Exhibit 99.2
CONSULTING AND RELEASE AGREEMENT
Xxxxx X. Xxxxx ("XXXXX") and WorldWide Web NetworX Corporation, 000
Xxxxxxxxxx Xxxx, Xxxxx 000, Xxxxx Xxxxxx, Xxx Xxxxxx 00000, and its successors
and assigns (together "WWWX"), hereby knowingly and voluntarily agree to enter
into this Consulting and Release Agreement ("AGREEMENT"), this 22nd day of
August, 2000 (the "Effective Date") in order to resolve all outstanding issues
and set forth all the obligations between the parties. Xxxxx and WWWX
acknowledge and agree that this Agreement, and the Agreements specifically
referenced in this document, constitute the sole obligation of each to the other
and that no other promises, commitments, or representations have been made with
or by each of the parties to the other.
WHEREAS, Xxxxx and WWWX have entered into (a) an Incentive Stock Option
Grant Agreement (the "ISO Agreement"), and (b) a Non-Qualified Stock Option
Grant Agreement (the "NQSO Agreement"), both dated August 12, 1999; and
WHEREAS, Xxxxx and WWWX have entered into an Employment Agreement,
dated March 20, 2000 (the "Employment Agreement").
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. As of the Effective Date, the relationship presently existing
between WWWX and Xxxxx is changed from an employment relationship to a
contractor relationship. As of the Effective Date, Xxxxx resigns as an officer,
director, agent or representative of the WWWX and any of its subsidiaries and
affiliates in which Xxxxx holds office, is a director, or for whom Xxxxx
currently acts as an agent or representative. As of the Effective Date, Xxxxx
also resigns as a fiduciary and member of any and all committees established
with respect to any employee benefit plan maintained by WWWX or any of its
subsidiaries and affiliates. The resignations described in the two preceding
sentences shall occur automatically and without any further required action by
Xxxxx, WWWX or any other person.
2. Upon the Effective Date, WWWX will (i) pay Xxxxx any portion of
Xxxxx'x Base Salary (as defined in the Employment Agreement) for the period up
to the date of termination that has been earned but remains unpaid; (ii) pay
Xxxxx any benefits that have accrued to Xxxxx under the terms of any benefit
plans of WWWX in which he is a participant, which benefits shall be paid in
accordance with the terms of those plans, including without limitation, accrued
but unpaid vacation time; (iii) have any options to purchase securities of WWWX
that were not previously vested vest pursuant to Section 3 of this Agreement;
and (iv) pay Xxxxx the sum of $87,500.00.00, representing the severance payment
that is payable to Xxxxx pursuant to Section 5(b)(D) of the Employment
Agreement.
SEPARATION & RELEASE AGREEMENT PAGE 1 of 9
3. Xxxxx and WWWX hereby terminate the ISO Agreement and amend the NQSO
Agreement, effective after expiration of the 7-day revocation period in Section
19, as follows:
a. Paragraph 1(a) is hereby replaced in its entirety with
the following: "GRANT OF OPTION. Subject to the terms
and conditions set forth in this Agreement and in the
Plan, the Company hereby grants to the Grantee an option
(the "Option") to purchase 250,000 shares of common
stock of the Company ("Shares") at an exercise price of
$.75 per Share. The Option shall become exercisable
according to Paragraph 2 below."
b. Paragraph 2 is hereby replaced in its entirety with the
following:
"EXERCISABILITY OF OPTION. The Option is now exercisable
by Grantee in full. Notwithstanding Section 5 of the
Plan, the Option is exercisable until the end of the
term specified in Section 3, without regard to any other
termination or separation from the Company.
c. Paragraph 3(b) is hereby deleted in its entirety.
d. A new paragraph 4(c) is inserted as follows:
"At any time during which the Option may be exercised,
Grantee may, at his option, choose to exercise the
Option on a cashless basis by giving written notice at
the principal office of the Company of his intent to
effect a cashless exercise ("NOTICE OF CASHLESS
EXERCISE"). For any cashless exercise, the Company will
issue to Grantee the number of shares of its common
stock equal to (i) the number of Shares specified by
Grantee in his Notice of Cashless Exercise (the "TOTAL
NUMBER") less (ii) the number of shares equal to the
quotient obtained by dividing (A) the product of the
Total Number and the Exercise Price by (B) the current
market value of a share of the Company's common stock.
