SEPARATION AGREEMENT
Exhibit 10.30
This SEPARATION AGREEMENT (this “Agreement”) is entered into as of October 9, 2007 by
and between NitroSecurity, Inc., a Delaware corporation (the “Company”), and Xxxxx X.
Xxxxxxxxxxx (“Xx. Xxxxxxxxxxx”).
WHEREAS, prior to September 28, 2007, Xx. Xxxxxxxxxxx served as the Company’s Executive Vice
President of Business Development; and
WHEREAS, the Company and Xx. Xxxxxxxxxxx previously entered into a Transition Agreement, dated
as of February 15, 2006 (the “Transition Agreement”).
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein,
the parties agree as follows.
1. Termination of Employment. The parties acknowledge that Xx. Xxxxxxxxxxx’x
employment with the Company ended as of September 28, 2007 (the “Separation Date”). In
addition, as of the Separation Date, Xx. Xxxxxxxxxxx resigned from all officerships and other
appointments that he may have held with the Company. For the avoidance of doubt, the Separation
Date under the Transition Agreement shall be the same as the Separation Date hereunder.
2. Termination Benefits.
(a) IPO Bonus. The Company shall pay Xx. Xxxxxxxxxxx an amount equal to $25,000 if,
prior to January 31, 2008, the Company closes (i) an initial public offering of its capital stock
(x) pursuant to which Xxxxxxx Investment Company is the managing underwriter and (y) that results
in aggregate net proceeds to the Company of at least $5,000,000 (after deduction of underwriting
discounts, commissions and fees) or (ii) a sale of all or substantially all of the Company’s assets
(whether by merger, stock purchase, asset purchase or otherwise) that results in aggregate net
proceeds to the Company’s securityholders of at least $20,000,000. Such payment shall be made to
Xx. Xxxxxxxxxxx within ten (10) business days after the closing of such initial public offering or
sale.
(b) Verizon Commission. The Company shall pay Xx. Xxxxxxxxxxx a commission equal to
6% of any product and service xxxxxxxx recognized by the Company on or prior to December 31, 2007
directly from business units of Verizon initially contacted by Xx. Xxxxxxxxxxx; provided, however,
that no such commission shall be paid to Xx. Xxxxxxxxxxx until the cash payments associated with
such xxxxxxxx are actually received by the Company with no right of return or other contingency
that might result in the return of such payments. Such commission, or a pro rata portion thereof
based on a partial payment by Verizon, shall be paid to Xx. Xxxxxxxxxxx within ten (10) business
days after the receipt of the respective payment from Verizon and the expiration of any related
rights of return or other contingencies.
(c) NetQoS Commission. The Company shall pay Xx. Xxxxxxxxxxx a commission equal to 4%
of any product and service xxxxxxxx recognized by the Company on or prior to March 31, 2008
directly from NetQoS, Inc.; provided, however, that no such commission shall be paid to Xx.
Xxxxxxxxxxx until the cash payments associated with such
xxxxxxxx are actually received by the Company with no right of return or other contingency
that might result in the return of such payments. Such commission, or a pro rata portion thereof
based on a partial payment by NetQoS, Inc., shall be paid to Xx. Xxxxxxxxxxx within ten (10)
business days after the receipt of the respective payment from NetQoS, Inc. and the expiration of
any related rights of return or other contingencies.
(d) Treatment of Stock Options.
(i) As of the Separation Date, Incentive Stock Option Agreement No. 2005/123 granted to Xx.
Xxxxxxxxxxx on October 5, 2006 for the right to purchase 55,000 shares of common stock of the
Company (“Option 2005/123”) shall be deemed to have become exercisable, to the extent
unvested, with respect to 50,000 of the shares of common stock underlying it and shall remain
exercisable with respect to such 50,000 shares until the four year anniversary of the Separation
Date. The parties acknowledge that, pursuant to the Internal Revenue Code, Option 2005/123, if
unexercised by Xx. Xxxxxxxxxxx during the three-month period following the Separation Date, will
automatically convert into a nonstatutory stock option. The parties further acknowledge that the
5,000 shares of common stock underlying Option 2005/123 that were not deemed to be vested as of the
Separation Date were cancelled as of such date. To the extent necessary, the terms of this
paragraph shall supersede any conflicting terms contained in Option 2005/123.
