EXHIBIT 10.26
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SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (this "Agreement") by and
between Change Technology Partners, Inc. (the "Company") and Xxxxxxx X. Xxxxx, a
resident of New Canaan, Connecticut ("Executive"), is dated as of this 17th day
of June, 2003.
WHEREAS, Executive is President and Chief Executive Officer of the
Company;
WHEREAS, the Company and Executive have entered into an agreement dated
as of September 17, 2001 (the "Employment Agreement"), governing the terms and
conditions of Executive's employment with the Company as well as a Stock Option
Award Agreement also dated September 17, 2001 (the "Award Agreement");
WHEREAS, Company and Executive have agreed that Executive's employment
as the President and Chief Executive Officer of the Company shall be terminated
effective as of the date hereof (the "Termination Date"); and
WHEREAS, each of Company and Executive desires to set forth herein its
respective rights and obligations to the other following the Termination Date
and that the Employment Agreement and the Award Agreement terminate as of the
Termination Date;
NOW, THEREFORE, in consideration of the mutual promises set forth in
this Agreement, the Company and Executive (collectively, the "Parties") hereby
agree as follows:
1. SEPARATION. The Executive's employment with the Company is
hereby terminated and Executive resigns any and all appointments he holds with
the Company and its affiliates and subsidiaries, whether as an officer,
director, employee, consultant, agent or otherwise, without any further action
required, in each case, as of the Termination Date. Effective as of the
Termination Date, (i) Executive shall have no authority to act on behalf of the
Company or any of its affiliates or subsidiaries, and shall not hold himself out
as having such authority or otherwise act in an executive or other decision
making capacity; and (ii) except as otherwise provided herein, the Employment
Agreement and the Award Agreement shall terminate and neither Executive nor any
member of the Company Group (as defined in Section 3 below) shall have any
obligations thereunder following the Termination Date.
2. ENTITLEMENTS.
(a) During the period beginning on the Termination Date
and ending on December 31, 2003 (the "Severance Period"), the Company shall make
payments to Executive in respect of salary at an annual rate of $280,000,
payable, in the sole discretion of the Executive, in accordance with the normal
pay practices of the Company or as a one time payment in an amount equal to the
salary owed to Executive for the Severance Period;
(b) The Company shall continue to provide Executive with
insurance (including, but not limited to, life, disability, accident, medical
and dental insurance and/or benefits and family medical and dental insurance),
death benefits and other insurance benefits
(collectively, "Insurance Benefits"), all in coverage, form, manner and cost to
Executive substantially equivalent to such benefits which the Company provided
to Executive as of the date hereof, at all times during the period beginning on
the Termination Date and ending on December 31, 2004 (the "Insurance Benefits
Period");
(c) During the period beginning on the Termination Date
and ending on June 30, 2003 or until such time as no secretary paid by the
Company is located in Greenwich, Connecticut, the Company shall provide
Executive with a secretary and secretarial services in form and manner
substantially equivalent to that provided to Executive in his employment as
President and Chief Executive Officer of the Company;
(d) During the period beginning on the Termination Date
and ending on September 30, 2003, the Company shall provide Executive with an
office at the headquarters of the Company substantially equivalent to that
provided to Executive immediately prior to the Termination Date;
(e) During the period beginning on the Termination Date
and ending on December 31, 2003, the Company shall continue to provide Executive
with access to, and use of, the email address of xxxx.xxxxx@xxxxxx.xxx;
(f) Effective as of the date of this Agreement, those
share options granted to Executive under the Award Agreement not yet vested
shall immediately vest and, notwithstanding any provision of the Award Agreement
to the contrary, all Nine Million (9,000,000) share options granted to Executive
under the Award Agreement shall be exercisable on or before March 31, 2005;
(g) Company shall pay all attorneys fees reasonably
incurred by Executive in respect of this Agreement;
(h) Company shall pay costs not to exceed Five Hundred
Dollars ($500.00) reasonably incurred by Executive in respect of the transfer of
Executive's computer and electronic files off of Company's server to a location
designated by Executive;
(i) Company shall pay all costs reasonably incurred by
Executive in moving the Executive's personal property and furniture from the
Company's office to a location designated by Executive;
(j) As soon as practicable following the Termination Date
and subject to any consent, if necessary, Company shall transfer and assign to
the Executive all of its right, title and interest in and to InSys Technology
LLC, a Delaware limited liability company ("InSys"), which membership interest
constitutes a forty nine percent (49%) in InSys and under a certain promissory
note made by Xxxx X. Xxxxxxx in a principal amount of $100,000 (the "InSys
Note");
(k) Company shall pay all Federal, state and local income
tax liabilities of Executive arising out of the transfer to the Executive of the
Company's interest in InSys and the InSys Note;
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(l) As soon as practicable following the Termination Date
and subject to any consent, if necessary, Company shall transfer and assign to
the Executive all of its right, title and interest in and to a certain Warrant
to purchase common stock, dated November 2, 2001, issued by RAND Interactive
Corporation, a Maryland corporation (the "Rand Warrant"); and
(m) Company shall pay all Federal, state and local income
tax liabilities of Executive arising out of the transfer to the Executive of the
Company's interest in the Rand Warrant.
