SEPARATION AGREEMENT
SEPARATION AGREEMENT dated as of March 10, 1998 by and between
CrossZ Software Corporation ("CrossZ" or the "Company") a Delaware corporation
with its principal office at 00 Xxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 and Xxxx Xxxxxxxxxxxxxx ("Chroscielewski"), who resides at 000-00 00xx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
WHEREAS, Chroscielewski has been employed by CrossZ as
Chairman of the Board pursuant to an Employment Agreement effective as of
October 14, 1997 by and between Chroscielewski and CrossZ (the "Employment
Agreement"); and
WHEREAS, CrossZ and Chroscielewski have determined that
Chroscielewski's employment with the Company was terminated effective March 10,
1998 and Chroscielewski will no longer serve as Chairman of the Board of the
Company effective as of May 26, 1998; and
WHEREAS, the parties hereto desire to set forth their
agreement as to the termination of Chroscielewski's employment and to set forth
certain other agreements and understandings;
NOW, THEREFORE, in consideration of the mutual promises and
covenants herein contained, it is hereby agreed as follows:
1. Termination of Employment Agreement and Severance. The
Employment Agreement is terminated and is of no further force or effect
effective as of the date hereof. The provisions of this Agreement are in full
settlement of any and all rights and
obligations that each party has to the other under the Employment Agreement.
Notwithstanding the foregoing, the Company and Chroscielewski agree that the
provisions of Section 1 of the Proprietary Rights and Separation Agreement dated
as of June 16, 1992 between Chroscielewski and the Company (the "Proprietary
Rights Agreement") shall remain in full force and effect until May 26, 1998. Any
activities that Chroscielewski engages in as a reseller will not be in violation
of the Proprietary Rights Agreement, provided that the Company's proprietary
information may not be disclosed without the express permission of the Company.
Chroscielewski shall be entitled to receive a severance payment in the amount of
$150,000 payable over the one-year period from March 10, 1998 through March 9,
1999 in accordance with normal Company payroll. Chroscielewski acknowledges that
he has received all severance payments that have been required to be made to him
through March 31, 1998 in accordance with the preceding sentence. In addition,
upon the execution of this Agreement, the Company is paying $151,896 to
Chroscielewski in full settlement of (i) all unpaid accrued salary and other
amounts owed to Chroscielewski or his wife, and (ii) all accrued and unused
vacation through March 10, 1998. The Company will also reimburse the law firm of
Reisman, Peirez, Xxxxxxx & Xxxxxx L.L.P. $16,000 in full settlement for all
attorney fees incurred by Chroscielewski in connection with the execution of
this Agreement and enforcing his rights under the Employment Agreement.
Chroscielewski is also being reimbursed for all heretofore unreimbursed expenses
reasonably and necessarily incurred by him in connection with the business of
CrossZ prior to March 10, 1998. Chroscielewski acknowledges that he has received
-2-
full and complete payment of quarterly MBO's through the date of termination of
his employment. Chroscielewski will resign, effective May 26, 1998, as Chairman
of the Board of CrossZ. Chroscielewski further acknowledges that he will not be
nominated by the Board of Directors for election as a director at the Company's
next annual meeting of the stockholders (which is presently scheduled to be held
on May 27, 1998). In addition, Chroscielewski may not (i) speak or take any
action on behalf of the Company including negotiating, discussing or executing
any agreement or (ii) have any discussions with any customers, clients or
suppliers of the Company or any potential customers, clients or suppliers of the
Company. The foregoing limitation includes, but is not limited to, representing
CrossZ or acting on behalf of CrossZ at any trade show or conference.
Notwithstanding the foregoing, the Company will enter into a standard reseller
agreement with such new company as may be hereinafter incorporated or formed by
Chroscielewski as specified in Paragraph 5 hereto.
2. Stock Options and Continuing Benefits. Concurrently
herewith, the Company is amending the terms of the stock option agreement dated
November 11, 1997 between the Company and Chroscielewski so that all options to
purchase Common Stock of the Company currently held by Chroscielewski shall
remain exercisable until December 31, 1999. In connection therewith, the Company
will make any amendments necessary under its 1991 Incentive Stock Option to
effectuate the foregoing. To the extent that the Company reprices any options
granted under the 1991 Incentive Stock Option Plan prior to December 31, 1999,
the Company will include the options granted to Chroscielewski in any such
repricing and will
-3-
reprice the options to purchase Common Stock held by Chroscielewski to an
exercise price equal to the exercise price of the repriced options.
In addition, Chroscielewski shall receive Company-paid health, dental,
medical, vision, disability and life insurance coverage as provided to
Chroscielewski immediately prior to March 10, 1998, upon the terms and
conditions, including deductibles and co- payments, provided in the Company's
then-existing plans, policies and programs (the "Company-Paid Coverage").
Company-Paid Coverage shall continue until March 10, 1999 in the case of life
insurance coverage and until March 10, 2003 for Chroscielewski and his spouse as
of the date of this Agreement in the case of medical, dental, disability and
vision coverage. Notwithstanding the foregoing, if Chroscielewski is covered
under any health, life, dental, vision or disability insurance plan(s) provided
by a subsequent employer, then the amount of coverage required to be provided by
the Company hereunder shall be reduced by the amount of coverage provided by the
subsequent employer's plan(s) for so long as such coverage continues.
