EXHIBIT 10.25
LETTER AGREEMENT DATED APRIL 21, 1997 WITH ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
CONNECT, INC.
AGREEMENT AND MUTUAL RELEASE
This Agreement and Mutual Release ("AGREEMENT") is made by and between
CONNECT, Inc., a Delaware corporation (the "COMPANY"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("▇▇. ▇▇▇▇▇▇").
WHEREAS, ▇▇. ▇▇▇▇▇▇ is employed by the Company; and
WHEREAS, the Company and ▇▇. ▇▇▇▇▇▇ have mutually agreed to terminate
the existing employment relationship and to release each other from any
claims arising from or related to the employment relationship.
NOW, THEREFORE, in consideration of the mutual promises made herein,
the Company and ▇▇. ▇▇▇▇▇▇ (collectively referred to as the "PARTIES")
hereby agree as follows:
1. RESIGNATION; CONTINUATION OF EMPLOYMENT.
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(a) ▇▇. ▇▇▇▇▇▇ and the Company agree to the following terms with
respect to continuation of ▇▇. ▇▇▇▇▇▇'▇ employment by the Company:
(i) that ▇▇. ▇▇▇▇▇▇'▇ status as President, Chief Executive
Officer and a member of the Board of Directors of the Company terminated on
April 8, 1997 (the "Resignation Date"), provided, however, that ▇▇. ▇▇▇▇▇▇'▇
employment with the Company shall continue beyond the termination of such status
as provided in this Agreement;
(ii) that ▇▇. ▇▇▇▇▇▇ shall continue to work as an employee of the
Company until April 8, 1998, and shall be entitled to receive an annual salary
of $50,000 (less applicable withholding) while so employed. ▇▇. ▇▇▇▇▇▇'▇ last
day of employment is referred to in this Agreement as the Termination Date; and
(iii) that as a condition to ▇▇. ▇▇▇▇▇▇'▇ continued employment with
the Company, ▇▇. ▇▇▇▇▇▇ agrees to provide services to assist the President, or
other employees of the Company as designated by the President, in fulfilling
such tasks reasonably consistent with ▇▇. ▇▇▇▇▇▇'▇ prior position with the
Company as identified by the President.
2. SEVERANCE PAYMENT. In consideration for the release of claims set
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forth below and other obligations under this Agreement, the Company agrees to
pay ▇▇. ▇▇▇▇▇▇ a lump sum severance payment of $100,000 (less applicable tax
withholding) on the Effective Date of this Agreement.
3. EMPLOYEE BENEFITS.
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(a) ▇▇. ▇▇▇▇▇▇ shall continue to receive the Company's life, medical,
dental and vision insurance benefits at Company expense until the Termination
Date, which date shall be the "qualifying event" date under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA").
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Following such date, ▇▇. ▇▇▇▇▇▇ shall have the right to continue, at his own
expense, coverage under the Company's medical, dental and vision (but not life)
insurance programs as provided by COBRA. ▇▇. ▇▇▇▇▇▇'▇ coverage under the
Company's Accidental Death & Dismemberment and Long-Term Disability Insurance
Programs shall terminate on the Termination Date.
(b) ▇▇. ▇▇▇▇▇▇ shall be entitled to keep and assume ownership of the
Company's laptop computer in his possession. ▇▇. ▇▇▇▇▇▇ shall be responsible
for any and all maintenance and repair costs incurred with respect to the
computer after the Effective Date of the Agreement.
(c) The Company agrees to maintain ▇▇. ▇▇▇▇▇▇'▇ voicemail and
electronic mail addresses on the Company's systems through the Termination Date.
(d) Except as otherwise provided above, ▇▇. ▇▇▇▇▇▇ shall not be
entitled to participate in any of the Company's benefit plans or programs
offered to employees or officers of the Company, including, but not limited to,
any accrual of vacation, after the Resignation Date.
