SEPARATION AGREEMENT AND GENERAL RELEASE
Exhibit
10.1
SEPARATION AGREEMENT AND
GENERAL RELEASE
This Separation Agreement and General
Release (the “Agreement”) is entered into by and between SeaChange
International, Inc. (the “Company”) and Xxxxx Xxxx (the
“Employee”).
1. Termination of
Employment. Employee’s employment will terminate on
October 19, 2010 (the “Separation Date”). By signing this
Agreement, Employee acknowledges receipt of all salary, bonuses, and other
employment compensation, and payment for all accrued, unused vacation, due
through and including the Separation Date (excluding the salary continuance
provided for in Section 4(b) below).
2. Benefits. Whether
or not Employee signs this Agreement, Employee may elect to continue Employee’s
group medical and/or dental insurance coverage at Employee’s expense for up to
eighteen (18) months following the Separation Date, provided Employee or
Employee’s eligible dependent(s) remain eligible for such coverage under the
federal law known as COBRA. The Company will provide Employee with
further information relating to Employee’s eligibility for COBRA coverage under
separate cover. Except as provided herein, Employee’s right to any
and all Company benefits terminated on the Separation Date.
3. Stock
Options. Except as provided in Section 4 below with the
Company’s receipt of this Agreement executed by Employee that has not been
revoked during the Revocation Period, as set forth in the Company’s Amended and
Restated 2005 Equity Compensation and Incentive Plan and the Company’s Amended
and Restated 1995 Stock Option Plan (collectively, the “Stock Option Plans”) and
Employee’s Stock Option Agreements with the Company (the “Stock Option
Agreements”) issued thereunder (a true and complete list of which outstanding
Stock Option Agreements is set forth on Exhibit A hereto), Employee’s options to
purchase stock in the Company ceased vesting on the Separation
Date. All of Employee’s rights and obligations to stock options,
including without limitation vesting, exercise and expiration, will continue to
be governed by the terms and conditions of the Stock Option Plans and the Stock
Option Agreements.
4. Post-Termination
Consideration.
(a) Release
Consideration. If Employee signs this Agreement within twenty-one (21)
days and does not revoke Employee’s acceptance within seven (7) days thereafter
(the “Revocation Period”), then, in exchange for the promises contained herein,
the Company will provide Employee with the following release consideration (the
“Release Consideration”), which consideration Employee acknowledges is not
otherwise owed to Employee under any employment agreement (oral or written) or
any Company policy or practice:
(i) In
exchange for Employee’s release of claims under the federal Age Discrimination
in Employment law (“ADEA”), and notwithstanding Section 3 above, the Company
shall provide accelerated vesting for seventeen thousand five hundred fifty
(17,550) Restricted Stock Units (“RSUs”) that were granted on April 30,
2009.
(ii) In
exchange for Employee’s release of all other claims of discrimination of any
sort, and notwithstanding Section 3 above, the Company shall provide accelerated
vesting for an additional thirteen thousand six hundred twenty (13,620) RSUs
that were granted on May 16, 2008.
Effective
upon the expiration of the Revocation Period, the agreements evidencing the RSUs
referenced in Section 4(a)(i) and (ii) above shall be and hereby are amended to
effect the accelerated vesting stipulated in Section 4(a)(i) and (ii) above, as
applicable.
(b) Additional
Consideration. As additional consideration for, and in
exchange for the release of, all other claims contained in the Employee’s
General Release of Claims set forth below, the Company shall pay Employee a
total gross amount of $184,615.38, representing thirty-two (32) weeks of pay,
less all applicable deductions, to be paid in sixteen (16) equal installments on
the Company’s regular payroll schedule, the first such payment to be made on the
first regular payroll date after the 7-day Revocation Period has
expired.
5. Internal Revenue Code
Section 409A. In the event Employee is determined to be a
“Specified Employee” under Treasury Regulation Section 1.409A-1(i) upon
Employee’s separation from service, any payment under this Agreement shall not
be paid until at least six (6) months after such separation
date. Notwithstanding the foregoing, Employee’s termination of
employment (and Separation Date) under this Agreement (a) shall occur only if it
constitutes a “separation from service” within the meaning
of Treasury Regulation Section 1.409A-1(h)(1) and (b) in the case of
any “involuntary separation from service” under Treasury Regulation 1.409A-1(n),
the six month delay shall only be applied to the extent such amounts, when added
to all other amounts required to be taken into account under the “separation
pay” limitation of Treasury Regulation Section 1.409A-1(b)(9)(iii), would, if
paid within such period, exceed the Employee’s Statutory
Maximum. Payment of any delayed amounts shall be made as soon as is
administratively practicable, but no more than ten (10) business days, after the
expiration of such six (6) month period. For purposes of this
Section, the term “Statutory Maximum” means, with respect to a Specified
Employee, the “two (2) times the lesser of” amount describe in Treasury
Regulation Section 1.409A(b)(9)(iii)(A).
