Exhibit 10.47
SEPARATION AND RELEASE AGREEMENT
THIS SEPARATION AND RELEASE AGREEMENT ("Agreement") is entered into by and
between Xxxx X. Xxxxxxx ("Xxxxxxx"), and Sound Source Interactive, Inc., a
Delaware corporation and Sound Source Interactive, Inc., a California
corporation (collectively, "Sound Source"), on the date herein indicated.
R E C I T A L S
X. Xxxxxxx is employed by Sound Source as its President and Chief
Operating Officer pursuant to that certain Second Amended and Restated
Employment Agreement dated as of April 30, 1996 (as amended and restated, the
"Employment Agreement");
B. Sound Source and Winston have mutually agreed to terminate Winston's
employment with Sound Source; and,
C. Sound Source and Winston desire, under the terms set forth in this
Agreement, to (i) provide Xxxxxxx xxxxxxxxx compensation, (ii) specify the
parties' respective rights and obligations regarding the termination of
Winston's employment and (iii) settle all disputes and controversies existing
between Sound Source and Winston.
A G R E E M E N T
In consideration of the mutual covenants and agreements contained herein
and other valuable consideration, the parties hereto hereby agree as follows:
1. Employment Termination. Sound Source and Winston have mutually
elected to terminate Winston's employment with Sound Source effective as of
November 1, 1996 (the "Termination Date"). Winston hereby resigns any and all
positions he may have as an officer or director of Sound Source or any entity
affiliated with Sound Source. Nothing in this Agreement or in the circumstances
surrounding its execution shall be deemed to constitute a unilateral termination
of employment by either Sound Source or Winston. Neither the entering into of
this Agreement nor anything contained in this Agreement shall be construed as an
admission by any party or by anyone else of any wrongdoing or liability of any
kind whatsoever, nor shall it constitute evidence of any wrongdoing or liability
of any kind whatsoever for any purpose whatsoever.
2. Compensation Through Termination Date. Winston hereby agrees that
Sound Source has paid Winston all compensation and other benefits (including all
salary, commission, accrued bonus, accrued vacation, expense reimbursement, and
other accrued expenses) through the Termination Date.
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3. Severance Compensation; Continuation Benefits. Subject to Section 4,
Winston shall be compensated as provided in Section 6(b) of the Employment
Agreement as if there had been an Early Termination other than for Death or
Disability without cause. In accordance therewith, Winston and Sound Source
agree that payments under subsections (i) and (ii) of Section 6(b) of the
Employment Agreement (excluding the second paragraph in such subsection (ii))
shall be paid in full, subject to usual tax withholdings required by law, (a) in
consecutive equal monthly installments of Eleven Thousand Six Hundred Sixty-Six
Dollars and Sixty-Seven Cents ($11,666.67) on the first (1st) business day of
each calendar month beginning on December 1, 1996 and ending on September 1,
1998, and (b) one additional payment of Five Thousand Eight Hundred Thirty-Three
Dollars and Thirty-Three Cents ($5,833.33) on September 15, 1998 (the "Final
Payment Date"). In addition, Sound Source shall pay to Winston a car allowance
(a) in consecutive equal monthly payments of One Thousand Dollars and NO Cents
($1,000.00) on the first (1st) business day of each calendar month beginning on
December 1, 1996 and ending on September 1, 1998, and (b) one additional payment
of Five Hundred Dollars and NO Cents ($500.00) on the Final Payment Date.
Moreover, all options granted to Winston pursuant to the Original Agreement (as
defined in the Employment Agreement) shall remain in full force and effect and
shall not be affected by this Agreement. Notwithstanding the foregoing, the
right of first offer granted by Winston to Xxxxxxx X. Xxxxxxx pursuant to
paragraph 15 of the Original Agreement shall survive in full force and effect.
