SEPARATION AGREEMENT AND RELEASE
Exhibit 10.1
Execution Version
SEPARATION AGREEMENT
AND RELEASE
AND RELEASE
This Separation Agreement and Release (“Agreement”) is entered into by and between Spark
Networks, Inc., a Delaware corporation (the “Company”), and Xxxx Xxxxxx (“Executive”) with
reference to the following:
A. Executive has been employed by the Company and has served in the position of Chief
Executive Officer pursuant to the terms of that certain Executive Employment Agreement dated as of
February 12, 2007 and as amended by Amendment No. 1 dated as of December 29, 2008 and Amendment No.
2 dated as of December 29, 2010 (collectively, the “Employment Agreement”). Executive has also
served as Chairman of the Company’s Board of Directors.
B. In connection with this Agreement and pursuant to and consistent with the terms of the
Employment Agreement, Executive and the Company (collectively the “Parties”) desire to resolve
fully and finally any and all claims and disputes, whether known or unknown, which exist or could
exist, arising out of Executive’s employment with the Company and the cessation of that employment.
THEREFORE, in consideration of the promises and mutual agreements set forth below, and
intending to be legally bound, it is agreed by the Parties as follows:
1. Cessation of Employment Relationship. Executive’s employment with the Company will
end on April 11, 2011 (the “Separation Date”), and Executive acknowledges and agrees that Executive
has been paid for all salary and wages earned through the Separation Date, including all accrued
but unused vacation pay pursuant to the terms of the Employment Agreement. Executive will not be
eligible or entitled to receive any other payments or benefits from the Company after the
Separation Date except as expressly provided for in this Agreement (including any related equity
award agreements) and the Employment Agreement. Executive will receive a COBRA notice and will be
eligible to elect to self-pay for continued medical coverage pursuant to applicable law. Executive
understands and agrees that the consideration provided in Section 2 below is in addition to
anything of value that Executive would otherwise be entitled to receive from the Company and
constitutes valid consideration in exchange for the releases and other obligations set forth in
this Agreement.
2. Equity Awards. Executive acknowledges and agrees to the following terms regarding
his outstanding stock option grants as of the Separation Date:
a. Executive holds vested incentive stock options to purchase a total of 46,722 shares
of the Company’s common stock, which shall be exercisable following the Separation Date in
accordance with the terms of the applicable Company stock plan and the option award
agreements, including exercisability of vested options twelve (12) months following
termination of service as a board member.
b. The Executive holds vested non-qualified stock options to purchase a total of
854,357 shares of the Company’s common stock, which shall be exercisable following the
Separation Date in accordance with the terms of the applicable Company stock plan and the
option award agreements, including exercisability of vested options twelve (12) months
following termination of service as a board member.
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c. All remaining unvested incentive stock options and non-qualified stock options held
by the Executive shall expire and no longer be exercisable as of the Separation Date and
Executive shall have no further right or interest in such options.
Effective as of the Separation Date, the Compensation Committee of the Company’s Board of Directors
shall grant a non-qualified stock option to the Executive in his capacity as a non-employee
director to purchase up to 50,000 shares of the Company’s common stock, with a per share exercise
price equal to the “fair market value” (as defined in the applicable Company stock plan) of the
Company’s stock as of the Separation Date (the “Director Option”). The Director Option shall vest
in four (4) equal annual installments beginning on the first anniversary of the date of grant and
will be subject to such other standard terms and conditions as set forth in the Company stock plan
and the option award agreement. Furthermore, immediately following the Separation Date, Executive
will become eligible to receive the standard compensation currently in effect, and as may be
changed from time to time, as a member of the Board of Directors.