4. STOCK OPTIONS. Under the terms of the Stock Option Agreements issued
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to ▇▇. ▇▇▇▇▇▇ over the course of his employment with the Company, ▇▇. ▇▇▇▇▇▇ was
granted options to purchase 83,600 (the "JULY 1992 OPTIONS"), 30,550 (the "APRIL
OPTIONS"), 80,715 (the "JULY 1993 OPTIONS"), 10,000 (the "MAY OPTIONS"), 30,000
(the "DECEMBER OPTIONS") and 375,000 (the "JANUARY OPTIONS") shares (on a post-
split basis), respectively, of the Company's Common Stock under the Company's
1989 Stock Option Plan and 1996 Stock Option Plan. As of the Resignation Date,
the Company's repurchase rights under the July 1992, April, July 1993, May,
December and January options shall have lapsed to the extent of 83,600, 30,550,
80,715, 9,443, 16,874, and 78,120 shares, respectively. In consideration for
the release of claims set forth below and other obligations under this
Agreement, the Parties agree that, as of the Effective Date of this Agreement,
the Company shall no longer have the right to repurchase 25,000 additional
shares of the Company's Common Stock, pursuant to the terms of the January
Options so that as of the Effective Date of this Agreement, a total of 103,120
shares of the January Options shall be fully vested. Pursuant to the terms of
Section 1(g) of the Stock Option Agreement issued to ▇▇. ▇▇▇▇▇▇ for the January
Options, the Board of Directors of the Company has determined that the
Performance Objectives set forth therein have not been satisfied. In accordance
with the terms of the Stock Option Agreements for the May, December and January
Options and this Agreement, the Company's repurchase rights under such options
shall continue to lapse at the rate of 1/36 per month for the May Options, at
the rate of 1/48 per month for the December Options and at the rate of 1/72 per
month for the January Options through August 31, 1997. As a result of the
continuation of such options after the Resignation Date, the Company's
repurchase rights under the May, December and July Options shall lapse to the
extent of an additional 557, 3,125 and 20,832 shares, respectively. The
remaining unvested 10,001 and 251,048 shares of the December and January
Options, respectively, shall expire on August 31, 1997. ▇▇. ▇▇▇▇▇▇ acknowledges
and agrees that he remains bound by all other terms of the Stock Option
Agreements issued by the Company to ▇▇. ▇▇▇▇▇▇.
5. NO OTHER PAYMENTS DUE. The Company agrees that it will continue to pay
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to ▇▇. ▇▇▇▇▇▇ the salary described in Section 1(a)(ii) through the Termination
Date in accordance with the Company's normal payroll practices, and
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that the Company will pay to ▇▇. ▇▇▇▇▇▇ on or before the Termination Date all
salary as may then be due to ▇▇. ▇▇▇▇▇▇. ▇▇. ▇▇▇▇▇▇ will execute an
acknowledgment of receipt of all such payments as received and an acknowledgment
that, in light of the payment by the Company of all wages due, or to become due
to ▇▇. ▇▇▇▇▇▇, California Labor Code Section 206.5 is not applicable to the
Parties hereto. That Section provides in pertinent part as follows:
No employer shall require the execution of any release of any
claim or right on account of wages due, or to become due, or made
as an advance on wages to be earned, unless payment of such wages
has been made.
6. RELEASE OF CLAIMS. In consideration for the obligations of both
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parties set forth in this Agreement, ▇▇. ▇▇▇▇▇▇ and the Company, on behalf of
themselves, and their respective heirs, executors, officers, directors,
employees, investors, stockholders, administrators and assigns, hereby fully and
forever release each other and their respective heirs, executors, officers,
directors, employees, investors, stockholders, administrators and assigns, of
and from any claim, duty, obligation or cause of action relating to any matters
of any kind, whether presently known or unknown, suspected or unsuspected, that
any of them may possess arising from any omissions, acts or facts that have
occurred up until and including the date of this Agreement including, without
limitation:
(a) any and all claims relating to or arising from ▇▇. ▇▇▇▇▇▇'▇
employment relationship with the Company and the termination of that
relationship;
(b) any and all claims relating to, or arising from, ▇▇. ▇▇▇▇▇▇'▇
right to purchase, or actual purchase of shares of stock of the Company;
(c) any and all claims for wrongful discharge of employment; breach of
contract, both express and implied; breach of a covenant of good faith and fair
dealing, both express and implied, negligent or intentional infliction of
emotional distress; negligent or intentional misrepresentation; negligent or
intentional interference with contract or prospective economic advantage;
negligence; and defamation;
(d) any and all claims for violation of any federal, state or
municipal statute, including, but not limited to, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment
Act of 1967, the Americans with Disabilities Act of 1990, and the California
Fair Employment and Housing Act;
(e) any and all claims arising out of any other laws and regulations
relating to employment or employment discrimination; and
(f) any and all claims for attorneys' fees and costs.