4. Termination of Severance Compensation. If, following the Termination
Date but prior to the Final Payment Date, Winston:
(i) engages, directly or indirectly (which includes, but is not
limited to, owning, managing, operating, controlling, being
employed by, giving financial assistance to, participating
in or being connected in any material way with any business
or person so engaged), anywhere in the continental United
States, in the business of interactive educational computer
software based on licensed products from major motion
pictures and television shows; provided, however, that
Winston's ownership as a passive investor of less than five
percent (5%) of the issued and outstanding stock of any
publicly held corporation or partnership so engaged shall
not by itself be deemed to constitute such engagement by
Winston; and provided further that, subject to obtaining (as
and when required) prior written consent, which consent will
not be unreasonably withheld, nothing herein shall be
construed to prevent Winston
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from engaging, directly or indirectly, in any capacity in any
business in the computer software or movie industries not
specified above; or,
(ii) Acts to induce any of Sound Source's or its subsidiaries,
customers or employees to take action which might be
disadvantageous to Sound Source,
then, Winston shall immediately notify Sound Source regarding such actions and
Sound Source's obligation to provide any additional severance compensation and
benefits pursuant to Section 3 after the date of such notification shall
immediately cease.
5. No Other Payments or Benefits. Winston agrees that he is not entitled
to receive from Sound Source any compensation, commission or other benefits
other than as set forth in Section 3.
6. Return of Sound Source Property. Winston represents and warrants that
Winston has returned to Sound Source all Sound Source property, books, lists,
records, other documents, and equipment. Similarly, all properties of Winston
possessed by Sound Source have be returned to Winston by Sound Source. Each
party hereto covenants that should such party later discover in such party's
possession any additional items of property of the other party hereto, such
party will promptly return such property to the other party. Winston
acknowledges that he has retrieved any personal property belonging to him that
was on Sound Source's premises.
7. Confidentiality of Private Information.
(a) Sound Source and Winston recognize that during the course of
Winston's employment with Sound Source, Winston has had access to and has
acquired Private Information (as defined below). Winston covenants and agrees
that on and after the date hereof, he will hold in the strictest of confidence
all Private Information and that he will not at any time or in any fashion, form
or manner, either directly or indirectly, use any Private Information or reveal,
disclose, disseminate, publish, publicize, whether for profit or otherwise, any
Private Information to any person, firm, corporation, partnership, trust, or to
or in the press or any other form of media. Winston further covenants and
agrees to take all appropriate measures to safeguard the confidentiality of the
Private Information.
(b) Winston covenants and agrees that in the event that he is
requested or required in a judicial, administrative or governmental proceeding
to disclose any Private Information, he shall provide Sound Source with
immediate notice (and in any event within five (5) business days after the
receipt of such request or requirement) of such request or requirement and all
related
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proceedings so that Sound Source may seek appropriate protective orders in
advance of any disclosure.
(c) Each party hereto acknowledges that the other party hereto would
be irreparably harmed in the event of any violation by such party of any of the
terms of this Agreement and that remedies at law would be inadequate. In the
event of any breach or threatened breach of this Agreement, such party shall be
entitled to obtain, without posting bond, a temporary restraining order and
temporary and permanent injunctive relief restraining and enjoining any such
breach or threatened breach of this Agreement. The remedies provided for in
this Section 7 shall be in addition to any and all other rights and remedies
that may be available to such party at law, in equity and under this Agreement,
all of which are expressly reserved by each of the parties hereto.
(d) "Private Information" shall mean any and all information relating
to any Sound Source Affiliate (as defined below) which is not generally known to
the public relating to (i) their respective businesses, operations, business
affairs, plans, customer and supplier lists and information, pricing and costing
lists and information, research and development work, method and techniques of
business, marketing plans and objectives, patterns, compilations, programs,
devices, methods, techniques and processes, and trade secrets; and, (ii) any of
the terms, conditions, provisions or facts set forth in, or related to, this
Agreement or its negotiation.
