Contract
Exhibit
10.28
This
Severance Agreement and Release of Claims (hereinafter referred to as the
“Agreement”) is made and entered into this 31st day of July, 2007
(hereinafter referred to as the “Execution Date”) by and between
InPlay Technologies, Inc., a Nevada
corporation (hereinafter referred to as “Employer”)
and Xxxxxx X. Xxxxxx (hereinafter referred to as
“Executive”).
RECITALS
WHEREAS,
Executive was employed by Employer as its Chief Executive Officer, President,
and Chief Financial Officer;
WHEREAS,
the terms and conditions of Executive’s employment with Employer are set forth
in an Employment Agreement between Employer and Executive dated October 1,
2005
(hereinafter referred to as the “Employment Agreement”);
WHEREAS,
the Company’s Board of Directors placed Executive on administrative leave,
effective June 27, 2007;
WHEREAS,
Executive’s employment with Employer was terminated on June 27, 2007, effective
July 27, 2007 (hereinafter the “Separation Date”);
WHEREAS,
Executive’s termination of employment was an “InPlay Initiated Separation” for
reasons other than Cause, Executive’s Death or Disability, or a Change of
Control, as provided for under Section 3.1(c)(ii) of the Employment
Agreement;
WHEREAS,
in connection with his employment and at various dates, Employer granted
to
Executive options to purchase an aggregate of 591,471 shares of Employer’s
common stock (hereinafter referred to as the “Options”) pursuant to
various option agreements between Executive and the Company (hereinafter
referred to as the “Option Agreements”), and, as of the Separation Date,
some of the Options have vested and some of the Options have not vested under
the terms of the Option Agreements;
WHEREAS,
Executive and Employer, in order to settle, compromise and fully and finally
release any and all claims and potential claims against Employer or the Released
Parties (as defined below in Paragraph 6) arising out of Executive’s employment
and the termination thereof, have agreed to resolve these matters on the
terms
and conditions set forth herein; and
WHEREAS,
Executive acknowledges that he is individually waiving, including on behalf
of
his marital community, rights and claims described herein in exchange for
consideration in addition to anything of value to which Executive may be
already
entitled.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties agree as follows:
1. Recitals;
Effective Date. The recitals set forth above are true, accurate,
and correct, and are incorporated in this Agreement by this reference and
made a
material part of this Agreement. This Agreement shall become
effective on the eighth calendar day after the Execution Date so long as
Executive has not revoked the Agreement under Paragraph 16 of this Agreement
(hereinafter referred to as the “Effective Date”).
2. Employment-Related
Compensation.
(a) Executive
acknowledges and agrees that upon receipt of the payroll check for the pay
period ending approximately July 31, 2007, he has received from Employer
all
compensation to which he is entitled for services provided to Employer through
the Separation Date. Executive further acknowledges and agrees that
he is not entitled to any accrued benefits as a result of his employment
with
Employer, other than accrued vacation benefits as provided for in the Employment
Agreement, and that he has received reimbursement from Employer of all
reasonable business expenses incurred by him through the Separation Date,
if
any, in accordance with Employer’s expense reimbursement policy and
practices.
(b) In
accordance with Section 1.3(f) of the Employment Agreement, Employer will
pay
Executive the gross amount of $128,927.88 (One Hundred Twenty Eight Thousand
Nine Hundred Twenty Seven Dollars and Eighty-Eight Cents), less any applicable
withholding for state and federal taxes, as payment for 991.02 hours of accrued
but unused vacation benefits. By signing below, Executive expressly
authorizes the following deductions from this amount: (i) $1,620.00 (One
Thousand Six Hundred Twenty Dollars and No Cents) to purchase one (1) Dell
Precision 390 desktop computer and one (1) ViewSonic 22” computer monitor
previously purchased by Employer that Executive will retain after the Separation
Date (upon completion of this purchase, Executive shall hold all right, title,
and interest to this property, subject to the obligations imposed by Article
II
of his Employment Agreement, should this equipment contain any Confidential
Information or Trade Secrets of InPlay, as referenced therein); and (ii)
$1,767.94 (One Thousand Seven Hundred Sixty Seven Dollars and Ninety-Four
Cents)
for personal charges made
by Executive that were paid inadvertently by Employer and for Employer charges
for which Executive was both reimbursed and credited on his personal credit
card
for returns of purchased items.