(ii) As of the Separation Date, Incentive Stock Option Agreement No. 2005/155 granted to Xx.
Xxxxxxxxxxx on November 7, 2006 for the right to purchase 200,000 shares of common stock of the
Company (“Option 2005/155”) shall be deemed to have become exercisable, to the extent
unvested, with respect to 25,000 of the shares of common stock underlying it (from the Successful
OEM Partnership allocation) and shall remain exercisable with respect to such 25,000 shares until
the three month anniversary of the Separation Date. The parties acknowledge that the 125,000
shares of common stock underlying Option 2005/155 that had not already been cancelled and were not
deemed to be vested as of the Separation Date were cancelled as of such date. To the extent
necessary, the terms of this paragraph shall supersede any conflicting terms contained in Option
2005/155.
(iii) Xx. Xxxxxxxxxxx acknowledges that the other stock options held by him shall be governed
by their terms and, if applicable, the terms of the Transition Agreement.
(e) Benefits Following Separation Date. Following the Separation Date, Xx.
Xxxxxxxxxxx, at his own expense, may elect to continue receiving group medical and dental insurance
pursuant to the federal “COBRA” law, 29 U.S.C. § 1161 et seq. All other benefits,
including life insurance and long term disability insurance, will cease on the Separation Date.
3. Non-Disclosure and Non-Solicitation Obligations. Xx. Xxxxxxxxxxx acknowledges and
reaffirms his obligation, consistent with applicable law, to keep confidential and not to disclose
any and all non-public information concerning the Company that he acquired during the course of his
employment with the Company, including, but not limited to, any non-public information concerning
the Company’s business affairs, business prospects and financial condition, as is stated more fully
in the Confidential Information and Invention Assignment Agreement he executed, which remains in
full force and effect. Xx. Xxxxxxxxxxx further
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acknowledges and reaffirms his obligations under Section 9 of the Employment Agreement, dated
as of July 1, 2005, between the Company and Xx. Xxxxxxxxxxx, which also remains in full force and
effect.
4. Return of Company Property. Xx. Xxxxxxxxxxx agrees that, as of the Separation
Date, he will return to the Company all keys, files, records (and copies thereof), equipment
(including, but not limited to, computer hardware, software and printers, wireless handheld
devices, cellular phones, pagers, etc.), Company identification and any other Company-owned
property in his possession or control, and that he will leave intact all electronic Company
documents, including, but not limited to, those which he developed or helped develop during his
employment. Xx. Xxxxxxxxxxx further confirms that he will have cancelled all accounts for his
benefit, if any, in the Company’s name, including, but not limited to, credit cards, telephone
charge cards, cellular phone and/or pager accounts and computer accounts, provided that Xx.
Xxxxxxxxxxx, at his expense, shall be entitled to retain the phone number associated with his
cellular phone and transfer it to a new cellular phone service paid for by Xx. Xxxxxxxxxxx.
5. Business Expenses and Compensation. On the Separation Date, Xx. Xxxxxxxxxxx shall
present the Company with a statement of all business expenses incurred in conjunction with the
performance of his employment with the Company. The Company shall reimburse Xx. Xxxxxxxxxxx for
such business expenses promptly after the Separation Date pursuant to the Company’s standard
reimbursement policies and practices. Except as provided in this Agreement, Xx. Xxxxxxxxxxx
acknowledges that, as of the Separation Date, he has received payment in full for all services
rendered in conjunction with his employment by the Company and that no other compensation is owed
to him.
6. Release of Claims by Xx. Xxxxxxxxxxx. In consideration of the benefits provided
for in this Agreement, which Xx. Xxxxxxxxxxx acknowledges he would not otherwise be entitled to
receive, Xx. Xxxxxxxxxxx hereby fully, forever, irrevocably and unconditionally releases, remises
and discharges the Company, its officers, directors, stockholders, corporate affiliates,
subsidiaries, parent companies, agents and employees (each in their individual and corporate
capacities) (hereinafter, the “Released Parties”) from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities and expenses (including attorneys’ fees and costs), of every
kind and nature which he ever had or now has against the Released Parties, including, but not
limited to, any claims arising out of his employment with and/or separation from the Company,
including, but not limited to, all employment discrimination claims under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. § 2000e et seq., the Age Discrimination in Employment Act, 29 U.S.C.