(e) Confidentiality of Settlement Agreement. Winston and Sound
Source, and each of them, each agree that the terms and conditions of this
Agreement shall remain confidential as between the parties and each shall not
disclose them to any other person, except to Winston or Sound Source's
professional advisors, attorneys, Directors or accountants, or to Sound Source's
officers solely on a need-to-know basis. Without limiting the generality of the
foregoing, neither Winston nor Sound Source will respond to or in any way
participate in or contribute to any public discussion, notice or other publicity
concerning, or in any way relating to, execution of this Agreement or the events
(including any negotiations) which led to its execution or the claims released
by Winston herein; provided, however, that nothing herein shall prevent
disclosure of the terms of this Agreement (i) by any officer of Sound Source to
any other officer, director or employee of Sound Source with a need to know or
(ii) unless such disclosure is required by law. If asked about the resolution
of the dispute between the parties, Winston, his attorneys, agents and
representatives may respond consistent with the following:
"Xx. Xxxxxxx was employed as President and Chief Operating
Officer by the company founder and Chief Executive Officer,
Xxxxxxx Xxxxxxx. Xx. Xxxxxxx has completed his assignment
to
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successfully take the company public, and has, in concert
with the company, agreed to leave Sound Source to pursue
other opportunities. The company wishes Xx. Xxxxxxx the
best in his future endeavors."
(f) No Disparagement. Winston covenants and agrees that he will in
no way disparage Sound Source or their products, services, employees, or
business reputation to any person or entity whether or not said person or entity
is a current or prospective supplier, client or employee of Sound Source. Sound
Source agrees not to make or publish, either orally or in writing, any
disparaging statement concerning Winston, including his departure from Sound
Source, his services with Sound Source and matters relating to his employment.
(g) Harassment. Winston agrees that he will not in any form or
manner, harass, intimidate, and/or threaten reprisals against Sound Source or
any Sound Source Affiliate (as defined below). Sound Source agrees that it will
not in any form or manner, harass, intimidate, and/or threaten reprisals against
Winston.
(h) Solicitation. For a period of at least two (2) years from the
date hereof, Winston will not solicit, or assist in the solicitation of, any
employee or consultant of Sound Source to leave the employ of Sound Source (or
cease providing any services to Sound Source) for any reason whatsoever.
8. Release of Claims.
(a) Winston hereby irrevocably and unconditionally releases, acquits,
and forever discharges Sound Source and each of Sound Source's subsidiaries,
affiliates and related entities (and each of their shareholders, insurers,
officers, directors, employees, trustees, representatives, agents, attorneys,
parents, predecessors, successors and assigns) (collectively, including Sound
Source, "Sound Source Affiliates") of and from any and all claims, debts,
liabilities, demands, damages, accounts, obligations, costs, attorneys' fees,
expenses, liens, actions, causes of actions or suits of any kind, whether known
or unknown, suspected or unsuspected, fixed or contingent, whether in law or in
equity, arising out of, or which may hereafter arise out of any and all matters
from the beginning of time through the date hereof, including but not limited to
any and all matters arising out of or resulting from or relating in any way to
Winston being an employee or officer of Sound Source and/or any of its
subsidiaries, affiliates or related entities and/or his termination and/or
removal from any such positions and/or arising out of or resulting from or
relating in any way to any alleged act or omission which in any way involves any
Sound Source Affiliate. The released claims specifically include (by way of
example only) any and all claims for bonus, severance, or other benefits apart
from the benefits
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stated herein; breach of contract; wrongful discharge; impairment of economic
opportunity; any claim under common-law or at equity; defamation; intentional
infliction of emotional harm; any tort; claims for reimbursements; claims for
commissions; or claims for employment discrimination under any state,
federal, local law, statute, or regulation (including, but not limited to,
claims under Title VII of the Civil Rights Act of 1964 or under the
California Fair Employment and Housing Act). Winston acknowledges and agrees
that this release, the releases contained in Section 9 and Section 10, and
the covenant not to xxx set forth in Section 11 are essential and material
terms of this Agreement and that, without such release and covenant not to
xxx, no agreement would have been reached by the parties. Winston
understands and acknowledges the significance and consequences of this
release and this Agreement.
