SEPARATION, RESTRICTIVE COVENANTS AND RELEASE AGREEMENT
SEPARATION,
RESTRICTIVE COVENANTS AND
RELEASE
AGREEMENT
This
SEPARATION, RESTRICTIVE COVENANTS AND RELEASE AGREEMENT (the “Agreement”) is
made and entered into as of June 28, 2007, by and between infoUSA, Inc., a
Delaware corporation (“infoUSA”), Guideline, Inc. a New York corporation
(“Guideline”), and Xxxxx Xxxxx, an individual (“Stone”).
BACKGROUND
|
A.
|
Guideline
and Stone are parties to that certain employment agreement dated
May 13,
2002, as amended January 1, 2005 (the “Employment Agreement”), pursuant to
which Stone is currently employed as the Chief Financial Officer
of
Guideline.
|
|
B.
|
Contemporaneously
herewith, infoUSA and Guideline have entered into an Agreement and
Plan of
Merger (the “Merger Agreement”), pursuant to which a wholly-owned
subsidiary of infoUSA (the “Subsidiary”) will conduct a tender offer for
all of the outstanding shares of capital stock of Guideline, after
which
such subsidiary will be merged with and into Guideline (the “Merger”),
with Guideline continuing as the surviving corporation (the “Surviving
Corporation”).
|
|
C.
|
Contemporaneously
herewith, infoUSA and Stone, in his capacity as a stockholder of
Guideline, have entered into a Shareholder Support Agreement (the
“Support
Agreement”), pursuant to which Stone has agreed to tender all shares of
Guideline capital stock owned by him to the aforementioned wholly-owned
subsidiary of infoUSA, to vote in favor of the Merger and against
any
competing proposal, and to take (or refrain from taking) various
other
actions to facilitate the consummation of the
Merger.
|
|
D.
|
As
a condition to entering into the Merger Agreement, infoUSA has requested
that Guideline and Stone enter into this Agreement providing for
the
termination of Stone’s employment, the satisfaction of the obligations of
Guideline pursuant to the Employment Agreement, and certain
non-competition, non-interference, confidentiality and intellectual
property related obligations on the part of Stone, and Guideline
and Stone
have agreed to do the same, subject to the closing of the tender
offer
contemplated by the Merger Agreement (the
“Closing”).
|
AGREEMENT
NOW
THEREFORE, in consideration of the discharge of the obligations of Guideline
pursuant to the Employment Agreement and the other promises contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, infoUSA, Guideline and Stone,
intending to be legally bound, hereby agree as follows:
1. Employment. Stone’s
employment will continue through the three (3) month anniversary of the Closing
(the “Termination Date”), at which time Stone’s employment with Guideline will
terminate; provided,
however,
that
Guideline may terminate Stone’s employment after the Closing Date but prior
to the Termination Date for “cause” (as defined below). Stone will
continue to receive his salary and benefits, at their current levels, up to
and
including the Termination Date. So long as Stone’s employment was not terminated
for “cause” and Stone did not resign prior to the Termination Date,
then commencing as of the Termination Date and continuing through the end of
the
Covenant Period, Guideline will pay to Stone an aggregate sum
of Three Hundred Seventy-Five Thousand Dollars ($375,000), subject to
applicable withholding and payable in accordance with Guideline’s normal
payroll policy from time to time in effect. Any amounts payable shall be
made to Stone’s estate in the event of his death. If, in accordance with any
applicable federal or state continuation coverage laws, including the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Stone
elects continuation coverage under Guideline’s medical, disability, dental or
other health insurance provided to Stone as of the Termination Date, Guideline
will continue to pay the employer portion of the premiums for such coverage
through the end of the Covenant Period or, if
earlier, until Stone is no longer eligible to continue such
coverage or Stone receives comparable benefits from another employer. All
rights which Stone may have under Guideline’s group plans are subject to
the terms of such plans, applicable laws and the continuation of such plans
for
active Guideline employees. Stone will not be eligible to participate
in, or receive any payments pursuant to, any bonus plan of Guideline
or the Surviving Corporation for any period following the Termination
Date. For purposes of this Agreement, “cause” shall be defined as (a)
Stone’s conviction in a court of law of any crime involving money or other
property or of a felony; (b) Stone’s failure or refusal to substantially perform
his duties hereunder, other than any such failure or refusal resulting from
his
incapacity, or his failure or refusal to carry out the directives of Guideline’s
or the Surviving Corporation’s Chief Executive Officer, or the willful taking of
any action by Stone not directed by Guideline’s or the Surviving Corporation’s
Chief Executive Officer which results in material damage to Guideline or the
Surviving Corporation, or the material default or breach by Stone of any
obligation, representation, warranty, covenant or agreement made by Stone
herein; provided,
however,
that
Guideline or the Surviving corporation shall have given Stone written notice
of
any such cause for termination and Stone shall have failed to cure such cause
(if curable) within fifteen (15) days after the date of such notice. If
the cause for termination is cured within the fifteen (15) day period, it shall
be deemed for all purposes that cause for termination has not occurred (except
that if the same or a similar event to the one resulting in notice pursuant
to
this Section recurs after a cure, the right to cure the second cause of
termination, after notice of such second event shall have been given, shall
expire within twenty-four (24) hours after the time the notice is
given).
