SOURCEFORGE, INC. SEPARATION AGREEMENT AND RELEASE
SEPARATION
AGREEMENT AND RELEASE
This
Separation Agreement and Release (“Agreement”)
is
made by and between
Xxx
Xxxxx (“Employee”)
and
SourceForge, Inc. (the “Company”,
collectively referred to with Employee as the “Parties”
or
each
individually referred to as a “Party”).
WHEREAS,
Employee was employed by the Company;
WHEREAS,
Employee signed an Employment,
Confidential Information and Assignment of Inventions Agreement with
the
Company on August 3, 2000 (the “Confidentiality
Agreement”);
WHEREAS,
Employee signed offer letters with the Company relating to his employment with
the Company on July 28, 2000 and February 27, 2001 (the “Offer
Letters”);
WHEREAS,
Employee and the Company entered into an Indemnification Agreement dated
December 31, 2001 (the “Indemnification
Agreement”);
WHEREAS,
on
August 31, 2006, Employee was granted a restricted stock award of 175,000 shares
of the Company’s stock, with time-based vesting made pursuant to the Company’s
1998 Stock Option Plan (the “Plan”),
and
memorialized in the Restricted Stock Purchase Agreement dated August 31, 2006
(the “2006
RSPA”),
and
on June 11, 2007, Employee was granted a restricted stock award of 280,000
shares of the Company’s stock, with time-based vesting made pursuant to the
Plan, and memorialized in the Restricted Stock Purchase Agreement dated August
31, 2006 (the “2007
RSPA”,
and
together with the 2006 RSPA, the “RSPAs”);
WHEREAS,
the
Company granted Employee an option on February 16, 2001 to purchase 700,000
shares of the Company’s common stock pursuant to the Plan, memorialized in a
Stock Option Agreement dated March 2, 2001 (as amended by the Option
Cancellation Agreement (as defined below), the “March
2001 Stock Option Agreement”),
an
option on June 14, 2001 to purchase 400,000 shares of the Company’s common stock
pursuant to the Plan, memorialized in a Stock Option Agreement dated July 24,
2001 (the “July
2001 Stock Option Agreement”),
an
option on October 11, 2001 to purchase 2,000,000 shares of the Company’s common
stock pursuant to the Plan, memorialized in a Stock Option Agreement dated
October 31, 2001 (the “October
2001 Stock Option Agreement”),
an
option on December 4, 2002 to purchase 200,000 shares of the Company’s common
stock pursuant to the Plan, memorialized in a Stock Option Agreement dated
December 16, 2002 (the “December
2002 Stock Option Agreement”),
an
option on December 10, 2003 to purchase 325,000 shares of the Company’s common
stock pursuant to the Plan, memorialized in a Stock Option Agreement dated
January 8, 2004 (the “January
2004 Stock Option Agreement”),
an
option on July 1, 2004 to purchase 204,080 shares of the Company’s common stock
pursuant to the Plan, memorialized in a Stock Option Agreement dated July 27,
2004 (the “July
2004 ISO Stock Option Agreement”),
an
option on July 1, 2004 to purchase 283,420 shares of the Company’s common stock
pursuant to the Plan, memorialized in a Stock Option Agreement dated July 27,
2004 (the “July
2004 NSO Stock Option Agreement”
and
together with the March 2001 Stock Option Agreement, the July 2001 Stock Option
Agreement, the October 2001 Stock Option Agreement, the December 2002 Stock
Option Agreement, the January 2004 Stock Option Agreement, and the July 2004
ISO
Stock Option Agreement, the “Stock
Option Agreements”,
and
collectively with the RSPAs, the “Stock
Agreements”);
WHEREAS,
Employee and the Company entered into an Option Cancellation Agreement on June
5, 2003 (the “Option
Cancellation Agreement”)
pursuant to which Employee and the Company agreed that the options granted
to
Employee on August 2, 2000 and December 6, 2000 would be cancelled in their
entirety and 306,250 of the share of Common Stock underlying the March
2001 Stock Option Agreement would be cancelled, such that Employee was entitled
to purchase up to up to 393,750 shares of Common Stock under and pursuant to
the
terms of the March 2001 Stock Option Agreement following the execution of the
Option Cancellation Agreement.