(b) Sound Source hereby irrevocably and unconditionally releases,
acquits, and forever discharges Winston of and from any and all claims, debts,
liabilities, demands, damages, accounts, obligations, costs, attorneys' fees,
expenses, liens, actions, causes of actions or suits of any kind, whether known
or unknown, suspected or unsuspected, fixed or contingent, whether in law or in
equity, arising out of, or which may hereafter arise out of any and all matters
from the beginning of time through the date hereof, including but not limited to
any and all matters arising out of or resulting from or relating in any way to
Winston being an employee or officer of Sound Source.
9. ADEA Claims. WINSTON SPECIFICALLY WAIVES AND RELEASES THE SOUND
SOURCE AFFILIATES FROM ALL CLAIMS HE MAY HAVE AS OF THE DATE HE SIGNS THIS
AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. Section 621 ("ADEA"). THIS
SECTION DOES NOT WAIVE RIGHTS OR CLAIMS THAT MAY ARISE UNDER THE ADEA AFTER THE
DATE WINSTON SIGNS THIS AGREEMENT. WINSTON AGREES THAT THIS AGREEMENT PROVIDES
BENEFITS TO WHICH HE MAY NOT OTHERWISE BE ENTITLED, THAT SOUND SOURCE HAS
ADVISED WINSTON TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT, AND THAT
WINSTON HAS CONSULTED COMPETENT COUNSEL OF HIS OWN SELECTION PRIOR TO SIGNING
THIS AGREEMENT. WINSTON HAS BEEN PROVIDED TWENTY-ONE (21) DAYS WITHIN WHICH TO
CONSIDER WHETHER HE SHOULD SIGN THIS AGREEMENT AND WAIVE AND RELEASE ALL CLAIMS
AND RIGHTS ARISING UNDER THE ADEA. WINSTON SHALL HAVE SEVEN (7) DAYS WITHIN
WHICH TO REVOKE THIS AGREEMENT AND THIS AGREEMENT SHALL NOT BECOME EFFECTIVE OR
ENFORCEABLE UNTIL THAT REVOCATION PERIOD HAS EXPIRED. WINSTON ACKNOWLEDGES THAT
HE RECEIVED THIS AGREEMENT ON OCTOBER 23, 1996, THAT THE TWENTY-ONE (21) DAY
PERIOD REFERENCED ABOVE ENDS ON NOVEMBER 13, 1996 AND HIS RIGHT TO REVOKE THIS
AGREEMENT ENDS ON NOVEMBER 1, 1996.
10. Civil Code Section 1542. Winston and Sound Source, and each of them,
acknowledge that they may learn of circumstances bearing upon the things and
items released by this Agreement, but it is their intention by doing so and
doing the acts called for by this Agreement, that this Agreement shall be
effective as a full
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and final accord and satisfaction and release of each and every thing and
item released herein, whether known or unknown. In furtherance of this
intention, Winston and Sound Source acknowledge that they are familiar with
Section 1542 of the Civil Code of the State of California, which provides as
follows:
A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him
must have materially affected his settlement with the
debtor.
Winston and Sound Source, and each of them, hereby waive and release any right
or benefit which they have or may have under Section 1542 of the Civil Code of
the State of California to the full extent that they may lawfully waive all such
rights and benefits pertaining only and limited specifically to the things and
items released herein.
11. Covenant Not To Xxx. To the maximum extent permitted by law, each
party covenants not to xxx or to institute or cause to be instituted any action
in any federal, state, or local agency or court against the other party
(including, with respect to Sound Source, any of the Sound Source Affiliates),
including, but not limited to, any of the claims released in Section 8,
Section 9 and Section 10, except with respect to violations and/or breaches of
the terms, conditions and provisions of this Agreement.