2. Effect
of Agreement.
The terms of the Employment Agreement shall govern Stone’s employment from
the date of this Agreement through the date of Closing; provided,
however,
that in
no event xxxx Xxxxx be entitled to terminate his employment on the basis of
“good reason” (as defined in Section 2.4 of the Employment Agreement),
and any provisions of the Employment Agreement relating to a Nonrenewal
Event will be disregarded; provided,
further,
that
Stone will be entitled to work not less than one (1) day per week from
home. Effective as of the date of Closing, and with no further action
by any party, all other agreements between Stone and Guideline or any
affiliate of Guideline relating to Stone’s employment or the terms and
conditions thereof, including the Employment Agreement, shall be terminated
and
superseded by this Agreement, and the terms of this Agreement shall govern
thereafter. In the event the Merger Agreement is terminated, this
Agreement shall be deemed terminated and null and void.
3. Restrictive
Covenants.
Stone
acknowledges that Guideline is in the information services business and that
Stone, as Chief Financial Officer of Guideline, is familiar in detail with
the
activities of Guideline and has participated in formulating such activities;
that he is familiar in detail with the activities and future plans of Guideline;
and that his position has given him a thorough knowledge of Guideline’s
customers, suppliers and servicing and marketing operations. Accordingly, in
consideration of the receipt of the Termination Payment, but subject to the
Closing, Stone hereby agrees and covenants as follows:
|
a.
|
Noncompetition.
For a period commencing on the Closing and for a period ending on
the
fifteen (15) month anniversary of the Closing (the “Covenant Period”),
unless otherwise consented to by the Surviving Corporation or infoUSA
in
writing, Stone shall not:
|
|
i.
|
within
any city, town, county, state or country in which Guideline or any
of its
affiliates, successors or assigns currently conducts or does business,
either for himself or as an equity owner, director, manager, officer,
employee, independent contractor or representative, directly or indirectly
render services to or solicit business on behalf of any other business
or
corporation, firm, partnership, association, trust, group, joint
venture,
or individual proprietorship that is engaged in any line of business
that
is competitive with any line of business in which Guideline or its
affiliates, as of the date of this Agreement, or their successors
or
assigns, were engaged (or in which they intended to engage, as evidenced
by some writing (e.g., a plan, corporate minutes, memoranda or letter,
expenditure or other indication of a genuine interest in the line
of
business)) on or before the date hereof (a “Competing Business”);
or
|
Page
2
|
ii.
|
acquire
a direct or indirect interest or an option to acquire such interest
in any
Competing Business (other than an interest of not more than five
percent
(5%) of the outstanding stock of any company which is publicly traded
on a
national stock exchange or the over-the-counter
market).
|
|
b.
|
Noninterference.
During the Covenant Period, unless otherwise consented to by the
Surviving
Corporation or infoUSA in writing, Stone shall
not:
|
|
i.
|
encourage,
in any way or for any reason, any supplier or customer of Guideline
or its
affiliates, successors or assigns to sever or alter the relationship
of
such supplier or customer with Guideline or its affiliates, successors
or
assigns;
|
|
ii.
|
aid
any other person attempting to take suppliers or customers from Guideline
or its affiliates, successors or
assigns;
|
|
iii.
|
serve
or work in any way for any customers of Guideline or its affiliates,
or
their successors or assigns, who were such customers as of the Closing
or
during the preceding one (1) year period that would be competitive
with
Guideline;
|
|
iv.
|
solicit,
employ, retain as a consultant, interfere with or attempt to entice
away
from Guideline or its affiliates, successors or assigns any current
employee thereof or any individual who has agreed to be, or has been,
employed or retained by Guideline or an affiliate, or their successors
or
assigns, within one (1) year prior to such solicitation, employment,
retention, interference or
enticement.
|
|
c.
|
Nondisparagement.
