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EXHIBIT 10.31
SEPARATION AGREEMENT
And
RELEASE
THIS SEPARATION AGREEMENT AND RELEASE AGREEMENT (the "Agreement") dated
as of this 28th day of February, 2001, made by and between Xxxxxx X. Xxxxxx
(hereinafter referred to as "Executive"), and Get Digital Xxxxx.xxx, Inc.
(hereinafter, unless the context indicates to the contrary, deemed to include
its subsidiaries, parent and affiliates and referred to as the "Company").
WITNESSETH THAT:
WHEREAS, Executive has been employed by the Company pursuant to the
terms of an Employment Agreement dated as of March 27, 2000 (the "Employment
Agreement");
WHEREAS, in connection with the Employment Agreement, Executive also
executed with the Company (1) a Proprietary Information and Inventions
Assignment Agreement dated March 27, 2000 ("Inventions Agreement") and (2) an
Award Agreement under the Company's 2000 Stock Option Plan ("Option Agreement");
WHEREAS, the Company ceased its operations in December 2000 and
Executive has assisted X.X. Xxxxxxxxx Inc. in the wind up of the Company's
business and the transition of its customers; accordingly, Executive's
employment with the Company will terminate effective as of February 28, 2001 the
("Termination Date"); and
WHEREAS, Section 5(d) of the Employment Agreement requires Executive to
execute a general release of claims in favor of the Company as a condition to
receiving certain benefits and payments under the Employment Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter provided and of the actions taken pursuant thereto, the parties
agree as follows:
1. Termination Date. Executive's employment with the Company and any of
its subsidiaries and affiliates, and Executive's membership on any boards or
committees, will be terminated, effective as of the Termination Date.
2. Entitlements under Employment Agreement. Upon Executive's
termination of employment, Executive shall be entitled to the payments and
benefits set forth below in accordance with Section 5(b) of the Employment
Agreement. Executive acknowledges and agrees that he is not entitled to (and
waives to the extent so entitled) any other or different payments or benefits
under the Employment Agreement or the Option Agreement , or otherwise as a
result of such termination. Each of the Company's and Executive's rights and
obligations under the Employment Agreement, the Inventions Agreement and the
Option Agreement shall terminate as of the Termination Date,
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except those that expressly survive termination of your employment under the
terms of those agreements or this Agreement. Without limiting the generality of
the foregoing, the provisions of Section 5 of the Employment Agreement regarding
certain entitlements upon the occurrence of a Change in Control (as defined in
the Employment Agreement) for which negotiations had commenced prior to the
Termination Date, shall expressly survive termination.
3. Severance Payments. Within five (5) business days following the
Termination Date, in lieu of further salary or bonus payments, Executive shall
be entitled to receive a lump-sum amount equal to $375,000 (representing 100% of
Executive's Base Salary as of the Termination Date plus 100% of Executive's
Target Bonus as of the Termination Date). In addition, in accordance with
Section 3 of the Employment Agreement, Executive shall be entitled to receive
his guaranteed annual Bonus for 2000 equal to $125,000, payable in cash within
five (5) business days following the Termination Date. Executive shall not be
entitled to any bonus payment with respect to 2001 or any portion thereof.
Lastly, within five (5) business days following the Termination Date, Executive
shall be paid a lump sum cash amount for his unused vacation during 2000 and for
his accrued but unpaid vacation for 2001.
4. Benefits. For the earlier to occur of twelve (12) months from the
Termination Date and Executive's becoming eligible to participate in comparable
plans of another employer, the Company (or one of its affiliates) shall continue
to provide Executive an opportunity to participate (at the same levels as in
effect as of the Termination Date) in the Company's health, life insurance and
disability plans at corporate rates. The Company will invoice Executive monthly
for the cost of such plans. The foregoing sentence shall not be construed to
require the Company to maintain any plan presently in effect or to adopt any new
or replacement plan, all such decisions with respect to plans being reserved by
the Company its sole and absolute discretion. Executive shall also be entitled
to participate, at no cost to Executive, in the Company's executive outplacement
program for six (6) months following the Termination Date.
5. Stock Options. Notwithstanding anything to the contrary set forth in
the Employment Agreement or the Option Agreement, all stock options granted to
Executive shall expire as of the Termination Date and not be subject to exercise
at any time.
6. Withholding Taxes. All amounts payable by the Company to Executive
hereunder, other than the Settlement Payment under Section 7 hereof, shall be
reduced for any applicable withholding taxes. The Settlement Payment to Employee
under Section 7 of this Agreement shall be reported by the Company to Executive
on Form 1099. Executive acknowledges that the Company intends to take a tax
deduction for the entire amount of the Settlement Payment and that Executive
shall be fully responsible for paying any and all applicable taxes with respect
to the Settlement Payment.
7. Settlement Payment. In consideration for the payments and benefits
to be made to Executive hereunder and in settlement of certain good faith, bona
fide disputes between Executive and the Company, within five (5) business days
following the Termination Date, the Company shall pay to Employee, in a lump
sum, the amount of $100,000 (the "Settlement Payment"). The parties agree that
the terms and conditions of this paragraph represent only a settlement of a bona
fide
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dispute and do not constitute and may not be construed as an admission of
wrongdoing or liability by any party.
8. Non-Competition. Executive hereby acknowledges the restrictions set
forth in Section 6(a) of the Employment Agreement (the "Non-Compete Provisions")
and, as consideration for the payments and benefits set forth above, Executive
hereby agrees that Executive shall be bound by such Non-Compete Provisions for
the twelve month period commencing as of the Termination Date.