12. Tax Indemnification. If any part of the compensation, benefits or
property being delivered to Winston pursuant to the terms of this agreement is
later determined to be subject to taxes, either federal or state, then Winston
understands that he is solely liable for the same and will indemnify, defend and
hold harmless each Sound Source Affiliate from and against any and all loss,
demand, damage, expense, cost (including, interest, penalties, court costs and
reasonable attorneys' fees), suit, action, claim, liability or obligation
related to any claim made by any state or federal agency for tax deductions not
made or for monies not withheld.
13. Employee Cooperation. Employee agrees to cooperate with Employer in
the truthful and honest prosecution and/or defense of any claim in which the
Parties may have an interest (subject to reasonable limitations concerning time
and place), which may include without limitation making himself available to
participate in any proceeding involving any of the Parties, allowing himself to
be interviewed by representatives of Employer, appearing for depositions and
testimony without requiring a subpoena, and producing and/or providing any
documents or names of other persons with relevant information.
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14. No Assignment of Claims. Winston warrants that he has made no
assignment and will make no assignment of any claim, chose in action, right of
action, or any right of any kind whatsoever, embodied in any of the claims and
allegations referred to herein, and that no other person or entity of any kind
had or has any interest in any of the demands, obligations, actions, causes of
action, debts, liabilities, rights, contracts, damages, attorneys' fees, costs,
expenses, losses or claims referred to herein.
15. Successors. This Agreement and all the terms and provisions hereof,
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and assigns.
16. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be considered an original but all of which
shall constitute one agreement.
17. Knowing and Voluntary Agreement. Winston acknowledges by signing this
Agreement that he has read and understands this document, that he has conferred
with or had opportunity to confer with his attorneys regarding the terms and
meaning of this Agreement, that he has had sufficient time to consider the terms
provided for in this Agreement, that no representations or inducements have been
made to him except as set forth herein, and that he has signed the same
KNOWINGLY AND VOLUNTARILY.
18. Interpretation. Should any portion, word, clause, phrase, sentence or
paragraph of this Agreement be declared void or unenforceable, such portion
shall be considered independent and severable from the remainder, the validity
of which shall remain unaffected. Whenever required by the context, as used in
this Agreement the singular number shall include the plural, and the masculine
gender shall include the feminine and neuter. All titles are for general
reference purposes only and shall not be considered part of this Agreement.
This Agreement shall be construed as though it were drafted jointly by the
parties.
19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties who have executed it and supersedes any and all other
agreements (including the Employment Agreement), understandings, negotiations,
or discussions, either oral or in writing, express or implied between the
parties. The parties to this Agreement each acknowledge (i) that no
representations, inducements, promises, agreements, or warranties, oral or
otherwise, have been made by them, or anyone acting on their behalf, which are
not embodied in this Agreement; (ii) that they have not executed this Agreement
in reliance on any such representations, inducements, promise, agreement or
warranty; and (iii) that no representation, inducement, promise, agreement or
warranty not contained in this Agreement, including, but not limited to, any
purported supplements, modifications, waivers, or
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terminations of this Agreement shall be valid or binding, unless executed in
writing by all of the parties to this Agreement.
20. No Waiver. Failure to insist on compliance of any term, covenant or
condition contained in this Agreement shall not be deemed a waiver of that term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power contained in this Agreement at any one time or more times be deemed a
waiver or relinquishment of any right or power at any other time or times.
21. California Law. This Agreement is made and entered into in the State
of California and shall in all respects be interpreted, enforced and governed
under the laws of such State. Any action to enforce this Agreement shall be
brought and maintained in the County of Los Angeles, State of California.
