SOURCEFORGE, INC. SEPARATION AGREEMENT AND RELEASE
EXHIBIT
10.1
This
Separation Agreement and Release ("Agreement") is made by and between
Xx.
Xxxxxxx X. Xxxxxx, Xx. (“Employee”)
and SourceForge, Inc. (the “Company”), collectively referred to as the
(“Parties”):
WHEREAS,
Employee is employed by the Company;
WHEREAS,
the Company and Employee have entered into an At Will Employment, Confidential
Information, Invention, Assignment and Arbitration Agreement dated May 15,
2006
(the "Confidentiality Agreement") and an indemnification agreement executed
on
September 6, 2006 (the “Indemnification Agreement”);
WHEREAS,
the Company granted Employee an option on May 15, 2006 to purchase 500,000
shares of the Company’s common stock pursuant to the Plan, memorialized in a
Stock Option Agreement dated May 15, 2006 (the “Stock Option
Agreement”);
WHEREAS,
on June 11, 2007, Employee was granted a restricted stock award of 80,000 shares
of the Company’s stock, with time-based vesting (the “RSA”) pursuant to the
Company’s 1998 Stock Option Plan (the “Plan”), and memorialized in the
Restricted Stock Agreement dated June 11, 2007 (the “Restricted Stock
Agreement”);
WHEREAS,
Employee’s employment with the Company will terminate effective October
5, 2007
(the
“Termination Date”);
WHEREAS,
the Parties, and each of them, wish to set forth the terms of Employee’s
separation from the Company and to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions and demands that the
Employee may have against the Company as defined herein, including, but not
limited to, any and all claims arising from or in any way related to Employee’s
employment with, or separation from, the Company;
NOW
THEREFORE, in consideration of the promises made herein, the Parties hereby
agree as follows:
COVENANTS
1. Termination
Date.
Employee’s employment with the Company shall end effective as of close of
business on the Termination Date.
2. Consideration.
(a) Separation
Payment.
Within
ten (10) business days of the Termination Date (but in no event prior to the
Effective Date), the Company agrees to pay Employee a lump sum separation
payment of sixty-five thousand dollars and no cents ($65,000), equivalent to
three (3) months of Employee’s annual base salary, less applicable withholding
and other standard deductions, in accordance with the Company’s regular payroll
practices.
(b) Benefits
Continuation.
Employee’s health insurance benefits will remain in effect through October 31,
2007. To the extent permitted by law and by the Company’s current group health
insurance policies, Employee will be eligible to continue his health
insurance benefits after October 31, 2007, under the federal COBRA law at his
own expense. Employee will be provided with a separate notice of his COBRA
rights. Subject to this Agreement becoming effective on the Effective Date,
the
Company will, however, reimburse Employee for the premium payments in the amount
of One Thousand One Hundred Eighty-Five Dollars and Three Cents ($1,185.03)
per
month for three (3) months (November 2007 - January 2008) following termination
of health insurance benefits, provided that Employee submits to Company monthly
receipts, cancelled checks, or other proofs of payments.
(c) Exercise
Period.
The
exercise of Employee’s vested stock options shall continue to be governed by the
terms and conditions of the Stock Option Agreement.
(d) Forfeiture
of Unvested Restricted Stock.
Effective on the Termination Date, Employee shall cease vesting of the RSA,
and
the Company shall repurchase all of Employee’s RSA.
3. Confidential
Information; Company Property.
Employee shall continue to maintain the confidentiality of all confidential
and
proprietary information of the Company and shall continue to comply with the
terms and conditions of the Confidentiality Agreement between Employee and
the
Company.
4. Salary
and Accrued Vacation. Employee acknowledges and represents that the Company
will have paid all salary, wages, bonuses, accrued vacation, commissions and
any
and all other benefits due to Employee once the above noted payments and
benefits are received.