3. Release of Company by Executive. Except for: (1) the consideration set forth in
this Agreement (including incorporation by reference of payments and benefits under any related
equity award agreements), (2) any claims, including claims for rights to payment or other benefits,
under any equity award agreements entered into by the Executive for incentive or non-qualified
options for shares of the Company’s common stock (including those identified in Section 2), and (3)
any claims, including claims for indemnification and/or advancement of expenses, arising under
Section 13.2 of the Employment Agreement, any indemnification agreement between Executive and the
Company or under the bylaws, certificate of incorporation of other similar governing document of
the Company, Executive, for himself and his heirs, successors and assigns, does hereby waive,
release, acquit and forever discharge the Company, and its respective parents, subsidiaries,
divisions, affiliates, and related entities or companies, and all respective past and present
owners, officers, directors, executives, shareholders, members, partners, employees, agents,
insurers, attorneys, heirs, successors, and assigns, (collectively the “Released Parties”) from any
claims, complaints, actions, charges, complaints, grievances, causes of action, suits, contracts,
liabilities, and damages (including attorneys’ fees and costs) (hereinafter collectively referred
to as “claims”), of whatever nature, whether known or unknown, which exist or could exist on
Executive’s behalf against the Released Parties as of the date of this Agreement, including but not
limited to, any and all claims based on tort, contract, wrongful termination, public policy,
retaliation, personal injury, emotional distress, invasion of privacy, defamation, libel, slander,
fraud, misrepresentation, quantum meruit, or any other common law claims; any and all claims for
wages, salary, bonuses, commissions, overtime pay, premium pay, vacation pay, severance pay,
benefits, contributions or any other claims for compensation; any and all claims for damages
(including general, special, compensatory, consequential, liquidated or punitive damages); any and
all claims for costs, expenses, attorneys’ fees, interest, civil or criminal penalties, waiting
time penalties, or any other available remedy; and any and all claims arising under any federal,
state, city and/or other governmental statute, law, regulation or ordinance relating to employment,
including but not limited to (as amended), Title VII of the Civil Rights Act of 1964, the Civil
Rights Act of 1991, the Equal Employment Opportunity Act of 1972, the Americans with Disabilities
Act, the Family and Medical Leave Act, the Age Discrimination in Employment Act, the Employee
Retirement Income Security Act, the California Labor Code and any applicable Wage Order, the
California Business and Professions Code, the California Family Rights Act, and the California Fair
Employment and Housing Act covering discrimination, harassment and retaliation in employment on the
basis of race, color, religious creed, national origin, ancestry, physical or mental disability,
medical condition, military status, marital status, pregnancy, family care leave, sex, sexual
orientation, gender, age, or any other protected basis.
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4. Release of Executive by Company. As further consideration in connection with this
Agreement, and except for the obligations as set forth in this Agreement, the Company, for itself
and its corporate affiliates, subsidiaries and parent companies, hereby waives, releases, acquits
and forever discharges Executive from any and all claims, complaints, actions, charges, complaints,
grievances, causes of action, suits, contracts, liabilities, and damages (including attorneys’ fees
and costs) (hereinafter collectively referred to as “claims”), whether in law or in equity, of
every kind and nature which Company ever had or now has against Executive from the beginning of
time to the date of this Agreement, including, but not limited to, all employment related claims of
any kind and under any law; all statutory claims, including claims under the California Labor Code
and Government Code; all common law claims including, but not limited to, actions in tort,
defamation, invasion of privacy and breach of contract; and all claims or damages, including
economic, emotional distress, and punitive damages, arising out of Executive’s employment with the
Company under any legal theory or any federal, state or local statute or ordinance of any kind
(including, for the avoidance of doubt, any claim related to the notice period of termination of
Executive’s employment under Section 8 of the Employment Agreement); provided, however, that,
notwithstanding the release language set forth in this Section 4 by the Company, the releases
described herein do not apply to any claims by the Company against Executive for fraud. The
Company is not presently aware of any such claims against Executive, but expressly reserves the
right to bring such claims (if any) to the extent discovered in the future, notwithstanding the
release language contained in this Section 4 to the contrary.