Otherwise, on the date the Company delivers the Shares
to Grantee, he shall pay the exercise price for each
Share in cash to the Company. For purposes of the
foregoing, the current market value of a share of the
Company's common stock is the price paid for one share
in the last open-market trade of the day either on a
national securities exchange or as listed on the OTC
Bulletin Board on the last trading day before the day
the Option is exercised."
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e. Paragraph 5 is hereby amended by inserting the following
after the first sentence:
"The Company will treat Grantee's outstanding Options in
a manner and with procedures no less favorable than it
treats all other Grantees."
All other terms of the NQSO Agreement remain unmodified and in force. WWWX
hereby covenants that it will use commercially reasonable efforts to file a
registration statement on Form S-8 or otherwise to register the WWWX shares
underlying Xxxxx'x Option not later than 120 days from the Effective Date of
this Agreement.
4. Xxxxx acknowledges that he is not entitled to any further
consideration or monies, including any benefits, payments or wages, except as
set forth in this Agreement. Xxxxx acknowledges and agrees that Sections 2 and 3
include all amounts owed to him for vacation, bonus, severance, commission or
any other entitlement, other than for consulting, as described in Section 21.
This Agreement supersedes or modifies, as applicable, any and all previous
agreements, whether written or oral, between Xxxxx and WWWX.
5. Xxxxx shall execute and deliver to WWWX, simultaneously
with the execution and delivery of this Agreement, his letter of resignation as
an officer, director, agent or representative of WWWX, attached hereto as
Exhibit "A."
6. Xxxxx will return all WWWX-owned or leased property,
documents, records and other information of any type whatsoever concerning or
relating to the business and affairs of WWWX or any successor, except that Xxxxx
shall not be required to return his current computer, workstation and related
accessories.
7. Xxxxx agrees that acceptance of this Agreement constitutes
a full, complete, and knowing waiver of any claims asserted or non-asserted that
Xxxxx may have against WWWX arising out of his employment and termination of
employment including, but not limited to, any claims Xxxxx may have under the
laws of New York or New Jersey for wages, bonuses, torts, contracts, or
employment agreements or under any federal, state, or local statute, regulation,
rule, ordinance, or order which covers or purports to cover or relates to any
aspect of employment, including, but not limited to, discrimination based on
race, sex, age, religion, national origin, sexual orientation, physical,
medical, or mental condition, or marital status under, among other statutes,
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Fair Labor Standards Act, the Family and Medical Leave Act, the New Jersey
Family and Medical Leave Act, the Employee Retirement Income Security Act, and
other similar federal, state or local laws.
8. As a material inducement to WWWX to enter into this
Agreement, Xxxxx hereby irrevocably and unconditionally releases, acquits, and
forever discharges WWWX, and its shareholders and each of WWWX's and such
shareholders' directors, officers, employees, representatives, attorneys, and
all persons acting by, through, under or
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in concert with any of them (collectively "WWWX RELEASEES"), from any and all
charges, complaints, claims, controversies, damages, actions, causes of action,
suits, rights, demands, costs, losses, debts, and expenses (including attorneys
fees and costs actually incurred), of any nature whatsoever, known or unknown,
which Xxxxx now has, owns, holds, or claims to have, own, or hold, or claimed to
have, own, or hold, or which Xxxxx at any time hereafter may have, own, or hold,
or claim to have, own, or hold, from the beginning of time arising out of or in
any manner relating to Xxxxx'x employment with WWWX or the separation of that
employment until the date of execution of this Agreement.
9. As a material inducement to Xxxxx to enter into this
Agreement, WWWX hereby irrevocably and unconditionally releases, acquits, and
forever discharges Xxxxx from any and all charges, complaints, claims,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts, and expenses (including attorneys fees and costs actually
incurred), of any nature whatsoever, known or unknown, which WWWX now has, owns,
holds, or claims to have, own, or hold, or claimed to have, own, or hold, or
which WWWX at any time hereafter may have, own, or hold, or claim to have, own,
or hold, from the beginning of time arising out of or in any manner relating to
Xxxxx'x employment with WWWX, or service as a director or an officer to the
extent permitted by law, or the separation of that employment and service, until
the date of execution of this Agreement.
