EXHIBIT 10.1
SEPARATION AND CONSULTING AGREEMENT
This SEPARATION AND CONSULTING AGREEMENT is entered into as of the 15th
day of February, 2006, by and between CELEBRATE EXPRESS, INC., a Washington
corporation (the "Company"), and XXXXXXX X. XXXXXX ("Xxxxxx"), with respect to
the following facts:
X. Xxxxxx has been the President and Chief Executive Officer of the
Company.
B. The parties each desire to, among other things, confirm Xxxxxx'
resignation as an officer of the Company and any subsidiaries and affiliates of
the Company and, as applicable, as trustee of any of the Company's employee
benefit plans and provide for Xxxxxx to render certain consulting services to
the Company, all on the terms and conditions set forth below.
ACCORDINGLY, in consideration of the foregoing premises, and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, Xxxxxx and the Company
hereby agree as follows:
1. Resignation. Concurrently with the execution and delivery of this
Agreement, Xxxxxx has delivered a resignation to the Board of Directors of the
Company, in the form attached to this Agreement as Exhibit A.
2. Consulting Services.
(a) The Company hereby retains Xxxxxx as a consultant, and Xxxxxx hereby
accepts such appointment, on the terms and conditions set forth below, to
perform such services as are required hereunder from time to time during the
period commencing on February 10, 2006 and ending on August 30, 2006 (the
"Consulting Period").
(b) Xxxxxx will render such services to the Company, and will perform such
duties and acts, in order to assure the smooth transition of his
responsibilities and/or as reasonably may be requested by the then acting Chief
Executive Officer or Board of Directors, or any committee thereof. Xxxxxx will
devote such time, ability and attention to the Company's business as may be
necessary or advisable to discharge his duties hereunder in a professional and
businesslike manner.
(c) Xxxxxx will make himself available to perform such services on a
full-time basis in February and March 2006, up to fifteen (15) days in April
2006, up to days ten (10) days a month in May, and up to five (5) days a month
June, July and August of 2006; provided, however, that additional days may be
requested by the Company and agreed to by Xxxxxx. The Company shall pay Xxxxxx
at the rate of $1,500 per day (or portion thereof based on a 10 hour day) for
the services performed during the term of this Agreement. Subject to prior
approval by the Company, the Company will reimburse Xxxxxx for reasonable and
necessary out-of-pocket costs incurred while performing the services.
(d) Xxxxxx will be an independent contractor of the Company. Nothing in
this Agreement will be construed to give Xxxxxx any rights as an employee,
agent, partner or joint venturer of the Company or to entitle Xxxxxx to control
in any manner the business of the Company or to incur any debt, liability or
obligation on behalf of the Company. Xxxxxx will keep complete written records
of the services provided and shall invoice the Company by the 10th day of the
following month for the services performed in the previous month. Invoices shall
be submitted to the attention of the Vice President, Finance of the Company.
Xxxxxx agrees that he will be responsible for the payment of all taxes and
withholding on any amounts paid to Xxxxxx under this Agreement.
3. Options. On March 1, 2006, Xxxxxx will receive the standard
"Non-Employee Director" nonstatutory stock option grant to purchase 13, 246
shares of Common Stock of the Company in accordance with the Company's 2004
Equity Incentive Plan.
4. Return of Property. Xxxxxx hereby represents and warrants to the
Company that as of February 28, 2006 he will have returned to the Company all
property of the Company and all property related to the Company's business, in
the custody or under the control of Xxxxxx, in whatever form, including, but not
limited to, all equipment (including computers), security access codes,
proprietary information, documents, books, records, reports, memoranda,
contracts, lists, computer disks (or other computer-generated files or data),
and copies thereof, created on any medium.
