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EXHIBIT 10.32
SEVERANCE AND RELEASE AGREEMENT
This SEVERANCE AND RELEASE AGREEMENT (the "Agreement") is entered into
between SystemSoft Corporation, on its own behalf and on behalf of its officers,
agents, directors, employees, subsidiaries, affiliates, assigns and successors
(collectively, "SystemSoft" or the "Company") and Xxxxx X. Xxxxxxx (on your own
behalf and on behalf of your heirs, executors, administrators, and assigns)
regarding the termination of your employment with SystemSoft.
In consideration of the mutual covenants and undertakings set forth
herein, you and SystemSoft hereby agree as follows:
1. Your employment with SystemSoft will end as of July 31, 1997 (the
"Termination Date"). You will continue to provide services to
SystemSoft in your current capacity as Senior Vice President, Treasurer
and Chief Financial officer until the Termination Date.
2. You will notify SystemSoft within one week of accepting new employment
of the name and address thereof, provided that the beginning date of
such employment is within 12 months from the Termination Date.
3. You will not disclose or use any of SystemSoft's confidential
information or confidential information entrusted to SystemSoft by
others to any non-SystemSoft person, corporation, or other entity.
SystemSoft's confidential information includes matters not generally
known outside of SystemSoft, such as experimentation, research and
developments relating to existing and future products and services
marketed or used by SystemSoft, and also any information relating to
the general business operations of SystemSoft (i.e., sales, products,
market opportunities, costs, profits, organizations, customer lists,
pricing methods, etc.). In the event you hear of SystemSoft
confidential information from a third party, you agree not to disclose
such confidential information.
4. You will settle all expense accounts and advances made by SystemSoft to
you and complete all other procedures required of terminating employees
by July 31, 1997. SystemSoft shall pay all reasonable and documented
expenses incurred by you prior to July 31, 1997. You will return to
SystemSoft all property provided by SystemSoft to you including all
credit, identification, and entry cards and all documents, records,
papers, notebooks, and other materials and copies thereof (regardless
of the medium on which the copy is made) related to or including any
information which is confidential to SystemSoft. As the sole exception
to the foregoing, SystemSoft will, as of the Effective Date of this
Agreement, transfer title to you of a Compaq desktop PC, NEC Versa
notebook PC, mobile phone and pager all of which you acknowledge are in
your possession. You shall delete all SystemSoft confidential computer
files residing on the two personal computers which will be transferred
to you as provided for herein.
5. SystemSoft, while expressly denying the commission of any wrongful act,
including but not limited to any violations of any federal, state or
local fair employment practice law, or other employment practice law,
or other employer duty or other employment-related obligation (all of
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which are hereinafter referred to as "employment relations laws") or
other equity, will provide the following:
a. Commencing on the Effective Date, with the first payment on August
15, 1997, semi-monthly payments of $6250 for the first twelve
months after the Termination Date. Your entitlement to these
separation payments will terminate if you breach your obligations
to the Company pursuant to Sections 3, 4 and 11 of this Agreement.
Such a breach by you will, among other things, relieve SystemSoft
of its obligations to you under this Agreement regardless of when
said breach occurs. You agree to seek comparable alternative
employment within 30 days of the Effective Date of this Agreement.
If you secure and begin other employment as a senior executive (VP
level or CFO), then during the second six month period during the
twelve months following the Termination Date, all payments payable
to you hereunder will cease. Each payment made shall be less any
amount required of SystemSoft by law to be withheld or elected to
be withheld by you on a voluntary basis. For purposes of
Paragraphs 2 and 5(a) of the Agreement, being "employed" or
"employment" means having a common law employment relationship
with another entity or engaging in any other comparable position
such as independent contractor for, owner of, consultant to, or
partner with or of another entity. Notwithstanding anything to the
contrary in this Agreement, your failure to attempt to find other
employment will not entitle SystemSoft to discontinue payment
under Paragraph 5 (a) or to cease to provide continuation of
benefits as described in Paragraphs 5(b) and 5( c).
b. The Termination Date will be the date of the "qualifying event"
under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), and you will receive COBRA information under separate
cover. However, commencing on the Effective Date, and for the
period during which you receive the above-referenced semi-monthly
payments from the Company, the Company will continue to make its
contribution to your dental insurance coverage on the same terms
and conditions available to active Company employees. Group
universal life insurance and disability insurance coverage in
effect at the Termination Date may be continued for a maximum of
twelve (12) months thereafter in accordance with the terms of
those policies. SystemSoft agrees to pay your Officers Life
Insurance and Disability Policies for a 12 month period from the
Termination Date.
c. Continuation of your participation in the SystemSoft Corporation
401(k) Plan for as long as payments continue to you under this
Agreement. Thereafter, your rights in the Plans shall be
determined under the terms of the Plan.
d. As of the Effective Date, a payment of $64,000 in aggregate over
six months, in semi-monthly payments of $5,333 beginning August
15, 1997, subject to all applicable taxes, in exchange for
cancellation of 7500 options (option grant 635) on July 24, 1996
and any other compensation that may have been due you.
