EXHIBIT 10.25
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (the "Agreement") is entered into
by and between IVI Publishing, Inc. (the "Company") and Xxxxxx X. Xxxx
("Employee") effective as of August 1, 1996.
RECITALS
Xxxxxx X. Xxxx has been an officer, director and employee of the Company
since soon after its inception. Effective as of August 1, 1996, Employee
resigned as the Chief Executive Officer and as a director of the Company. In
consideration of his covenants hereunder and his release of claims set forth
hereunder, the Company has made provisions for certain payments and other
benefits to be paid to Employee.
AGREEMENT
NOW THEREFORE, the parties agree as follows:
1. COMPANY. Company, as used herein, means IVI Publishing, Inc., its
successors and assigns, its subsidiaries, and its present and former directors,
officers, shareholders, employees, and agents, whether in their individual or
official capacities.
2. EMPLOYEE. Employee, as used herein, means Xxxxxx X. Xxxx and
anyone who has or obtains legal rights or claims through him.
3. RESIGNATION. Effective as of August 1, 1996, Employee resigned as
the Chief Executive Officer and as a director of the Company. He will continue
as a non-officer employee of the Company until December 31, 1996, performing
such duties as are set by and shall be subject to the control of the Chairman of
the Board. Thereafter Employee will continue as a consultant to the Company
until June 14, 1998.
4. DUTIES AS A CONSULTANT. Employee agrees that as a Consultant to
the Company he will, upon reasonable notice and at his convenience, consult with
the Company's Board of Directors, its Chairman of the Board and management on
matters involving the Company. It is understood that Employee shall be under no
specific hours obligation to the Company nor shall he have any specific
assignment of duties.
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AGREEMENT NOT TO COMPETE.
(a) Employee agrees that until December 31, 1997, he shall not,
directly or indirectly, engage in competition with the Company in any
manner or capacity (e.g., as an advisor, principal, agent, partner,
officer, director, stockholder, employee, member of any association, or
otherwise) in any phase of the business which the Company is conducting
during the term of this Agreement. For purposes of this Agreement, the
Company business shall be defined as the electronic publishing of health
and medical information in any format for the consumer and professional
medical markets.
(b) The Company shall make monthly payments to Employee through
December of 1997 in consideration for Employee's agreement not to
compete, equal to his monthly base salary at the time of termination
(excluding any bonus or other compensation or employee benefits less any
compensation received by Employee for employment or consulting work
during such period) provided, however, that such payments shall terminate
if Employee obtains employment of a nature substantially equivalent to
his employment hereunder which does not violate the foregoing agreement
not to compete (and Employee agrees that he shall give prompt written
notice of such employment to the Company). If Employee violates his
agreement not to compete, the Company shall have the right to terminate
his monthly payment and seek injunctive relief prohibiting Employee from
competing against the Company.
(c) GEOGRAPHIC EXTENT OF COVENANT. The obligations of Employee
not to compete shall apply to any geographic area in which the Company:
(i) has engaged in business during the term of this
Agreement through production, promotional, sales or marketing
activity or otherwise; or
(ii) has otherwise established its goodwill, business
reputation , or any customer or supplier relations.
(d) INDIRECT COMPETITION. Employee further agrees that through
December, 1997, he will not, directly or indirectly, assist or encourage
any other person in carrying out, directly or indirectly, any activity
that would be prohibited by the above provisions of Section 5(a) if such
activity were carried out by Employee, either directly or indirectly; and
in particular Employee agrees that he will not, directly or indirectly,
induce any employee of the Company to carry out, directly or indirectly,
any such activity.
(e) NON-SOLICITATION. Employee further agrees that through
December of 1997 he will not solicit or encourage employees of the
Company to terminate their employment with the Company.
6. PROMISSORY NOTE. Employee and the Company agree that the interest
on his
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$200,000 Promissory Note in favor of the Company shall be frozen as of August 1,
1996, and no further interest shall be accrued. Imputed interest, if any, will
be the responsibility of Employee. The amount owing to the Company under this
Promissory Note on August 1, 1996 was $229,475 which will be paid in accordance
with the provisions of the following Section 7.
7. PAYMENTS. Employee shall continue to receive his base salary in
effect on July 31, 1996, through June 13, 1998, less the following:
(a) Payments made to Employee in consideration of his agreement
not to compete as set forth in Section 5 above;
(b) Any compensation received by Employee for employment
or consulting work from employers other than the Company. Employee
agrees to provide the Company with a monthly report which sets forth any
employment or consulting arrangements entered into in the previous month
and the amount of any compensation paid to Employee as a result of such
arrangements;
(c) Promissory Note principal and interest owed by Employee to
the Company as set forth in Section 6 above. The principal and interest
balance will be paid by Employee over the period beginning in April 1997
through June 1998 as a set-off against the compensation payments to be
made by the Company to Employee pursuant to this Section 7. If, as
provided in this Section 7, Employee does not make the monthly reports
regarding outside employment or consulting, or misstates such reports or
fails to make the required excess payments when due, the Company shall
have the right to declare the principal balance of the Promissory Note
immediately due and payable.