3. RETURN OF COMPANY PROPERTY. No later than the Termination
Date, Executive shall return to the Company all originals and copies of papers,
notes and documents (in any medium, including computer disks), whether property
of the Company or any of its subsidiaries or affiliates, (collectively, the
"Company Group") or not, prepared, received or obtained by Executive during the
course of his employment with the Company Group, and all equipment and property
of the Company Group which may be in Executive's possession or under his
control, whether at the Company Group's offices, Executive's home or elsewhere,
including all such papers, work papers, notes, documents and equipment in the
possession of Executive. Executive agrees that he and his family shall not
retain copies of any such papers, work papers, notes and documents.
Notwithstanding the foregoing, Executive may retain copies of any employment or
benefits agreements between Executive and the Company Group, this Agreement, any
publicly filed materials and any employee benefit plan materials distributed
generally to participants in any such plan by the Company Group. On the
Termination Date, all telephone and other accounts being paid by the Company
Group on Executive's behalf shall be terminated and all company credit cards
shall be returned to the Company Group and canceled. To the extent any charges
are made by Executive using company accounts or credit cards after the
Termination Date, such charges will be solely Executive's responsibility.
4. CONFIDENTIALITY. Executive acknowledges that by reason of his
employment he has had access to and acquired proprietary and other confidential
information and trade secrets concerning operations, future plans and methods of
doing business of the Company Group. Accordingly, Executive covenants that he
will not at any time hereafter reveal or divulge to any person, firm,
corporation or other business entity or use for his own personal or business
purposes any trade secrets or confidential information or knowledge relating to
the business or businesses of the Company Group, including without limiting the
generality of the foregoing, any information or knowledge pertaining to
products, formulae or processes, and developments or improvements with respect
thereto, inventions, discoveries, trademarks, patents, designs, sketches,
manufacturing, packaging, merchandising, advertising, distribution and sales
methods, sales and profits figures, budgeting materials, customer lists and
relationships between the Company Group and any of its clients, suppliers, or
affiliates (collectively called the "Confidential Information"). As used in this
Agreement, an "affiliate" of the Company means each corporation or other
business entity at any time directly or indirectly controlling, controlled by,
or under common control with any member of the Company Group, its successors or
assigns, and the term "client" means any person, firm or corporation to whom
goods, services or intellectual property were actively being supplied by the
Company Group for compensation at the time Executive learned of such person's,
firm's or corporation's Confidential Information, or to whom Executive has
knowledge that the Company Group is at such time actively soliciting a
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business relationship to engage in such activities. Executive acknowledges that
any materials or documents relating to the Company Group's Confidential
Information, in existence or developed in the future, including all copies
thereof, are proprietary to the Company Group and shall, following the
termination of Executive's employment, regardless of the circumstances thereof
or reasons therefore, remain the Company Group's sole and exclusive property and
that Executive shall immediately return all such materials and documents
including any copies thereof to the Company Group upon the Termination Date.
5. NON-SOLICITATION. During the Severance Period, Executive will
not, either for his benefit or for the benefit of any other person or entity,
directly or indirectly solicit any contractor or employee of the Company or its
subsidiaries to terminate his or her employment or other relationship with the
Company or its subsidiaries.
6. CUSTOMER AND SUPPLIER SOLICITATION. During the Severance
Period, Executive shall not divert, or attempt to divert any person, business or
entity from doing business with the Company, nor will Executive attempt to
induce any such person, business or entity to cease being a customer of or
supplier to the Company.