WHEREAS,
Employee resigned all positions as an officer, director and employee with the
Company effective as of June 10, 2008 (the “Termination
Date”);
WHEREAS,
the
Company and Employee desire to enter into a consulting agreement pursuant to
which Employee shall perform consulting services for the Company, which
consulting services shall commence immediately upon the resignation of
Employee’s other positions such that Employee’s service to the Company shall
continue uninterrupted; and
WHEREAS,
the
Parties wish to resolve any and all disputes, claims, complaints, grievances,
charges, actions, petitions, and demands that Employee may have against the
Company and any of the Releasees (as defined below), including, but not limited
to, any and all claims arising out of or in any way related to Employee’s
employment with or separation from the Company.
NOW,
THEREFORE, in consideration of the mutual promises made herein, the Company
and
Employee hereby agree as follows:
1. Consideration.
a. Cash
Severance. The
Company hereby agrees that contingent upon the effectiveness of this Agreement,
the Company will pay Employee cash
severance in an amount equal to Seven Hundred Thirty-Five Thousand Dollars
($735,000) (the “Cash
Severance”),
less
applicable withholding, in one lump sum on the third business day following
the
Effective Date (as defined below).
b. Fourth
Quarter Fiscal 2008 Bonus.
The
Company hereby agrees that contingent upon the effectiveness of this Agreement,
Employee will be eligible to receive a cash payment equal to the fourth quarter
fiscal 2008 bonus that otherwise would have been paid to Employee under the
standard terms and conditions of the Company’s Named Executive Officer Bonus
Policy and Plan for the Company’s fiscal year ending July 31, 2008 (the
“Named
Executive Officer Plan”),
a
copy of which was attached as Exhibit 10.1 to the Current Report Form 8-K dated
September 5, 2007, if Employee had been a named executive officer of the Company
at the time eligibility for fourth quarter fiscal 2008 bonuses was determined
thereunder. Employee acknowledges and understands that this provision is not
a
guarantee of any future payments and that it is possible that no payments will
be made pursuant to this provision. Any payments pursuant to this provision
shall be made contemporaneously with the payment of fourth quarter fiscal 2008
bonuses, if any, to the Company’s named executive officers pursuant to the terms
and conditions of the Named Executive Officer Plan.
c. Vesting.
The
Parties hereby agree that as of the earlier of (i) termination of the Consulting
Agreement (as defined below) and (ii) the end of the term of the Consulting
Agreement, contingent upon and subject to the effectiveness of this Agreement,
Employee shall receive accelerated vesting with respect to that number of shares
of Company Common Stock underlying the Stock Agreements that Employee would
have
vested in during the twelve (12) month period following the termination of
the
Consulting Agreement or the end of the term of the Consulting Agreement,
whichever occurs first, had Employee continued to vest during such period (the
“Accelerated
Shares”).
For the
avoidance of doubt, the Parties acknowledge and agree that (i) Employee shall
be
deemed to be a “Service Provider” (as such term is defined in the Plan) during
the term of the Consulting Agreement, (ii) that Employee’s status as a “Service
Provider” shall be continuous and uninterrupted during the period of his
employment and through, and to the conclusion, of the term, or earlier
termination pursuant to Section 6 thereof, of the Consulting Agreement such
that
there shall be no change in Employee’s status as a “Service Provider” throughout
this period, (iii) that Employee shall continue to vest in shares subject to
the
Stock Agreements during the term of the Consulting Agreement if and to the
extent permitted under the terms of the Stock Agreements and (iv) the
calculation of the number of Accelerated Shares shall be based upon and
performed as of the date on which the Consulting Agreement is terminated or
the
end of the term of the Consulting Agreement, whichever occurs first, pursuant
to
the provisions thereof. For
further avoidance of doubt and to facilitate the calculation of the Accelerated
Shares, the Parties acknowledge and agree that the Stock Agreements provide
that
Employee shall vest, subject to the terms thereof, in the following number
of
shares of the Company’s Common Stock on the following dates: (a) under the 2006
RSPA, Employee shall vest in an additional 43,750 shares of Company Common
Stock
on August 31, 2008 and an additional 87,500 shares of Company Common Stock
on
August 31, 2009 and (b) under the 2007 RSPA, Employee shall vest in an
additional 93,334 shares of Company Common Stock on June 11, 2008, an additional
93,333 shares of Company Common Stock on June 11, 2009 and an additional 93,333
shares of Company Common Stock on June 11, 2010.