5. 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 officers, managers, supervisors, agents and employees. Employee,
on his own behalf, and on behalf of his respective heirs, family members,
executors, agents, and assigns, hereby fully and forever releases the Company
and its officers, directors, employees, agents, investors, stockholders,
administrators, affiliates, divisions, subsidiaries, predecessor and successor
corporations, and assigns (the “Releasees”), from, and agrees not to xxx
concerning, any claim, duty, obligation or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or
unsuspected, that Employee may possess arising from any omissions, acts or
facts
that have occurred up until and including the Effective Date of this Agreement
including, without limitation:
(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 under the law of any jurisdiction including, but not limited to,
wrongful discharge of employment; constructive discharge from employment;
termination in violation of public policy; discrimination; breach of contract,
both express and implied; breach of a covenant of good faith and fair dealing,
both express and implied; promissory estoppel; negligent or intentional
infliction of emotional distress; 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;
and
conversion;
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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 Age Discrimination in Employment Act of 1967, the Americans
with Disabilities Act of 1990, the Fair Labor Standards Act, the Employee
Retirement Income Security Act of 1974, The Worker Adjustment and Retraining
Notification Act, the Older Workers Benefit Protection Act; the California
Fair
Employment and Housing Act, and the California Labor Code;
(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.
The
Parties agree 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.
This release does not extend to any obligations incurred under this Agreement,
the Confidentiality Agreement, or the Indemnification Agreement.
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.
7. Civil
Code Section 1542. The Parties represent that they are not aware of any
claim by either of them other than the claims that are released by this
Agreement. Employee and the Company acknowledge that they have been advised
by
legal counsel and are familiar with the provisions of California Civil Code
Section 1542, which provides as follows:
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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.
Employee
and the Company, being aware of said code section, agree to expressly waive
any
rights they may have thereunder, as well as under any other statute or common
law principles of similar effect.
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 other person
or entity referred to herein. 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 other person or entity referred to herein. Company
represents that it has no lawsuits pending in its name against Employee and,
to
the actual knowledge of the Company’s president and chief executive officer, no
lawsuits are pending against Employee relating to Employee’s period of service
as an employee of the Company.
9. Confidentiality.
The Parties acknowledge that Employee’s agreement to keep the terms and
conditions of this Agreement confidential was a material factor on which all
parties relied in entering into this Agreement. Employee hereto agrees to use
reasonable efforts to maintain in confidence the existence of this Agreement,
the contents and terms of this Agreement, the consideration for this Agreement,
and any allegations relating to the Company or his employment with the Company
except as otherwise provided for in this Agreement (hereinafter collectively
referred to as "Settlement Information"). Employee agrees to take every
reasonable precaution to prevent disclosure of any Settlement Information to
third parties, and agrees that there will be no publicity, directly or
indirectly, concerning any Settlement Information. Employee shall, however,
be
permitted to disclose Settlement Information to those attorneys, accountants,
governmental entities, and family members who have a reasonable need to know
of
such Settlement Information. Furthermore,
in the event either Party is legally required to disclose the terms of this
Agreement such disclosure shall be permitted hereunder provided written notice
of such disclosure is provided to the nondisclosing Party.
10. No
Cooperation. Employee agrees he will not act in any manner that might damage
the business of the Company. Employee agrees that he will not 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 the Releasees, unless under a subpoena or other court order
to do so. Employee further agrees both to immediately notify in writing the
Company upon receipt of any court order, subpoena, or any legal discovery device
that seeks or might require the disclosure or production of the existence or
terms of this Agreement, and to furnish, within three (3) business days of
its
receipt, a copy of such subpoena or legal discovery device to the
Company.
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11. Non-Disparagement.
Each Party agrees to refrain from any defamation, libel or slander of the other
Party or tortious interference with the contracts and relationships of the
other
Party.
12. Non-Solicitation.
Employee agrees that for a period of twelve (12) months immediately following
the Effective Date of this Agreement, Employee shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company’s employees
to leave their employment, or take away such employees, or attempt to solicit,
induce, recruit, encourage, take away or hire employees of the Company, either
for him or any other person or entity.
13. No
Admission of Liability. The Parties understand and acknowledge that this
Agreement constitutes a compromise and settlement of actual or potential
disputed claims. No action taken by the Parties hereto, or either of them,
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 claims heretofore made or any potential
claims; or
(b) an
acknowledgment or admission by either Party of any fault or liability whatsoever
to the other Party or to any third party.
14. Costs.
The
Parties shall each bear their own costs, expert fees, attorneys' fees and other
fees incurred in connection with this Agreement, except as provided
herein.