§ 621 et seq., the Americans With Disabilities Act of 1990, 00 X.X.X. §00000 et seq., the Family
and Medical Leave Act, 29 U.S.C. § 2601 et seq., the Worker Adjustment and Retraining Notification
Act (“WARN”), 29 U.S.C. § 2101 et seq., and the Rehabilitation Act of 1973, 29 U.S.C. § 701
et seq., all as amended; all claims arising out of the Fair Credit Reporting Act, 15 U.S.C. §1681
et seq., the Employee Retirement Income Security Act of
0000 (“XXXXX”), 00 X.X.X. §0000 et
seq., the Massachusetts Fair Employment Practices Act., M.G.L.
c. 151B, § 1 et seq., the
Massachusetts Civil Rights Act, M.G.L. c. 12, §§ 11H and 11I, the Massachusetts Equal Rights Act,
M.G.L. c. 93, § 102 and M.G.L. c. 214, § 1C, the Massachusetts Labor and Industries Act, M.G.L. c.
149, § 1 et seq., the Massachusetts Privacy Act, M.G.L. c. 214, § 1B,
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the Massachusetts Maternity Leave Act , M.G.L. c. 149, § 105(d), the New Hampshire Law Against
Discrimination, N.H. Rev. Stat. Xxx. § 354-A:1 et seq., N.H. Rev. Stat. Xxx. §
275:36 et seq. (New Hampshire equal pay law), and the New Hampshire Whistleblowers’
Protection Act, N.H. Rev. Stat. Xxx. § 275-E:1 et seq., all as amended; all common
law claims including, but not limited to, actions in tort, defamation and breach of contract; all
claims to any non-vested ownership interest in the Company, contractual or otherwise, including,
but not limited to, claims to stock or stock options (except for those share/stock option rights
and interests set forth in this Agreement); and any claims or damages arising out of his employment
with or separation from the Company (including a claim for retaliation) under any common law theory
or any federal, state or local statute or ordinance not expressly referenced above; provided,
however, that nothing in this Agreement prevents Xx. Xxxxxxxxxxx from filing, cooperating with or
participating in any proceeding before the EEOC or a state Fair Employment Practices Agency (except
that Xx. Xxxxxxxxxxx acknowledges that he may not be able to recover any monetary benefits in
connection with any such claim, charge or proceeding). Notwithstanding the foregoing, nothing
herein shall impair Xx. Xxxxxxxxxxx’x rights to indemnification pursuant to the Company’s Amended
and Restated Certificate of Incorporation and that certain Director Indemnification Agreement,
dated as of January 11, 2006, between the Company and Xx. Xxxxxxxxxxx.
7. Company Release of Claims. The Company, on behalf of itself and all of the
Released Parties, hereby fully, forever, irrevocably and unconditionally releases, remises and
discharges Xx. Xxxxxxxxxxx from any and all claims, charges, complaints, demands, actions, causes
of action, suits, rights, debts, contracts, agreements, promises, damages, liabilities and expenses
of any kind or nature, known or unknown, which the Company or any of the Released Parties ever had
or have against him arising out of his employment with or separation from the Company. Nothing
herein shall be deemed to waive or release claims by the Company or any of the Released Parties for
any acts of dishonesty, disloyalty, bad faith, moral turpitude, fraud, misappropriation,
embezzlement or any knowing or willful violation of any applicable law, rule or regulation.
8. Acknowledgments. Xx. Xxxxxxxxxxx is advised that he has at least twenty-one (21) days to
consider this Agreement and that the Company advises him to consult with an attorney of his own
choosing prior to signing this Agreement. Xx. Xxxxxxxxxxx is advised that he may revoke this
agreement for a period of seven (7) days after he signs it, and the agreement shall not be
effective or enforceable until the expiration of each seven (7) day revocation period. Xx.