7. NON-DISPARAGEMENT. Executive will not, at any time, publicly
disparage the Company, its affiliates and shareholders or any of their officers,
directors, employees or agents, other than in connection with disclosures
required by applicable law, regulation or order of court or governmental agency.
8. ACKNOWLEDGMENT AND RELEASE.
(a) In consideration of the Company's execution of this
Agreement, and except with respect to the Company's obligations arising under or
preserved in this Agreement, Executive, for and on behalf of himself and his
heirs and assigns, hereby waives and releases any common law, statutory or other
complaints, claims, charges or causes of action arising out of or relating to
Executive's employment or termination of employment with, or his serving in any
capacity in respect of, any member of the Company Group, both known and unknown,
in law or in equity, which Executive may now have or ever had against any member
of the Company Group or any shareholder, employee, director or officer of any
member of the Company Group (collectively, the "Releasees"), including, without
limitation, under the Employment Agreement or the Award Agreement, and any
complaint, charge or cause of action arising out of his employment with the
Company Group under the Age Discrimination in Employment Act of 1967 ("ADEA," a
law which prohibits discrimination on the basis of age), the National Labor
Relations Act, the Civil Rights Act of 1991, the Americans With Disabilities Act
of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement
Income Security Act of 1974, all as amended; and all other federal, state and
local laws. By signing this Agreement Executive acknowledges that he intends to
waive and release any rights known or unknown he may have against the Releasees
under these and any other laws; PROVIDED, HOWEVER, that Executive does not waive
or release claims with respect to the right to enforce this Agreement.
(b) Executive acknowledges that he has not filed any
complaint, charge, claim or proceeding against any of the Releasees before any
local, state or federal
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agency, court or other body relating to his employment or the resignation
thereof (each individually a "Proceeding"). Executive represents that he is not
aware of any basis on which such a Proceeding could reasonably be instituted.
(c) Executive (i) acknowledges that he will not initiate
or cause to be initiated on his behalf any Proceedings and will not participate
in any Proceeding, in each case, except as required by law; and (ii) waives any
right he may have to benefit in any manner from any relief (whether monetary or
otherwise) arising out of any Proceeding, including any Proceeding conducted by
the Equal Employment Opportunity Commission ("EEOC"). Further, Executive
understands that by entering into this Agreement, he will be limiting the
availability of certain remedies that he may have against the Company and
limiting also his ability to pursue certain claims against the Releasees.
Notwithstanding the above, nothing in this Section 8 shall prevent Executive
from (x) initiating or causing to be initiated on his behalf any complaint,
charge, claim or proceeding against the Company before any local, state or
federal agency, court or other body challenging the validity of the waiver of
his claims under ADEA contained in Section 8 (but no other portion of such
waiver); or (y) initiating or participating in an investigation or proceeding
conducted by the EEOC with respect to ADEA.
(d) Executive acknowledges that he has been given
twenty-one (21) days from the date of receipt of this Agreement to consider all
the provisions of this Agreement and he does hereby knowingly and voluntarily
waive said given twenty-one (21) day period. EXECUTIVE FURTHER ACKNOWLEDGES THAT
HE HAS READ THIS AGREEMENT CAREFULLY, HAS BEEN ADVISED BY THE COMPANY TO CONSULT
AN ATTORNEY, AND FULLY UNDERSTANDS THAT BY SIGNING BELOW HE IS GIVING UP CERTAIN
RIGHTS WHICH HE MAY HAVE TO XXX OR ASSERT A CLAIM AGAINST ANY OF THE RELEASEES,
AS DESCRIBED IN THIS SECTION 8 AND THE OTHER PROVISIONS HEREOF. EXECUTIVE
ACKNOWLEDGES THAT HE HAS NOT BEEN FORCED OR PRESSURED IN ANY MANNER WHATSOEVER
TO SIGN THIS AGREEMENT AND EXECUTIVE AGREES TO ALL OF ITS TERMS VOLUNTARILY.
(e) Executive shall have seven days from the date of his
execution of this Agreement to revoke this Agreement, including the release
given under this Section 8 with respect to all claims referred to herein
(including, without limitation, any and all claims arising under ADEA). If
Executive revokes this Agreement including, without limitation, the release
given under this Section 8, Executive will be deemed not to have accepted the
terms of this Agreement, and no action will be required of the Company under any
Section of this Agreement.
