SEVERANCE AGREEMENT AND GENERAL RELEASE
Exhibit
10.3
This
SEVERANCE
AGREEMENT AND GENERAL RELEASE
(“Agreement”) is made and entered into by SMART ONLINE, INC. (the “Company”) and
Xxxxxx Xxxxxxxxx (“Employee”). Throughout the remainder of the Agreement, the
Company and Employee may be collectively referred to as “the
parties.”
The
Company employed Employee as Chief Operating Officer. Employee resigned,
effective February 18, 2008. The parties desire to conclude the employment
relationship on mutually agreeable terms and to avoid all litigation relating
to
the employment relationship and its termination, and Employee desires severance
benefits. Accordingly, the parties have agreed upon the terms described
herein.
Employee
represents that he has carefully read the entire Agreement, understands its
consequences, and voluntarily enters into it.
In
consideration of the above and the mutual promises and good and valuable
consideration set forth below, the sufficiency of which is acknowledged by
the
parties, Employee and the Company agree as follows:
1. SEPARATION.
Employee
resigned from his employment by the Company, effective February 18, 2008 (the
“Resignation Date”).
2. SEVERANCE
BENEFITS.
The
Company will pay Employee:
|
i.
|
an
amount equal to $27,267.00, less any applicable taxes and withholdings
(2
month wage payment);
|
|
ii.
|
an
amount equal to $2,615.58, less any applicable taxes and withholdings
(2
month grossed up benefit premium
payment).
|
These
amounts shall be paid in separate lump sum payments on the first regularly
scheduled payday following the Company’s receipt of a fully executed copy of
this Agreement.
In
addition, the Company will agree to amend the Restricted Stock Agreement between
the parties dated August 15, 2007 in accordance with the terms of the Amendment
to the Restricted Stock Agreement, a copy of which is attached hereto as Exhibit
A
The
severance and other benefits afforded under this Agreement are in lieu of any
other compensation or benefits to which Employee otherwise might be
entitled.
3. RELEASE.
In
consideration of the benefits conferred by this Agreement, EMPLOYEE
(ON BEHALF OF HIMSELF AND HIS ASSIGNS, HEIRS, AND OTHER REPRESENTATIVES)
RELEASES THE COMPANY, ITS PREDECESSORS, SUCCESSORS, AND ASSIGNS AND ITS AND/OR
THEIR PAST, PRESENT, AND FUTURE OWNERS, PARENTS, SUBSIDIARIES, AFFILIATES,
PREDECESSORS, SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, EMPLOYEE
BENEFIT PLANS (TOGETHER WITH ALL PLAN ADMINISTRATORS, TRUSTEES, FIDUCIARIES,
AND
INSURERS), AND AGENTS (“RELEASEES”) FROM ALL
CLAIMS AND WAIVES ALL
RIGHTS, KNOWN OR UNKNOWN, HE MAY HAVE OR CLAIM TO HAVE RELATING TO HIS
EMPLOYMENT WITH THE COMPANY, ITS PREDECESSORS, SUBSIDIARIES, OR AFFILIATES
OR
HIS SEPARATION THEREFROM
arising
before the execution of this Agreement, including, but
not limited to,
claims:
(i) for discrimination, harassment, or retaliation arising under federal,
state, or local laws prohibiting age, sex, national origin, race, religion,
disability, veteran status, or other protected class discrimination, harassment,
or retaliation for protected activity; (ii) for compensation and benefits
(including, but not limited to, claims under the Employee Retirement Income
Security Act of 1974 (ERISA), as amended, the Fair Labor Standards Act of 1938
(FLSA), as amended, and similar federal, state, and local laws);
(iii) arising under federal, state, or local law of any nature whatsoever
(including, but not limited to, constitutional, statutory, tort, express or
implied contract, or other common law); (iv) arising under the August 15, 2007
Employment Agreement between the parties or the August 15, 2007 Restricted
Stock
Agreement between the parties; and (v) for attorneys’ fees. The release of
claims set forth in this paragraph does not apply to claims for workers’
compensation benefits or unemployment benefits filed with the applicable state
agencies.
4. COVENANT
NOT TO XXX.
Employee
will not xxx Releasees on any matters relating to his employment arising before
the execution of this Agreement or join as a party with others who may xxx
Releasees on any such claims; provided, however, this paragraph will not bar
claims for workers’ compensation or unemployment benefits referenced in
paragraph 3 above, and this paragraph will not apply when prohibited by law.
If
Employee does not abide by this paragraph, then: (i) he will return all
monies received under this Agreement and indemnify Releasees for all expenses
they incur in defending the action; and (ii) Releasees will be relieved of
their obligations hereunder.
5. AGENCY
CHARGES/INVESTIGATIONS.
Nothing
in this Agreement shall prohibit Employee from filing a charge or participating
in an investigation or proceeding conducted by the U.S. Equal Employment
Opportunity Commission or other governmental agency with jurisdiction concerning
the terms, conditions, and privileges of his employment; provided, however,
that
by signing this Agreement, Employee waives his right to, and shall not seek
or
accept, any monetary or other relief of any nature whatsoever in connection
with
any such charges, investigations, or proceedings.