Stone shall not disparage or defame infoUSA, Guideline, the Surviving
Corporation, or their respective affiliates, successors or assigns,
or any
director, officer or employee of any of the foregoing, or otherwise
cause
any negative publicity to be disseminated about such entities or
persons
or their products or services either orally or in writing. Without
limiting the generality of the foregoing, Stone shall not, without
the
prior written consent of infoUSA or the Surviving Corporation, in
any
manner disclose, divulge or discuss any Confidential Information,
as
hereinafter defined; provided,
however,
that Stone shall be permitted to disclose the dates of his employment
with
Guideline and his position and responsibilities and to disclose any
facts
that infoUSA, Guideline, the Surviving Corporation or their respective
affiliates, successors or assigns have previously publicly disclosed.
Neither infoUSA, the Surviving Corporation or any affiliate, successor
or
assign of the foregoing shall disparage or defame Stone or otherwise
cause
any negative publicity to be disseminated about Stone either orally
or in
writing.
|
Page
3
|
d.
|
Confidentiality.
Stone shall not use, appropriate or disclose to any person, directly
or
indirectly, any “Confidential Information” of infoUSA, Guideline, the
Surviving Corporation or their affiliates, successors or assigns
during
the Covenant Period. Upon termination of Stone’s employment, Stone shall
immediately return to the Surviving Corporation, in good condition,
all
Confidential Information, including all copies of the same, as well
as all
documents, data and records of any kind and in any form (including
computer records) which contain any Confidential Information of infoUSA,
Guideline or their affiliates, successors or assigns or which were
prepared based on such Confidential Information. “Confidential
Information” means confidential and proprietary information of the
specified entity that includes, but is not limited to, information
about
products, services, markets, customers, prospective customers, personnel,
compensation, accounting, financial and technical data, business
plans and
operational and marketing strategies. “Confidential Information” shall not
include any information that is (i) generally known to the industry
or the
public other than as a result of Stone’s breach of this covenant or any
breach of other confidentiality obligations by third parties; or
(ii)
required by law or judicial process to be disclosed; provided
that Stone shall give prompt written notice to infoUSA and Guideline
of
such requirement, disclose no more information that is so required,
and
cooperative with any attempts by infoUSA or Guideline to obtain a
protective order or similar
treatment.
|
|
e.
|
Intellectual
Property.
Stone shall not, directly or indirectly, use, appropriate or interfere
with any “Intellectual Property,” as defined below, of Guideline or its
affiliates, successors or assigns or any combination, abbreviation
or
derivation thereof, or any applicable logos of such entities. Stone
covenants and agrees that he:
|
|
i.
|
has
disclosed to Guideline, and that Guideline owns, all right, title
and
interest in, all inventions, improvements, technical information,
methods,
computer software and other intellectual property (the “Stone Developed
Intellectual Property”) which Stone conceived or developed during the
course of his employment (excluding that which Stone conceived or
developed without the use of time, resources or facilities of Guideline
and which does not relate to the past, present or prospective activities
of Guideline);
|
|
ii.
|
will,
at the request of Guideline or the Surviving Corporation, affix
appropriate legends and copyright notices indicating Guideline’s or the
Surviving Corporation’s ownership of all Stone Developed Intellectual
Property and all underlying documentation; and
|
|
iii.
|
will
execute such further assignments and other documents as may be reasonably
requested by Guideline or the Surviving Corporation in order to vest,
perfect, maintain or defend Guideline’s or the Surviving Corporation’s
right, title and interest in the Stone Developed Intellectual
Property.
|
|
iv.
|
“Intellectual
Property” means: (a) all inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto,
and all
patents, patent applications and patent disclosures, together with
all
reissuances, continuations, continuations-in-part, revisions, extensions
and reexaminations thereof; (b) all trademarks, service marks, trade
dress, logos, trade names, corporate names and domain names, together
with
all abbreviations, translations, adaptations, derivations and combinations
thereof and including all goodwill associated therewith, and all
applications, registrations and renewals in connection therewith;
(c) all
copyrightable works, all copyrights and all applications, registrations
and renewals in connection therewith; (d) all mask works and all
applications, registrations and renewals in connection therewith;
(e) all
trade secrets and confidential business information (including ideas,
research and development, know-how, formulas, compositions, manufacturing
and production processes and techniques, technical data, designs,
drawings, specifications, customer and supplier lists, pricing and
cost
information and business and marketing plans and proposals); (f)
all
computer software (including data and related documentation); (g)
all
other proprietary rights; and (h) all copies and tangible embodiments
thereof (in whatever form or
medium).
|
Page
4
4. Return
of Guideline Property.