15. Indemnification.
Employee agrees to indemnify and hold harmless the Company from and against
any
and all loss, costs, damages or expenses, including, without limitation,
attorneys’ fees or expenses incurred by the Company arising out of the breach of
this Agreement by Employee, or from any false representation made herein by
Employee, or from any action or proceeding which may be commenced, prosecuted
or
threatened by Employee or for Employee’s benefit, upon Employee’s initiative, or
with Employee’s aid or approval, contrary to the provisions of this Agreement.
Employee further agrees that in any such action or proceeding, this Agreement
may be pled by the Company as a complete defense, or may be asserted by way
of
counterclaim or cross-claim.
16. 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 binding arbitration in Santa Xxxxx County before the American
Arbitration Association under its National Rules for the Resolution of
Employment Disputes, supplemented by the California Code of Civil Procedure.
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 agree that the prevailing party in any
arbitration shall be awarded its reasonable attorneys’ fees and costs.
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.
This
paragraph 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 Employee’s obligations under
this Agreement and the Confidentiality Agreement.
17. 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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18. No
Representations. Each Party represents that it has had the opportunity to
consult with an attorney, and has carefully read and understands the scope
and
effect of the provisions of this Agreement. In entering into this Agreement,
neither Party has relied upon any representations or statements made by the
other Party hereto which are not specifically set forth in this
Agreement.
19. Severability.
In the event that any provision, or any portion thereof, becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void,
this
Agreement shall continue in full force and effect without said provision or
portion thereof so long as the remaining provisions remain intelligible and
continue to reflect the original intent of the Parties.
20. Entire
Agreement. This Agreement, the Indemnification Agreement, the
Confidentiality Agreement, the Restricted Stock Agreement and the Stock Option
Agreement, constitute the entire agreement and understanding between the Parties
concerning the subject matter of this Agreement and all prior representations,
understandings, and agreements concerning the subject matter of this Agreement
(other than the Indemnification Agreement, the Confidentiality Agreement, the
Restricted Stock Agreement and the Stock Option Agreement) have been superseded
by the terms of this Agreement. In the event that the indemnification language
of this Agreement conflicts with the indemnification language of 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.
21. No
Waiver. The failure of either Party to insist upon the performance of any of
the terms and conditions in this Agreement, or the failure to prosecute any
breach of any of the terms and conditions of this Agreement, shall not be
construed thereafter as a waiver of any such terms or conditions. This entire
Agreement shall remain in full force and effect as if no such forbearance or
failure of performance had occurred.
22. No
Oral Modification. Any modification or amendment of this Agreement, or
additional obligation assumed by either Party in connection with this Agreement,
shall be effective only if placed in writing and signed by both Parties or
by
authorized representatives of each Party. No provision of this Agreement can
be
changed, altered, modified, or waived except by an executed writing by the
Parties.
23. Governing
Law. This Agreement shall be deemed to have been executed and delivered
within the State of California, and it shall be construed, interpreted,
governed, and enforced in accordance with the laws of the State of California.
24. 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, plus reasonable attorneys’ fees, incurred in connection with such an
action.
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25. Effective
Date. Each Party has seven (7) days after that Party signs this Agreement to
revoke it. This Agreement will become effective after seven (7) days have passed
since Employee signed the Agreement, assuming it is not revoked by either Party
before that date (the “Effective Date”).
26. Counterparts.
This Agreement may be executed in counterparts, and each counterpart shall
have
the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.
27. Voluntary
Execution of Agreement. This Agreement is executed voluntarily and without
any duress or undue influence on the part or behalf of the Parties hereto,
with
the full intent of releasing all claims. The Parties acknowledge
that:
(a) They
have
read this Agreement;
(b) They
have
been represented in the preparation, negotiation, and execution of this
Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel;
(c) They
understand the terms and consequences of this Agreement and of the releases
it
contains; and
(d) They
are
fully aware of the legal and binding effect of this Agreement.
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
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Dated:
10/4/2007
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By /s/
Xxx
Xxxxx
|
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Xxx
Xxxxx
|
|
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President
& Chief Executive Officer
|
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Xxxxxxx
X. Xxxxxx, Xx. an individual
|
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Dated:
10/4/2007
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By
/s/ Xxxxxxx
X. Xxxxxx, Xx.
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Xxxxxxx
X. Xxxxxx, Xx.
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