22. Disputes. Any dispute arising out of, relating to or in connection
with this Agreement shall be resolved by binding arbitration. The arbitration
shall consist of a panel of three arbitrators and shall take place in Los
Angeles County, California at a place designated by the parties (or, failing
agreement, by the arbitrator) and shall commence as soon as practicable on a
date mutually agreed upon by counsel for the parties (or the party if a party
does not have counsel) and the arbitrator. The arbitration proceeding shall be
conducted confidentially and the parties shall take the necessary actions to
assure the confidentiality of the arbitration proceeding. The arbitration
proceeding shall be governed by the provisions of the California Code of Civil
Procedures Sections 1280 et seq. The party desiring to institute arbitration
shall serve written notice to the other party (with copies to all parties to
this Agreement). Such notice shall briefly describe the dispute. Sound Source
shall name one (1) arbitrator and Winston shall name one (1) arbitrator and the
two (2) arbitrators so named shall name the third (3rd) arbitrator. The names
of the two (2) arbitrators named shall be submitted within forty-five (45) days
of the notice instituting arbitration. When the two (2) arbitrators have chosen
the third (3rd) arbitrator, the three (3) arbitrators shall proceed with the
arbitration. Any award rendered in such an arbitration proceeding shall be
final and binding on the parties and may be entered in any court having
jurisdiction over the parties and/or the subject matter thereof. The
arbitrators shall have no jurisdiction or authority to add to, detract from, or
alter in any way the provisions of this Agreement, but shall limit their
considerations and decision to the interpretation and application of this
Agreement to the subject matter presented to them. Nothing contained in this
Section 22 shall restrict Sound Source's right to institute and prosecute any
legal or equitable action in court for temporary restraining orders and
temporary and permanent injunctive relief or otherwise as deemed appropriate by
Sound Source.
23. Notices. All notices or demands by any party relating to this
Agreement shall be in writing and shall be personally
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delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, at their addresses set forth below:
To Winston: Xxxx X. Xxxxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxx X. Xxxxxx, Xx., Esq.
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
To Sound Source: Sound Source Interactive, Inc.
0000 Xxxx Xxxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxx Xxxxxxx, XX 00000
Attn: President
With a copy to: XxXxxxxxx, Will & Xxxxx
0000 X Xxxxxx, X.X., 0xx Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
The parties hereto may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
parties. All notices or demands sent in accordance with this Section 23, shall
be deemed to have been duly given (i) on the date of service if served
personally on the party to whom notice is to be given, or (ii) three (3)
calendar days if mailed to the party to whom notice is to be given by first
class or air mail, postage prepaid.
24. Legal Representation. Winston acknowledges that Winston has been
represented by independent legal counsel of Winston's own choice in connection
with the preparation, review and execution of this Agreement, and that this
Agreement has been executed by Winston with the consent of and on advice of such
counsel. Winston represents and warrants that in executing this Agreement,
Winston does so with full knowledge of all rights which Winston may have and
with the understanding that Winston may be waiving legal rights and claims and
that Winston is hereby entering into this Agreement voluntarily with the intent
to be legally bound by its terms.
25. Indemnification Regarding Claims. Sound Source agrees to defend and
indemnify and hold harmless Winston of any and all claims, causes of action or
complaints made or filed by any party regarding acts performed by Winston in the
course and scope of his employment with Sound Source (to the extent permitted by
Section 317 of the California Corporations Code, by Section 2802 of the
California Labor Code or any other applicable law or contractual provision).
26. Mediation Precondition to Formal Assertion of Claims. The parties
hereto, and each of them, agree that, in the event a dispute arises out of or
concerning this Agreement, he/it will not
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commence any litigation or demand for arbitration without first submitting a
formal demand to the other party for a mediation of the dispute. If such a
demand is made, the dispute will be submitted to mediation before a neutral
mediator in accordance with the mediation rules of the American Arbitration
Association. The party opposing the asserted claim must agree to submit to
mediation within ten (10) days after demand is made or this precondition
shall be deemed waived. The cost of the mediation shall be borne equally by
the parties.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned have executed this Separation and
Release Agreement on the date set forth hereinafter.
DATED: October 24, 1996 SOUND SOURCE INTERACTIVE, INC., a Delaware
corporation
By: /s/ Xxxxxxx X. Xxxxxxx
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Its: CEO
DATED: October 24, 1996 SOUND SOURCE, INTERACTIVE, INC.,
a California corporation
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Its: CEO
DATED: October 24, 1996 /s/ Xxxx X. Xxxxxxx
------------------------------------
XXXX X. XXXXXXX
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