The Company and ▇▇. ▇▇▇▇▇▇ agree that the release set forth in this
Section 6 shall be and remain in effect in all respects as a complete general
release as to the matters released. This release does not extend to any
obligations incurred or specified under this Agreement.
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7. ACKNOWLEDGMENT OF WAIVER OF CLAIMS UNDER ADEA. ▇▇. ▇▇▇▇▇▇ acknowledges
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that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 ("ADEA") and that this waiver and
release is knowing and voluntary. ▇▇. ▇▇▇▇▇▇ and the Company agree that this
waiver and release does not apply to any rights or claims that may arise under
ADEA after the Effective Date of this Agreement. ▇▇. ▇▇▇▇▇▇ acknowledges that
the consideration given for this waiver and release Agreement is in addition to
anything of value to which ▇▇. ▇▇▇▇▇▇ was already entitled. ▇▇. ▇▇▇▇▇▇ further
acknowledges that he has been advised by this writing that (a) he should consult
with an attorney prior to executing this Agreement; (b) he has at least twenty-
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one (21) days within which to consider this Agreement; (c) he has at least seven
(7) days following the execution of this Agreement by the Parties to revoke the
Agreement (the "Revocation Period"); and (d) this Agreement shall not be
effective until the Revocation Period has expired.
8. CIVIL CODE SECTION 1542. The Parties represent that they are not aware
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of any claim by either of them other than the claims that are released by this
Agreement. ▇▇. ▇▇▇▇▇▇ and the Company acknowledge that they have been advised
by legal counsel and are familiar with the provisions of 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 FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
▇▇. ▇▇▇▇▇▇ and the Company, being aware of said Code section, agree to
expressly waive any rights they may have thereunder, as well as under any other
statute or common law principles of similar effect.
9. NONDISCLOSURE OF CONFIDENTIAL AND PROPRIETARY INFORMATION. ▇▇. ▇▇▇▇▇▇
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understands and agrees that his obligations to the Company under his existing
Proprietary Information and Inventions Assignment and Confidentiality Agreement
between ▇▇. ▇▇▇▇▇▇ and the Company (the "CONFIDENTIALITY AGREEMENT"), a copy of
which is attached hereto as Exhibit A, shall continue through the Termination
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Date and shall survive termination of his relationship with the Company under
this Agreement and that ▇▇. ▇▇▇▇▇▇ shall continue to maintain the
confidentiality of all confidential and proprietary information of the Company
as provided by the Confidentiality Agreement. ▇▇. ▇▇▇▇▇▇ agrees that at all
times hereafter, he shall not intentionally divulge, furnish or make available
to any party any of the trade secrets, patents, patent applications, price
decisions or determinations, inventions, customers, proprietary information or
other intellectual property of the Company, until after such time as such
information has become publicly known otherwise than by act of collusion of ▇▇.
▇▇▇▇▇▇.
10. NONCOMPETITION AND NONSOLICITATION. ▇▇. ▇▇▇▇▇▇ agrees that through
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the Termination Date, ▇▇. ▇▇▇▇▇▇ shall not, without the prior written consent of
the Company, at any time, directly or indirectly, whether or not for
compensation, (a) engage in, or have any interest in any person, firm,
corporation or business (whether as an employee, officer, director, agent,
security holder, creditor, consultant, partner or otherwise) that engages in any
activity that is in direct competition with the Company, including without
limitation, Open Market, Inc. and BroadVision, but excluding companies that may
on their own decide to build interactive commerce software as part of a broader
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business initiative but that do not specifically aim to license application
software to others in direct competition with the Company, (b) divert or attempt
to divert from the Company, or any affiliated company, any business of a kind
involving the professional specialties or product lines indicated in clause (a)
above, or (c) induce or attempt to induce any person who is an employee of the
Company, or any affiliated company, to leave the Company, or any affiliated
company, to become an employee of any person, firm, corporation or business
described in clause (a) above; provided, however, that ▇▇. ▇▇▇▇▇▇ may own up to
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1% of the securities of any company whose securities are publicly traded that is
of a sort described in clause (a) above. It is expressly agreed by the Parties
that ▇▇. ▇▇▇▇▇▇ may pursue and engage in full-time employment that does not
conflict with his obligations under the preceding sentence and Section 1(a)(iii)
of this Agreement and that such employment shall not constitute a breach of this
Agreement by ▇▇. ▇▇▇▇▇▇.
