EXHIBIT 10.32
CONFIDENTIAL RESIGNATION AGREEMENT
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AND GENERAL RELEASE OF CLAIMS
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1. Royal X. Xxxxxx ("Employee") is currently employed by iPrint
Technologies, inc. (the "Company"). Employee has now decided to resign from his
employment with the Company. It is the Company's desire to provide Employee with
a severance package that differs from that which he would otherwise be entitled
to receive upon his resignation and to resolve any claims that Employee has or
may have against the Company. Accordingly, Employee and the Company agree as set
forth below under this Confidential Resignation Agreement and General Release of
Claims (the "Agreement"). This Agreement is effective as of December 31, 2001
(the "Effective Date"), provided that Employee has not revoked this Agreement
(by written notice to the Company's General Counsel) in accordance with the
provisions following paragraph 12 below.
2. Employee hereby resigns from his position as an employee of the
Company effective February 1, 2002 (the "Resignation Date"), on which date he
shall cease to be an employee of the Company for all purposes. Between the date
Employee signs the Agreement and the Resignation Date (the "Transition Period"),
Employee will report to the Company's Chief Executive Officer or such other
executive as designated by the Company's Chief Executive Officer, and will
perform only those duties, if any, designated by such person. During the
Transition Period, Employee will continue to receive his salary, less standard
payroll deductions and withholdings, at his current rate of $20,833.33 per
month, less the 10% salary reduction currently in effect, and continuing so long
as the salary reduction is in effect.
In addition to continued employment and the specified salary payments during the
Transition Period, the other benefits provided in exchange for this release
include the continuation of Employee's current employment benefits during the
Transition Period, which include without limitation participation in the
Company's 401K Plan, vacation accrual, group health insurance plans and
continued vesting in stock options granted in paragraph 2(d) of the Employment
Agreement. On the Resignation Date the Company will pay Employee all accrued
salary, and all accrued and unused vacation earned through the Resignation Date,
subject to standard payroll deductions and withholdings based on Employee's
former salary of $250,000 per year (the "Former Salary"). On or prior to January
31, 2001 , the Company will reimburse Employee for all properly documented
business expenses.
In the event the Company terminates Employee's employment during the Transition
Period for cause, the Company's obligation to pay his salary and all benefits
shall cease immediately, and his employment shall end immediately. For purposes
of this paragraph and paragraph 4, "cause" is defined in paragraph 5(a) of
Employee's Employment Agreement (the "Employment Agreement") effective as of
November 1, 2001, and attached hereto as Exhibit A.
3. During the Transition Period, Employee agrees not to represent or
purport to represent the Company in any manner other than in his capacity as
Chairman of the Company's board of directors.
4. Provided that Employee has not been earlier terminated for cause, on
the eighth day following the Resignation Date, if Employee signs on the
Resignation Date a general release of known and unknown claims in the form
attached hereto as Exhibit B, Employee will receive the following consideration,
which includes the severance package described in paragraph 5(c) of the
Employment Agreement:
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(a) A lump sum severance payment equal to twelve months' pay
at Employee's Former Salary, less applicable withholding (the "Severance
Payment"). Employee owes the Company $721,423 pursuant to a Secured Demand
Promissory Note he executed in favor of the Company on April 16, 2001 (the
"Loan"). The purpose of the Loan was to enable Employee to pay tax on
alternative minimum tax ("AMT") income Employee realized in the 2000 tax year in
connection with Employee's purchase of 278,000 shares of Company common stock
(the "Option Stock") through the exercise of options. The Severance Payment will
be paid to Employee as reduction of the Loan Employee owes the Company ("Loan
Reduction"). Employee understands and agrees that if he violates Paragraph 6, 7,
or 8 of the Employment Agreement, Employee will have to immediately reimburse
the Company the cash equivalent of the Severance Payment.
The Company hereby agrees, for the purpose of enabling Employee to pay the
Company all amounts he owes on the Loan, to repurchase the Option Stock from
Employee for a price equal to the product of (i) 90% of the closing price of one
share of the Company's common stock on December 31, 2001 as reported on the
Nasdaq National Market, multiplied by (ii) 278,000 (the "Repurchase Price").