10. Xxxxx represents that he has not filed any complaint,
charge or claim against WWWX with any other governmental agencies and, on behalf
of himself, his heirs, executors, administrators and assigns agrees never to
directly or indirectly commence or prosecute, or assist in the commencement or
prosecution, or in any way cause, or advise to be commenced or prosecuted, any
action or proceeding against WWWX, its successors, and assigns or their past,
present or future officers, directors, agents or employees, and WWWX Releasees,
with respect to any matter, whether or not now known, based upon any act,
transaction, practice, conduct or omission that occurred prior to the date of
this Agreement, unless required by law. In the event that Xxxxx institutes, is a
party to, or is a voluntary member of a class that institutes any such action,
his claims shall be dismissed or class membership terminated with prejudice
immediately upon presentation of this Agreement. In addition, Xxxxx will pay
WWWX its costs, including reasonable attorney's fees, in obtaining dismissal of
such action.
11. WWWX represents that it has not filed any complaint,
charge or claim against Xxxxx in any forum or with any governmental agencies
and, on behalf of itself, subsidiaries, affiliates, successors, assigns or their
past, present or future officers, directors, agents or employees, and WWWX
agrees never to directly or indirectly commence or prosecute, or assist in the
commencement or prosecution, or in any way cause, or advise to be commenced or
prosecuted, any action or proceeding against Xxxxx, his heirs, executors,
administrators and assigns, with respect to any matter, whether or not now
known, based upon any act, transaction, practice, conduct or omission that
occurred prior to the Effective Date of this Agreement. In the event that WWWX
institutes, is a party to, or is a voluntary member of a class that institutes
any such action, its claims shall be dismissed or class membership terminated
with prejudice immediately upon
SEPARATION & RELEASE AGREEMENT PAGE 4 of 9
presentation of this Agreement. In addition, WWWX will pay Xxxxx his costs,
including reasonable attorney's fees, in obtaining dismissal of such action.
12. In the course of employment with WWWX prior to the date
hereof, Xxxxx may have had access to confidential and proprietary information
and records, data and other trade secrets of WWWX ("CONFIDENTIAL INFORMATION").
Confidential Information shall include, without limitation, the following types
of information or material, both existing and contemplated, regarding WWWX, or
its subsidiary or affiliated companies: corporate information, including plans,
strategies, policies, resolutions, and any litigation or negotiations; marketing
information, including strategies, methods, customers, prospects, or market
research data; financial information, including cost and performance data, debt
arrangement, equity structure, investors, and holdings, operational and
scientific information, including trade secrets and technical information; and
personnel information, including personnel lists, resumes, personnel data,
organizational structure, compensation structure, and performance evaluations.
Xxxxx shall not directly or indirectly disclose Confidential Information to any
person or entity or use Confidential Information in any way, except that Xxxxx
may utilize Confidential Information, if and to extent that he is required to do
so in order to render consulting services to WWWX, during the Consulting Period.
13. Xxxxx acknowledges that the terms of this Agreement and
all discussions leading up to it are confidential and agrees that he will not
divulge the terms of this Agreement to any third party, except his immediate
family, financial advisor, attorney or as required by law or court order.
14. Xxxxx agrees not to directly or indirectly take, support,
encourage or participate in any action or attempted action that in any way would
damage the reputation of WWWX and/or any of its subsidiaries or affiliates.
Nothing contained in this Agreement nor the fact that the parties have signed
the Agreement shall be considered an admission by either party. Xxxxx agrees
that he will cooperate with WWWX, at its cost, and its designated
agents/representatives as reasonably necessary consistent with his business
obligations in any legal disputes and/or proceedings and/or business matters
relating to issues and/or incidents which took place during his term of
employment.
15. Both Xxxxx and WWWX agree not to disparage each other in
any way. Xxxxx and WWWX agree that they will not speak about each other in
negative terms. Should Xxxxx discuss the terms of the Agreement with individuals
other than his immediate family, his attorney, or as required by law, Xxxxx
shall pay only the actual damages proximately caused by his violation, WWWX's
reasonable attorneys' fees and costs incurred in enforcing its rights, and may
be subject to injunctive relief. Similarly, should WWWX or any of its directors,
officers, employees, agents, or other authorized representatives discuss the
terms of the Agreement with individuals other than WWWX directors, officers,
employees, agents, other authorized representatives, their attorneys, or as
required by law, WWWX shall pay only the actual damages proximately caused by
its violation, Xxxxx'x reasonable attorneys fees and costs incurred to enforce
his rights, and may be subject to injunctive relief.
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16. In the event of any default by WWWX under this Agreement,
Xxxxx will use reasonable efforts to mitigate his damages, but such acts will
not limit or modify any of Xxxxx'x rights under this Agreement, and WWWX will
pay to Xxxxx a reasonable sum for attorney fees and other reasonable costs and
expenses incurred by Xxxxx in enforcing any right or privilege under this
Agreement.