All payments to Employee through December 31, 1996, in his capacity as an
employee shall be subject to normal withholdings, taxes and other consideration.
For all payments to Employee after December 31, 1996, in his capacity as a
consultant, the Company will issue to Employee a Form 1099. In the event that
the outside employment or consulting gross payments plus the amortized note
payments exceed Employee's compensation payments in any given month, the excess
shall be paid to the Company by the tenth day of the following month.
8. BENEFITS. Through December 31, 1996, Employee will have the
following benefits:
(a) Employee will continue to be a participant in the Company's
health, dental, life, short-term and long-term disability insurance
programs.
(b) Employee will continue to participate in the Company's
401(k) Plan and Trust.
(c) The Company and Employee are co-insureds under a key-man
life
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insurance policy. As of December 31, 1996, the Company will assign all
of its right, title and interest in such policy to Employee.
Employee will not be a participant in any bonus or incentive compensation
plan in 1996 or thereafter.
Beginning on January 1, 1997, Employee will have access to the following
benefits:
(a) INSURANCE BENEFITS. Provided that Employee timely executes
the necessary documents to continue such insurance as required by state
and federal law (and the Company agrees to provide such documents to
Employee in a timely manner), Employee and his dependents can elect to be
covered under COBRA and all premiums for this coverage will be the
responsibility of Employee.
(b) PENSION AND PROFIT SHARING. Effective as of January 1,
1997, Employee's vested account balance under the Company's 401(k) Plan
and Trust shall be distributed to Employee or, at his direction,
pursuant to the terms of the 401(k) Plan and Employee's election
thereunder.
9. STOCK OPTIONS. Employee has been granted the following stock
options: (i) 40,000 shares at an exercise price of $1.00 per share; (ii)
30,000 shares at an exercise price of $5.75 per share; (iii) 30,000 shares at an
exercise price of $13.125 per share; (iv) 40,000 shares at an exercise price of
$14.50 per share; (v) 106,000 shares at an exercise price of $17.75 per share;
and (vi) 90,000 shares at an exercise price of $7.00 per share. After the
termination of Employee's employment on December 31, 1996, Employee will have
until March 31, 1997, to exercise all of these options which are 100% vested as
of the date hereof.
10. RELEASE OF EMPLOYMENT CLAIMS. Employee hereby releases and
forever discharges the Company of and from any and all actions or causes of
action, suits, debts, claims, complaints, contracts (expressed or implied),
controversies, agreements, promises, damages, claims for attorneys' fees,
judgments, costs, disbursements, severance, compensation, vacation pay and other
benefits (except as specifically provided for in this Agreement), known or
unknown, in law or equity, Employee ever had, now has, or shall have as of the
date of this Agreement relating in any manner to Employee's employment with
and/or resignation as an officer, director or employee of the Company,
including, but not limited to, any alleged violation of any federal, state, or
local law, regulation or ordinance prohibiting discrimination or other unlawful
activity on the basis of race, color, creed, marital status, sex, age, religion,
national origin, sexual orientation, sexual harassment, disability, or any other
basis (whether arising under Title VII of the Civil Rights Act, 42 U.S.C.
Section 2000e ET SEQ., the Age Discrimination in Employment Act, 29 U.S.C.
Section 621 ET SEQ., the Americans With Disabilities Act, 42 U.S.C. Section
12101 ET SEQ., the Minnesota Human Rights act, Minn. Stat. Section 363.01 ET
SEQ., or elsewhere), or any alleged obligation created by statute or by common
law contract or tort theory. Employee releases and discharges Company not only
from any and all claims that he could make on his own behalf, but also those
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that may or could be brought by any other person or organization on his behalf.
Employee affirms that as a current or former employee he has not caused or
permitted to be filed any charge, complaint, or action against Company and
agrees that he will not cause or permit to be filed any charge, complaint, or
action and that he will not participate with any other party in the filing of
any charge, complaint or action on the basis of his employee status.