5. Release.
(a) Except as expressly set forth in this Agreement, each party hereby
fully, forever and unconditionally releases, exonerates, waives, relinquishes,
discharges, acquits, relieves and covenants not to xxx or charge the other and
its agents, employees, representatives, attorneys, stockholders, officers,
directors, successors and assigns (collectively, "all related persons"), and all
affiliated, parent and subsidiary corporations, and each of them, and all
related persons connected therewith, from any and all rights, claims, demands,
debts, obligations, liabilities, promises, acts, agreements, costs, expenses
(including, but not limited to, attorneys' fees and costs), damages, disputes,
controversies, actions and causes of action (collectively, "claims") through the
date of this Agreement, of whatever kind or nature, in law or equity, potential
or actual, including but not limited to those based on, arising out of or in any
way connected with or related to (i) the employment of Xxxxxx by the Company, or
the termination of such employment, (ii) Xxxxxx' right to purchase, or actual
purchase, of securities of the Company, (iii) the breach by Xxxxxx or the
Company of any provision of the Company's employee handbook, personnel policies
or any oral or written representations or statements made by Xxxxxx or by
officers, directors, employees or agents of the Company, (iv) the breach by
Xxxxxx or the Company of any state or federal law regulating wages, hours,
compensation or employment, and (v) any claim for misrepresentation, wrongful
termination or intentional infliction of emotional distress in connection with
any of the foregoing matters. Notwithstanding the foregoing or any other
provision of this Agreement, the releases provided for in this Section 4 do not
extend to any obligations arising under this Agreement or, except as provided in
Section 5(a)(ii), any claims related to ownership of securities of the Company.
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(b) Except as expressly set forth in this Agreement, each party hereby
acknowledges that except for the express provisions of this Agreement, no
statement, representation, promise or inducement has been made by the other
party in connection with this Agreement, and each party specifically
acknowledges that he or it has not relied upon any statement, representation,
promise or inducement of the other party in executing this Agreement that is not
expressly set forth in this Agreement. Each party hereby represents and warrants
to the other party that he or it holds all rights necessary to release all
claims being released under this Agreement by he or it, without obtaining the
approval or consent of any other person or entity, and he or it has not
transferred or otherwise assigned any of the claims being released under this
Agreement by he or it to any other person or entity.
(c) The parties acknowledge and agree that they are familiar with, and
have been advised by legal counsel with respect to, the provisions of Section
1542 of the Civil Code of the State of California, 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.
Each party hereby expressly waives and releases any right or benefit which
he or it has or may have under Section 1542 of the Civil Code of the State of
California, as well as under the provisions of any and all comparable or similar
statutes, codes, laws, or regulations of any and all states of the United States
and of the United States, to the fullest extent that such rights and benefits
may be waived. Each party acknowledges that he or it may hereafter discover
claims presently unknown or unsuspected, or facts in addition to or different
from those which he or it now knows or believes to be true, with respect to the
matters released herein. Nevertheless, it is the intention of each party through
this Agreement, fully, finally and forever to settle and release all such
matters, and all claims relative thereto, which do now exist, may exist or
heretofore have existed in connection with such matters. In furtherance of such
intention, the release herein given will be and remain in effect as a full and
complete release of such matters notwithstanding the discovery or existence of
any such additional different claims or facts relative thereto.
(d) Xxxxxx hereby represents, warrants and acknowledges to the Company
that (i) he has not suffered nor aggravated any known on-the-job injuries for
which he has not already filed a claim, and (ii) assuming receipt of full
payment for wages for the period from the date of this agreement, and for
vacation accrued, thru February 28, 2006, he has been fully compensated by the
Company for all amounts owed to him for wages, salaries, bonuses, health
benefits, vacation, expenses, and any other form of compensation and benefits.
(e) The Company hereby confirms its obligation to indemnify Xxxxxx on the
terms set forth in that certain Indemnification Agreement between Xxxxxx and the
Company, and nothing in Agreement is intended to limit Xxxxxx' rights to
indemnification as provided therein. In addition, Xxxxxx will be provided
indemnification under the Company's articles of
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incorporation and bylaws and applicable law, and coverage under director and
officer liability insurance, no less favorable than is provided to other present
and former officers and directors of the Company.