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e. You acknowledge that you have been granted the following options:
Grant # Grant Date Type Granted Vested at May 31, 1998
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510 2/27/96 ISO 39,584 22,266
511 2/27/96 NQ* 50,000 50,000
513 2/27/96 NQ 10,416 5,859
557 4/15/96 NQ* 12,834 6,418
559 4/15/96 NQ 13,698 6,850
560 4/15/96 NQ 10,738 5,370
561 4/15/96 NQ 2,500 1,250
562 4/15/96 ISO 230 116
The Option Grant Number 511 shall be immediately vested on the
Effective Date. You will be able to exercise Option Grants 510, 513,
557, 559, 560, 561 and 562 in accordance with their original vesting
schedules until August 31, 1998.
* Originally incorrectly issued as ISO. They are correctly classified
as Non-Qualified options.
You shall be appointed to the SystemSoft Corporation Advisory
Committee for not less that 10 months after the Termination Date,
during which time any options granted to you shall not be canceled
and the vesting thereof shall continue. In your capacity as a
member of the SystemSoft Advisory Committee, you will provide
assistance to the Company on an as needed basis. Such assistance
shall be limited to reasonable amounts of your time and shall take
place at mutually convenient schedules.
f. Commencing on the Effective Date and ending three months
thereafter, you may direct SystemSoft in writing to make a payment
not in excess of $16,500 to an out-placement service firm. This
payment will be made upon receipt of a proper invoice and shall be
for out-placement counseling services at prevailing industry
rates. If you make this election, you authorize SystemSoft to
deduct this payment from the final two gross payments due you
under Section 5 (d) until that amount is repaid.
g. SystemSoft will permit you to maintain access to your existing US
mail. SystemSoft will hold your personal mail for you at
SystemSoft's reception desk or mail it to you once per week at
your option. SystemSoft will also maintain your voice account for
a period of three months after the Termination Date.
6. In exchange for the consideration set forth above and for other good
and valuable consideration receipt and sufficiency of which is hereby
acknowledged:
a. You and your agents, insurers, representatives, assigns, heirs,
estates, executors, administrators, successors and attorneys
hereby accept the foregoing, in full and complete waiver, release,
and satisfaction of any and all claims of any kind or description
that you have or may have had or may have through the date you
execute the Agreement against SystemSoft
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and/or its officers, benefit plans (including benefit plan
fiduciaries, trustees, administrators and sponsors), attorneys,
trustees, insurers, directors or employees including but not
limited to claims arising from any employment relations laws,
contract or tort law, public policy, law or equity or claims for
expenses or other monetary or equitable relief including any right
to or claim arising out of a right, to re-employment. You also
hereby release SystemSoft from liability for such claims and waive
any other rights relating to your employment, or your termination
from employment, with SystemSoft.
b. You represent that you have not filed any complaints,
administrative charges and/or lawsuits or proceedings against
SystemSoft based upon claims released in Paragraph 6(a), with any
local, state or federal court or agency and further that you have
not assigned or transferred to any person any portion of any claim
which is released or waived by this Agreement; and
c. We agree to issue on a press release regarding your separation
from the Company. A copy of the release is attached hereto as
Exhibit A.
d. A personal reference statement to be provided future employers
and others upon authorization by you will be consistent with the
press release. SystemSoft will instruct its officers and directors
that this is the only statement to be made about your employment
by the Company.
7. SystemSoft hereby acknowledges that the foregoing is in full and
complete waiver, release and satisfaction of any and all claims of any
kind or description that SystemSoft has or may have had or may have
against you through the date you execute the Agreement, including but
not limited to claims arising from any employment relations laws,
contract or tort law, public policy, law or equity or claims for other
monetary or equitable relief, and SystemSoft hereby expressly releases
you from liability from such claims. However, this release shall have
no force or effect as to claims, if any, by SystemSoft that you
violated any of the provisions of this Agreement. The Company will
provide you with indemnification rights in accordance with the
Company's Certificate of Incorporation and by-laws in effect on the
date hereof, to the same extent available to the Company's officers and
directors.. In the event that the applicable indemnity in the
Certificate of Incorporation and by-laws are amended by the Company's
Board of Directors, such amendments shall apply to you as well. In all
policies of liability insurance for directors and officers, you will be
covered for acts occurring during your period of employment with the
Company.
8. You accept the payments and benefits set forth in Paragraphs 4 and 5 as
full and complete payment, settlement, consideration, accord and/or
satisfaction of any and all obligations of the Company arising out of
your employment, including, but not limited to, any and all claims for
vacation time and all other compensation and benefits such as stock,
stock options, severance pay, commissions, bonuses, car allowance
payments, deferred compensation payments, expenses (including, without
limitation, travel, moving and/or housing-related expenses),
contractual obligations and all other payments, compensation or
reimbursements of any kind.
