SEPARATION AND GENERAL RELEASE AGREEMENT
Exhibit 10.1
This Separation and General Release Agreement (the “Agreement”) is being entered into by and
between Xxxxx.xxx Corporation (“Employer” or the “Company”) and Xxxx Xxxxxx (“Employee”)
(collectively the “Parties”) as of the date of Employee’s execution of this Agreement (the “Date
of this Agreement”).
WHEREAS, Employee is employed by Employer;
WHEREAS, the Parties wish to terminate their employment relationship on mutually acceptable
terms and conditions; and
WHEREAS, the Parties wish to resolve any disputes between them fully and finally.
NOW, THEREFORE, in consideration of the foregoing premises and the terms and conditions set
forth below, the Parties agree as follows:
1. Resignation. Employee hereby resigns his employment effective as of February 23,
2009 (the “Resignation Date”). Employee understands that by resigning from his employment, he is
giving up any right or claim to compensation or benefits of employment with the Company beyond the
Resignation Date, except as set forth in this Agreement. On the Resignation Date, Employee will be
paid all unpaid, earned wages, including without limitation, any accrued, unused vacation pay.
2. Compensation to Employee for General Release. Provided that Employee delivers a
signed copy of this Agreement to the Company within twenty-one (21) days after his receipt of this
Agreement, and does not revoke this Agreement within seven (7) days after he signs it, the Company
will:
a. Pay to Employee an amount (the “Severance Payment”) in the total gross sum of One
Hundred Ninety Five Thousand Dollars ($195,000.00), which represents one (1) times
Employee’s Annual Salary. The Severance Payment will be paid in equal installments on the
Company’s regularly scheduled payroll dates over a twelve (12) month period beginning with
the next regularly scheduled payroll date following the Effective Date of this Agreement
and continuing until the last payment is made. The Severance Payment shall be subject to
appropriate state and federal withholdings, and other authorized deductions. For purposes
of this Agreement, the term “Effective Date” shall mean the date that is eight days after
Employee executes (and does not revoke) the Agreement pursuant to Section 4(c)(6) herein;
b. provided Employee elected coverage under the Company’s group health insurance
program prior to the Resignation Date and makes a timely election for continued coverage
pursuant to COBRA, the Company further agrees to pay the full monthly premiums for such
continued coverage under the Company’s group health insurance program for a period of
twelve (12) months from Employee’s Separation Date (March 2009 through and including
February 2010). Thereafter, if applicable, continuation coverage pursuant to COBRA will be
available to Employee at Employee’s
sole expense and Employee will be responsible for the full COBRA premium for any
remaining months of the COBRA coverage period made available pursuant to applicable
law;(the “Benefit Continuation”).
c. Employee has the right to exercise any or all vested stock options through February
22, 2010. Effective upon the Resignation Date, unvested options held by Employee and
listed in Appendix “A” to this Agreement shall accelerate and become fully vested. (the
“Accelerated Vesting”); and
d. The Company will pay to Employee an amount (the “Bonus”) in the total gross sum of
Seventy-Eight Thousand Dollars ($78,000.00), less applicable withholding, which is equal to
forty percent (40%) of Employee’s Annual Salary. The Bonus will be payable on a quarterly
basis in accordance with the standard bonus payment practices of the Company over a twelve
(12) month period beginning with the next regularly scheduled bonus payment date following
the Effective Date of this Agreement and continuing until the last payment is made.
Employee understands that the Severance Payment, Benefit Continuation, Accelerated Vesting
and Bonus represent the Company’s sole financial obligation to Employee under this
Agreement.
3. Cooperation. Employee will make himself available at reasonable times upon
reasonable request of the Company to the extent reasonably needed by the Company to complete
documentation or provide information relating to the period during which Employee was employed by
the Company.