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d. Extended
Exercise Period.
Subject
to this Agreement becoming effective on the Effective Date, Employee shall
have
a twelve (12) month period following the termination of the Consulting Agreement
or the end of the term of the Consulting Agreement, whichever occurs first,
during which Employee may exercise any and all of his vested shares of Common
Stock underlying any of the Stock Agreements. The exercise of Employee’s vested
stock options shall continue to be governed by the terms and conditions of
the
Stock Option Agreements. Employee
understands that these amendments may disqualify any of the options subject
to
the Option Agreements from qualifying as incentive stock options and result
in
such options being considered non-statutory stock options. Employee
acknowledges that in any event, three (3) months and one (1) day from the
Termination Date the portion of Employee’s vested but unexercised options under
the Stock Option Agreements that formerly qualified as incentive stock options
shall cease to qualify as incentive stock options and will be treated for tax
purposes as non-statutory stock options.
e. Consulting
Agreement.
The
Company and Employee hereby agree to enter into a consulting agreement in
substantially the form attached hereto as Exhibit
A
(the
“Consulting
Agreement”),
pursuant to which Employee will provide the consulting services described
therein for a period of three (3) months in exchange for the Company’s payment
of a monthly consulting fee equal to $35,000, on the terms and subject to the
conditions set forth in the Consulting Agreement.
f. COBRA
Payments.
If
Employee properly elects continuation coverage under the Company’s group health
plan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”),
the
Company will reimburse Employee for COBRA premiums paid by Employee for Employee
and his enrolled family members for the period beginning on July 1, 2008, and
ending on the earlier of (a) October 31, 2009, (b) the date Employee first
becomes eligible for coverage under any group health plan maintained by another
employer of Employee or his spouse, or (c) the date such COBRA continuation
coverage otherwise terminates as to Employee under the provisions of the
Company’s group health plan. Nothing herein shall be deemed to extend the
otherwise applicable maximum period in which COBRA continuation coverage is
provided or supersede the plan provisions relating to early termination of
such
COBRA continuation coverage.
g. Personal
Computer, Mobile Telephone and E-mail Account.
During
the term of the Consulting Agreement, Employee may continue to utilize his
current personal computer, mobile telephone and e-mail address that was provided
to him by the Company for his use during his employment with the Company.
Employee shall return the personal computer and mobile telephone to the Company
on or before the termination of the Consulting Agreement or the end of the
term
of the Consulting Agreement, whichever occurs first. Employee covenants and
agrees that he will not make or retain copies of any information contained
on
the personal computer or mobile telephone other than for the purpose of
fulfilling Employee’s obligations to the Company. To ensure that all of its
confidential and proprietary information and/or computer programs have been
removed from Employee’s personal computer, the Company may, at its sole option,
exchange the hard drive contained in the laptop computer for a new hard drive
provided that the new hard drive has at least the same processing speed, memory
capacity, and other similar characteristics.
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2. Benefits.
Employee’s health insurance benefits shall cease on June 30, 2008, subject to
Employee’s right to continue his health insurance under COBRA. Except as
specifically provided in this Agreement, Employee’s participation in all
benefits and incidents of employment, including, but not limited to the accrual
of bonuses, vacation, and paid time off, ceased as of the Termination Date
and
Employee is not entitled to and will not receive any benefits pursuant to the
Offer Letters.
3. Payment
of Salary and Receipt of All Benefits.
Employee acknowledges and represents that (a) other than the consideration
set
forth in this Agreement, the Company has paid or provided all salary, wages,
bonuses, accrued vacation/paid time off, premiums, housing allowances,
relocation costs, interest, severance, outplacement costs, fees, reimbursable
expenses for which reimbursement documentation has been submitted to the
Company, commissions, stock, stock options, vesting, and any and all other
benefits and compensation due to Employee, (b) other than pursuant to the Stock
Agreements, the Company has no obligation to issue or grant
to
Employee any securities of the Company, whether pursuant to stock options,
stock
grants, or otherwise
and (c)
Employee is not entitled to and will not receive any benefits pursuant to the
Offer Letters.
4. Release
of Claims.
