CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS
Exhibit
10.21
CONFIDENTIAL
SEPARATION AGREEMENT
AND
GENERAL RELEASE OF CLAIMS
1. Xxxx
Xxxxxxxxxxxx (“Employee”) was employed by PureDepth, Inc. (the “Company”) as
Chief Executive Officer pursuant to an Executive Employment Agreement effective
November 10, 2006 (the “Employment Agreement”). The Company and
Employee have mutually agreed to terminate the employment
relationship. Employee was also co-employed by Administaff, pursuant
to an Administaff employment agreement; Employee agrees that Employee’s
employment with Administaff will terminate under such agreement in conjunction
with Employee’s termination of employment with the Company. Employee
also will resign from the Board of Directors of the Company, and its
subsidiaries. It is the Company’s desire to provide Employee with
certain benefits upon his termination of employment and to resolve any claims
that Employee has or may have against the Company.
2. Employee
hereby voluntarily resigns from his employment with the Company, in his capacity
as Chief Executive Officer, and also resigns as a member of the Board of
Directors of the Company (and its subsidiaries), and the Company and Board
of
Directors hereby accepts such voluntary resignations effective June 26, 2007
(the “Termination Date”). Employee and the Company agree that as of
Termination Date, they are terminating the Employment Agreement, other than
the
Surviving Terms (as defined below). In so doing, Employee and the
Company specifically acknowledge and agree that both parties have waived
any
obligations with respect to payments to be made to Employee which may otherwise
have been required under the Employment Agreement and that the consideration
to
be paid to Employee by the Company pursuant to this Agreement will supersede
the
obligations of the Company under the Employment Agreement.
3. Employee
represents and agrees that, except as expressly provided below, he has received
all compensation owed to him by the Company through the Termination Date,
including any and all wages, commissions, bonuses, incentives, stock options,
earned but unused vacation, severance benefits and any other compensation
of any
kind to which he was or may have been entitled in connection with his employment
with the Company.
4. With
respect to outstanding business expenses, if any, Employee agrees that on
or
before July 20, 2007, he will submit a final expense reimbursement statement
reflecting any outstanding business expenses incurred through the Termination
Date, along with the appropriate receipts and necessary supporting
documentation. The Company will provide reimbursement for appropriate
and reasonable business expenses in accordance with its current business
policies and practices, and for only expenses incurred prior to the Termination
Date. Payment shall be made at the time described in Section 6 of the
Employment Agreement.
5. Employee
represents to the Company that he is signing this Separation Agreement and
General Release (the “Separation Agreement”) voluntarily and with a full
understanding of and agreement with its terms for the purpose of receiving
additional pay and consideration from the Company beyond that which is owed
to
him.
6. The
Company shall provide Employee with the following benefits after this Separation
Agreement becomes effective (as defined below):
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(a) Employee
will be retained as a consultant for a period commencing on the Effective
Date
and continuing through September 26, 2007 (the “Consulting Period”), to render
such services as the Company may reasonably request from time to time on
areas
within Employee’s expertise, and agrees to assist with any transition matters
(including without limitation assistance in preparation, execution or filings
of
any required regulatory filings, standard corporate governance documents
such as
Board of Director minutes or actions, etc. or other matters as reasonably
requested by the Company). Employee will maintain the confidentiality
of any Company confidential information received during such period and agrees
to sign and return a confidentiality agreement, substantially in the form
attached to this Separation Agreement, providing for such confidential
information (“NDA”). Employee will not be required to come to the
Company’s office on a daily basis, but agrees to use his best efforts to respond
to any reasonable Company request on a reasonable and timely
basis. As compensation for the consulting services to be rendered by
Employee during such the Consulting Period, the Company shall pay Employee
a
monthly consulting fee (paid twice monthly) equal to the monthly salary amount
Employee earned immediately prior to the Termination Date (“Salary Rate”),
subject to standard deductions.