6. Company
Property. By signing this Agreement, Employee represents and
acknowledges that Employee has returned to the Company all originals and copies
(both in paper and electronic form) of all Company documents and data and all
Company property, including without limitation, personal computers, laptops, fax
machines, scanners, copiers, cellular phones, Company credit cards and telephone
charge cards, manuals, building keys and passes, courtesy parking passes,
diskettes, intangible information stored on diskettes, software programs and
data compiled with the use of those programs, software passwords or codes,
tangible copies of trade secrets and confidential information, sales forecasts,
names and addresses of Company customers and potential customers, customer
lists, customer contacts, sales information, sales forecasts, memoranda, sales
brochures, business or marketing plans, reports, projections, and all other
information or property held or used by Employee in connection with Employee’s
employment with the Company.
7. General Release of
Claims.
(a) In
exchange for the Release Consideration, Employee, on behalf of Employee and
Employee’s spouse, heirs, executors, administrators, trustees, legal
representatives, and assigns, hereby releases, indemnifies, holds harmless and
forever discharges the Company, its predecessors and successors, its past and
present parent corporations, divisions, subsidiaries, and affiliates, and the
past and present officers, directors, employees, consultants, shareholders,
partners, benefit plans, attorneys, agents, and assigns of any of them (any or
all of which are referred to as the “Releasees”), from any and all claims,
demands, liabilities, actions, and causes of action of every name and nature,
whether known or unknown, that Employee now has or ever had from the beginning
of the world to Effective Date or that arise out of or relate to Employee’s
employment by or separation from employment with the Releasees or any of
them. This general release of claims is intended by Employee to be
all encompassing and to act as a full and total release of any legally available
claims, whether specifically enumerated herein or not, that Employee may have or
may have had against the Releasees arising from conduct occurring up to and
through the Effective Date of this Agreement, including but not limited to any
and all claims under local, state or federal law for wrongful discharge,
wrongful termination, or wrongful dismissal; any and all claims for breach of an
express or implied contract, covenant, or agreement; any and all claims for
unlawful discrimination or harassment (including but not limited to claims
alleged based on race, sex, sexual preference or sexual orientation, marital
status, pregnancy, religion, creed, age, handicap, disability, national origin,
ethnic heritage, ancestry, veteran status, retaliation, or any other protected
classification protected by local, state, or federal law); any and all claims
for violation of any fair employment practice law, including the Age
Discrimination in Employment Act, 29 U.S.C. §621 et seq.; any and all
claims under the Family and Medical Leave Act or any other federal or state law
concerning leaves of absence; any and all claims under the Worker Adjustment and
Retraining Notification (“WARN”) Act or any other local, state, or federal law;
any and all claims under the Employee Retirement Income Security Act (other than
claims against an employee benefit plan seeking payment of a vested benefit
under the terms of that plan); any and all claims for infliction of emotional
distress; any and all claims for defamation; any and all claims for invasion of
any right of privacy; any and all negligence claims; any and all tort claims;
any and all statutory claims; any and all constitutional claims; any and all
claims for violation of any civil rights; any and all claims for
reinstatement or reemployment by the Releasees; any and all claims for wages,
bonuses, incentive compensation, equity compensation, stock payments or
appraisal rights, phantom stock payments, or other compensation or benefits, and
any and all claims for compensatory or punitive damages, interest, attorney’s
fees, or costs, including costs and fees already incurred.
(b) This
release shall not be construed to impair Employee’s right to enforce the terms
of this Agreement, the Stock Option Agreements or the RSUs specified in Section
4(a)(i) and (ii). This release shall terminate that certain Amended
and Restated Change-in-Control Severance Agreement, dated as of December 21,
2009, by and between the Company and the Employee.
(c) This
release does not include any claim which, as a matter of law, cannot be released
by private agreement. Nor does this release prohibit or bar Employee
from providing truthful testimony in any legal proceeding or from cooperating
with, or making truthful disclosures to, any local, state, or federal
governmental agency. Notwithstanding the foregoing, with respect to
any claim that cannot be released by private agreement, Employee agrees to
release and waive Employee’s right (if any) to any monetary damages or other
recovery as to such claims, including any claims brought on Employee’s behalf,
either individually or as part of a collective action, by any governmental
agency or other third party.
(d) This
release shall not preclude Employee from submitting claims for coverage for any
claims asserted against Employee as a result of actions or omissions in the
course of Employee’s non-negligent duties during Employee’s employment with the
Company.
8. Non-Filing of
Claims. Employee represents and warrants that Employee has not
filed any complaints, charges or claims for relief against any of the Releasees
with any local, state or federal court or administrative agency.