Payment for the Option Stock will be made as part of the Loan Reduction by
reducing the amount Employee owes the Company on the Loan by the Repurchase
Price.
(b) If Employee elects continuation of coverage under COBRA
for himself (and his spouse, if permitted under COBRA), contribution by the
Company to the COBRA premium payments for twelve months from the Resignation
Date. The Company will pay a portion of the COBRA premium equal to the amount of
the premium the Company would have paid if the Employee had remained employed
(plus an additional amount for his spouse, if permitted).
(c) Payment of a bonus calculated on the same percentage of
annual base salary as the bonus paid the Chief Executive Officer for 2001, if
any (the "Bonus"). If the Bonus is payable in cash, the Bonus payment, less
applicable withholding, will be paid to Employee as Loan Reduction. If the Bonus
is payable in Company stock (the "Stock"), the cash equivalent value of the
Stock (based on the market price of the Stock on the date executive Stock
Bonuses are paid), less applicable withholding, will be paid to Employee as Loan
Reduction instead of receiving the Stock. If the Bonus is payable in stock
options, then $0.20 for each immediately vesting option to purchase a share of
stock, less applicable withholding, will be paid to Employee as Loan Reduction
instead of receiving the immediately vested portion of the stock option.
Employee will not receive any payment in connection with the balance of the
stock option granted the Chief Executive Officer that does not vest immediately.
(d) Payment of the equivalent of 3 monthly payments the
Company currently makes on the Chief Executive Officer's car, less applicable
withholding, as Loan Reduction.
(e) Accelerated vesting of all of Employee's existing stock
options which have not been exercised ("Unexercised Options") for 12 months
following the Resignation Date, meaning through February 1, 2003.
(f) An exercise period for all of Employee's Unexercised
Options extended from the standard 30 days to 12 months following the
Resignation Date, meaning through February 1, 2003. Except as provided in this
Agreement, all other terms of Employee's option agreements with the Company will
not change and will be controlled by the terms of the Company's stock option
plan and related agreements.
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(g) Any interest Employee owes the Company on the Loan will be
offset by any and all outstanding interest owed by the Company to Employee, such
that Employee shall no longer owe any interest on the Loan and the Company will
no longer owe any interest to Employee; provided, however, that Employee
understands and agrees that if he violates Paragraph 6, 7, or 8 of the
Employment Agreement, Employee will have to immediately reimburse the Company
the cash equivalent of the interest that would have been owed on the Loan up to
and including the date of any such violation.
(h) Employee will retain his Company email address, voicemail,
office, equipment, and connectivity as long as he remains the Company's Chairman
of the Board, but for no longer than one year following the Resignation Date,
except as otherwise agreed in writing by the Company's Chief Executive Officer.
The changes to Employee's stock option rights referenced in paragraphs 4(e) and
4(f), as well as how long Employee waits to exercise these options, could affect
the tax treatment of the options. Also, Employee acknowledges that the benefits
in paragraphs 4(e) and 4(f) to accelerate vesting and extend the exercise period
could result in undesired tax liability or tax treatment of the options.
Employee acknowledges that he has obtained competent tax advice and wishes to
accept all of the benefits in paragraphs 4(e) and 4(f), along with any
associated tax risks and liabilities. Except as provided in this Agreement, all
other terms of Employee's option agreements with the Company will not change and
will be controlled by the terms of the Company's stock option plan and related
agreements.
Employee acknowledges and agrees that he is responsible for any tax obligation
or liability imposed on him in connection with the compensation set forth in
this paragraph 4.
5. Provided that Employee has not been earlier terminated for cause or
is otherwise in breach of his continuing obligations under the Employment
Agreement, within 10 days of Xxxxx Xxxx'x receipt of any paid sabbatical leave
from the Company, if Employee signs on the Resignation Date a general release of
known and unknown claims in the form attached hereto as Exhibit B, Employee will
receive as further consideration a lump sum payment, less applicable
withholding, equal to any sabbatical leave pay received from the Company by Xx.
Xxxx.