9. a. You acknowledge that you have been informed that since you are forty
(40) years of age or older, you have or may have specific rights and/or
claims under the Age Discrimination in Employment Act of 1967, 29 U.S.
C. Section 621 et seq., as amended. In consideration of the amounts
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and benefits described in Paragraphs 5 and 7 of this Agreement, which
are in addition to anything of value to which you are already entitled,
you specifically waive such rights and/or claims to the extent that
such rights and/or claims arose prior to the date this Agreement was
executed.
b. You were advised by the Company of your right to consult with an
attorney prior to executing this Agreement and you consulted with an
attorney prior to July 1, 1997.
c. You were advised when presented by the Company with the initial
draft of this Agreement prior to July 1, 1997, that you had at least
twenty-one (21) days within which to consider its terms and to consult
with or seek advice from an attorney or any other person of your
choosing, until the close of business on July 22, 1997.
d. The parties hereby agree that the twenty-one (21) day period
referenced in subsection (c) of this Paragraph will not be affected or
extended by any revisions which might be made to the initial draft of
this Agreement.
10. It is further agreed by you and SystemSoft that the consideration paid
by SystemSoft hereunder is in return for specific performance by you of
each and every one of your obligations under this Agreement, and that
SystemSoft will seek and is entitled to specific performance by you in
the event of a violation of any such obligation by you, in addition to
all other remedies available to SystemSoft.
11. Neither you nor SystemSoft shall release, reveal, publish, cause to be
published, publicize, discuss, or otherwise disclose the terms of the
Agreement except as provided for herein and in Paragraph 12 of the
Agreement and to your family, accountants, and attorneys and except as
you or SystemSoft may be obligated to disclose on account of statutory,
regulatory, or other legal requirements. Both SystemSoft and you agree
not to publicly criticize or discuss, except as mutually agreed, nor
make any derogatory comments regarding, the facts and circumstances
leading to your departure from SystemSoft, but you may state that your
departure was voluntary. You further agree not to disparage in any way
the Company and/or its officers, directors, employees, shareholders,
operations, finances, business and/or products in any way. SystemSoft
further agrees not to disparage you in any way. Notwithstanding
anything to the contrary in this Agreement, nothing herein will prevent
you from answering questions from a duly authorized government agent
acting in his or her official capacity.
12. The terms of the Agreement including all facts, circumstances,
statements or documents relating thereto, shall not be admissible for
any purpose in any litigation in any forum other than to secure
enforcement of the terms and conditions of the Agreement.
13. The Agreement has been reached by mutual accord of the parties hereto,
and the parties by their signatures indicate their full agreement and
understanding of its terms.
14. The Agreement includes all of the agreements of the parties relative to
your termination, and supersedes any prior agreements or
representations between the parties as to the subjects covered.. This
Agreement has no precedential effect, value, or impact whatsoever as to
any person not a party to it.
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15. Should any provision or part of any provision of this Agreement be
found by a duly authorized court or forum to be legally unenforceable
and/or against public policy, such unenforceability shall not prevent
enforcement of the remaining provisions or parts of this Agreement.
16. The Agreement shall be interpreted under the laws of the Commonwealth
of Massachusetts. Any action to bring and try any dispute concerning
the enforcement or interpretation of this Agreement shall be done in an
appropriate court located in the Commonwealth of Massachusetts, and the
parties hereby consent to the jurisdiction of any such court for that
purpose.
17. You may revoke this Agreement for a period of seven (7) days following
its execution and this Agreement will not become effective or
enforceable until this revocation period has expired (the "Effective
Date").
IN WITNESS WHEREOF, all parties have set their hand and seal to this
Agreement as of the date written below.
SYSTEMSOFT CORPORATION XXXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxxxxxxx /s/ Xxxxx X. Xxxxxxx
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By: Xxxxx X. Xxxxxxx
Xxxx X. Xxxxxxxxxxx
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Print Name:
7-16-97 7-16-97
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Date Date
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Xxxxx X. Xxxxxxx acknowledges that he was informed and understands that he has
at least 21 days within which to consider the attached Agreement/Waiver, has
consulted with an attorney regarding such Agreement and has considered carefully
every provision of the Agreement, and that after having engaged in those
actions, prefers to and has requested that he enter into the Agreement/Waiver
prior to the expiration of the 21-day period.
Dated: 7/16/97 Xxxxx X. Xxxxxxx
_____________________________ ___________________________
Xxxxx X. Xxxxxxx
Dated: 7/16/97 Xxxx X. Xxxxxxxxxxx
_____________________________ ___________________________
Witness