The Parties intend that the covenant contained in the preceding paragraph
shall be construed as a series of separate covenants, one for each county or
other geographic or political subdivision of each jurisdiction in which the
Company conducts business. If, in any judicial proceeding, a court shall refuse
to enforce any of the separate covenants deemed included in this paragraph, then
the unenforceable covenant shall be deemed eliminated from the provisions for
the purpose of those proceedings to the extent necessary to permit the remaining
separate covenants to be enforced.
11. NON-DISPARAGEMENT. Each Party agrees to refrain from any
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disparagement, criticism, defamation, slander of the other, or tortious
interference with the contracts and relationships of the other.
12. AUTHORITY. The Company represents and warrants that the undersigned
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has the authority to act on behalf of the Company and to bind the Company and
all who may claim through it to the terms and conditions of this Agreement. ▇▇.
▇▇▇▇▇▇ represents and warrants that he has the capacity to act on his own behalf
and on behalf of all who might claim through him to bind them to the terms and
conditions of this Agreement. Each Party warrants and represents that there are
no liens or claims of lien or assignments in law or equity or otherwise of or
against any of the claims or causes of action released herein.
13. NO REPRESENTATIONS. Neither Party has relied upon any representations
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or statements made by the other Party hereto which are not specifically set
forth in this Agreement.
14. SEVERABILITY. In the event that any provision hereof becomes or is
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declared by a court or other tribunal of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision.
15. ARBITRATION. The Parties shall attempt to settle all disputes arising
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in connection with this Agreement through good faith consultation. In the event
no agreement can be reached on such dispute within fifteen (15) days after
notification in writing by either Party to the other concerning such dispute,
the dispute shall be settled by binding arbitration to be conducted in Santa
▇▇▇▇▇ County before the American Arbitration Association under its California
Employment Dispute Resolution Rules, or by a judge to be mutually
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agreed upon. The arbitration decision shall be final, conclusive and binding on
both Parties and any arbitration award or decision may be entered in any court
having jurisdiction. The Parties agree that the prevailing party in any
arbitration shall be entitled to injunctive relief in any court of competent
jurisdiction to enforce the arbitration award. The Parties further agree that
the prevailing Party in any such proceeding shall be awarded reasonable
attorneys' fees and costs. This Section 15 shall not apply to the
Confidentiality Agreement. THE PARTIES HEREBY WAIVE ANY RIGHTS THEY MAY HAVE TO
TRIAL BY JURY IN REGARD TO ARBITRABLE CLAIMS.
16. ENTIRE AGREEMENT. This Agreement, and the exhibit hereto, represent
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the entire agreement and understanding between the Company and ▇▇. ▇▇▇▇▇▇
concerning ▇▇. ▇▇▇▇▇▇'▇ separation from the Company, and supersede and replace
any and all prior agreements and understandings concerning ▇▇. ▇▇▇▇▇▇'▇
relationship with the Company and his compensation by the Company, other than
the Stock Option Agreements described in Section 4 and the Confidentiality
Agreement described in Section 10.
17. NO ORAL MODIFICATION. This Agreement may only be amended in writing
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signed by ▇▇. ▇▇▇▇▇▇ and the Company.
18. GOVERNING LAW. This Agreement shall be governed by the laws of the
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State of California, without regard to its conflicts of law provisions.
19. EFFECTIVE DATE. This Agreement is effective seven days after it has
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been signed by both Parties and such date is referred to herein as the
"EFFECTIVE DATE."
20. COUNTERPARTS. This Agreement may be executed in counterparts, and
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each counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
21. ASSIGNMENT. This Agreement may not be assigned by ▇▇. ▇▇▇▇▇▇ or the
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Company without the prior written consent of the other party. Notwithstanding
the foregoing, this Agreement may be assigned by the Company to a corporation
controlling, controlled by or under common control with the Company without the
consent of ▇▇. ▇▇▇▇▇▇.
22. VOLUNTARY EXECUTION OF AGREEMENT. This Agreement is executed
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voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) they have read this Agreement;
(b) they have been represented in the preparation, negotiation, and
execution of this Agreement by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) they understand the terms and consequences of this Agreement and
of the releases it contains; and
(d) they are fully aware of the legal and binding effect of this
Agreement.
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IN WITNESS WHEREOF, the Parties have executed this Agreement and Mutual
Release on the respective dates set forth below.
CONNECT, INC.
Dated as of April 21, 1997 By: /s/ ▇▇▇▇▇▇ ▇. BRIDGE
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Title: President & Chief Executive Officer
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual
Dated as of April 21, 1997 /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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