9. AVAILABILITY OF RELIEF.
(a) In the event that Executive willfully and materially
breaches Section 5, 6 or 7 of this Agreement, the Company may, in addition to
any other remedies it may have, terminate any benefits or payments that are
subsequently due under this Agreement, without waiving the release granted
herein.
(b) Executive acknowledges and agrees that the remedy at
law available to the Company Group for breach of any of his post-termination
obligations under this
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Agreement, including but not limited to his obligations under Sections 4, 5, 6
and 7 of this Agreement, would be inadequate and that damages flowing from such
a breach may not readily be susceptible to being measured in monetary terms.
Accordingly, Executive acknowledges, consents and agrees that, in addition to
any other rights or remedies which the Company Group may have at law, in equity
or under this Agreement, upon adequate proof of his violation of any such
provision of this Agreement, the Company Group shall be entitled to immediate
injunctive relief and may obtain a temporary order restraining any threatened or
further breach, without the necessity of proof of actual damage.
10. MISCELLANEOUS.
(a) NOTICES. Any notice given pursuant to this Agreement
to any party hereto shall be deemed to have been duly given when mailed by
registered or certified mail, return receipt requested, or by overnight courier,
or when hand delivered as follows:
If to the Company:
Change Technology Partners, Inc.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx
If to Executive:
Xxxxxxx X. Xxxxx
000 Xxxxx Xxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxxx 00000
With a Copy to:
Xxxxxxxxxxx X. Xxxxxx
Xxxxxx, Xxxxx & Xxxxxxx, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
(b) SUCCESSOR. This Agreement shall be binding upon and
inure to the benefit of the Parties, their respective heirs, successors and
assigns.
(c) TAXES. Except as otherwise provided herein, Executive
shall be responsible for the payment of any and all required federal, state,
local and foreign taxes incurred, or to be incurred, in connection with any
amounts payable to Executive under this Agreement. Notwithstanding any other
provision of this Agreement, the Company may withhold from amounts payable under
this Agreement all federal, state, local and foreign taxes that are
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required to be withheld by applicable laws and regulations.
(d) ENTIRE AGREEMENT. This Agreement is the entire
agreement between the Parties with respect to the subject matter hereof and
contains all agreements, whether written, oral, express or implied, between the
Parties relating thereto and supersedes and extinguishes any other agreement
relating thereto, whether written, oral, express or implied, between the
Parties, including, without limitation, the Employment Agreement and the Award
Agreement. Other than this Agreement, there are no agreements of any nature
whatsoever among the Parties that survive this Agreement. This Agreement may not
be modified or amended, nor may any rights under it be waived, except in a
writing signed and agreed to by the Parties.
(e) SEVERABILITY. In the event that any provision of this
Agreement is determined to be invalid or unenforceable, the remaining terms and
conditions of this Agreement shall be unaffected and shall remain in full force
and effect. In addition, if any provision is determined to be invalid or
unenforceable due to its duration and/or scope, the duration and/or scope of
such provision, as the case may be, shall be reduced, such reduction shall be to
the smallest extent necessary to comply with applicable law, and such provision
shall be enforceable, in its reduced form, to the fullest extent permitted by
applicable law.
(f) COUNTERPARTS. This Agreement may be executed by one
or more of the Parties hereto on any number of separate counterparts and all
such counterparts shall be deemed to be one and the same instrument. Each party
hereto confirms that any facsimile copy of such party's executed counterpart of
this Agreement (or its signature page thereof) shall be deemed to be an executed
original thereof.
(g) NON-ADMISSION. Nothing contained in this Agreement
shall be deemed or construed as an admission of wrongdoing or liability on the
part of Executive or on the part of the Company.
(h) NO MITIGATION. Executive shall not be required to
mitigate the amount of any payment provided for pursuant to this Agreement by
seeking other employment and, to the extent that Executive obtains or undertakes
other employment, the payment will not be reduced by the earnings of Executive
from the other employment.
(i) GOVERNING LAW/VENUE. This Agreement shall be governed
by, and construed in accordance with the internal laws of the State of
Connecticut, without regard to principles of conflicts of laws. Any dispute
regarding this Agreement shall be adjudicated in the state or Federal courts
located in Connecticut.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on
June 17, 2003.
CHANGE TECHNOLOGY PARTNERS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Chairman
EXECUTIVE
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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