Chroscielewski's rights under this Paragraph 2 shall be in addition to, and not
in lieu of, any post-termination continuation coverage or conversion rights
Chroscielewski may have pursuant to applicable law, including without
limitation, continuation coverage required by Section 4980B of the Internal
Revenue Code of 1986, as amended.
3. Office Space. Until May 26, 1998, Chroscielewski (i) will
be allowed to use during the normal and customary business hours of the Company
his current office at the Company's executive offices located a set forth above,
and (ii) will receive
-4-
administrative support, consistent with the administrative support he received
from the Company immediately prior to May 26, 1998. After May 26, 1998,
Chroscielewski shall completely vacate the Company's offices, unless he is
granted permission to appear at the Company's offices by the President of the
Company.
4. Office Equipment. By separate xxxx of sale, the Company is
transferring to Chroscielewski concurrently herewith title to the laptop
computer, desktop computer and printer currently in Chroscielewski's possession,
for the sum of $1.00.
5. Reseller Agreement. (a) CrossZ shall enter into a standard
reseller agreement (the "Reseller Agreement") with such new company as may
hereafter be incorporated or formed by Chroscielewski (the "Chroscielewski
Reseller Company"). The Reseller Agreement will be subject to and in accordance
with the provisions of Paragraph 7 hereof.
(b) As inducement for the Company to enter into the
Reseller Agreement, it shall provide that Chroscielewski and the Chroscielewski
Reseller Company for, and on behalf of, themselves and their directors,
officers, consultants, employees and "affiliates" (as such term is defined in
Rule 405 under the Securities Act of 1933, as amended) will not disclose or
divulge any information, knowledge or data relating to the Reseller Agreement,
including without limitation, its terms to any person or entity including, but
not limited to, other resellers or indirect channel partners, value added
resellers, original equipment manufacturers, consultants and systems integrators
of the Company. Notwithstanding the foregoing, Chroscielewski may disclose the
terms of the Reseller Agreement to the legal, accounting and tax
-5-
professionals involved in the administration of the Chroscielewski Reseller
Company.
6. Phone Numbers and E-mail. Chroscielewski will have the
opportunity to transfer both of his cell phone numbers as well as his home
office phone number, to his personal use by no later than May 26, 1998, after
which the service will be discontinued. Chroscielewski will have access to the
Company's e-mail through Lotus Notes as well as the Company's voice mail until
May 26, 1998, after which the service will discontinued.
7. Noncompete and Confidentiality. Chroscielewski agrees that
until March 10, 1999 he shall not:
(i) engage in, own, manage or control, or
participate in the ownership, management or control, directly or indirectly, of
any person, firm, corporation or other entity engaged in the design,
development, provision, sales or marketing of any product for the creation,
compression, storage, retrieval or analysis of relational databases ("Restricted
Business") anywhere in the world (the "Restricted Area"). Notwithstanding the
foregoing, Chroscielewski may acquire shares representing not more than 5% of
the outstanding securities of any publicly traded company engaged in the
Restricted Business and the Chroscielewski Reseller Company may enter into the
Reseller Agreement.
(ii) for himself or on behalf of any other
person or entity, directly or indirectly or by action together with others, call
on any person or entity that is or was at any time during the one year period
prior to the date of this Agreement, a customer, licensor, licensee, contractor,
employee, consultant, representative or agent of or for CrossZ, or any of them,
for the
-6-
purpose of (A) diverting or taking away any such person or entity from CrossZ,
or (B) inducing, influencing or seeking to induce or influence, any such person
or entity to terminate such relationship with CrossZ, or any of them; provided,
that if the employment of any such employee has been terminated by CrossZ and if
Chroscielewski notifies CrossZ that he proposes to employ such employee, CrossZ
will not unreasonably withhold its consent to such subsequent employment; or
(iii) use, disclose or divulge any
information, knowledge or data specifically relating to or concerned with
CrossZ, its respective operations, businesses, methods of doing business,
revenues, results of operations, financial condition or customers to any person
or entity, provided, however, that (A) if Chroscielewski becomes legally
compelled to disclose any such information, knowledge or data, he will promptly
advise CrossZ in writing so that it may seek a protective order or other
appropriate judicial remedy and/or waive compliance with the provisions of this
Paragraph 7, and (B) nothing contained herein shall prevent the use or
disclosure of any information, knowledge or data (1) that is generally known to
the public or (2) that has become generally known to the public otherwise than
by the breach of this Agreement by Chroscielewski or the breach of any other
agreement of like tenor by Chroscielewski, any other shareholder of CrossZ or
any officer, director or employee of the CrossZ.