Upon
termination of Stone’s employment, Stone shall immediately return to Guideline
or the Surviving Corporation all Guideline property including, without
limitation, Guideline credit cards, Guideline keys, and Guideline calling
cards.
5. No
Admission.
The
parties agree that neither this Agreement nor any obligations under this
Agreement constitute an admission by infoUSA, Guideline, the Surviving
Corporation or Stone of any violation of any federal, state or local laws,
rules, regulations or ordinances, or of any liability under contract or tort
theories, of any nature whatsoever.
6. Release.
Subject
to the Closing and payment of all severance payments due hereunder, and
effective as of the Termination Date, Stone, on behalf of himself and his
agents, family members, heirs, successors and assigns, hereby releases infoUSA,
Guideline, the Surviving Corporation, and the affiliates of each of the
foregoing, and their respective shareholders, directors, officers, employees,
and partners (or persons or entities of a comparable status (e.g., members
and
partners) or holding comparable positions (e.g., governors and managers)) and
the successors and assigns of each of the foregoing (the “Released Parties”)
from all claims and liabilities of any kind (including attorney’s fees)
(“Claims”) that could have been asserted prior to, or based on facts or
circumstances existing as of, the Termination Date, whether vested or
contingent, known or unknown. Claims include, but are not limit to, any Claim
alleging breach of contract, express or implied, promissory estoppel or any
tort, and Claims under any federal, state statute or local ordinance, or
government regulation or common laws, including, but not limited to, the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
the
Americans With Disabilities Act, the Fair Labor Standards Act, Family and
Medical Leave Act, Employee Retirement Income Security Act, the New York Fair
Employment Practices Act and the New York Wage Payment and Collection Act,
all
as amended. Guideline, infoUSA and the Surviving Corporation, and the affiliates
of each of the foregoing, specifically acknowledge and agree that nothing
contained herein shall be deemed to release Guideline, infoUSA, the Subsidiary
and the Surviving Corporation from: (i) the breach of this Agreement; (ii)
any
statutory claims for state unemployment insurance, workers compensation and
disability insurance benefits; (iii) legal claims regarding non-bonus or
non-incentive compensation related to payment of wages earned; (iv) and any
legal obligations by either Guideline, infoUSA, the Subsidiary and the Surviving
Corporation to indemnify Stone.
Stone
acknowledges that certain states provide that a general release of claims does
not extend to claims that the person/entity executing the release does not
know
or suspect to exist in her/its favor at the time of executing the release that,
if known, may have materially affected the decision to enter into the release.
Being aware that such statutory protection may be available, Stone expressly,
voluntarily and knowingly waives any arguable benefit or protection of any
such
statute in executing this agreement, whether such benefit or protection is
known
or unknown.
Guideline
represents and warrants to Stone that, to its knowledge, and infoUSA represents
and warrants to Stone that, to its knowledge and based solely on information
provided to it by Guideline, as of the date of this Agreement, they are not
aware of any claims for actions arising from or related to Stone’s employment
relationship with Guideline.
Page
5
7. Review
Acknowledgment and Effective Date.
By
voluntarily executing this Agreement, Stone confirms and acknowledges that
Stone
has been advised to consult with and has consulted with an attorney, that Stone
has read and understands this Agreement, that Stone has signed this Agreement
freely and voluntarily. Stone further acknowledges that Stone has been given
up
to twenty-one (21) calendar days to consider signing this Agreement and Stone
agrees that the changes, whether material or immaterial, made through
negotiation with Stone’s legal counsel did not restart the running of the 21-day
period. Stone may sign this Agreement at any time prior to the termination
of
the 21-day period. Additionally, Stone will have seven (7) calendar days
following signing of this Agreement to rescind it and to reinstate federal
age
discrimination claims that he may have against Guideline. Such rescission must
be in writing and received by infoUSA (attention: Xxxx Xxxxxx) prior the end
of
the rescission period and accompanied by repayment to Guideline of all amounts
that were previously paid to him pursuant to Section 1 of this Agreement, if
any.