Employee agrees that the foregoing consideration represents settlement in full
of all outstanding obligations owed to Employee by the Company and its current
and former officers, directors, employees, agents, investors, attorneys,
shareholders, administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, and subsidiaries, and predecessor and successor
corporations and assigns (collectively, the “Releasees”).
Employee, on his own behalf and on behalf of his respective heirs, family
members, executors, agents, and assigns, hereby and forever releases the
Releasees from,
and
agrees not to xxx concerning, or in any manner to institute, prosecute, or
pursue, any claim, complaint, charge, duty, obligation, demand, or cause of
action relating to any matters of any kind, whether presently known or unknown,
suspected or unsuspected, that Employee may possess against any of the Releasees
arising from any omissions, acts, facts, or damages that have occurred up until
and including the Effective Date of this Agreement, including, without
limitation:
5. The
Company agrees that, prior to demanding arbitration or otherwise initiating
legal action against Employee based upon any alleged material breach of this
Agreement, the Confidentiality Agreement or the Consulting Agreement, that
Company will first provide Employee five days written notice of its belief
that
a breach has occurred and the basis for the alleged breach, to enable the
Employee to respond to the Company's allegations with further information,
in
the event Employee elects to do so.
a. any
and
all claims relating to or arising from Employee’s employment relationship with
the Company and the termination of that relationship;
b. any
and
all claims relating to, or arising from, Employee’s right to purchase, or actual
purchase of shares of stock of the Company, including, without limitation,
any
claims for fraud, misrepresentation, breach of fiduciary duty, breach of duty
under applicable state corporate law, and securities fraud under any state
or
federal law;
c. any
and
all claims for wrongful discharge of employment; termination in violation of
public policy; discrimination; harassment; retaliation; breach of contract,
both
express and implied; breach of covenant of good faith and fair dealing, both
express and implied; promissory estoppel; negligent or intentional infliction
of
emotional distress; fraud; negligent or intentional misrepresentation; negligent
or intentional interference with contract or prospective economic advantage;
unfair business practices; defamation; libel; slander; negligence; personal
injury; assault; battery; invasion of privacy; false imprisonment; conversion;
and disability benefits;
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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
Rehabilitation Act of 1973; the Americans with Disabilities Act of 1990; the
Equal Pay Act; the Fair Labor Standards Act, except as prohibited by law;
the
Fair
Credit Reporting Act; the
Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act; the
Employee Retirement Income Security Act of 1974; the Worker Adjustment and
Retraining Notification Act; the Family and Medical Leave Act, except as
prohibited by law; the Xxxxxxxx-Xxxxx Act of 2002;
the
Uniformed Services Employment and Reemployment Rights Act;
the
California Family Rights Act; the California Labor Code, except as prohibited
by
law; the California Workers’ Compensation Act, except as prohibited by law; and
the California Fair Employment and Housing Act;
e. any
and
all claims for violation of the federal or any state constitution;
f. any
and
all claims arising out of any other laws and regulations relating to employment
or employment discrimination;
g. any
claim
for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by
Employee as a result of this Agreement; and
h. any
and
all claims for attorneys' fees and costs, with the exception of such fees and
costs as may be governed by the terms of the Indemnification
Agreement.
Employee
agrees that the release set forth in this section shall be and remain in effect
in all respects as a complete general release as to the matters released.
Notwithstanding the foregoing, this release does not extend to any claims that
Employee currently has or in the future may have for indemnification (statutory,
equitable, contractual, pursuant to the Company’s governing documents, or
otherwise) or contribution, or to any obligations incurred under this Agreement,
the Confidentiality Agreement or the Indemnification Agreement. This
release does
not
release claims that cannot be released as a matter of law,
including, but not limited to: (1) Employee’s right to file a charge with or
participate in a charge by the Equal Employment Opportunity Commission, or
any
other local, state, or federal administrative body or government agency that
is
authorized to enforce or administer laws related to employment, against the
Company (with the understanding that any such filing or participation does
not
give Employee the right to recover any monetary damages against the Company;
Employee’s release of claims herein bars Employee from recovering such monetary
relief from the Company);
(2)
claims
under Division 3, Article 2 of the California Labor Code (which includes
California Labor Code section 2802 regarding indemnity for necessary
expenditures or losses by employee); and (3) claims prohibited from release
as
set forth in California Labor Code section 206.5 (specifically “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”).