Other than any salary and benefits that may become due during the Transition
Period and the severance package described in these paragraphs 4 and 5, Employee
acknowledges and agrees that he has been paid all wages and accrued, unused
vacation that Employee earned during his employment with the Company. Employee
understands and acknowledges that he shall not be entitled to any payments or
benefits from the Company other than the salary and benefits earned during the
Transition Period and the severance package described in these paragraphs 4
and 5.
6. Employee will pay the Company on December 31, 2001 $400,000 in cash
to reduce the amount Employee owes the Company on the Loan. The Company will
perform a reconciliation of the amount Employee still owes the Company on the
Loan with the amounts paid or to be paid pursuant to paragraphs 4(a), 4(c), and
4(d). On the eighth day following the Resignation Date, if Employee signs on the
Resignation Date a general release of known and unknown claims in the form
attached hereto as Exhibit B, Employee will pay the Company in cash any
remaining balance Employee still owes the Company on the Loan. Once the Company
has determined that Employee has paid the entire balance of the Loan, the
Company will remove any liens previously placed on the property of Employee or
his spouse in connection with the Loan (the "Liens"). Employee will
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take all reasonable action to assist the Company in removing the Liens,
including, but not limited to, the execution and delivery of any required
documentation related thereto.
7. In exchange for the Company's willingness to provide Employee with
extended employment through the Transition Period and other consideration,
Employee and his successors release the Company and its shareholders, investors,
directors, officers, parents, subsidiaries, employees, agents, attorneys,
insurers, legal successors and assigns of and from any and all claims, actions
and causes of action, whether now known or unknown, which Employee now has, or
at any other time had, or shall or may have against those released parties based
upon or arising from or related to his employment with the Company and/or the
termination of his employment with the Company, including, but not limited to,
any claims of breach of contract, wrongful termination, breach of fiduciary
duty, retaliation, fraud, defamation, infliction of emotional distress or
national origin, race, age, sex, sexual orientation, disability or other
discrimination or harassment under the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act,
the California Labor Code, the Fair Employment and Housing Act or any other
applicable law or statute.
In exchange for the consideration described in paragraphs 4 and 5 to which
Employee would not otherwise be entitled, Employee agrees to execute a second
release at the conclusion of the Transition Period which release is attached
hereto as Exhibit B.
8. Employee acknowledges that he has read section 1542 of the Civil
Code of the State of California, which states in full:
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 release, which if known by him must have
materially affected his settlement with the debtor.
Employee waives any rights that he has or may have under section 1542 to the
full extent that he may lawfully waive such rights pertaining to this general
release of claims, and affirms that he is releasing all known and unknown claims
that he has or may have against the parties listed above.
9. Employee acknowledges and agrees that he shall continue to be bound
by and comply with the terms of the Employment Agreement except as explicitly
modified herein, and the Employee Innovations and Proprietary Rights Assignment
Agreement between the Company and Employee.
10. Employee agrees that by the Resignation Date he will return to the
Company all Company documents (and all copies thereof) and other Company
property which he has had in his possession at any time, including but not
limited to Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded information,
tangible property (including but not limited to computers), credit cards, entry
cards, identification badges and keys, and any materials of any kind which
contain or embody any proprietary or confidential information of the Company
(and all reproductions thereof).
11. Employee agrees that he shall not directly or indirectly disclose
any of the terms of this Agreement to anyone other than his immediate family or
counsel, except as such disclosure may be required for accounting or tax
reporting purposes or as otherwise may be required by law.
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Employee further agrees that he will not, at any time in the future, make any
critical or disparaging statements about the Company, its products or its
employees, unless such statements are made truthfully in response to a subpoena
or other legal process.
12. This Agreement, including Exhibits A and B, constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written or oral, with
the exception of any agreements described in paragraph 9. This Agreement may not
be modified or amended except by a document signed by an authorized officer of
the Company and Employee. If any provision of this Agreement is determined to be
invalid or unenforceable, in whole or in part, this determination will not
affect any other provision of this Agreement and the provision in question shall
be modified by the court or arbitrator so as to be rendered enforceable. This
Agreement shall be deemed to have been entered into and shall be construed and
enforced in accordance with the laws of the State of California as applied to
contracts made and to be performed entirely within California.