17. Xxxxx agrees that this Agreement shall be construed under
New Jersey law without regard to the conflict of laws provision therein and any
actions relating thereto must be brought within the State of New Jersey.
18. The provisions of this Agreement are independent and
severable from each other and this Agreement and any other documents executed
pursuant to this Agreement are independent of each other whereby if any term or
provision of this Agreement or any document delivered pursuant hereto shall be
determined to be illegal or unenforceable, all of the terms and provisions of
this Agreement and any document delivered pursuant hereto shall nevertheless
remain effective and shall be enforced to the fullest extent permitted by
applicable law.
19. Xxxxx and WWWX, along with their respective attorneys,
have participated fully in the review and revision of this Agreement. Any rule
of construction to the effect that ambiguities are to be resolved against the
drafting party shall not apply in interpreting this Agreement.
20. Xxxxx warrants that he is fully competent to enter into
this Agreement and that he has carefully read and fully understands the terms of
this Agreement, has had the advice of counsel with respect this Agreement and
has signed this Agreement freely and voluntarily. Further, Xxxxx understands
that he has the opportunity to revoke such Agreement within 7 days of signing
it. Xxxxx understands that if he does revoke the Agreement, he must notify WWWX
in writing within 7 days of signing the Agreement.
21. Consulting Services. (a) WWWX hereby engages Xxxxx as a
consultant to WWWX, and Xxxxx hereby accepts such engagement, for a period of
two (2) months following the Effective Date (the "Consulting Period"); PROVIDED,
HOWEVER, that upon not less than two (2) weeks written notice to Xxxxx prior to
the expiration of the Consulting Period, WWWX may extend the Consulting Period
for up to an additional month. During the Consulting Period, Xxxxx shall, upon
the request of the Board of Directors or the Chief Executive Officer of WWWX,
make himself reasonably available to the Board of Directors or the Chief
Executive Officer and answer questions, provide information and render advice,
based upon his historical knowledge of WWWX, to the Board of Directors or the
Chief Executive Officer. In consideration for Xxxxx'x services and a consultant
to WWWX during the Consulting Period, WWWX shall pay Xxxxx a consulting fee
during the Consulting Period in the amount of $16,771.00 per month, which sum
shall be payable in advance of each monthly period in the Consulting Period.
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(b) For a period of six (6) months commencing on the Effective Date,
Xxxxx elects to continue coverage for himself under WWWX's group health, dental,
and other benefit plans pursuant to the continuation of coverage provisions
contained in Sections 601 through 608 of the Employee Retirement Income Security
Act of 1974, as amended, WWWX shall pay to Xxxxx an amount equal to the
difference, if any, between (i) the monthly premium charged by WWWX generally to
its former executive employees for such continuation coverage under such plans
and (ii) the monthly premium charged by WWWX generally to its active executive
employees for coverage under such plans.
(c) As Xxxxx is an independent contractor, he shall pay all social
security, federal income taxes, unemployment insurance, worker's compensation
insurance, pensions, annuities, or other liabilities or taxes incurred by or on
behalf or for the benefit of Xxxxx arising out of the performance by Xxxxx of
his obligations as a consultant during the Consulting Period under this Section
21 of the Agreement.
(d) WWWX shall reimburse Xxxxx for all reasonable out-of-pocket
expenses actually incurred by Xxxxx in performance of the consulting services,
provided that Xxxxx furnishes to WWWX adequate records for the substantiation of
each such expenditure in accordance with applicable WWWX expense reimbursement
policies and such expenses have been approved by WWWX in advance. During the
Consulting Period, WWWX will also reimburse Xxxxx for the actual cost of
attorney malpractice insurance that he deems necessary in performing the
consulting services. Xxxxx shall be provided with the use of an office in WWWX's
Mount Laurel office; provided that (i) such use of the office and support
relates to the business of WWWX and is not disruptive of WWWX's normal business
activities and (ii) WWWX's obligations under this sentence shall end on the
earlier of the end of the Consulting Period, or the date WWWX no longer
maintains an office in Mount Laurel, NJ.
(e) Throughout the entire Consulting Period, Xxxxx shall be an
independent contractor with the full power and authority to select the means,
methods and manner of performing Consulting Services hereunder. Xxxxx will in no
way be considered to be an agent, employee, or servant of WWWX or any of its
subsidiaries or affiliates. Xxxxx shall have no authority to bind WWWX or any of
its subsidiaries or affiliates in any capacity for any purpose. It is not the
purpose or intention of this Agreement or the parties to create, and the same
shall not be construed as creating, any partnership, partnership relation, joint
venture, agency, or employment relationship. Xxxxx shall be free to pursue such
other business or consulting interests, including full time employment,
directorships and investments of any kind. Xxxxx hereby agrees that he shall
not, during the Consulting Period, participate in WWWX's benefit plans and
programs for its employees, except as stated in this Agreement. There is no
minimum number of hours of service required of Xxxxx under this Agreement.