6. Prohibition Against Disparagement. The Company will not disparage,
defame or denigrate the reputation of, or cause or encourage any other person to
so disparage, defame or denigrate the reputation of, Xxxxxx; and Xxxxxx will not
disparage, defame or denigrate the reputation of, or cause or encourage any
other person to so disparage, defame or denigrate the reputation of, the
Company, any of its subsidiaries or affiliates, or any of their respective
officers, directors or employees. This Section 6 will not, however, prevent a
party from truthfully testifying as required by compulsion of law.
7. Restrictive Covenants.
(a) Xxxxxx hereby agrees that from the date hereof to and including
February 28, 2007, he will not, directly or indirectly, , on behalf of himself
or any other person or entity, engage in any employment or business activity
which is competitive with the business, products or services of the Company, or
which were under development, as of the date of this Agreement.
(b) Xxxxxx hereby further agrees that from the date hereof to and
including February 28, 2007, he will not, directly or indirectly, on behalf of
himself or any other person or entity, (i) solicit, accept or take away any
customer of the Company with respect to any business, products or services that
are competitive with the business, products or services of the Company, or which
were under development, as of the date of this Agreement, (ii) induce or
encourage any person or entity that is a licensor, vendor to or customer of the
Company to cease doing business with the Company, or (iii) otherwise interfere
with the relationships between the Company and any of its licensors, vendors or
customers.
(c) Xxxxxx hereby further agrees that from the date hereof to and
including February 28, 2007, he will not, directly or indirectly, on behalf of
himself or any other person or entity, (i) solicit for employment or
consultation services any person who is at the time of solicitation employed by
the Company, or (ii) induce, or attempt to induce, any person who is at the time
of inducement employed by the Company to terminate his or her employment with
the Company.
8. Confidential Information.
(a) As used in this Section 8, the term "Confidential Information" means
any and all trade secrets or other confidential or proprietary information of
the Company, or other information of any kind, nature or description concerning
any matters affecting or relating to the Company that derives economic value,
actual or potential, from not being generally known to the public or to other
persons who can obtain economic value from its disclosure or use. Confidential
Information includes without limitation any such information relating to the
financial condition, results of operations, business, customers, properties,
assets, liabilities or future prospects of the Company.
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(b) Xxxxxx hereby acknowledges and agrees that the Confidential
Information is the sole property of the Company. Xxxxxx hereby agrees that he
will keep confidential and will not directly or indirectly divulge to anyone or
use or otherwise appropriate for his own benefit, or for the benefit of any
other person or entity, any Confidential Information.
9. Inventions and Intellectual Property.
(a) As used in this Section 9, the term "Inventions" means any and all
ideas, inventions, techniques, modifications, processes, or improvements
(whether patentable or not), any trademarks, trade names or industrial designs
(whether registerable or not), and any works of authorship (whether or not
copyright protection may be obtained for them) created, conceived, or developed
by Xxxxxx to date, either solely or in conjunction with others, that relate in
any way to, or are useful in any manner in connection with, the Company's
business as it was conducted on or prior to the date of this Agreement. As used
in this Section 9, the terms "Intellectual Property Right" and "Intellectual
Property Rights" mean (i) all rights under all copyright laws of the United
States and all other countries for the full terms thereof (and all rights
accruing by virtue of copyright treaties and conventions), including, but not
limited to, all renewals, extensions, reversions or restorations of copyrights
now or hereafter provided by law and all rights to make applications for and
obtain copyright registrations therefor and recordations thereof; (ii) all
rights to and under new and useful inventions, discoveries, designs, technology
and art and all other patentable subject matter, including, but not limited to,
all improvements thereof and all know-how related thereto, all applications for
and the rights to make applications for patents in the United States and all
other countries, and all reissues, extensions, renewals, divisional applications
and continuations (including continuations-in-part and other continuing
applications) thereof, for the full term thereof; (iii) all trade secrets; (iv)
all trademarks, service marks and Internet domain names and the like throughout
the world; and (v) all other intellectual and industrial property and
proprietary rights throughout the world not otherwise included in the foregoing,
including, without limitation, all techniques, methodologies and concepts and
trade dress.