Xxxxxxxxxxx understands and agrees that by entering into this agreement and signing it he is
waiving any and all rights or claims he might have under The Age Discrimination in Employment Act,
as amended by The Older Workers Benefit Protection Act, and that he has received consideration
beyond that to which he was previously entitled.
9. Non-Disparagement. Xx. Xxxxxxxxxxx understands and agrees that as a condition for the
consideration herein described, he shall not make any false, disparaging or derogatory statements
to any media outlet, industry group, financial institution or current or former employee,
consultant, client or customer of the Company regarding the Company or any of its directors,
officers, employees, agents or representatives or about the Company’s business affairs and
financial condition. The Company shall instruct its directors and executive officers not to
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make any false, disparaging or derogatory statements to any media outlet, industry group,
financial institution or future employer regarding Xx. Xxxxxxxxxxx.
10. Confidentiality. The terms and contents of this Agreement, and the contents of the
negotiations and discussions resulting in this Agreement, shall be maintained as confidential by
the Company and Xx. Xxxxxxxxxxx, and their respective agents and representatives and shall not be
disclosed except to the extent required by federal or state law, regulations of governmental
authorities or as otherwise agreed to in writing by the Company and Xx. Xxxxxxxxxxx, provided that
Xx. Xxxxxxxxxxx acknowledges that this Agreement may need to be described in and filed as an
exhibit to the registration statement on Form SB-2 that the Company has filed with the Securities
and Exchange Commission.
11. Amendment. This Agreement shall be binding upon the parties and may not be
modified in any manner, except by an instrument in writing of concurrent or subsequent date signed
by duly authorized representatives of the parties hereto. This Agreement is binding upon and shall
inure to the benefit of the parties and their respective agents, assigns, heirs, executors,
successors and administrators.
12. No Waiver. No delay or omission by either party in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by
a party on any one occasion shall be effective only in that instance and shall not be construed as
a bar or waiver of any right on any other occasion.
13. Validity. Should any provision of this Agreement be declared or be determined by
any court of competent jurisdiction to be illegal or invalid, the validity of the remaining parts,
terms or provisions shall not be affected thereby and said illegal and/or invalid part, term or
provision shall be deemed not to be a part of this Agreement.
14. Voluntary Assent. Xx. Xxxxxxxxxxx affirms that no other promises or agreements of
any kind have been made to or with him by any person or entity whatsoever to cause him to sign this
Agreement, and that he fully understands the meaning and intent of this agreement. Xx. Xxxxxxxxxxx
states and represents that he has had an opportunity to fully discuss and review the terms of this
Agreement with an attorney. Xx. Xxxxxxxxxxx further states and represents that he has carefully
read this Agreement, understands the contents therein, freely and voluntarily assents to all of the
terms and conditions hereof, and signs his name of his own free act.
15. Applicable Law. This Agreement shall be interpreted and construed by the laws of
the State of New Hampshire, without regard to conflict of laws provisions. The Company and Xx.
Xxxxxxxxxxx each agrees that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement shall be settled by
arbitration to be held in Boston, Massachusetts, in accordance with the Employment Dispute
Arbitration Rules of the American Arbitration Association before a single arbitrator who shall have
experience in the area of the matter in dispute. The arbitrator may grant relief in the nature of
injunctions or other relief in such dispute or controversy. The decision of the arbitrator shall
be final, conclusive and binding on the parties. Judgment may be entered on the arbitrator’s
decision in any court having jurisdiction. The Company and Xx. Xxxxxxxxxxx shall each pay one-
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half of the costs and expenses of such arbitration, and each of them shall separately pay
their own counsel fees and expenses and other costs of the arbitration.
16. Entire Agreement. This Agreement contains and constitutes the entire
understanding and agreement between the parties hereto and cancels all previous oral and written
negotiations, agreements, commitments and writings in connection therewith. Nothing in this
Section, however, shall modify, cancel or supersede Xx. Xxxxxxxxxxx’x obligations set forth in
Section 3 herein.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first
set forth above.
| NITROSECURITY, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| /s/ Xxxxx X. Xxxxxxxxxxx | ||||
| Xxxxx X. Xxxxxxxxxxx | ||||
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