observations or data without the written consent of the Chief Executive Officer or
Board of Directors of the Company. If the Executive is served with a deposition subpoena or other
legal process calling for the disclosure of such information, or if she is contacted by any third
person requesting such information, she will notify the Company’s Chief Executive Officer as soon
as is reasonably practicable after receiving notice and will cooperate with the Company and its
Related Entities in minimizing the disclosure thereof.
19. Prohibited Activities. The Executive agrees that she will not, directly or
indirectly, become engaged as an owner, employee, consultant or agent of any printed circuit board manufacturing or assembly entity for a period of twelve (12) months from the
Termination Date.
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20. Remedies. The Executive acknowledges that any unfair competition or misuse of
trade secret or Confidential Information belonging to the Company and its Related Entities, and any
violation of Sections 16, 18 and 19 of this Agreement, will result in irreparable harm to the
Company and its Related Entities, and therefore, the Company and its Related Entities shall, in
addition to any other remedies, be entitled to immediate injunctive relief. In addition, in the
event of a breach of any provision of this Agreement by the Executive, including Sections 16, 18
and 19, the Executive shall forfeit, and the Company and its Related Entities may cease paying, any
unpaid installments of the Severance Payment under Section 6, above, and the Company and its
Related Entities shall, without excluding other remedies available to them, be entitled to an award
in the amount of all installments of the Severance Payment made by the Company to the Executive.
21. Cooperation Clause.
(a) To facilitate the orderly conduct of the Company and its Related Entities’ businesses, for
the Severance Period, the Executive agrees to cooperate, at no charge, with the Company and its
Related Entities’ reasonable requests for information or assistance related to the time of her
employment.
(b) For the Severance Period, the Executive agrees to cooperate, at no charge, with the
Company’s and its Related Entities’ and its or their counsel’s reasonable requests for information
or assistance related to (i) any investigations (including internal investigations) and audits of
the Company and its Related Entities’ management’s current and past conduct and business and
accounting practices and (ii) the Company and its Related Entities’ defense of, or other
participation in, any administrative, judicial, or other proceeding arising from any charge,
complaint or other action which has been or may be filed relating to the period during which the
Executive was engaged in employment with the Company and its Related Entities. The Company will
promptly reimburse Executive for her reasonable, customary and documented out-of-pocket business
expenses in connection with the performance of her duties under this Section 21. Except as
required by law or authorized in advance by the Board of Directors of the Company, the Executive
will not communicate, directly or indirectly, with any third party, including any person or
representative of any group of people or entity who is suing or has indicated that a legal action
against the Company and its Related Entities or any of their directors or officers is being
contemplated, concerning the management or governance of the Company and its Related Entities, the
operations of the Company and its Related Entities, the legal positions taken by the Company and
its Related Entities, or the financial status of the Company and its Related Entities. If asked
about any such individuals or matters, the Executive shall say: “I have no comment,” and shall
direct the inquirer to the Company. The Executive acknowledges that any violation of this Section
21 will result in irreparable harm to the Company and its Related Entities and will give rise to an
immediate action by the Company and its Related Entities for injunctive relief.
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22. No Future Employment. The Executive understands that her employment with the
Company and its Related Entities will irrevocably end as of the Termination Date and will not be
resumed at any time in the future. The Executive agrees that she will not apply for, seek or accept
employment by the Company and its Related Entities at any time, unless invited to do so by the
Company and its Related Entities.
23. Non-disparagement. The Executive agrees not to disparage or otherwise publish or
communicate derogatory statements about the Company and its Related Entities and any director,
officer or manager and/or the products and services of these entities to any third party. The
Company, on behalf of itself and its Related Entities, agrees not to disparage or communicate
derogatory statements about the Executive. Neither truthful testimony in a judicial or
administrative proceeding nor factually accurate statements in legal or public filings shall
violate this provision.
24. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of California, without giving effect to principles of conflict of laws.
25. Venue and Waiver of Right to Jury Trial. The parties hereby agree that all actions
or proceedings arising directly or indirectly hereunder, whether instituted by the Executive or the
Company and its Related Entities, shall be litigated in courts having situs within the State of
California, County of Orange, and that each of the parties hereby expressly consents to the
jurisdiction of any local, state or federal court located within said state and county, and consent
that any service of process in such action or proceeding may be made by personal service upon the
parties wherever such parties may be located, respectively, or by certified or registered mail
directed to the Executive at his/its last known address. The parties hereby waive trial by jury in
connection with any future dispute between them, any objection based on forum non conveniens, and
any objection to venue of any action instituted hereunder.
26. Attorneys’ Fees. Except as otherwise provided herein, in any action, litigation or
proceeding between the parties arising out of or in relation to this Agreement, including any
purported breach of this Agreement, the prevailing party shall be entitled to an award of its costs
and expenses, including reasonable attorneys’ fees.
27. Non-Admission of Liability. The parties understand and agree that neither the
payment of any sum of money nor the execution of this Agreement by the parties will constitute or
be construed as an admission of any wrongdoing or liability whatsoever by any party.
28. Severability. If any one or more of the provisions contained herein (or parts
thereof), or the application thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity and enforceability of any such provision
in every other respect and of the remaining provisions hereof will not be in any way impaired or
affected, it being intended that all of the rights and privileges shall be enforceable to the
fullest extent permitted by law.
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29. Entire Agreement. This Agreement represents the sole and entire agreement among
the parties and, except as expressly stated herein, supersedes all prior agreements, negotiations
and discussions among the parties with respect to the subject matters contained herein.
