EXHIBIT 10.13
SETTLEMENT AGREEMENT AND GENERAL RELEASE
This SETTLEMENT AGREEMENT AND GENERAL RELEASE of claims ("Agreement")
is entered into by and between Xxxx, Xxxxxx & Associates, Inc. (the "Company" or
"Xxxx, Xxxxxx & Associates"), on the one hand, and Xxxx Xxxxxx ("Xxxxxx"), on
the other.
W I T N E S S E T H:
WHEREAS, Xxxxxx'x employment with the Company terminated on August 30,
1996;
WHEREAS, the parties wish to preserve the goodwill which exists
between them and resolve all disputes between them.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, and for other good and sufficient consideration, receipt of which is
hereby acknowledged, the parties agree as follows:
X. Xxxx, Xxxxxx & Associates agrees as follows:
1. That it fully and forever releases and discharges Xxxxxx
from any and all claims and causes of action that the Company may have against
him and covenants not to xxx or otherwise institute or cause to be instituted or
in any way participate in, except as may be mandated by legal process, legal or
administrative proceedings against Xxxxxx with respect to any matter arising out
of or connected with Xxxxxx'x employment with the Company or the termination of
that employment, including any and all liabilities, claims, demands, contracts,
debts, obligations and causes of action of every nature, kind and description,
in law, equity, or otherwise, whether or not now known or ascertained, which
heretofore do or may exist.
2. That the Company agrees to pay Xxxxxx beginning on September
1, 1996 and ending on the earlier of (i) February 29, 1998, (ii) the date of
Xxxxxx'x death or permanent disability, (iii) the date that Xxxxxx first engages
in Competitive Activities (as defined below), or (iv) the date Xxxxxx breaches
any of his obligations set forth in this Agreement (the "Continuation Period")
the sum of $9,033 per month, a sum to which Xxxxxx is not otherwise entitled.
In addition, upon execution of this Agreement, Xxxxxx shall be paid a lump sum
of $11,239 in full payment of all unpaid bonus obligations due and owing to him
by the Company including without limitation bonuses due for the period ending
June 30, 1995, as well as all business expense reimbursements owed to him by the
Company. Xxxxxx will be deemed to be engaged in Competitive Activities if he
has any Relationship (as defined below) with any entity, including but not
limited to any corporation, partnership, limited liability company, sole
proprietorship or unincorporated business (whether or not for profit) (such
entity, a "Business") in the course of which Relationship Xxxxxx engages in or
assists such Business with respect to permanent or temporary high technology
staffing services, which services are competitive with the services then being
offered by the Company. Xxxxxx will be deemed to have a relationship (a
"Relationship") with a Business if Xxxxxx (i) owns, manages, operates, joins or
is employed by such Business, (ii) is a director, member, agent, shareholder,
owner or general partner of such Business, (iii) acts as a consultant or advisor
to such Business, or (iv) controls or participates in the ownership or operation
of such Business; provided, however, that nothing herein shall prevent the
purchase or ownership by Xxxxxx of an interest in a Business that constitutes
less than 1% of the outstanding equity securities of such Business.
3. If Xxxxxx elects to continue his medical, dental or vision
coverage pursuant to COBRA, then the Company will reimburse Xxxxxx for such
coverage through the earlier of (i) the end of the Continuation Period or (ii)
the date he is eligible for health insurance coverage by another party.
X. Xxxxxx for himself, his heirs, executors, administrators, and
successors agrees as follows:
1. That he fully and forever releases and discharges the
Company, its successors, predecessors, subsidiaries, officers, directors,
agents, attorneys, employees, and assigns (hereinafter collectively referred to
as "Releases"), from any claims and damages and causes of action that Xxxxxx may
have against Releasees and covenants not to xxx or otherwise institute or cause
to be instituted or in any way participate in, except at the request of the
Company, legal or administrative proceedings against Releasees with respect to
any matter arising between the parties from the beginning of time until the date
of execution of this Agreement, including but not limited to all matters arising
out of or connected with Xxxxxx'x employment with the Company or the termination
of that employment, including any and all liabilities, claims, demands,
contracts, debts, obligations and causes of action of every nature, kind and
description, in law, equity, or otherwise, whether or not now known or
ascertained, which heretofore do or may exist. Nothing herein will affect
Xxxxxx'x right to continue his medical coverage under COBRA, or any rights
arising out of this Agreement, or that Series A Preferred Stock and Warrant
Purchase Agreement, Investors' Rights Agreement, Right of First Refusal and Co-
Sale Agreement, Voting Trust Agreement, Secured Promissory Note and Pledge
Agreement all dated as of January 30, 1996.