4. Release by Employee.
a. General Release. In exchange for the Payment and the other consideration
set forth in this Agreement, Employee does hereby release and forever discharge the
“Company Releasees” herein, consisting of Employer, its parent, subsidiary and affiliate
corporations, and each of their respective past and present parents, subsidiaries,
affiliates, associates, owners, members, stockholders, predecessors, successors, assigns,
employees, agents, directors, officers, partners, representatives, lawyers, and all persons
acting by, through, under, or in concert with them, or any of them, of and from any and all
manner of claims or causes of action, in law or in equity, of any nature whatsoever, known
or unknown, fixed or contingent (hereinafter called “Claims”), that Employee now has or may
hereafter have against the Company Releasees by reason of any and all acts, omissions,
events or facts occurring or existing prior to the Date of this Agreement. The Claims
released hereunder include, without limitation, any alleged breach of any express or
implied employment agreement; any alleged torts or other alleged legal restrictions
relating to the Employee’s employment and the termination thereof; and any alleged
violation of any federal, state or local statute or ordinance including, without
limitation, Title VII of the Civil Rights Act of 1964, as amended, 42 USC Section 2000,
et seq.; Americans with Disabilities Act, as amended, 42 U.S.C. § 12101
et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701
et seq.; Civil Rights Act of 1866, and Civil Rights Act of 1991; 42 USC
Section 1981, et
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seq.; Age Discrimination in Employment Act, as amended, 29 USC Section 621,
et seq.; Equal Pay Act, as amended, 29 USC Section 206(d); regulations of
the Office of Federal Contract Compliance, 41 CFR Section 60, et seq.; The
Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the
Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the
Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et
seq.; and the California Fair Employment and Housing Act, California Government
Code Section 12940, et seq. This release shall not apply to the Company’s
obligations hereunder, to any vested retirement plan benefits, Employee’s rights under
Labor Code Section 2802 with respect to claims asserted against him, or his rights as a
stockholder of the Company.
b. Unknown Claims.
Employee acknowledges that Employee is familiar with the provisions of California civil code
section 1542, which provides as follows:
“A general release does not extend to claims which the creditor does not
know or suspect to exist in his or her favor at the time of executing the
release, which, if known by him or her must have materially affected his or
her settlement with the debtor.”
Employee being aware of said code section, hereby expressly waives any rights Employee may have
thereunder, as well as under any other statutes or common law principles of similar effect.
c. Older Worker’s Benefit Protection Act.
Employee agrees and expressly acknowledges that this Agreement includes a waiver and release
of all claims which he has or may have under the Age Discrimination in Employment Act of 1967, as
amended, 29 U.S.C. § 621, et seq. (“ADEA”). The following terms and conditions
apply to and are part of the waiver and release of the ADEA claims under this Agreement:
(1) This Section, and this Agreement are written in a manner calculated to be
understood by him.
(2) The waiver and release of claims under the ADEA contained in this Agreement does
not cover rights or claims that may arise after the Date of this Agreement.
(3) This Agreement provides for consideration in addition to anything of value to which
he is already entitled.
(4) Employee has been advised to consult an attorney before signing this Agreement.
(5) Employee has been granted twenty-one (21) days after he is presented with this
Agreement to decide whether or not to sign this Agreement. If he executes this
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Agreement prior to the expiration of such period, he does so voluntarily and after having
had the opportunity to consult with an attorney, and hereby waives the remainder of the
twenty-one (21) day period. Employee agrees that any modifications, material or otherwise,
made to this Agreement do not restart or affect in any manner the original twenty-one (21)
calendar day consideration period.
(6) Employee has the right to revoke this general release within seven (7) days of
signing this Agreement. In the event this general release is revoked, this Agreement will
be null and void in its entirety, and he will not receive the Severance Payment, Benefit
Continuation, Accelerated Vesting or Bonus. If he wishes to revoke this agreement, Employee
shall deliver written notice stating his intent to revoke this Agreement to Xxxxxxx Xxxxxx,
Vice President, Human Resources at the offices of Employer on or before 5:00 p.m. on the
seventh (7th) day after the Date of this Agreement.
d. No Assignment. Employee represents and warrants to the Company Releasees
that there has been no assignment or other transfer of any interest in any Claim that the
Employee may have against the Company Releasees, or any of them. Employee agrees to
indemnify and hold harmless the Company Releasees from any liability, claims, demands,
damages, costs, expenses and attorneys’ fees incurred as a result of any person asserting
such assignment or transfer of any right or claims under any such assignment or transfer
from Employee.
e. No Actions. Employee represents and warrants that he is not presently
aware of any injury for which he may be eligible for workers’ compensation benefits.