8. Remedies.
|
x.
|
Xxxxx
acknowledges that each of infoUSA and the Surviving Corporation have
relied on this Agreement and the covenants of Stone set forth herein
in
entering into the Merger Agreement and consummating the Merger, and
therefore agrees that each of infoUSA and the Surviving Corporation
are
intended beneficiaries of this Agreement and that either or both
of them
will be entitled to the benefit of, and to enforce, the covenants
of Stone
set forth herein. infoUSA and/or the Surviving Corporation will have
the
right to injunctive relief to enforce the covenants set forth in
this
Agreement (including without limitation the restrictive provisions
of
Section 3) in addition to any other relief to which infoUSA and/or
the
Surviving Corporation may be entitled under law or in equity. Stone
further agree that, if Stone violates any of the terms of this Agreement,
including, but not limited to Section 3, or breaches any provision of
the Support Agreement, infoUSA, Guideline and the Surviving Corporation
will have no further obligations hereunder (including the payment
obligation set forth in Section 1, if not yet performed), and infoUSA,
Guideline or the Surviving Corporation will have the right to bring
a
legal action to recover damages for the damages resulting from Stone’s
violation of this Agreement.
|
|
b.
|
In
the event of any action arising out of or relating to this Agreement
or
the enforcement thereof, the prevailing party will be entitled to
recover,
in addition to any damages awarded to such party, all costs and fees
incurred in contemplation of and in connection with such action,
including
without limitation attorneys’ fees.
|
9. General.
|
a.
|
Governing
Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New
York.
|
|
b.
|
Entire
Agreement.
This Agreement sets forth the entire agreement and understanding
of the
parties relating to the subject matter hereof, and supersedes all
prior
agreements, arrangements and understandings, written or oral between
the
parties. Stone acknowledges that he has not relied on any representation
or statement not set forth in this Agreement by any representative
of the
other parties hereto.
|
|
c.
|
Amendments
and Assignment. Any
amendment to, modification of, or supplement to this Agreement must
be in
writing and signed by infoUSA, Guideline and Stone. This Agreement
shall
not be assignable or delegable by Stone. This Agreement may be assigned
by
infoUSA or Guideline to any person or entity which is an affiliate
and
shall be assignable to any successor in interest to any part of the
business of infoUSA or Guideline.
|
Page
6
|
d.
|
Severability.
If
any of the covenants, agreements or restrictions contained in this
Agreement shall be determined by a court of competent jurisdiction
to be
invalid or unenforceable, the same shall not affect the remainder
of the
covenants, agreements, restrictions, rights or remedies, which shall
be
given full effect without regard to the invalid or unenforceable
portions,
it being understood and agreed that all such covenants, agreements,
restrictions, rights and remedies shall be deemed separate and severable.
Additionally, and without limiting the foregoing, the parties hereto
agree
that if, at the time of enforcement of this Agreement, a court of
competent jurisdiction shall hold that the duration, scope or area
of the
restrictions stated herein, including but not limited to any of the
restrictive covenants set forth in Section 3 (inclusive), are unreasonable
under the circumstances then existing, the maximum restrictions reasonable
under such circumstances as then exist shall be substituted for the
restrictions stated herein.
|
|
e.
|
Counterparts/Electronic
Transmission.
This Agreement may be executed in one or more counterparts, any of
which
may be executed and transmitted by facsimile or other electronic
method,
and each of which shall be deemed an original, but all of which together
shall constitute one and the same
instrument.
|
|
f.
|
Further
Assurances.
The parties agree to promptly execute and deliver to each other any
and
all other documents and writings, in form approved by their respective
counsel, that are necessary or appropriate for the full and efficient
implementation of this agreement.
|
|
g.
|
Successors.
This agreement shall inure to the benefit of and be enforceable by
and
binding upon infoUSA, the Subsidiary, Guideline and the Surviving
Corporation, as well as their successors and assigns. This agreement
shall
inure to the benefit of and be enforceable by and binding upon Stone
and
his legal representatives.
|
*
* * * *
*
[Remainder
of Page Intentionally Left Blank. Signature Page Follows]
Page
7
IN
WITNESS WHEREOF, the parties hereto have executed this Separation, Restrictive
Covenants and Release Agreement as of the day and year first above
written.
| infoUSA, Inc. | ||
|
/s/
Xxxx Xxxxxx
|
||
|
By:
|
Xxxx Xxxxxx | |
|
Its:
|
Chief Administrative Officer | |
| /s/ Xxxxx Xxxxx | ||
|
By:
|
Xxxxx Xxxxx | |
|
Its:
|
Chief Executive Officer | |
|
Stone:
|
||
|
/s/
Xxxxx Xxxxx
|
||
|
Xxxxx
Xxxxx
|
||
Page
8