NOTICE REQUIRED BY REVISED CODE OF WASHINGTON 49.44.140:
Any assignment of Inventions required by this Agreement does not apply to
an Invention for which no equipment, supplies, facility or trade secret
information of the Company was used and which was developed entirely on the
employee's own time, unless (a) the Invention relates (i) directly to the
business of the Company or (ii) to the Company's actual or demonstrably
anticipated research or development or (b) the Invention results from any work
performed by the employee for the Company.
(b) Xxxxxx acknowledges and agrees that all of the Inventions are works
made for hire and are the property of the Company, including any copyrights,
patents, or other Intellectual Property Rights pertaining thereto.
Notwithstanding the foregoing, Xxxxxx agrees to assign and does hereby assign to
the Company all of Xxxxxx' right, title and interest, including all rights of
copyright, patent and other Intellectual Property Rights, to or in such
Inventions. Xxxxxx covenants that he will promptly: (i) disclose to the Company
in writing any Invention; (ii) take all actions that the Company may request
from time to time to assign to the Company (or to a party designated by the
Company), without additional compensation,
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all of Xxxxxx' rights in and to any Invention for the United States and all
foreign jurisdictions; (iii) execute and deliver to the Company such
applications, assignments and other documents as the Company may request in
order to apply for and obtain patent or other registrations with respect to any
Invention in the United States and all foreign jurisdictions; (iv) sign all
other papers necessary to carry out the foregoing; and (v) give testimony and
render any other reasonable assistance in support of the Company's rights to any
Invention.
(c) To the extent allowed by law, the foregoing agreement to assign and
the assignment of Inventions include all rights known as or referred to as
"moral rights," "artist's rights," "droit moral," or the like (collectively
"Moral Rights"). To the extent Xxxxxx retains any such Moral Rights under
applicable law, Xxxxxx hereby ratifies and consents to any action that may be
taken with respect to such Moral Rights by, or authorized by, the Company, and
agrees not to assert any Moral Rights with respect thereto.
(d) Xxxxxx hereby irrevocably designates and appoints the Company and its
agents as attorneys-in-fact to act for and in Xxxxxx' behalf to execute and file
any document and to do all other lawfully permitted acts to further the purposes
of this Section 9 with the same legal force and effect as if executed by Xxxxxx.
10. Successors and Assigns. This Agreement will inure to the benefit of,
and will be binding upon, the successors and assigns of the parties hereto.
11. Severability. In the event that any provision of this Agreement should
be held to be void, voidable or unenforceable, the remaining provisions, and any
partially unenforceable provisions to the extent enforceable, will remain in
full force and effect.
12. Governing Law. This Agreement will be construed in accordance with,
and be governed by, the laws of the State of Washington applicable to contracts
made and to be performed wholly within that State.
13. Attorneys' Fees. Subject to Section 21 of this Agreement, in the event
any party takes legal action to enforce any of the terms of this Agreement, the
unsuccessful party to such action will pay the successful party's expenses,
including reasonable attorneys' fees and costs, incurred in such action.
14. Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each one of which will be deemed an original, but all of
which will constitute one and the same instrument.
15. Survival. All representations, warranties and agreements made by the
parties hereto in this Agreement will survive the date hereof and any
investigations, inspections, examinations or audits made by or on behalf of any
party.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto pertaining to the subject matter hereof, and, except
as otherwise expressly set forth herein, supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, relating
to the subject matter of this Agreement. No supplement, modification, waiver or
termination of this Agreement will be valid unless
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executed by the party to be bound thereby. No waiver of any of the provisions of
this Agreement will be deemed or will constitute a waiver of any other
provisions hereof (whether or not similar), nor will such waiver constitute a
continuing waiver unless otherwise expressly provided. Nothing in this Agreement
will affect the provisions of that certain Proprietary Information Agreement
between Xxxxxx and the Company, which will remain in full force and effect.