Employee
represents that he has made no assignment or transfer of any right, claim,
complaint, charge, duty, obligation, demand, cause of action, or other matter
waived or released in this Section.
6. Acknowledgment
of Waiver of Claims under ADEA.
Employee acknowledges 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. Employee agrees that
this
waiver and release does not apply to any rights or claims that may arise under
the ADEA after the Effective Date of this Agreement. Employee acknowledges
that
the consideration given for this waiver and release is in addition to anything
of value to which Employee was already entitled. Employee 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 twenty-one (21) days within which to
consider this Agreement; (c) he has seven (7) days following his execution
of
this Agreement to revoke this Agreement; (d) this Agreement shall not be
effective until after the revocation period has expired; and (e) nothing in
this
Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA,
nor
does it impose any condition precedent, penalties, or costs for doing so, unless
specifically authorized by federal law. In the event Employee signs this
Agreement and returns it to the Company in less than the 21-day period
identified above, Employee hereby acknowledges that he has freely and
voluntarily chosen to waive the time period allotted for considering this
Agreement. Employee acknowledges and understands that revocation must be
accomplished by a written notification to Xxxxxx X. Xxxxxxxxxx that is received
prior to the Effective Date.
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7. California
Civil Code Section 1542.
Employee
acknowledges that he
has been
advised to consult with legal counsel and is familiar with the provisions of
California Civil Code Section 1542, a statute that otherwise prohibits the
release of unknown claims, 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.
Employee,
being aware of said code section, agrees to expressly waive any rights
he/she
may
have
thereunder, as well as under any other statute or common law principles of
similar effect.
8. No
Pending or Future Lawsuits.
Employee represents that he has no lawsuits, claims, or actions pending in
his
name, or on behalf of any other person or entity, against the Company or any
of
the other Releasees. Employee also represents that he does not intend to bring
any claims on his own behalf or on behalf of any other person or entity against
the Company or any of the other Releasees.
9. Application
for Employment.
Employee understands and agrees that, as a condition of this Agreement, Employee
shall not be entitled to any employment with the Company, and Employee hereby
waives any right, or alleged right, of employment or re-employment with the
Company. Employee further agrees not to apply for employment with the Company
and not otherwise to pursue an independent contractor or vendor relationship
with the Company, except as provided in this Agreement.
10. Confidentiality.
Employee agrees to maintain in complete confidence the existence of this
Agreement, the contents and terms of this Agreement, and the consideration
for
this Agreement (hereinafter collectively referred to as “Separation
Information”),
except to the extent the Company publicly discloses such information, in which
case, Employee shall only be permitted to disclose information already disclosed
by the Company. Except as required by law or in response to a subpoena or other
request made through legal process, Employee may disclose Separation Information
only to his immediate family members, the court in any proceedings to enforce
the terms of this Agreement, and Employee’s counsel, accountant or any
professional tax advisor to the extent that they need to know the Separation
Information in order to provide advice on legal issues, tax treatment or to
prepare tax returns, and must prevent disclosure of any Separation Information
to all other third parties. Employee agrees that he will not publicize to the
general public, directly or indirectly, any Separation Information.
11. Trade
Secrets and Confidential Information/Company Property.
Employee reaffirms and agrees to observe and abide by the terms of the
Confidentiality Agreement. Employee’s signature below constitutes his
certification under penalty of perjury that he has returned, or will return
promptly following the termination of the Consulting Agreement or the end of
the
term of the Consulting Agreement, whichever occurs first, all documents and
other items provided to Employee by the Company, developed or obtained by
Employee in connection with his employment with the Company, or otherwise
belonging to the Company.
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12. No
Cooperation.
Employee
agrees not to act in any manner that might damage the business of the Company.
Employee further agrees that he will not knowingly encourage, counsel, or assist
any attorneys or their clients in the presentation or prosecution of any
disputes, differences, grievances, claims, charges, or complaints by any third
party against any of the Releasees, unless under a subpoena or other court
order
to do so or as related directly to the ADEA waiver in this Agreement. Employee
agrees both to immediately notify the Company upon receipt of any such subpoena
or court order, and to furnish, as soon as practicable and, in any case, within
five (5) business days of its actual receipt by Employee or his obtaining
knowledge thereof, a copy of such subpoena or other court order.