2. That he is waiving any rights he may have had or now has to
pursue any and all remedies available to him under any employment-related cause
of action against Releasees, including without limitation, claims of wrongful
discharge, emotional distress, defamation, harassment, breach of the covenant of
good faith and fair dealing, violation of the provisions of the California Labor
Code, the Employee Retirement Income Security Act, and all other laws and
regulations relating to employment. Xxxxxx further acknowledges and expressly
agrees that he is waiving any and all rights he may have had or now has to
pursue any claim of harassment or discrimination based on sex, age, race,
national origin, or on any other basis, under Title VII of the Civil Rights Act
of 1964, as amended, the California Fair Employment and Housing Act, the
California Constitution, the Age Discrimination in Employment Act of 1967, any
comparable laws of other states and all other laws and regulations relating to
employment; provided that nothing herein shall be deemed as a waiver of assets
set aside for Xxxxxx pursuant to the Company's 401(k) plan.
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3. That his employment with the Company ceased on August 30,
1996 (hereinafter "Termination Date"), Xxxxxx hereby resigns as of the
Termination Date all positions as an officer of the Company. Xxxxxx agrees that
he has no right to employment with the Company after the Termination Date; that
he shall not apply for reemployment with the Company after that date; and that
the Company shall have no obligation to employ him after that date.
4. That prior to the execution of this Agreement, he has been
paid all salary, bonus, and other compensation and benefits that he earned or
was entitled to while employed by the Company and that the only amounts that he
will receive in the future are those expressly set forth herein.
5. That he will execute and remain bound by the Company's
Proprietary Information Agreement attached hereto as Exhibit A pursuant to the
terms thereof and for the period of time set forth therein. During the
Continuation Period, Xxxxxx agrees that (i) he will not disrupt, damage, impair
or interfere with the business of the Company, whether by way of interfering
with or soliciting its employees, disrupting its relationships with customers,
agents, vendors, or representatives or otherwise, (ii) he will not solicit or
encourage any employee to leave the Company's employ for any reason, encourage
any employee to devote less than all of any such employee's efforts to the
affairs of the Company, or interfere in any other manner with employment
relationships existing between the Company and its current or future employees
or (iii) reveal the terms of this agreement to anyone without the Company's
prior written consent except as necessary for the purpose of preparing Xxxxxx'x
income tax returns or in connection with any legal actions brought by Xxxxxx to
enforce the terms hereof.
6. That Xxxxxx holds 2,115,100 shares of Common Stock of the
Company (the "Xxxxxx Stock"). Xxxxxx agrees to deposit all of the Xxxxxx Stock
with the trustee of the Xxxxxx Voting Trust Agreement ("Voting Trust") and
agrees to take all action reasonably requested by the Company to amend the
Voting Trust to grant to Xxxxxx Xxxx as Voting Trustee, the right to vote all of
the shares of Xxxxxx Stock in all matters (including without limitation)
acquisitions and financings by and of the Company, election of directors,
amendments to the Company's articles of incorporation and/or bylaws, and other
significant transactions involving the Company; provided however, that Xxxxxx
Xxxx shall not have the right to vote the Xxxxxx stock in connection with any
approval that treats Xxxxxx in a manner adversely and differently than Xxxxxx
Xxxx in her position as a common stockholder of the Company, and provided
further that Xxxxxx'x obligation to retain such shares in the Voting Trust shall
terminate in the event (a) Xxxxxx owns less than 500,000 shares of Common Stock
of the Company or (b) Xxxxxx Xxxx is not an executive officer of the Company.