17. Injunctive Relief. The parties acknowledge that if a party should
default in any of its obligations under this Agreement it would be impracticable
to measure the resulting damages to the aggrieved party and it may not be
possible to adequately compensate the aggrieved party for the resulting injury
by means of monetary damages. Accordingly, without prejudice to the right to
seek and recover monetary damages, the aggrieved party will be entitled to seek
and obtain specific performance of this Agreement or other injunctive relief,
subject to Section 21 of this Agreement, and the parties each waive any defense
that a remedy in damages would be adequate and any requirement for the aggrieved
party to post any bond or other security in order to obtain such relief.
18. Notices. Any notice or other communication required or permitted
hereunder will be in writing and will be deemed to have been given and received
(i) if personally delivered, when so delivered, (ii) if mailed, one week after
having been placed in the U.S. mail, as certified mail, postage prepaid,
addressed to the party to whom it is directed at the address set forth below or
(iii) if given by facsimile, when such notice or other communication is
transmitted to the telecopier number specified below and the appropriate
answerback or telephonic confirmation is received. Either party may change the
address to which such notices are to be addressed by giving the other party
notice in the manner herein set forth.
If to the Company, to:
Celebrate Express, Inc.
00000 000xx Xxx. XX
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile:
Attention: President and CEO
With a copy to:
Xxxxxx Xxxxxx
Xxxxxx Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
If to Xxxxxx, to:
Xxxxxxx X. Xxxxxx
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With a copy to:
19. Headings. Section and subsection headings are not to be considered
part of this Agreement and are included solely for convenience and reference and
in no way define, limit or describe the scope of this Agreement or the intent of
any provisions hereof.
20. Further Assurances. Each party hereto will, from time to time at and
after the date hereof, execute and deliver such instruments, documents and
assurances and take such further actions as the other party may reasonably
request to carry out the purpose and intent of this Agreement.
21. Arbitration. Any and all disputes, controversies or claims arising out
of or related to this Agreement, including without limitation, those relating to
claims released in Section 6, fraud in the inducement of this Agreement, or the
general validity or enforceability of this Agreement, will be submitted to final
and binding arbitration before JAMS, or its successor, if any, or if it is no
longer in existence, before the American Arbitration Association. The
arbitration will be conducted in King County, Washington, in accordance with the
provisions of JAMS's Streamlined Arbitration Rules and Procedures or, if
applicable, the rules of the American Arbitration Association, in effect at the
time of filing of the demand for arbitration. There will be one arbitrator, who
will be a retired circuit court or federal judge. The parties agree that they
have waived any right to trial by jury. The decision of the arbitrator will be
final and binding and the judgment rendered may be entered in any court having
jurisdiction. The prevailing party in any such arbitration proceeding will be
entitled to its costs and reasonable attorneys' fees, costs and expenses.
Notwithstanding the foregoing, either party may apply to either the federal or
state courts in King County, Washington for temporary or preliminary injunctive
relief, and any such application will not be deemed incompatible with or a
waiver of this agreement to arbitrate.
22. Legal Counsel. EACH PARTY HEREBY ACKNOWLEDGES THAT IN CONNECTION WITH
THIS AGREEMENT IT HAS SOUGHT THE ADVICE OF SUCH INDEPENDENT LEGAL COUNSEL AS IT
WILL HAVE DETERMINED TO BE NECESSARY OR ADVISABLE IN ITS SOLE AND ABSOLUTE
DISCRETION.
[Signature Page Follows]
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EXHIBIT 10.1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first set forth above.
CELEBRATE EXPRESS, INC.
By /s/ Xxxx Xxxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxxx
Title: Director
/s/ Xxxxxxx X. Xxxxxx
-------------------------------------------
XXXXXXX X. XXXXXX