Employee covenants and agrees never to commence, aid in any way, prosecute or cause to be
commenced or prosecuted any action or other proceeding based upon any claims, demands,
causes of action, obligations, damages or liabilities which are the subject the release
contained in paragraph 4 of this Agreement; provided however, that Employee does not
relinquish any protected rights he may have to file a charge, testify, assist or
participate in any manner in an investigation, hearing or proceeding conducted by the Equal
Employment Opportunity Commission, the Office of Federal Contract Compliance or any similar
state human rights agency. However, Employee may not recover additional compensation or
damages as a result of such participation.
5. No Admission. The Parties further understand and agree that neither the payment of
money nor the execution of this release shall constitute or be construed as an admission of any
liability whatsoever by the Company Releasees.
6. Severability. The provisions of this Agreement are severable, and if any part of
it is found to be unenforceable, the other Sections (or portions thereof) shall remain fully valid
and enforceable.
7. Confidentiality. The terms of this Agreement are intended to be confidential by
the parties. Employer would not enter into this Agreement but for Employee’s promise to maintain
the confidentiality of the terms of and existence of this Agreement. Employee may not disclose the
terms of this Agreement to any person, except that Employee may disclose the terms of this
agreement as may be required by law or to his immediate family,
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attorneys, tax and financial advisors, provided that such individuals agree to be bound by the
confidentiality provisions of this Agreement.
8. Arbitration/Waiver of Jury Trial. The Parties hereby agree to submit any claim or
dispute between Employee and the Company or any of the Company Releasees, including any dispute
arising out of or relating to the terms of this Agreement, Employee’s employment or the termination
thereof to binding arbitration by a single neutral arbitrator experienced in employment law.
Subject to the terms of this Section, the arbitration proceedings shall be governed by the rules of
the Judicial Arbitration and Mediation Services (“JAMS”) applicable to employment disputes as they
may be in effect from time to time, and shall take place in Los Angeles County, California. The
arbitrator shall be appointed by agreement of the Parties hereto or, if no agreement can be
reached, by JAMS pursuant to its rules. The decision of the arbitrator shall be rendered in
writing and be final and binding on all Parties to this Agreement, and judgment thereon may be
entered in any court having jurisdiction. All fees and costs payable to the Arbitrator or JAMS
shall be paid by the Parties in accordance with JAMS rules; provided, however, that Employee shall
not be required to pay any amount to the Arbitrator or JAMS that would be unique to arbitration or
exceed the costs Employee would incur in pursuing the same claim(s) and action(s) in a court of
competent jurisdiction. Any shortfall shall be paid by the Company. Each party shall bear his,
her or its own attorneys’ fees, expert witness fees, witness expenses and other costs; provided,
however, that the Arbitrator may award such costs, fees or expenses in accordance with applicable
law. This arbitration procedure is intended to be the sole and exclusive method of resolving any
dispute between Employee, the Company and/or the Company Releasees, including without limitation
any claim for breach of this Agreement or otherwise arising out of or relating to this Agreement or
Employee’s employment, and the Parties hereby waive any rights to a jury trial.
9. Withholding. All compensation or benefits payable to Employee pursuant to the
terms of this Agreement shall be subject to deduction of all required federal and state withholding
taxes and any other employment taxes the Company may be required to collect or withhold.
