1
EXHIBIT 10.42
SEVERANCE AGREEMENT AND GENERAL RELEASE OF CLAIMS BETWEEN
TRITEAL CORPORATION AND XXXXXX X. XXXX
TriTeal Corporation ("TriTeal") and Xxxxxx X. Xxxx ("Employee") agree as
follows:
1. By mutual agreement, Employee submits, and TriTeal accepts, Employee's
resignation on October 1, 1997 effective September 30, 1998.
2. Subject to the provisions of paragraph 3, Employee shall receive the
following severance benefits from TriTeal. Employee acknowledges that he is not
entitled to receive these benefits, and accordingly, these benefits are being
provided to Employee in exchange for the promises and representations of
Employee contained in this agreement.
a. TriTeal agrees to pay Employee compensation at his regular base rate of
pay for a period of six (6) months. Payments will be made in equal bi-weekly
installments of $5,384.62 on TriTeal's regularly scheduled pay dates.
Additionally, Employee will continue to be eligible for the Executive
Performance Incentive Plan for the two periods ending December 31, 1997 and
March 31, 1998, which is $17,500.00 per period. Employee will be paid an
incentive bonus in accordance with the Plan.
b. TriTeal agrees to pay Employee on April 1, 1998, a lump sum equal to six
(6) months of Employee's regular base rate of pay, that is, $70,000.60.
c. TriTeal will pay the premiums for COBRA coverage for up to eighteen
months following the Employee's termination date provided that Employee is
eligible for an elects COBRA coverage. Any life insurance or other deductions
selected by Employee shall continue unchanged until March 31, 1998, unless
otherwise directed by Employee.
d. TriTeal will pay to Employee the sum of $50,000.00 upon execution of
this Agreement, which will be included in Employee's W-2.
e. Employee shall draft a reference statement which will be reviewed,
approved, and signed by Xxxxx X. Xxxx, President and COO of TriTeal. No other
references will be provided by TriTeal without the prior approval of Employee.
f. Stock options previously granted will continue to vest until September
30, 1998. Employees right to exercise these options will be pursuant to the plan
or plans under which they were granted except that the exercise period shall be
up to October 31, 1998.
3. In consideration for the severance benefits provided for in paragraph 2,
Employee agrees as follows:
a. Employee shall not, for a period of one year beginning October 1, 1997,
directly or indirectly own, manage, operate, control, consult, or work for any
competitor of TriTeal. If Employee begins performing services for any competitor
during this time period, TriTeal's obligation to make any further payments under
this paragraph shall cease immediately, with no further obligation on the part
of TriTeal. Employee shall be responsible for notifying TriTeal in writing of
any actions by Employee which would relieve TriTeal of its obligation to
continue to provide him with severance benefits pursuant to this paragraph. If
Employee fails to so notify TriTeal, Employee shall be obligated to repay
TriTeal, with interest at the legal rate, any amounts paid to him after he
begins performing services for any competitor prior to September 30, 1998, plus
any attorneys' fees and costs incurred by TriTeal in connection with such claim,
without affecting the enforceability of the release of claims in favor of
TriTeal.
b. Employee shall not, for a period of one year following the termination
of his employment with TriTeal, directly or indirectly solicit any employee of
TriTeal to leave TriTeal's employment to perform services for remuneration for
any other business or entity. Any knowing breach of the provisions of this
paragraph will entitle TriTeal to the return of all amounts paid under this
agreement, plus any attorneys' fees
TRITEAL PROPRIETARY XXXXXX X. XXXX
CONFIDENTIAL NEED TO KNOW SEPTEMBER 5, 1997
PAGE 1
2
and costs incurred by TriTeal in connection with such claim, without affecting
the enforceability of the release of claims in favor of TriTeal.
4. Nothing in this agreement is intended to, nor does relieve Employee from
any xxxxxxx xxxxxxx restrictions to which he may be subject under applicable
state and/or federal law, with respect to information he may have obtained as an
officer or employee of this company.