3. Options. Employer
and Executive hereby acknowledge and agree that, as a result of Employer’s
decision to terminate Executive’s employment under Section 3.1(c)(ii) of the
Employment Agreement, all unvested Options held by Executive shall immediately
vest and become exerciseable on the day prior to the Separation
Date. The exercise of all vested options held by Executive shall be
subject to and determined in accordance with the terms of the Option
Agreements.
4. Severance
Benefits.
(a) Provided
Executive does not revoke this Agreement pursuant to Paragraph 16 herein,
in
consideration of the covenants, promises, and undertakings of Executive set
forth in this Agreement, Employer hereby agrees that it will provide Executive
with payments, the sum of which is equal to two times Executive’s current gross
annual base salary of $270,600, or a total of $541,200 (Five Hundred Forty
One
Thousand Two Hundred Dollars and No Cents), as a severance benefit, to be
paid
to Executive over a two-year period in equal installments timed to coincide
with
each of Employer’s payroll periods, less any applicable withholding for state
and federal taxes, commencing on the Effective Date.
(b) Provided
Executive does not revoke this Agreement pursuant to Paragraph 16 herein,
in
consideration of the covenants, promises, and undertakings of Executive set
forth in this Agreement, Employer hereby agrees that it will provide Executive
the gross amount of $250,000 (Two Hundred Fifty Thousand Dollars and No Cents),
less any applicable withholding for state and federal taxes, as an agreed-upon
amount to comply with the bonus payment obligation arising under Section
3.2(c)
of the Employment Agreement. The parties hereto acknowledge and agree
that this agreed-upon amount shall constitute full and complete satisfaction
of
any bonus payment to be made to Executive under the terms of the Employment
Agreement, and that the release of claims given by Executive in Paragraph
6
below specifically covers and encompasses any bonus-related claims that could
be
made by Executive, other than for actual payment of the amount provided in
this
Paragraph 4(b). This agreed-upon bonus payment shall be paid to
Executive within a reasonable period of time after the Effective
Date.
(c) Provided
Executive does not revoke this Agreement pursuant to Paragraph 16 herein,
in
consideration of the covenants, promises, and undertakings of Executive set
forth in this Agreement, Employer shall continue to pay Executive’s, his
spouse’s, and his dependent children’s medical and dental insurance premiums to
maintain coverage under Employer’s group medical and dental insurance plans,
only to the extent such premiums are not covered by any subsequent employer
of
Executive during the two-year period following the Separation Date (the
“Extended Benefits Period”). Employer shall make the required
standard premium payments on behalf of Executive, his spouse, and his dependent
children during the Extended Benefits Period. To the extent permitted
by Employer’s then health benefits provider, any rights required to be provided
to Executive by local, state, and federal rules or regulations shall be granted
at the end of the Extended Benefits Period (i.e., COBRA
notification).
(d) Provided
Executive does not revoke this Agreement pursuant to Paragraph 16 herein,
in
consideration of the covenants, promises, and undertakings of Executive set
forth in this Agreement, Employer also shall pay to Executive the amount
of
$6,659.50 (Six Thousand Six Hundred Fifty Nine Dollars and Fifty Cents) to
pay
one-half of the remaining amount due on the automobile lease of the Lexus
automobile presently co-leased by Executive and Employer. Employer
will pay this amount to Executive within a reasonable period of time after
the
Effective Date. In return for this payment, Executive agrees to
promptly take all necessary actions and execute all necessary documentation
in
order to release Employer from any continuing or other obligations under
the
automobile lease of the Lexus automobile presently co-leased by Executive
and
Employer.
5. Adequate
Consideration. Executive acknowledges and agrees that Paragraph 4
of this Agreement includes substantial consideration to Executive in addition
to
anything of value to which he is, as a matter of law, otherwise
entitled.