5. Waiver of Unknown Claims. It is further understood and agreed by each Party that
as a condition of this Agreement, it hereby expressly waives and relinquishes any and all claims,
rights or benefits that the Party may have under any applicable state or federal statutes that
would otherwise limit the Party’s ability to release unknown claims, including but not limited to
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.”
In connection with such waiver and relinquishment, each Party hereby acknowledges that it may
hereafter discover claims or facts in addition to, or different from, those which it now knows or
believes to exist, but that it expressly agrees to fully, finally and forever settle and release
any and all claims (pursuant to the terms of Section 3 in the case of Executive and Section 4 in
the case of the Company), known or unknown, suspected or unsuspected, which exist or may exist on
its’ behalf against Executive or the Released Parties at the time of execution of this Agreement,
including, but not limited to, any and all claims relating to or arising from Executive’s
employment with Company and the cessation of that employment.
6. Effective Date of Agreement. Executive agrees to the release of all known and
unknown claims, including expressly the waiver of any claims against the Released Parties arising
out of the Federal Age Discrimination in Employment Act, 29 U.S.C. § 621, et seq. (“ADEA”), and in
connection with such waiver, and as provided by the Older Worker Benefit Protection Act, 29 U.S.C.
§ 626(f):
a. Executive is hereby advised to consult with an attorney of Executive’s choosing (and
at Executive’s own expense) prior to signing this Agreement.
b. Executive shall have a period of twenty-one (21) days from the date of receipt of
this Agreement in which to consider the terms of the Agreement. Executive may sign this
Agreement at any time during the twenty-one (21) day period. If the
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Executive does not return the signed Agreement prior to the expiration of the
twenty-one (21) day period, then the offer of consideration set forth in this Agreement
shall be withdrawn.
c. Executive may revoke this Agreement at any time during the first seven (7) days
following Executive’s execution of this Agreement, and this Agreement and release shall not
be effective or enforceable until the seven-day period has expired. If Executive revokes
this Agreement by notifying the Company of Executive’s revocation at any time during the
7-day period, then this Agreement shall not be effective or enforceable. Accordingly, the
“Effective Date” of this Agreement shall be on the eighth (8th) day after
Executive signs the Agreement and returns it to the Company, and provided that Executive
does not revoke the Agreement during the seven (7) day revocation period.
7. No Admission of Liability. By entering into this Agreement, the Parties make no
admission that they have engaged, or are now engaging, in any wrongful or unlawful conduct. The
Parties understand and acknowledge that this Agreement is not an admission of any liability or
wrongdoing by either Party and shall not be used or construed as such in any legal or
administrative proceeding.
8. Return of Company Property. As a condition of receiving the severance payments
provided by this Agreement and pursuant to the terms of the Employment Agreement, Executive agrees
to fully comply with the terms of section 10.2 of the Employment Agreement (other than the return
of Executive’s laptop computer, which Executive shall be allowed to retain once it has been
reviewed by the Company’s Chief Information Officer).
9. Confidentiality. Executive agrees to fully comply with all confidentiality and
non-disclosure agreements and policies of the Company applicable to Executive, including the terms
of the Employment Agreement, effective both during and after the termination of employment, to
protect the confidential, proprietary and trade secret information of the Company.
10. Non-Disparagement. Executive agrees that Executive will not at any time defame,
disparage or impugn the reputation of the Company or its services, business affairs or financial
condition, or any of the Company’s directors, officers, employees, or representatives, in any
future communications with any person or entity, and the Company agrees not to defame, disparage or
impugn the reputation of Executive to any third parties. Company agrees to respond to any
employment inquires about Executive by only providing, pursuant to Company policy, the dates of
employment, position held, and confirmation of annual salary/wages. “Disparage,” as used in this
Agreement, means to make any statement, written or oral, that casts another party in a negative
light, or implies or attributes any negative quality to another party. Neither this Section 10 nor
anything in this Agreement shall prohibit either party from making truthful statements to
governmental agencies or authorities as may be required or permitted by law.
11. Interference with Business Relations. Executive agrees to fully comply with the
terms of Section 11 of the Employment Agreement.