5. Employee acknowledges that during the course of his employment with
TriTeal he has had access to confidential information with regard to the
business of TriTeal, including, but not limited to, trade secrets, customer
lists, details of client or consultant contracts, pricing policies, operational
methods, marketing plans and strategies, product development techniques and
plans, business acquisitions plans, ideas, discoveries, designs, computer
programs, processes, procedures, formulas, improvements or other proprietary or
intellectual property of TriTeal ("Trade Secrets"). Employee acknowledges that
disclosure or improper use of such Trade Secrets could cause serious and
irreparable injury to TriTeal. Accordingly, Employee agrees not to disclose such
Trade Secrets to any party without TriTeal's prior written consent, or to use
such information in competition with TriTeal at any time.
6. In exchange for TriTeal's promises as contained in this agreement
Employee agrees to irrevocably release and discharge TriTeal, its officers,
directors, employees and agents from any and all claims, causes of action or
liabilities of any kind relating to or arising from any transactions between
them or any other occurrences from the beginning of their relationship until the
date this agreement is executed. This release is a general release of all claims
and is intended to include claims covered by California Civil Code section 1542,
which provides that "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 GENERAL RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR."
Employee acknowledges that he may discover facts in addition to those now
known or believed with respect to the claims he is releasing, but nonetheless
agrees that this release will remain in effect.
7. This Agreement is intended to release and discharge any and all claims
Employee may have against TriTeal as set forth in paragraph 6, including but not
limited to any claims arising under the Age Discrimination in Employment Act, 29
U.S.C. ss. 621 et seq. It is the intent of Employee and TriTeal that this
Agreement satisfy the requirements of the Older Workers Benefit Protection Act,
Public Law 101-433, codified at 29 U.S.C. ss. 626(f). The following general
provisions, along with the other provisions of this Agreement, are agreed to for
this purpose:
a. Employee acknowledges and agrees that he has read and understands the
terms of this Agreement.
b. Employee acknowledges that he has been given a full opportunity to
consult with his own lawyer with respect to the matters referenced in this
Agreement, and that he has obtained and considered such legal counsel as he
deems necessary, such that he is entering into this Agreement freely, knowingly,
and voluntarily.
c. Employee acknowledges that he has been given at least twenty-one days in
which to consider whether or not to enter this Agreement.
d. This Agreement shall not become effective or enforceable until seven
days after Employee signs this Agreement.
8. All disputes of any kind and nature arising under, or by virtue of this
Agreement, shall be resolved by submission to final and binding arbitration
before the American Arbitration Association located in San Diego, California.
The rules of the American Arbitration Association shall govern the arbitration
process. However, nothing in this paragraph is intended to apply to actions
solely for temporary restraining orders,
TRITEAL PROPRIETARY XXXXXX X. XXXX
CONFIDENTIAL NEED TO KNOW SEPTEMBER 5, 1997
PAGE 2
3
preliminary injunctions and permanent injunctions. The parties agree that
arbitration must be initiated within one year after any claimed breach has
occurred and that the failure to initiate the arbitration within the one year
period constitutes an absolute bar to the institution of new proceedings, unless
the breach was concealed by the party against which the breach is claimed, in
which case the one-year period shall commence upon reasonable discovery of the
breach. In the event of arbitration, any money due Employee shall be paid into
an escrow account selected by the arbitrator and dispensed with in accordance
with the arbitration decision.
9. This agreement contains the entire agreement between Employee and
TriTeal with respect to the subjects it addresses. All prior or contemporaneous
agreement son these subjects are merged in this document. This agreement can
only be modified by a writing signed by Employee and an officer of TriTeal.
Dated: September 7, 1997 /s/ Xxxxxx X. Xxxx
------------------------
Xxxxxx X. Xxxx
Dated: September 7, 1997 /s/ Xxxxx X Xxxx
------------------------
Xxxxx X. Xxxx
President and COO
TriTeal Corporation
TRITEAL PROPRIETARY XXXXXX X. XXXX
CONFIDENTIAL NEED TO KNOW SEPTEMBER 5, 1997
PAGE 3