6. Release
of All Claims. In consideration of the severance benefits set
forth in Paragraph 4 of this Agreement, Executive, for himself, his spouse,
their marital xxxxxxxxx, xxxxx, xxxxxxx, representatives, executors, successors
and assigns, hereby fully, forever, irrevocably, and unconditionally release
and
discharge Employer, its shareholders, affiliates, subsidiaries, employees
benefit plans, any co-employers or joint employers, their officers, directors,
employees, agents, attorneys, administrators, representatives, successors,
heirs, assigns, and all persons acting by, through, under, or in concert
with
them (collectively referred to as the “Released Parties”), from any and
all claims which he may have against them, or any of them, which could have
arisen out of any act or omission occurring from the beginning of time to
the
Execution Date of this Agreement, whether now known or unknown, asserted
or
unasserted. This release includes, but is not limited to, any and all claims
brought or that could be brought under the Employment Agreement, the Option
Agreements, or any other agreements between Employer and Executive (except
for
this Agreement), as well as any and all claims brought or that could be brought
pursuant to or under the Age Discrimination in Employment Act, Americans
with
Disabilities Act, Title VII of the Civil Rights Act of 1964, the Civil Rights
Act of 1991, the National Labor Relations Act, the Fair Labor Standards Act,
the
Employee Retirement and Income Security Act (ERISA), the Securities and Exchange
Acts of 1933 and 1934, the Xxxxxxxx-Xxxxx Act, any other securities-related
statute or law, the Consolidated Omnibus Budget Reconciliation Act (COBRA),
the
Family and Medical Leave Act, the Equal Pay Act, the Arizona Civil Rights
Act,
the Arizona Employment Protection Act, Arizona’s wage and hour statutes, and any
other statute set forth in the United States Code or in the statutes or codes
of
any state, including but not limited to Arizona, that pertains or relates
to, or
otherwise touches upon, the employment relationship between Employer and
Executive and the Released Parties, including (but not limited to) any and
all
actions for breach of contract, express or implied, breach of the covenant
of
good faith and fair dealing, express or implied, promissory estoppel, wrongful
termination in violation of public policy, all other claims for wrongful
termination and constructive discharge, hostile work environment, and all
other
tort claims, including, but not limited to, assault, battery, false
imprisonment, intentional interference with contractual relations, intentional
or negligent infliction of emotional distress, invasion of privacy, negligence,
negligent investigation, negligent hiring, supervision, or retention,
defamation, intentional or negligent misrepresentation, fraud, and any and
all
other laws and regulations relating to employment, employment termination,
employment discrimination, harassment, and/or retaliation, wages, hours,
employee benefits, compensation, sexual harassment, and any and all claims
for
attorneys’ fees and costs, pursuant to or arising under any federal, state, or
local statute, law, regulation, ordinance, or order. This release of
claims expressly includes, but is not limited to, any and all claims arising
out
of and/or in any way related to Executive’s employment with Employer or the
circumstances of the termination of that employment, as well as any claims
arising out of and/or in any way related to the Employment Agreement or the
Option Agreements, including but not limited to any claims for any bonus
amounts, vacation pay amounts, or any other benefits thereunder; provided,
however, that by signing this Agreement, Executive is not waiving any rights
or
claims that may arise after the Execution Date of this Agreement.
7. Board
Resignation. In further consideration of the severance benefits
provided for above in Paragraph 4 of this Agreement, contemporaneous with
the
execution of this Agreement, Executive agrees to voluntarily resign as a
member
of the Company’s Board of Directors, and to execute any and all documentation
necessary to effectuate his resignation, including but not limited to the
form
of Resignation attached hereto as Exhibit A.
8. No
Pending Claims.
(a) Executive
represents and warrants that there are no claims, charges, injunctions,
restraining orders, lawsuits, or any similar matters of any kind filed by
him or
on his behalf or for his benefit presently pending against Employer or the
Released Parties, or any of them, in any forum whatsoever, including, without
limitation, in any state or federal court, or before any federal, state,
or
local administrative agency, board, or governing body.
(b) Employer
and the Released Parties represent and warrant that there are no claims,
charges, injunctions, restraining orders, lawsuits, or any similar matters
of
any kind filed by it or on its behalf or for its benefit presently pending
against Executive, in any forum whatsoever, including, without limitation,
in
any state or federal court, or before any federal, state, or local
administrative agency, board, or governing body.
9. Covenant
Not to Xxx. Executive, for himself, for his spouse, his marital
xxxxxxxxx, xxxxx, xxxxxxx, representatives, executors, successors and assigns,
covenants not to file any lawsuits, complaints, claims, or charges, on his
behalf or in any representative capacity, in any state or federal court or
before any federal, state, or local administrative agency, board, or governing
body against Employer or the Released Parties, or any of them, on and/or
for any
and all of the claims released by this Agreement.
10. Preclusive
Effect of Agreement. Executive acknowledges, understands, and
agrees that this Agreement may be pled as a complete bar to any action or
suit
before any court or administrative body with respect to any lawsuit, complaint,
charge, or claim under federal, state, local, or other law relating to any
possible claim that existed or may have existed against Employer or the Released
Parties, or any of them, arising out of any event occurring from the beginning
of time through the Execution Date of this Agreement, except Executive’s claims
or rights arising out of Executive’s ownership of the Shares.