If
approached by anyone for counsel or assistance in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against any of the Releasees, Employee shall state no more than
that
he/she cannot provide counsel or assistance.
13. Non-Disparagement.
Employee agrees to refrain from any disparagement, defamation, libel, or slander
of any of the Company, its officers and directors, and agrees to refrain from
any tortious interference with the contracts and relationships of the Company.
Employee shall direct any inquiries by potential future employers to the
Company’s human resources department, which shall use its best efforts to
provide only the Employee’s last position and dates of employment. Company
agrees to refrain from any disparagement, defamation, libel, or slander of
Employee, and agrees to refrain from any tortious interference with the
contracts and relationships of Employee.
14. Breach.
Employee acknowledges and agrees that any material breach of this Agreement,
unless such breach constitutes a legal action by Employee challenging or seeking
a determination in good faith of the validity of the waiver herein under the
ADEA, or of any provision of the Confidentiality Agreement or the Consulting
Agreement shall entitle the Company immediately to recover and/or cease
providing the consideration provided to Employee under this Agreement, except
as
provided by law. The Company agrees that, prior to demanding arbitration or
otherwise initiating legal action against Employee based upon any alleged
material breach of this Agreement, the Confidentiality Agreement or the
Consulting Agreement, that Company will first provide Employee five days written
notice of its belief that a breach has occurred and the basis for the alleged
breach, to enable the Employee to respond to the Company's allegations with
further information, in the event Employee elects to do so.
15. No
Admission of Liability.
Employee understands and acknowledges that this Agreement constitutes a
compromise and settlement of any and all actual or potential disputed claims
by
Employee. No action taken by the Company hereto, either previously or in
connection with this Agreement, shall be deemed or construed to be (a) an
admission of the truth or falsity of any actual or potential claims or
(b) an acknowledgment or admission by the Company of any fault or liability
whatsoever to Employee or to any third party.
16. Non-Solicitation.
Employee agrees that for a period of twelve (12) months immediately following
the Effective Date of this Agreement, Employee shall not directly or indirectly
solicit any of the Company’s employees to leave their employment at the Company.
For
purposes of this paragraph, the term “solicit” shall be deemed not to include
advertisements or other generalized employment searches, including
advertisements in various media (including trade media) or any job posting
system, not specifically directed to employees of the Company and shall not
include any action by Employee following any response by any person to such
advertisements or generalized searches or any communication initiated by such
person and not by Employee.
17. Costs.
The
Company shall pay for Employee’s attorneys’ fees and costs incurred in
connection with the preparation of this Agreement, within thirty days of the
Effective Date of this Agreement.
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18. ARBITRATION.
THE
PARTIES AGREE THAT ANY AND ALL DISPUTES ARISING OUT OF THE TERMS OF THIS
AGREEMENT, THEIR INTERPRETATION, AND ANY OF THE MATTERS HEREIN RELEASED, SHALL
BE SUBJECT TO ARBITRATION IN SANTA XXXXX COUNTY, BEFORE JAMS, PURSUANT TO ITS
EMPLOYMENT ARBITRATION RULES & PROCEDURES (“JAMS
RULES”).