8. Standstill. Chroscielewski agrees that prior to March 10,
1999, without the prior written consent of the Company, he will not, in any
manner, whether publicly or otherwise, directly or indirectly initiate, make,
effect, cause, seek, offer or propose
-7-
to initiate, participate in or take a position with respect to, advise or
influence, call or seek to call or execute: (i) any tender or exchange offer,
merger or other business combination involving CrossZ or any of its affiliates;
(ii) any "solicitation" of "proxies" (as such terms are used in the rules of the
Securities and Exchange Commission) or consents that relate in any way to any
shares of Common Stock or other securities of CrossZ, whether before or after
the formal commencement of any such solicitation; (iii) any person or entity
with respect to the voting of, or the giving or withholding of any consents with
respect to, any shares of common stock of CrossZ or other securities of CrossZ;
(iv) a meeting of CrossZ's shareholders or any written consent or any proposal
for action by shareholders of CrossZ; (v) alone or in concert with others, to
acquire control of CrossZ or influence the Board, management or policies of
CrossZ; (vi) any claim, suit, action or otherwise acting to contest the validity
of this letter or proceeding a release of the restrictions contained herein.
Notwithstanding the foregoing, in the event that the Company defaults in the
payment of any installment severance payment provided for him or fails to pay or
refuses to pay any installment severance payment and such default or failure or
refusal to pay is not cured within 15 days after the receipt by the Company of
written notice from Chroscielewski of such default, failure or refusal to pay,
the provisions of this Paragraph 8 will be null and void and of no further force
and effect.
9. Enforceability of Paragraphs 7 and 8. Chroscielewski
acknowledges that (a) the provisions of Paragraphs 7 and 8 hereof are reasonable
and necessary for the protection of
-0-
XxxxxX and are essential to the willingness of CrossZ to enter into this
Separation Agreement. In the event that any provision of Paragraphs 7 and 8
hereof, including any sentence, clause or part thereof, shall be deemed contrary
to law or invalid or unenforceable in any respect by a court of competent
jurisdiction, the remaining provisions shall not be affected, but shall, subject
to the discretion of such court, remain in full force and effect and any invalid
and unenforceable provisions shall be deemed, without further action on the part
of the parties hereto, modified, amended and limited to the extent necessary to
render the same valid and enforceable.
10. Withdrawal of Legal Complaint. Simultaneously with the
execution of this Agreement, Chroscielewski will discontinue the Action filed on
his behalf in the Supreme Court of the State of New York, County of Nassau and
provide the Company with a copy of the discontinuance certified by
Chroscielewski's attorneys.
11. Survival of Provisions. The termination of this Agreement
shall not terminate or affect in any manner any provision of this Agreement that
is intended by its terms to survive such termination.
12. Entire Agreement; Amendment. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof, and any prior agreement between CrossZ and Chroscielewski relating to
his employment with CrossZ is hereby superseded and terminated effective
immediately and shall be without further force or effect, except for the
provisions of, Section 1 of the Proprietary Rights Agreement. No amendment or
modification of this Agreement shall be valid or binding unless
-9-
made in writing and signed by the party against whom enforcement thereof is
sought.
13. Notices. Any notice required, permitted or desired to be
given pursuant to any of the provisions of this Agreement shall be deemed to
have been sufficiently given or served for all purposes if delivered in person
or by responsible overnight delivery service or sent by certified mail, return
receipt requested, postage and fees prepaid to the parties at their respective
addresses set forth above, and if to CrossZ, with a copy to:
Xxxxxx Xxxxxxxx Frome & Xxxxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
and if to Chroscielewski, with a copy to:
Reisman, Peirez, Xxxxxxx & Calica, L.L.P.
Counselors-at-Law
0000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Any of the parties hereto may at any time and from time to time change the
address to which notice shall be sent hereunder by notice to the other parties
given under this Paragraph 12. The date of the giving of any notice hand
delivered or delivered by responsible overnight carrier shall be the date of its
delivery and of any notice sent by mail shall be the date five days after the
date of the posting of the mail.
14. No Assignment; Binding Effect. Neither this Agreement, nor
the right to receive any payments hereunder, may be assigned by Chroscielewski.
This Agreement shall be binding upon
-10-
Chroscielewski, his heirs, executors and administrators and upon CrossZ and its
successors and assigns.
15. Waivers. No course of dealing nor any delay on the part of
CrossZ in exercising any rights hereunder shall operate as a waiver of any such
rights. No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
16. Governing Law. This Agreement shall be governed,
interpreted and construed in accordance with the laws of the State of New York,
except that body of law relating to choice of laws.
17. Invalidity. If any clause, paragraph, section or part of
this Agreement shall be held or declared to be void, invalid or illegal, for any
reason, by any court of competent jurisdiction, such provision shall be
ineffective but shall not in any way invalidate or affect any other clause,
paragraph, section or part of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Separation Agreement to be duly executed as of the day and year first above
written.
CROSSZ SOFTWARE CORPORATION
By: /s/ XXXXXX XXXX
--------------------------------------
Name: XXXXXX XXXX
Title: Senior Vice President of
Finance and Administration,
Chief Financial Officer and
Secretary
/s/ XXXX XXXXXXXXXXXXXX
-----------------------------------------
XXXX XXXXXXXXXXXXXX
-11-