30. Waiver. No waiver by any party hereto at any time of any breach of, or compliance
with, any condition or provision of this Agreement to be performed by any other party hereto may be
deemed a waiver of similar or dissimilar provisions or conditions at the same time or at any prior
or subsequent time.
31. Amendment. This Agreement may be modified or amended only if such modification or
amendment is agreed to in writing and signed by duly authorized representatives of the parties
hereto, which writing expressly states the intent of the parties to modify this Agreement.
32. Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original as against any party that has signed it, but all of which
together will constitute one and the same instrument.
33. Assignment. This Agreement inures to the benefit of and is binding upon the
Company and its successors and assigns, but the Executive’s rights under this Agreement are not
assignable, except to her estate.
34. Notice. All notices, requests, demands, claims and other communications hereunder
shall be in writing and shall be deemed to have been duly given (a) if personally delivered; (b) if
sent by telecopy or facsimile (except for legal process); or (c) if mailed by overnight or by first
class, certified or registered mail, postage prepaid, return receipt requested, and properly
addressed as follows:
If to the Company:
|
DDi Corp. 0000 Xxxxx Xxxxxx Xxxxxxx, Xxxxxxxxxx 00000 Attn: General Counsel Fax No. (000) 000-0000 |
|
If to Executive:
|
Xx. Xxxxx X. Xxxxxxxx 000 Xxxxxxx Xxxx Xxxxx, XX 00000 Fax No: |
Such addresses may be changed, from time to time, by means of a notice given in the manner provided
above. Notice will conclusively be deemed to have been given when personally delivered (including,
but not limited to, by messenger or courier); or if given by mail, on the third day after being
sent by first class, certified or registered mail; or if given by Federal Express or other similar
overnight service, on the date of delivery; or if given by telecopy or facsimile machine during
normal business hours on a business day, when confirmation of transmission is indicated by the
sender’s machine; or if given by telecopy or facsimile machine at any time other than during normal
business hours on a
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business day, the first business day following when confirmation of transmission is indicated by
the sender’s machine. Notices, requests, demands and other communications delivered to legal
counsel of any party hereto, whether or not such counsel shall consist of in-house or outside
counsel, shall not constitute duly given notice to any party hereto.
35. Miscellaneous Provisions.
(a) The parties represent that they have read this Agreement and fully understand all of its
terms; that they have conferred with their attorneys, or have knowingly and voluntarily chosen not
to confer with their attorneys about this Agreement; that they have executed this Agreement without
coercion or duress of any kind; and that they understand any rights that they have or may have and
sign this Agreement with full knowledge of any such rights.
(b) Both parties have participated in the drafting of this Agreement with the assistance of
counsel to the extent they desired. The language in all parts of this Agreement must be in all
cases construed simply according to its fair meaning and not strictly for or against any party.
Whenever the context requires, all words used in the singular must be construed to have been used
in the plural, and vice versa, and each gender must include any other gender. The captions of the
Sections of this Agreement are for convenience only and must not affect the construction or
interpretation of any of the provision herein.
(c) Each provision of this Agreement to be performed by a party hereto is both a covenant and
condition, and is a material consideration for the other party’s performance hereunder, and any
breach thereof by the party will be a material default hereunder. All rights, remedies,
undertakings, obligations, options, covenants, conditions and agreements contained in this
Agreement are cumulative and no one of them is exclusive of any other. Time is of the essence in
the performance of this Agreement.
(d) Each party acknowledges that no representation, statement or promise made by any other
party, or by the agent or attorney of any other party, except for those in this Agreement, has been
relied on by her or it in entering into this Agreement.
(e) Each party understands that the facts with respect to which this Agreement is entered into
may be materially different from those the parties now believe to be true. Except in the case where
the existence of any additional or different facts constitutes the breach of a representation or
warranty, each party accepts and assumes this risk and agrees that this Agreement and the releases
in it shall remain in full force and effect, and legally binding, notwithstanding the discovery or
existence of any additional or different facts, or of any claims with respect to those facts.
(f) Unless expressly set forth otherwise, all references herein to a “day” are deemed to be a
reference to a calendar day. All references to “business day” mean any day of the year other than a
Saturday, Sunday or a public or bank holiday in
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Orange County, California. Unless expressly stated otherwise, cross-references herein refer to
provisions within this Agreement and are not references to the overall transaction or to any other
document.
(g) Each party to this Agreement will cooperate fully in the execution of any and all other
documents and in the completion of any additional actions that may be necessary or appropriate to
give full force and effect to the terms and intent of this Agreement.
EACH OF THE PARTIES ACKNOWLEDGES THAT HE/IT HAS READ THIS AGREEMENT, UNDERSTANDS IT AND IS
VOLUNTARILY ENTERING INTO IT, AND THAT IT INCLUDES A WAIVER OF THE RIGHT TO A TRIAL BY
JURY, AND, WITH RESPECT TO THE EXECUTIVE, she UNDERSTANDS THAT THIS AGREEMENT INCLUDES A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and
year first above written.
| COMPANY: | DDi CORP. |
|||
| By: | /S/ XXXX X. XXXXXXXXXX | |||
| Name: | Xxxx X. Scheuerma | |||
| Title: | Vice President & General Counsel | |||
| EXECUTIVE: | /s/ XXXXX X. XXXXXXXX | |||
| Xxxxx X. Xxxxxxxx | ||||
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