11. Covenant
Not to Reapply. Executive agrees and covenants that he will not
reapply for any position as an Executive or independent contractor with Employer
or any of its affiliates in the future, and he expressly waives and releases
Employer and any affiliates from any and all possible or potential liability
associated with the refusal to consider or refusal to hire him for any position
in the future.
12. Non-Disparagement. Executive
agrees that neither he nor anyone acting directly or indirectly on his behalf
will make any knowingly derogatory or disparaging statement about the Employer
or the Released Parties, or any of them, to any current, former, or prospective
Employer customers, contractors, vendors, directors, officers, shareholders,
employees, or affiliates, to any member of the press or media, or to any
other
persons about Employer or the Released Parties, nor knowingly directly or
indirectly take any action which is intended to embarrass any of
them. Employer similarly agrees that neither it nor any authorized
person acting on its behalf will make any knowingly derogatory or disparaging
statement about Executive to any current, former, or prospective Employer
customers, contractors, vendors, directors, officers, shareholders, employees,
or affiliates, to any member of the press or media, or to any other persons
about Executive, nor knowingly directly or indirectly take any action which
is
intended to embarrass Executive. For purposes of this Paragraph 12, a
disparaging statement is any communication, oral or written, which would
cause
or to tend to cause the recipient of the communication to question the business
condition, integrity, competence, fairness or good character of the person
to
whom or entity to which the communication relates.
13. Return
of Employer Property; Cooperation in Transitioning of Duties. On
or before the Separation Date, Executive agrees to return to Employer all
Employer property in his actual or constructive possession. Executive
further agrees, prior to the Separation Date, to use his best professional
efforts to orderly transition his job duties and responsibilities to his
designated successor.
14. Non-Admission. Execution
of this Agreement and compliance with its terms shall not be considered or
deemed an admission by Employer of any liability whatsoever, or as an admission
by Employer of any violation of Executive’s rights or the rights of any other
person, a violation of any order, law, statute or duty, or breach of any
duty
owed to Executive or any other person. Employer specifically
disclaims any and all such liability.
15. Review. A
copy of this Agreement was delivered to Executive on June 27,
2007. Executive acknowledges and agrees that he was provided with
more than twenty-one (21) days from the date he was presented with this
Agreement to consider this Agreement, and that this twenty-one (21) day review
period was extended by mutual agreement of the parties until the Execution
Date.
16. Revocation. Executive
may revoke this Agreement for a period of seven (7) days after he signs
it. Executive agrees that if he elects to revoke this Agreement, he
will notify Employer, care of Employer’s Chairman of its Board of Directors,
(with a copy to Xxxxx X. Xxxxxxxx, Xxxxxxxxx Xxxxxxx, LLP, 0000 Xxxx Xxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxx, Arizona, 85016), in writing, on or before the
expiration of the revocation period. Receipt of proper and timely
notice of revocation by Employer cancels and voids this
Agreement. Provided that Executive does not provide notice of
revocation, this Agreement will become effective upon the Effective
Date.
17. Cooperation. During
the period that Executive is on administrative leave and continuing after
the
Separation Date, Executive agrees to provide reasonable assistance to Employer
(including assistance with litigation and arbitration matters), upon Employer’s
reasonable request, concerning Executive’s previous responsibilities as Chief
Executive Officer, President, and Chief Financial Officer of
Employer. Such assistance may include, but is not limited to,
communicating and/or meeting with Employer’s attorneys, giving deposition
testimony, attending depositions, reviewing pleadings, including discovery
pleadings, and attending and giving testimony in court and arbitration
proceedings. Similarly, Employer agrees to cooperate with Executive
and provide reasonable assistance to him (including assistance with litigation
and arbitration matters), upon the Executive's reasonable request, concerning
Executive's previous responsibilities as Chief Executive Officer, President,
and
Chief Financial Officer of Employer. Such assistance may include, but
is not limited to, communicating and/or meeting with Executive's attorneys,
providing access to company documents and employees of Employer who may be
important as witnesses in connection with such litigation or arbitration
matters.
18. Bylaw
Indemnification. In accordance with Section 4.2 of the Employment
Agreement, Employer agrees that following the Separation Date, the
indemnification provisions under Employer’s Bylaws will continue in full force
and effect for the benefit of Executive for so long as such indemnification
provisions would have any application to claims against Executive.