6. COMPANY
INFORMATION AND PROPERTY.
Employee
shall not at any time after his employment terminates disclose, use, or aid
third parties in obtaining or using any confidential or proprietary Company
information. Confidential or proprietary Company information is information
relating to the Company, the Company’s parents, subsidiaries, or affiliates, or
any aspect of their business that is not generally available to the public,
their competitors, or other third parties or ascertainable through common sense
or general business or technical knowledge. Nothing in this Agreement shall
relieve Employee from any confidentiality, proprietary information, secrecy,
non-compete, non-disclosure, non-solicitation, or invention rights and
assignment obligations under any previously executed agreements.
All
records, files, or other materials maintained by or under the control, custody,
or possession of the Company or its agents in their capacity as such shall
be
and remain the Company’s property.
7. RIGHT
TO REVIEW.
The
Company sent this Agreement to Employee via overnight mail on February 20,
2008
and desires that he have adequate time and opportunity to review and understand
the consequences of entering into it. Accordingly, the Company advises him
to
consult with an attorney prior to executing it and that he has seven (7) days
within which to consider it. In the event that he does not return an executed
copy of the Agreement to the Company by no later than the 8th calendar day
after
receiving it, it and the obligations of the Company herein shall become null
and
void.
2
8. CONFIDENTIALITY
AND NONDISPARAGEMENT.
The
terms and provisions of this Agreement are confidential, and Employee represents
and warrants that since receiving this Agreement he has not disclosed, and
going
forward will not disclose, the terms and conditions of this Agreement to third
parties, except as required by law. Notwithstanding the above, he may reveal
the
terms and provisions of this Agreement to members of his immediate family or
to
an attorney whom he may consult for legal advice, provided that such persons
agree to maintain the confidentiality of the Agreement. Employee represents
and
warrants that since receiving this Agreement, he: (i) has not made, and
going forward will not make, disparaging, defaming, or derogatory remarks about
the Company or its products, services, business practices, directors, officers,
managers, or employees to anyone; and (ii) has not taken, and going forward
will not take, any action that may impair the relations between the Company
and
its vendors, customers, employees, or agents or that may be detrimental to
or
interfere with the Company or its business.
9. STIPULATION.
Employee
acknowledges, agrees, and hereby stipulates to the following facts:
(i) during his employment with the Company, Employee was allowed to take
all leave and afforded all other rights to which he was entitled under the
Family and Medical Leave Act (FMLA); and (ii) the Company has not in any
way interfered with, restrained, or denied Employee’s exercise of (or attempt to
exercise) any FMLA rights and has not terminated or otherwise discriminated
or
retaliated against Employee for exercising (or attempting to exercise) any
such
rights.
10. OTHER.
Except
as expressly provided in this Agreement, this Agreement supersedes all other
understandings and agreements, oral or written, between the parties and
constitutes the sole agreement between the parties with respect to its subject
matter. Each party acknowledges that no representations, inducements, promises,
or agreements, oral or written, have been made by any party or by anyone acting
on behalf of any party, that are not embodied in this Agreement, and no
agreement, statement, or promise not contained or described in this Agreement
shall be valid or binding on the parties. No change or modification of this
Agreement shall be valid or binding on the parties unless such change or
modification is in writing and is signed by the parties. Employee’s or the
Company’s waiver of any breach of a provision of this Agreement shall not waive
any subsequent breach by the other party. If a court of competent jurisdiction
holds that any provision or sub-part thereof contained in this Agreement is
invalid, illegal, or unenforceable, that invalidity, illegality, or
unenforceability shall not affect any other provision in this
Agreement.
This
Agreement is intended to avoid all litigation relating to Employee’s employment
with the Company and his separation therefrom; therefore, it is not to be
construed as the Company’s admission of any liability to him - liability that
the Company denies.
This
Agreement shall apply to, be binding upon, and inure to the benefit of the
parties’ successors, assigns, heirs, and other representatives and be governed
by North Carolina law and the applicable provisions of federal law.
CAUTION!
READ BEFORE SIGNING. THIS AGREEMENT CONTAINS A RELEASE OF ALL
CLAIMS.
3
IN
WITNESS WHEREOF,
the
parties have entered into this Agreement on
the
day and year written below.
EMPLOYEE
REPRESENTS THAT HE HAS CAREFULLY READ THE ENTIRE AGREEMENT,
UNDERSTANDS
ITS CONSEQUENCES, AND VOLUNTARILY ENTERS INTO IT.
| /s/ Xxxxxx Xxxxxxxxx |
2/24/08
|
||
|
Xxxxxx
Xxxxxxxxx
|
Date
|
||
| SMART ONLINE, INC. | |||
|
By:
|
/s/
Xxxxx X. Xxxxxxx
|
2/25/08
|
|
|
Date
|
|||
|
Title:
Chief Executive Officer
|
|||
4