12. No Filing of Claims. Each Party represents and warrants that it does not
presently have on file any claims, charges, grievances, actions, appeals or complaints against the
Released Parties or the Executive in or with any administrative, state, federal or governmental
entity, agency, board or court, or before any other tribunal or panel of arbitrators, public or
private, based upon any actions by Released Parties or the Executive occurring prior to the date of
this Agreement. To the extent any such claims or actions do exist as of the
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Effective Date of this Agreement, the Parties represents and agree to dismiss, with prejudice,
of any and all such claims, and each Party may use this Agreement as a basis to seek such
dismissal.
13. Ownership of Claims. Each Party represents and warrants that it is the sole and
lawful owner of all rights, title and interest in and to all released matters, claims and demands
as herein contained and that there has been no assignment or other transfer of any interest of any
claim or demand which it may have against the other Party or the Released Parties.
14. Successors and Assigns. It is expressly understood and agreed by the Parties that
this Agreement and all of its terms shall be binding upon the Parties’ respective representatives,
heirs, executors, administrators, successors and assigns.
15. Applicable Law. The validity, interpretation and performance of this Agreement
shall be construed and interpreted according to the laws of the United States of America and the
State of California.
16. Attorneys Fees and Costs. To the extent not covered by the terms of the
Employment Agreement, the Parties agree that if any legal action is brought under this Agreement
for an asserted breach of or to enforce the terms of this Agreement, then the prevailing party
shall be entitled to recover costs and reasonable attorneys fees. However, to the extent the
issues raised in any such dispute are based on state or federal statutes that provide for attorneys
fees to the prevailing party, including the ADEA, then the basis for awarding such attorneys fees
shall be consistent with the applicable standards for awarding attorneys fees to the prevailing
party under those respective state or federal statutes and applicable law.
17. Severability. In the event any provision of this Agreement shall be found
unenforceable by a court of competent jurisdiction, the provision shall be deemed modified to the
extent necessary to allow enforceability of the provision as so limited, it being intended that
Company shall receive the benefits contemplated herein to the fullest extent permitted by law. If
a deemed modification is not satisfactory in the judgment of such court, the unenforceable
provision shall be deemed deleted, and the validity and enforceability of the remaining provisions
shall not be affected thereby.
18. Entire Agreement; Modification. Except for the Employment Agreement, this
Agreement (including any related equity award agreements) is intended to be the entire agreement
between the Parties relating to the termination of employment and supersedes and cancels any and
all other and prior agreements, written or oral, between the Parties regarding the subject matter
of this Agreement. Except for the Employment Agreement, it is agreed that there are no collateral
agreements or representations, written or oral, regarding the terms and conditions of Executive’s
separation of employment from the Company and release of all claims by Executive other than those
set forth in this Agreement. This Agreement may be amended only by a written instrument executed
by all Parties hereto.
19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all counterparts so executed shall constitute one agreement
binding on all of the Parties hereto. This Agreement may be executed and transmitted either by
original, facsimile, or electronic delivery, and each such copy shall be fully binding upon receipt
by the other Party.
20. Voluntary Agreement. Executive understands that Executive may be waiving
significant legal rights by signing this Agreement and Executive represents and agrees that
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Executive has entered into this Agreement voluntarily, with a full understanding of and in
agreement with all of its terms.
THE PARTIES TO THIS AGREEMENT HAVE READ THE FOREGOING AGREEMENT AND FULLY UNDERSTAND EACH AND
EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED THIS AGREEMENT ON THE DATES
SHOWN BELOW.
| XXXX XXXXXX |
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| Dated: April 11, 2011 | By: | /s/ Xxxx Xxxxxx | ||
| SPARK NETWORKS, INC. |
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| Dated: April 11, 2011 | By: | /s/ Xxxxxx Xxxxxxxxx | ||
| Xxxxxx Xxxxxxxxx | ||||
| General Counsel | ||||
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