THE
ARBITRATOR MAY GRANT INJUNCTIONS AND OTHER RELIEF IN SUCH DISPUTES. THE
ARBITRATOR SHALL ADMINISTER AND CONDUCT ANY ARBITRATION IN ACCORDANCE WITH
CALIFORNIA LAW, INCLUDING THE CALIFORNIA CODE OF CIVIL PROCEDURE, AND THE
ARBITRATOR SHALL APPLY SUBSTANTIVE AND PROCEDURAL CALIFORNIA LAW TO ANY DISPUTE
OR CLAIM, WITHOUT REFERENCE TO ANY CONFLICT-OF-LAW PROVISIONS OF ANY
JURISDICTION. TO THE EXTENT THAT THE JAMS RULES CONFLICT WITH CALIFORNIA LAW,
CALIFORNIA LAW SHALL TAKE PRECEDENCE. THE DECISION OF THE ARBITRATOR SHALL
BE
FINAL, CONCLUSIVE, AND BINDING ON THE PARTIES TO THE ARBITRATION. 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 TO THE ARBITRATION SHALL EACH PAY AN EQUAL SHARE OF THE COSTS AND
EXPENSES OF SUCH ARBITRATION, AND EACH PARTY SHALL SEPARATELY PAY FOR ITS
RESPECTIVE COUNSEL FEES AND EXPENSES; PROVIDED, HOWEVER, THAT THE ARBITRATOR
SHALL AWARD ATTORNEYS’ FEES AND COSTS TO THE PREVAILING PARTY, EXCEPT AS
PROHIBITED BY LAW. THE
PARTIES HEREBY AGREE TO WAIVE THEIR RIGHT TO HAVE ANY DISPUTE BETWEEN THEM
RESOLVED IN A COURT OF LAW BY A JUDGE OR JURY. NOTWITHSTANDING THE FOREGOING,
THIS SECTION WILL NOT PREVENT EITHER PARTY FROM SEEKING INJUNCTIVE RELIEF (OR
ANY OTHER PROVISIONAL REMEDY) FROM ANY COURT HAVING JURISDICTION OVER THE
PARTIES AND THE SUBJECT MATTER OF THEIR DISPUTE RELATING TO THIS AGREEMENT
AND
THE AGREEMENTS INCORPORATED HEREIN BY REFERENCE.
SHOULD
ANY PART OF THE ARBITRATION AGREEMENT CONTAINED IN THIS PARAGRAPH CONFLICT
WITH
ANY OTHER ARBITRATION AGREEMENT BETWEEN THE PARTIES, THE PARTIES AGREE THAT
THIS
ARBITRATION AGREEMENT SHALL GOVERN.
19. Tax
Consequences.
The
Parties agree that, to the extent that payment of the Cash Severance constitutes
or is to be treated as constituting the payment by the Company of an obligation
to pay amounts to Employee upon his termination of employment with the Company,
or a substitute for or satisfaction of such an obligation, then (a) payment
of
the sum of Four Hundred Sixty Thousand Dollars ($460,000) of the Cash Severance
is intended to be and shall be treated as a payment that is not a “deferral of
compensation,” within the meaning of United States Department of Treasury
Regulations (“Treasury
Regulations”)
section 1.409A-1(b), by virtue of Treasury Regulations section 1.409A-1(b)(9)
and (b) the sum of Two Hundred Seventy-Five Thousand Dollars ($275,000) of
the
Cash Severance is intended to be and shall be treated as a payment that is
not a
“deferral of compensation” by virtue of the “short term deferral” rule of
Treasury Regulations section 1.409A-1(b)(4) and shall constitute a “separate
payment” for purposes of the application of that rule. The Company makes no
other representations or warranties with respect to the tax consequences of
the
payments and any other consideration provided to Employee or made on his/her
behalf under the terms of this Agreement. Employee agrees and understands that
he is responsible for payment, if any, of local, state, and/or federal taxes
on
the payments and any other consideration provided hereunder by the Company
and
any penalties or assessments thereon. Employee further agrees to indemnify
and
hold the Company harmless from any claims, demands, deficiencies, penalties,
interest, assessments, executions, judgments, or recoveries by any government
agency against the Company for any amounts claimed due on account of (a)
Employee’s failure to pay or Employee’s delayed payment of, federal or state
taxes, or (b) damages sustained by the Company by reason of any such claims,
including attorneys’ fees and costs.
20. Authority.
The
Company represents and warrants that the undersigned 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. Employee 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.
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8 -
21. No
Representations.
Employee represents that he has had an opportunity to consult with an attorney,
and has carefully read and understands the scope and effect of the provisions
of
this Agreement. Employee has not relied upon any representations or statements
made by the Company that are not specifically set forth in this
Agreement.
22. Severability.
In the
event that any provision or any portion of any provision hereof or any surviving
agreement made a part hereof becomes or is declared by a court of competent
jurisdiction or arbitrator to be illegal, unenforceable, or void, this Agreement
shall continue in full force and effect without said provision or portion of
provision.
23. Attorneys’
Fees.
Except
with regard to a legal action challenging or seeking a determination in good
faith of the validity of the waiver herein under the ADEA, in the event that
either Party brings an action to enforce or effect its rights under this
Agreement, the prevailing Party shall be entitled to recover its costs and
expenses, including the costs of mediation, arbitration, litigation, court
fees,
and reasonable attorneys’ fees incurred in connection with such an
action.