9. Confidentiality of
Agreement. Employee agrees to keep the terms of this Agreement
and amount of post-termination consideration provided completely confidential,
and not to disclose any such matters to anyone, in words or in substance, except
as set forth in this Section 9. Employee may disclose the terms of
and consideration under this Agreement (a) to Employee’s spouse, attorney,
and/or accountant, provided
that Employee shall first obtain any such person’s written agreement to
keep any such matters completely confidential and not to disclose any such
matters to anyone; (b) to the extent required by law or to the extent necessary
to enforce Employee’s rights under this Agreement; and (c) to the extent
permitted under Section 7(c).
10. Non-Disparagement. Except
as permitted by Section 7(c), Employee agrees not to make any direct or indirect
statement, written or oral, which disparages the Company, its products or
services, or any of its directors, officers, employees, or agents, or take any
action or conduct himself in any way that adversely affects the reputation or
goodwill of the Company, its products or services, or any of its directors,
officers, employees or agents. Employee further agrees not to
communicate with any of the Company’s directors, analysts or investors without
prior written approval from Xxxxxxx Xxxxxxxxxx.
11. Cooperation. Employee
hereby agrees to provide any and all necessary assistance to and cooperation
with the Company if called upon by it with regard to: (i) the transition of
Employee’s job responsibilities, (ii) any lawsuit, claim, action, investigation,
administrative review or otherwise that may be brought by a third party against
the Company and which may involve facts or knowledge of which Employee may be
aware as a result of Employee’s employment or position with the Company, and
(iii) any other reasonable requests for information or assistance made by the
Company through the one-year anniversary of the Separation Date.
12. Waiver of Rights and Claims
Under the Age Discrimination in Employment Act. Because
Employee is forty (40) years of age or older, Employee is protected against age
discrimination by the federal Age Discrimination in Employment
Act. Employee has or may have specific rights and/or claims under the
Age Discrimination in Employment Act of 1967 (ADEA) and the Employee agrees
that:
(a) In
consideration for the amounts described in Section 4(a) and 4(b) of this
Agreement, which Employee is not otherwise entitled to receive, Employee
specifically and voluntarily waives such rights and/or claims under the ADEA, as
amended by the Older Workers Benefit Protection Act, that Employee might have
against the Company Releasees to the extent such rights and/or claims arose
prior to the date this Agreement was executed.
(b) Employee
understands that rights or claims under the ADEA which may arise after the date
this Agreement is executed are not waived by Employee.
(c) The
Company has advised Employee that Employee has at least twenty-one (21) days
within which to consider the terms of this Agreement (including all Exhibits)
and to consult with or seek advice from an attorney of Employee’s choice prior
to executing this Agreement. If Employee signs this Agreement in
fewer than twenty-one (21) days, Employee acknowledges that the decision was
entirely voluntary and that Employee was given the full twenty-one (21) days to
consider the Agreement. If Employee does not sign this Agreement and
return it to the Company within twenty-one (21) days, the offer contained herein
shall be null and void.
(d) The
twenty-one (21) day review period will not be affected or extended by any
revisions, whether material or immaterial, that might be made to this
Agreement.
(e) Employee
understands that Employee may revoke this Agreement for a period of seven (7)
days after signing this Agreement, and that it shall not be effective or
enforceable until the expiration of this seven (7) day Revocation
Period. To revoke this Agreement, a written notice of revocation must
be received by Human Resources at the Company within the 7-day revocation
period.
(f) Employee
has carefully read and fully understood all of the provisions of this Agreement,
and Employee knowingly and voluntarily agrees to all of the terms set forth in
this Agreement; and
(g) In
entering into this Agreement Employee is not relying on any representation,
promise or inducement made by the Company or its attorneys with the exception of
those promises described in this document.
13. Binding Nature of
Agreement. This Agreement shall be binding on and inure to the
benefit of Employee and Employee’s heirs, administrators, representatives, and
executors. Employee’s obligations under this Agreement are personal
and may not be assigned. The Company may assign its rights and obligations under
this Agreement. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
14. Use of the Agreement as
Evidence; Liability. This Agreement may not be used as
evidence in any proceeding of any kind, except a proceeding in which one of the
parties or a Releasee alleges a breach of the terms of this Agreement or elects
to use this Agreement as a defense to any claim. This Agreement shall
not constitute an admission or acknowledgment of liability or wrongdoing on the
part of any or all of the Releasees.