EMPLOYEE UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING
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THIS RELEASE AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINST THE
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PARTIES RELEASED ABOVE WHICH ARE BASED UPON OR ARISE FROM OR ARE RELATED TO HIS
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EMPLOYMENT WITH THE COMPANY AND/OR THE TERMINATION OF HIS EMPLOYMENT WITH THE
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COMPANY BY SIGNING THIS RELEASE. EMPLOYEE FURTHER UNDERSTANDS THAT HE MAY HAVE
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UP TO 21 DAYS TO CONSIDER THIS RELEASE, AND THAT HE MAY REVOKE IT AT ANY TIME
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DURING THE 7 DAYS AFTER HE SIGNS IT. EMPLOYEE ACKNOWLEDGES THAT HE IS SIGNING
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THIS RELEASE KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE
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COMPENSATION AND BENEFITS DESCRIBED IN PARAGRAPHS 2, 4 AND 5.
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Dated: February 5 , 2002 /s/ Royal X. Xxxxxx
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Royal X. Xxxxxx
iPrint Technologies, inc.
Dated: February 5 , 2002 By: /s/ Xxxxx Xxxx
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Exhibit A
EMPLOYMENT AGREEMENT
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Exhibit B
GENERAL RELEASE
Employee and his successors release the Company and its shareholders, investors,
directors, officers, employees, agents, attorneys, insurers, legal successors
and assigns of and from any and all claims, actions and causes of action,
whether now known or unknown, which Employee now has, or at any other time had,
or shall or may have against those released parties based upon or arising from
or related to his employment with the Company and/or the termination of his
employment with the Company, including, but not limited to, any claims of breach
of contract, wrongful termination, retaliation, fraud, defamation, infliction of
emotional distress or national origin, race, age, sex, sexual orientation,
disability or other discrimination or harassment under the Civil Rights Act of
1964, the Age Discrimination In Employment Act of 1967, the Americans with
Disabilities Act, the Fair Employment and Housing Act or any other applicable
law or statute.
Employee acknowledges that he has read section 1542 of the Civil Code
of the State of California, which states in full:
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 release, which if known by him must have materially affected his
settlement with the debtor.
Employee waives any rights that he has or may have under section 1542, or any
similar provision of the laws of any other applicable jurisdiction, to the full
extent that he may lawfully waive such rights pertaining to this general release
of claims, and affirms that he is releasing all known and unknown claims that he
has or may have against the parties listed above.
This release does not extend to: 1) any right or claim that Employee
may have arising from acts or omissions to act after the date of this Release;
2) any claim by the Employee to vested benefits which would otherwise be
available under any Company sponsored employee benefit plan including, without
limitation, any 401k plan, any employee stock ownership plan, any incentive or
other stock option plan or any insurance plan; 3) any right the Employee would
otherwise have to defense or indemnification in the event of a claim against the
Employee by a third party arising out of acts or omissions within the course and
scope of his employment; or 4) any claims arising out of or related to
transactions or agreements between Employee and the parties released other than
the employment relationship or the termination of that relationship.
EMPLOYEE UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING
THIS RELEASE AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINST THE
PARTIES RELEASED ABOVE WHICH ARE BASED UPON OR ARISE FROM OR ARE RELATED TO HIS
EMPLOYMENT WITH THE COMPANY AND/OR THE TERMINATION OF HIS EMPLOYMENT WITH THE
COMPANY BY SIGNING THIS RELEASE. EMPLOYEE FURTHER UNDERSTANDS THAT HE MAY HAVE
UP TO 21 DAYS TO CONSIDER THIS RELEASE, AND THAT HE MAY REVOKE IT AT ANY TIME
DURING THE 7 DAYS AFTER HE SIGNS IT. EMPLOYEE ACKNOWLEDGES THAT HE IS SIGNING
THIS RELEASE KNOWINGLY,
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WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE COMPENSATION AND BENEFITS
DESCRIBED IN PARAGRAPHS 2, 4 AND 5.
Dated: February 5 , 2002 /s/ Royal X. Xxxxxx
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Royal X. Xxxxxx
iPrint Technologies, inc.
Dated: February 5 , 2002 By: /s/ Xxxxx Xxxx
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