11. NOTIFICATION OF RIGHTS PURSUANT TO THE FEDERAL AGE DISCRIMINATION
IN EMPLOYMENT ACT (29 U.S.C. Sections 621-634) AND MINNESOTA HUMAN RIGHTS ACT
(MINN. STAT. CH. 363). Employee agrees that he is hereby notified that the
Federal Age Discrimination in Employment Act provides that he is entitled to
wait 21 days to sign this Agreement. The 21-day period shall begin the day
following the day on which Employee receives the Agreement. Employee
acknowledges that the purpose of the 21-day period is to provide Employee
adequate time to consider whether the terms of this Agreement are acceptable to
him. Employee is also hereby notified of his right to rescind his release of
claims arising under the Federal Age Discrimination in Employment Act within 7
calendar days of his signing of this Agreement. Employee is further notified of
his right to rescind his release of claims arising under the Minnesota Human
Rights Act within 15 calendar days of his signing of this Agreement. In order
to be effective, Employee's rescission must be in writing and delivered by hand
or mail to Xxx Xxxxxxx, IVI Publishing, Inc., 0000 Xxxxxx Xxxxx Xxxxx,
Xxxxxxxxxxx, XX 00000-0000. If delivered by mail, the rescission must be
postmarked within the required period, properly addressed to Xxx Xxxxxxx as set
forth above, and sent by certified mail, return receipt requested. Employee
understands that if he rescinds his release of claims as provided for in this
paragraph, Employee will not receive, and will have to return to Company, all
benefits and payments provided for in this Agreement.
12. CONFIDENTIALITY. The parties agree specifically that the contents
and terms of this Agreement shall remain confidential except as required by
applicable law or regulation (including of the Securities and Exchange
Commission or of the Nasdaq National Market). However, Employee shall be
entitled to discuss the matters contained herein with his legal and financial
advisors and his immediate family, provided they also agree to keep this
Agreement confidential. Provided further that Company shall be entitled to
discuss the matters contained herein with its legal and financial advisers and
its management employees on a need to know basis.
13. NON-DISPARAGEMENT. Each party agrees not to disparage in any
manner the other party. Any such disparagement will be grounds for recision of
this Agreement.
14. CORPORATE INFORMATION. Employee agrees that he will not remove
any proprietary corporate information from the Company's offices, including the
office he occupied. The determination of what information is proprietary will
be in the discretion of the Company. Subject to the foregoing, corporate
information shall include, but not be limited to, sales plans, customer
information, lease forms, lease contracts, employee information, business
correspondence and any other information which is related to IVI Publishing,
Inc. or its subsidiaries or their businesses. In addition, Employee has agreed
to return or purchase six
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pieces of equipment identified in the attached Schedule A at a fair price to be
negotiated by the parties at a later date. All personal property of the
Employee, property which is not owned by or is not proprietary or confidential
to the Company, will be returned to Employee.
15. ASSIGNMENT. The obligations of Employee under this Agreement may
not be assigned by Employee. However, in the event of Employee's mental or
physical disability, incapacitation or death, all remaining payments shall
continue to be made to Employee's spouse, or in the event of the death of the
Employee's spouse, the payments will be made to Employee's estate. The
Company's rights and obligations under this Agreement will inure to the benefit
and be binding upon the Company's successors and assignees.
16. SEVERABILITY. If a court rules that any part of this Agreement is
not enforceable, that part may be modified by the court to make it enforceable.
The parties expressly agree that the restrictions contained in paragraph 5 are
reasonable and should be enforced to the maximum extent and scope possible.
17. GOVERNING LAW. Any disputes arising under this Agreement shall be
governed by the laws of the State of Minnesota.
18. ACKNOWLEDGMENT OF READING AND UNDERSTANDING; CONSULTATION WITH
COUNSEL; PERIOD TO CONSIDER AGREEMENT. Employee, by signing this Agreement,
acknowledges and agrees that he has carefully read and understood all provisions
of this Agreement and that he has entered into this Agreement knowingly and
voluntarily. Employee further acknowledges that he has consulted with counsel
before signing this Agreement. Employee also acknowledges that Company informed
him that he has 21 days from the receipt of this Agreement to consider whether
its terms are acceptable to him and that he has had the benefit of the 21-day
period. Employee acknowledges and agrees that he has not relied on any
representations or statements by Company, whether oral or written, other than
the express statements of this Agreement, in executing this Agreement.
19. AGREEMENT EXTENSION. Effective as of December 31, 1996, when
Employee's employment terminates, Employee agrees to provide the Company with
releases similar in nature to those set forth in Sections 10 and 11 of this
Agreement.
20. FULL AGREEMENT. This Agreement contains the full agreement of the
parties and may not be modified, altered, or changed in any way except by
written agreement signed by both parties. Except as expressly stated in this
Agreement, the parties agree that this Agreement supersedes and terminates any
and all oral and written prior agreements and understandings between the
parties.
IVI PUBLISHING, INC.
Dated: 1/10/97 By /s/ Xxx X. Xxxxxxx
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Xxx X. Xxxxxxx
President and Chief Executive Officer
Dated: January 6, 1997 /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
SCHEDULE A
IVI EQUIPMENT HELD BY XXX XXXX
NEC 5FGe Monitor (17"), #455
Quatra 605 Macintosh, #0000
Xxxxxxxx
Xxxxxxxxxx
28.8 USRobotics External Modem
Apple CD-ROM External
Toshiba 400 CDT Laptop, #1809
External Floppy Disk Drive
Carrying Case
Panasonic Laptop CF-41 with CD, #1811
Floppy
Modem
AC Adaptor
TV
VCR
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