19. Knowing
and Voluntary. Executive represents and warrants that he was
advised by Employer to consult with an attorney of his own choosing concerning
the provisions set forth herein, and that he was represented in the negotiations
leading to this Agreement by S. Cash Xxxxxxxxx, Esq. Executive
further represents and warrants that he has carefully read and fully understands
all of the provisions of this Agreement, including the fact that he is releasing
all claims and potential claims against Employer and the Released Parties,
and
that he is entering into this Agreement, without coercion, and with full
knowledge of its significance and the legal consequences
thereof. Executive represents and warrants that he understands that,
as part of this Agreement, he is releasing and waiving any claims he believes
he
may have under the Age Discrimination in Employment Act.
20. Amendment.
This Agreement shall be binding upon the parties and may not be amended,
supplemented, changed, or modified in any manner, orally or otherwise, except
by
an instrument in writing of concurrent or subsequent date signed by all of
the
parties hereto.
21. Entire
Agreement. This Agreement and exhibits hereto contain and
constitute the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof, and, except as otherwise provided
herein, cancel all prior or contemporaneous oral or written understandings,
negotiations, agreements, commitments, representations, and promises in
connection herewith. Notwithstanding the forgoing, nothing set forth
in this Agreement shall cancel, terminate, modify, suspend, or otherwise
affect
the provisions and obligations set forth in Article II of the Employment
Agreement, which survive the termination of Executive’s employment with
Employer.
22. Paragraph
Titles. The paragraph titles in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect
its
interpretation.
23. Construction. The
parties hereto acknowledge and agree that each party has participated in
the
drafting of this Agreement and has had the opportunity to have this document
reviewed by the respective legal counsel for the parties hereto and that
the
normal rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall not be applied to the interpretation
of this Agreement. No inference in favor of, or against, any party
shall be drawn from the fact that one party has drafted any portion
hereof.
24. Execution
in Counterparts; Facsimile Signatures. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to
be an
original as against any party whose signature appears thereon, and all of
which
shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or
taken
together, shall bear the signatures of the parties reflected hereon as the
signatories. Facsimile signatures shall be sufficient and fully
binding.
25. Choice
of Law and Venue. This Agreement shall be governed by the laws of
the State of Arizona, without regard to the conflicts of laws or principles
thereof. With respect to any litigation based on, arising out of, or
in connection with this Agreement, the parties expressly submit to the personal
jurisdiction of the Superior Court of the State of Arizona in and for the
County
of Maricopa or the United States District Court for the District of Arizona,
and
the parties hereby expressly waive, to the fullest extent permitted by law,
any
objection that they may now or hereafter have, to the laying of venue of
any
such litigation brought in any such court referred to above, including without
limitation any claim that any such litigation has been brought in an
inconvenient forum.
26. Severability.
Should any provision in this Agreement or any provision of any agreement
incorporated or referenced herein be declared or determined by any court
to be
illegal or invalid, the validity of the remaining parts, terms, or provisions
shall not be affected, and the illegal or invalid part, term, or provision
shall
be deemed not to be a part of this Agreement.
27. Waiver. The
failure of a party to insist upon strict adherence to any obligation of this
Agreement shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term
of
this Agreement. Any waiver of any provision of this Agreement must be
in a written instrument signed and delivered by the party waiving the
provision.
28. Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of, as applicable, the parties’ respective successors, assigns,
heirs, estates, and representatives.
29. Attorneys’
Fees and Costs. Executive and Employer agree that each party will
bear its own costs and attorneys’ fees in connection with all matters related to
the subject matter of this Agreement and the settlement of those matters
encompassed by this Agreement. Should any legal action be commenced
arising out of this Agreement, the prevailing party in any such action shall
be
entitled to an award of attorneys’ fees and costs incurred therein.
30. Reasonableness
of Terms. Executive acknowledges and agrees that the terms set
forth in this Agreement, individually and collectively, are commercially
reasonable, as contemplated by Section 3.2(c) of the Employment
Agreement.
By
signing
below, the parties acknowledge that they have carefully read and fully
understand all of the provisions of this Agreement and that they are voluntarily
entering into this Agreement.
Xxxxxx X. Xxxxxx | InPlay Technologies, Inc. | |
“Executive” | “Employer” | |
/s/ Xxxxxx X. Xxxxxx | By: /s/ Xxxxxx X. Xxxxxx | |
Dated: July 31,
2007
|
Its: Chairman and CEO | |
Dated: July 31, 2007 |