15. Nondisclosure and
Noncompetition Obligations. Regardless of whether Employee
signs this Agreement, the Employee Noncompetition, Nondisclosure and
Developments Agreement with the Company (the “Noncompetition Agreement”), which
is attached hereto as Exhibit A shall remain in full force and effect following
the Separation Date. Employee represents and acknowledges that he has
at all times complied with the Noncompetition Agreement, and will continue to do
so following the Separation Date. Employee also acknowledges that,
with respect to any invention, modification, discovery, design, development,
improvement, process, software program, work of authorship, documentation,
formula, data, technique, know-how, trade secret or intellectual property right
whatsoever or any interest therein (whether or not patentable or registrable
under copyright, trademark or similar statutes or subject to analogous
protection) (herein called “Developments”) which Employee made, conceived,
created, discovered, invented or reduced to practice (either alone or with
others) at any time during his employment with the Company that (i) relates to
the business of the Company or any customer of or supplier to the Company or any
of the products or services being developed, manufactured or sold by the Company
or which may be used in relation therewith, (ii) results from tasks assigned
Employee by the Company or (iii) results from the use of premises or personal
property (whether tangible or intangible) owned, leased or contracted for by the
Company, he agrees and represents that:
1. such
Developments and the benefits thereof are the sole and absolute property of the
Company and its assigns, as works made for hire or otherwise;
2. he has
promptly disclosed to the Company (or any persons designed by it) each such
Development;
3. as may be
necessary to ensure the Company’s ownership of such Developments, Employee has
assigned, or will assign by the Separation Date, any rights (including, but not
limited to, any copyrights and trademarks) he may have or acquire in the
Developments and benefits and/or rights resulting therefrom to the Company and
its assigns without further compensation;
4. he has
communicated, or will communicate before the Separation Date, without cost or
delay, and without disclosing to others the same, all available information
relating thereto (with all necessary plans and models) to the Company;
and
5. he will,
during and after the Employment Period, at the request and cost of the Company,
promptly sign, execute, make and do all such deeds, documents, acts and things
as the Company and its duly authorized agents may reasonably require
to:
(i) apply
for, obtain, register and vest in the name of the Company alone (unless the
Company otherwise directs) letters patent, copyrights, trademarks or other
analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and
(ii) assist
in the defense of any judicial, opposition or other proceedings in respect of
such applications and any judicial, opposition or other proceedings or petitions
or applications for revocation of such letters patent, copyright, trademark or
other analogous protection.
16. Consequences of
Breach. Employee understands and agrees that the Company may
terminate Employee’s eligibility for the Release Consideration if Employee
violates this Agreement or the Noncompetition Agreement, and that the Company
shall further have the right to recover from Employee any Release Consideration
paid to Employee or on Employee’s behalf during any time periods following the
commencement of any such breach. Employee further agrees that a
breach of Paragraphs 6, 8, 9, 10, 11 and/or 15 herein would result in
irreparable harm to the Company and that money damages would not provide an
adequate remedy. Therefore, Employee agrees that in addition to any
other rights that it may have, the Company shall have the right to specific
performance and injunctive relief in the event Employee breaches any of those
Paragraphs of this Agreement.
17. Entire Agreement;
Modification. With the exception of the Noncompetition Agreement,
the Stock Option Plans, the Stock Option Agreements and the agreements
evidencing the RSUs, all of which shall remain in full force and effect, this
Agreement is the entire agreement between the Company and Employee and all
previous agreements or promises between them are superseded and
void. This Agreement may be modified only by a written agreement
signed by Employee and an officer of the Company.
18. Acknowledgements. By
signing this Agreement, Employee acknowledges that Employee has carefully read
and fully understands this Agreement, Employee is not relying on any
representations by any representative of the Company concerning the meaning of
any aspect of this Agreement, Employee has had twenty-one (21) days to review
this Agreement, and Employee is signing it voluntarily.
19. Governing Law;
Interpretation. In the event of any dispute, this Agreement
will be construed as a whole, will be interpreted in accordance with its fair
meaning, and will not be construed strictly for or against either Employee or
the Company. The internal laws of The Commonwealth of Massachusetts,
exclusive of rules and principles of conflicts of law, will govern any dispute
about this Agreement. If for any reason any part of this Agreement
shall be determined to be unenforceable, the remaining terms and conditions
shall be enforced to the fullest extent possible.
IN
WITNESS WHEREOF, the parties have executed this Agreement under seal as of the
date last written below.
| /s/ Xxxxx Xxxx |
October
19, 2010
|
||||
| Xxxxx Xxxx |
DATE
|
||||
| SEACHANGE INTERNATIONAL, INC. | |||||
| By: | /s/ Xxxxx Xxxxxx | October 19, 2010 | |||
| DATE | |||||
| Title: | Senior Director, Human Resources | ||||
| By: | /s/ Xxxxx X. Xxxxxx | ||||
| Title: | Chief Financial Officer, Treasurer, | ||||
| Secretary and Senior Vice President, Finance and Administration | |||||