9. Confidentiality; Non-Disparagement. Executive hereby acknowledges
the confidentiality restrictions set forth in Section 7 of the Employment
Agreement and the confidentiality provisions set forth in Sections 2 and 5 of
the Inventions Agreement, and the restrictions on statements about the Company
set forth in Section 6(b) of the Employment Agreement (collectively, the
"Confidentiality and Non-Disparagement Provisions") and, as consideration for
the payments and benefits set forth above, Executive hereby agrees that
Executive shall continue to be bound by such Confidentiality and
Non-Disparagement Provisions into perpetuity.
10. Material Inducement. Executive acknowledges and agrees that the
Non-Compete Provisions and the Confidentiality and Non-Disparagement Provisions
are an essential element of the parties' agreement, are a material inducement
for the Company to make the payments and provide the benefits set forth above
and the breach thereof would be a material breach of this Agreement. Executive
further acknowledges and agrees that the Company's remedies at law for a breach
or threatened breach of the Non-Compete Provisions or the Confidentiality and
Non-Disparagement Provisions would be inadequate and, in recognition of this
fact, Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which may
then be available.
11. Release.
a. Except with respect to Executive's rights hereunder,
Executive, Executive's representatives, successors and assigns releases and
forever discharges the Company and its successors, assigns, subsidiaries,
affiliates, directors, officers, employees, attorneys, agents and trustees or
administrators of any Company plan from any and all claims, demands, debts,
damages, injuries, actions or rights of action of any nature whatsoever
(collectively "Claims"), whether known or unknown, which Executive had, now has
or may have against the Company, its successors, assigns, subsidiaries,
affiliates, directors, officers, employees, attorneys, agents and trustees or
administrators of any Company plan, from the beginning of Executive's employment
to and including the date of this Agreement, including, without limitation,
Claims relating to or arising out of Executive's employment with the Company or
the termination of such employment. Executive represents that Executive has not
filed any action, complaint, charge, grievance or
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arbitration against the Company or any of its successors, assigns, subsidiaries,
affiliates, directors, officers, employees, attorneys, agents and trustees or
administrators of any Company plan.
b. Executive covenants that neither Executive, nor any of
Executive's respective heirs, representatives, successors or assigns, will
commence, prosecute or cause to be commenced or prosecuted against the Company
or any of its successors, assigns, subsidiaries, affiliates, directors,
officers, employees, attorneys, agents and trustees or administrators of any
Company plan any action or other proceeding based upon any claims, demands,
causes of action, obligations, damages or liabilities which are being released
by this Agreement, nor will Executive seek to challenge the validity of this
Agreement, except that this covenant not to xxx does not affect Executive's
future right to enforce appropriately the terms of this Agreement in a court of
competent jurisdiction.
12. Executive Acknowledgments. Executive acknowledges that (a)
Executive has been advised to consult with an attorney before executing this
Agreement and that Executive has been advised by an attorney or has knowingly
waived Executive's right to do so, (b) Executive has been offered a period of at
least twenty-one (21) days to consider this Agreement, (c) Executive has a
period of seven (7) days from the date hereof within which to revoke it and that
this Agreement will not become effective or enforceable until the expiration of
this seven (7) day revocation period, (d) Executive fully understands the terms
and contents of this Agreement and freely, voluntarily, knowingly and without
coercion enters into this Agreement, and (e) the waiver or release by Executive
of rights or claims Executive may have under Title VII of the Civil Rights Act
of 1964, The Executive Retirement Income Security Act of 1974, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit Protection
Act, the Fair Labor Standards Act, the Americans with Disabilities Act, the
Rehabilitation Act, the Worker Adjustment and Retraining Act (all as amended)
and/or any other local, state or federal law dealing with employment or the
termination thereof is knowing and voluntary and, accordingly, that it shall be
a breach of this Agreement to institute any action or to recover any damages
that would be in conflict with or contrary to this acknowledgment or the
releases Executive has granted hereunder. Executive understands and agrees that
the Company's payment of money and other benefits to Executive and Executive's
signing of this Agreement does not in any way indicate that Executive has any
viable claims against the Company or that the Company admits any liability
whatsoever.
13. Reasonable Assistance. As consideration for the payments and
benefits set forth above, during the two years following the Termination Date,
at the Company's reasonable expense, Executive hereby agrees, upon the Company's
written request, to reasonably assist the Company in any matters relating to his
prior responsibilities with the Company and to reasonably cooperate with respect
to any claims, litigation or investigations relating to his prior
responsibilities.
14. Notice of Termination. Each of Executive and the Company hereby
waives the Notice of Termination provided for in Section 5(c) of the Employment
Agreement.
15. Entire Agreement. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof. It shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and legal representatives but neither
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this Agreement nor any rights hereunder shall be assignable by Executive without
the Company's written consent.
16. Severability. If for any reason any one or more of the provisions
of this Agreement shall be held or deemed to be inoperative, unenforceable or
invalid by a court of competent jurisdiction, such circumstances shall not have
the effect of rendering such provision invalid in any other case or rendering
any other provisions of this Agreement inoperative, unenforceable or invalid,
and any such provision shall be read by such court to be as broad and
restrictive as possible without rendering such provision inoperative,
unenforceable or invalid.
17. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to the conflict of laws
provisions thereof, except to the extent superceded by applicable federal law.
18. Counterparts. This Agreement may be signed in counterparts, each of
which shall be deemed an original, with all counterparts taken together
representing one and the same Agreement, with the same effect as if all of the
signatures were upon the same instrument.
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IN WITNESS WHEREOF, Executive and Get Digital Xxxxx.xxx, by its duly authorized
agent, have hereunder executed this Agreement.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Get Digital Xxxxx.xxx
/s/ Xxxxxx X. Xxxx
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Name: Xxxxxx X. Xxxx
Title: General Counsel and Assistant Secretary
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