10. Internal Revenue Code Section 409A. Notwithstanding anything in this Agreement to
the contrary, if any amounts or benefits payable under this Agreement on account of Employee’s
termination of employment constitute deferred compensation subject to Section 409A of the of the
Internal Revenue Code of 1986, as amended (the “Code”) and applicable regulations, no payments or
benefits shall be paid or provided until Employee incurs a separation from service within the
meaning of Treasury Regulation § 1.409A-1(h) from the Company and any entity that would be
considered a single employer with the Company under Code Sections 414(b) or 414(c) (“Separation
from Service”). If, at the time of Employee’s Separation from Service, Employee is a “specified
employee” (within the meaning of Code Section 409A and Treasury Regulation §1.409A-3(i)(2)), the
Company will not pay or provide any “Specified Benefits” (as defined herein) until immediately
after the six-month period (the “409A Suspension Period”) beginning immediately after Employee’s
Separation from Service. For purposes of this Agreement, “Specified Benefits” are any amounts or
benefits that would be subject to Code Section 409A penalties if the Company were to pay them,
pursuant to this Agreement, on account of Employee’s Separation from Service. This Agreement is
intended to
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comply with (or be exempt from) Code Section 409A, and the Company shall have complete
discretion to interpret and construe this Agreement and any associated documents in any manner that
establishes an exemption from (or otherwise conforms them to) the requirements of Code Section
409A. The Company reserves the right to unilaterally amend this Agreement without the consent of
Employee in order to accurately reflect its correct interpretation and operation, as well as to
maintain an exemption from or compliance with Code Section 409A. Nevertheless, and notwithstanding
any other provision of this Agreement, neither the Company nor any of its employees, directors, or
their agents shall have any obligation to mitigate, nor hold Employee harmless from, any or all
taxes (including any imposed under Code Section 409A) arising under this Agreement.
11. Choice of Law and Venue. The Parties acknowledge and agree that this Agreement
shall be interpreted in accordance with California law. To the extent any actions arising out of
relating to this Agreement or Employee’s Employment with Employer must be filed in a court, rather
than arbitration, such actions shall be filed in either the Superior Court of the State of
California for the County of Los Angeles, or the Federal District Court for the Central District of
California.
12. Sole and Entire Agreement, No Oral Modification. This Agreement represents the
sole and entire agreement among the Parties and supersedes all prior agreements, negotiations, and
discussions between the Parties hereto and/or their respective counsel, excluding any agreements
concerning confidentiality, trade secret information, or assignment of intellectual property
rights. Any agreement amending or superseding this Agreement must be in writing, signed by duly
authorized representatives of the Parties, specifically references this Agreement; and state the
intent of the Parties to amend or supersede this Agreement. Except as expressly modified by the
terms of this Agreement, any and all outstanding stock options granted to Employee by the Company
shall remain subject to the terms and conditions of the relevant stock option agreements evidencing
such options and the relevant plan under which such options were granted (in each case, either the
Company’s 1999 Equity Incentive Plan, 2000 Equity Incentive Plan, 2004 Equity Incentive Plan, 2005
Equity Incentive Plan, or 2007 Equity Incentive Plan).
12. Non-Disparagement/Litigation Assistance. Employee agrees to refrain from
any disparagement, defamation, or slander of Xxxxx.xxx, its subsidiaries, employees,
investors, officers, directors, shareholders, agents, or partners, and Employee agrees to
refrain from any tortious or wrongful interference with Xxxxx.xxx’s contracts and
relationships. Employer agrees to refrain from any disparagement, defamation, or slander
of Employee. Employee agrees not to assist in the prosecution of litigation against
Xxxxx.xxx, its officers, directors, or employees, except as compelled by legal process, and
Employee further agrees not to commence, maintain, prosecute or participate in (except as
may be required by law, pursuant to court order, or in response to a valid subpoena) any
action, charge, complaint, or proceeding of any kind (on his own behalf and/or on behalf of
any other person or entity and/or on behalf of or as a member of any alleged class of
persons) in any court, or before any administrative or investigative body or agency
(whether public, quasi-public or private) against Xxxxx.xxx, its officers, directors, or
employees, with respect to any act, omission, transaction or occurrence
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arising out of employment or this Agreement. This provision will not apply to conduct
as to which this provision would be unlawful.
| Xxxxx.xxx Corporation |
||||
| Date: February 23, 2009 | By: | /s/ Xxxxxx Xxxxx | ||
| Title: Chief Financial Officer | ||||
| Employee |
||||
| Date: February 23, 2009 | /s/ Xxxxxxx X. Xxxxxx | |||
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Appendix A
| Grant Date | Grant Type | Number of Shares | Price | |||||||||
3/9/06 |
Incentive | 2,501 | $ | 3.83 | ||||||||
12/14/06 |
Incentive | 10,001 | $ | 3.49 | ||||||||
12/13/07 |
Incentive | 449 | $ | 4.74 | ||||||||
Total |
12,951 | |||||||||||
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