(f) In the event that Xxxxx obtains full time employment with some
third party or agrees to provide full time consulting services to some third
party (the term "full time" means at least thirty (30) hours per week) during
the Consulting Period, WWWX shall have the right to terminate the consulting
relationship under this Agreement at the end of
SEPARATION & RELEASE AGREEMENT PAGE 7 of 9
the first month of the Consulting Period by providing a written notice of
termination to Xxxxx.
22. (a) Right To Indemnification: If Xxxxx is made a party or
is threatened to be made a party or is involved in any action, suit or
proceeding, whether civil, criminal, administrative, or investigative
(hereinafter a "Proceeding"), by reason of the fact that he is the legal
representative, is or was a director or officer, of WWWX or is or was serving at
the request of WWWX as a director, officer, employee, or agent of another
corporation or of a partnership, joint venture, trust, or other enterprise,
whether the basis of such proceeding is alleged action in an official capacity
as a director, officer, employee, or agent or in any other capacity while
serving as a director, officer, employee, or agent, Xxxxx shall be indemnified
and held harmless by WWWX to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
WWWX to provide broader indemnification rights than said law permitted WWWX to
provide prior to such amendment), against all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties,
and amounts paid or to be paid in settlement) incurred or suffered by the Xxxxx
in connection therewith and such indemnification shall continue even though
Xxxxx has ceased to be a director, officer, employee, or agent and shall inure
to the benefit of his heirs, executors, and administrators. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by WWWX the expenses incurred in defending any such
proceeding in advance of its final disposition.
(b) Right Of Xxxxx To Bring Suit: If a claim under paragraph (a) of
this Section is not paid in full by WWWX within ten days after a written claim
has been received by WWWX, Xxxxx may at any time thereafter bring suit against
WWWX to recover the unpaid amount of the claim and, if successful in whole or in
part, Xxxxx shall be entitled to be paid also the expense of prosecuting such
claim.
(c) Rights Not Exclusive: Notwithstanding any limitation to the
contrary contained in sub-paragraphs (a) and (b) of this section, WWWX shall, to
the fullest extent permitted by Section 145 of the General Corporation Law of
the State of Delaware, as the same may be amended and supplemented, indemnify
Xxxxx from and against any and all of the expenses, liabilities, or other maters
referred to in or covered by said section, and the indemnification provided for
herein shall not be deemed exclusive of any other rights to which Xxxxx may be
entitled under any law, By-Law, agreement, vote of stockholders or disinterested
Directors, or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue even
though Xxxxx has ceased to be director, officer, employee, or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
(d) Insurance: For a period of at least six (6) years, WWWX shall
maintain insurance, at its expense, to protect itself and Xxxxx resulting from
his service as a director, officer, employee, or agent of WWWX or another
corporation, partnership, joint venture, trust, or other enterprise against any
such expense, liability or loss, whether or not
SEPARATION & RELEASE AGREEMENT PAGE 8 of 9
WWWX would have the power to indemnify Xxxxx against such expense, liability, or
loss under the Delaware General Corporation Law. Such insurance shall be
substantially similar in terms, insurer ratings, and policy limits to the
policies currently in effect as of the date of this Agreement.
PLEASE READ CAREFULLY. THIS AGREEMENT INCLUDES A RELEASE OF
ALL KNOWN AND UNKNOWN CLAIMS.
[SIGNATURES ON NEXT PAGE]
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To signify the parties' agreement to the terms of the foregoing Agreement, the
parties have executed this Agreement on the date set forth opposite their
signatures, which appear below.
Date: 8/22/00 /s/ Xxxxx X. Xxxxx
-------------- ----------------------------------
XXXXX X. XXXXX
Date: 8/22/00 WORLDWIDE WEB NETWORX CORPORATION
--------------
/s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: President
Exhibit A
August 22, 2000
The Board of Directors of
WorldWide Web NetworX Corporation
000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
Gentlemen:
I hereby voluntarily resign as officer, director, employee, agent or
representative of WorldWide Web NetworX Corporation ("WWWX"), effective
immediately.
Very truly yours,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