24. Entire
Agreement.
This
Agreement, together with the Confidentiality Agreement, the Consulting
Agreement, the Indemnification Agreement and the Stock Agreements, represents
the entire agreement and understanding between the Company and Employee
concerning the subject matter of this Agreement and Employee’s employment with
and separation from the Company and the events leading thereto and associated
therewith, and supersedes and replaces any and all prior agreements and
understandings (other
than the Indemnification Agreement, the Confidentiality Agreement and the Stock
Agreements) concerning
the subject matter of this Agreement and Employee’s relationship with the
Company, including, but not limited to, the Offer Letters. In
the
event that the indemnification language of this Agreement conflicts with the
indemnification language contained in the Indemnification Agreement, the
Indemnification Agreement shall govern. In addition, Employee shall continue
to
be provided coverage under director and officer liability insurance, no less
favorable than the other officers employed by the Company as of the Effective
Date of this Agreement.
25. No
Oral Modification.
This
Agreement may only be amended in a writing signed by Employee and the Company’s
Chief Executive Officer.
26. Governing
Law.
This
Agreement shall be governed by the laws of the State of California, without
regard for choice-of-law provisions. Employee consents to personal and exclusive
jurisdiction and venue in the State of California.
27. Effective
Date.
Each
Party has seven (7) days after that Party signs this Agreement to revoke it.
This Agreement will become effective on the eighth (8th) day after Employee
signed this Agreement, so long as it has been signed by the Parties and has
not
been revoked by either Party before that date (the “Effective
Date”).
28. Counterparts.
This
Agreement may be executed in counterparts and by facsimile, and each counterpart
and facsimile 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.
29. Voluntary
Execution of Agreement.
Employee understands and agrees that he executed this Agreement voluntarily,
without any duress or undue influence on the part or behalf of the Company
or
any third party, with the full intent of releasing all of his/her claims against
the Company and any of the other Releasees. Employee acknowledges
that:
| (a) |
he
has read this Agreement;
|
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9 -
| (b) |
he
has been represented in the preparation, negotiation, and execution
of
this Agreement by legal counsel of his/her own choice or has
elected not
to retain legal
counsel;
|
| (c) |
he
understands the terms and consequences of this Agreement and
of the
releases it contains;
and
|
| (d) |
he
is fully aware of the legal and binding effect of this
Agreement.
|
30. Stock
Agreements and Indemnification Agreement Remaining in Full Force and
Effect.
Except
as specifically provided by this Agreement, the Stock Agreements and the
Indemnification Agreement shall remain in full force and effect, unamended
by
this Agreement.
31. Further
Assurances.
The
Parties agree to execute any and all documents, consents and instruments and
to
take all actions and to do all things necessary or appropriate to effectuate
the
purposes and intents of this Agreement, and, in furtherance and not limitation
thereof, Employee hereby agrees to execute and deliver to the Company all such
documentation as the Company determines to be necessary and appropriate, in
its
sole discretion, for Employee to effect his resignation from each position
as a
director, officer or employee of the Company or any of its subsidiaries and
for
Employee to transfer to the Company, without further consideration, any shares
of the capital stock of any of the Company’s subsidiaries.
[Remainder
of page intentionally left blank.
Signature
page follows.]
-
10 -
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
|
XXX
XXXXX, an individual
|
||
|
Dated:
June 9, 2008
|
/s/
Xxx Xxxxx
|
|
|
Xxx
Xxxxx
|
||
|
Dated:
June 9, 2008
|
By
|
/s/
Xxxxxx X. Xxxxxxxxxx
|
|
Xxxxxx X.
Xxxxxxxxxx
|
||
|
Chairman
& Chief Executive Officer
|
||
|
Approved
as to Form:
|
||
|
Dated:
June 9, 2008
|
By:
|
/s/
Xxxxx Xxxxxx
|
|
Xxxxx
Xxxxxx
|
||
|
GCA
Law Partners LLP
|
||
|
Counsel
for Xxx
Xxxxx
|
||
|
Dated:
June 9, 2008
|
By:
|
/s/
Xxxxx X. Xxxxx
|
|
Xxxxx
X. Xxxxx
|
||
|
Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx
|
||
|
Counsel
for SourceForge, Inc.
|
||
Exhibit
A
Consulting
Agreement