X. Xxxx, Xxxxxx & Associates and Xxxxxx jointly agree as follows:
1. That nothing contained in this Agreement shall constitute or
be treated as an admission by the Company or any party to this Agreement of
liability, of any wrongdoing, or of any violation of the law.
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2. That if any provision of this Agreement is found to be
unenforceable, it shall not affect the enforceability of the remaining
provisions and the court shall enforce all remaining provisions to the extent
permitted by law, but such remaining provisions shall be construed in a manner
so as to effectuate the intent of this Agreement as a whole, notwithstanding
such stricken provision or provisions.
3. That Xxxxxx has an outstanding loan from the Company in the
principal amount of Two Million Dollars ($2,000,000.00) pursuant to a promissory
note dated January 30, 1996 which is secured by the Xxxxxx Stock (the "Note").
In consideration of the promises contained herein, the Company agrees that it
will not enforce its rights (if any) under the Note to demand payment of the
balance of the Note in connection with Xxxxxx'x termination of employment,
provided that the Note shall become due on the earlier of (i) any breach of the
terms of this Agreement (provided however, that Xxxxxx has been given written
notice of such default and thirty days from the date of receipt of such notice
in which to cure such default (if the default is one for which cure is
possible)) or (ii) any other date provided for under the terms of the Note, as
modified by this paragraph C.3.
4. That the Voting Trustee shall vote all of the shares of
Xxxxxx Stock for the election of a director designated by Xxxxxx.
5. That this Agreement and all Exhibits attached hereto contain
the entire agreement between the parties and, except as expressly provided
herein, this Agreement and its Exhibits shall supersede and render null and void
any and all prior agreements between the parties. Xxxx, Xxxxxx & Associates
represents and warrants that the entering into and performance of this Agreement
has been approved by its Board of Directors. In addition, Xxxx, Xxxxxx &
Associates represents and warrants that it has received confirmation from the
Investors (as defined in that certain Series A Preferred Stock and Warrant
Purchase Agreement dated January 30, 1996, the "Purchase Agreement"), that
amounts paid to Xxxxxx hereunder will not be deemed "Damages" under Section 7.13
of the Purchase Agreement, and that this Agreement has been agreed to by a
majority of the outstanding Series A Preferred Stock as required by that certain
Investors' Rights Agreement dated as of January 26, 1996.
6. Although the parties may hereafter discover facts different
from or in addition to those which the parties now know or believe to be true,
that this Agreement shall be and remain effective in all respects
notwithstanding such different or additional facts or the discovery thereof.
7. That in consideration of the foregoing the Company and
Xxxxxx (except as otherwise set forth herein) expressly waive any all rights and
benefits conferred upon them by the provisions of Section 1542 of the Civil Code
of the State of California, and under any comparable provision of the laws of
any other jurisdiction, which states 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 debtor.
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8. This Agreement and its Exhibits may be amended only by
written instrument designated as an amendment to this Agreement and executed by
the President of the Company and Xxxxxx.
9. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10. That all parties have read and understand this Agreement,
and that they affix their signatures hereto voluntarily and without coercion.
Xxxxxx further acknowledges that he has been advised by the Company to consult
with an attorney of his own choosing concerning the waivers he has made; and the
terms he has agreed to herein are knowing, conscious and with full appreciation
that he is forever foreclosed from pursuing any of the rights so waived.
11. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.
Dated: October 29, 1996 /s/ Xxxx Xxxxxx
________________________________________
XXXX XXXXXX
XXXX, XXXXXX & ASSOCIATES, INC.
/s/ Xxxxxx Xxxx
By:_____________________________________
CEO
Dated: October 29, 1996 Title:__________________________________
Dated: October 29, 1996 XXXXXX XXXX, AS VOTING TRUSTEE
OF THE VOTING TRUST
/s/ Xxxxxx Xxxx
By:_____________________________________
Xxxxxx Xxxx
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