(b) After
the Consulting Period, Employee will no longer be retained as a consultant,
but
he will receive salary continuation, subject to his compliance with the terms
herein, in the NDA and/or the Surviving Terms (as defined below), in a monthly
amount equal to the Salary Rate, to be paid twice monthly, for an additional
twelve (12) month period. During such twelve (12) month period,
Employee shall not be required to provide consulting services to the Company,
but shall remain subject to the terms contained herein, and in the NDA and/or
the Surviving Terms (as defined below).
In
the
event that Employee elects to provide any services, directly or indirectly,
to
any competitor of the Company (as reasonably determined by the Company’s Board
of Directors in its sole discretion) during the fifteen (15) month period,
referenced in (a) and (b) above, whether as an employee, consultant, advisor,
investor, or otherwise, Employee shall provide the Company advance written
notice, and Employee acknowledges and agrees that the Company shall be released
from its obligations to make any further payments to Employee
hereunder. In addition, during the fifteen (15) month period,
Employee agrees to vote any shares of the Company’s securities held beneficially
by Employee (or to execute a consent pursuant to an action by a written consent
of the Company’s shareholders with respect to such securities) in favor of any
action approved by the Board of Directors of the Company from time to time
and
submitted to the stockholders of the Company for approval. Should the
foregoing provision be construed to constitute the granting of a voting proxy,
such proxy shall be deemed to be coupled with an interest and is irrevocable
for
the term thereof.
(c) Employee
is covered under the Company’s group health plan as of the Termination Date and
provided he timely elects to continue his group coverage pursuant to
federal/state law (COBRA), the Company will pay twenty (24) months of the
applicable COBRA premiums as COBRA is provided in accordance with the terms
of
the applicable plans and the law. At the earlier of (i) such time as
Employee is employed by another employer, or (ii) the end of the 24-month
period, Employee will be solely responsible for the timely payment of the
COBRA
premiums; in the event that COBRA coverage is not offered for that length
of
term, the Company will pay for and maintain health insurance coverage for
Employee and his immediate family for a period of twenty-four (24) months
from
July 1, 2007; and
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(d) the
Company agrees that it will not contest Employee’s claim for unemployment
benefits that may be filed by Employee after the Termination Date unless
such
claim is falsely filed.
(e) Employee
has an outstanding option (the “Option”) to purchase common stock of
the Company pursuant to a Stock Option Agreement, as amended pursuant to
an
Amendment of Stock Option Agreement dated December 2006 (the
“Amendment”). Company and Employee hereby agree that the terms of the
Option are further amended, effective as of immediately prior to the Termination
Date, as set forth below:
(i) The
first sentence of Section 2 of the Amendment is hereby revised to read:
“Notwithstanding the termination date in the Option Agreement, the Option
may be
exercised only in the calendar years indicated on Schedule A.”
(ii) The
Note on Schedule A is hereby deleted in its entirety.
(iii) Schedule
B is revised to read as follows:
Schedule
B
Selling
Schedule
2006
100,000 Shares
2007
600,000 Shares
2008
870,000 Shares
2009 1,430,000
Shares
Employee
acknowledges that to the extent such Options are exercised, they will be
treated
for tax purposes as nonqualified stock options and that the Company shall
be
entitled to withhold from amounts otherwise due to Employee any taxes required
to be withheld upon any such exercise.
(f) In
the event that the Company consummates a private placement of the Company’s
securities any time prior to December 31, 2007, in which existing stockholders
of the Company are invited to participate by; selling shares of their common
stock therein, Employee will be eligible to participate in such transaction
such
that he will be invited to sell a number of shares of common stock in an
amount
of no less than 200,000 shares and no more than 300,000 shares; provided
however, that if existing stockholders indicate an interest to include in
such
offering for sale a greater aggregate number of their shares of common stock
than in the reasonable opinion of the managing underwriter of the proposed
offering, or the investment banker engaged to manage the offering, can be
accommodated without adversely affecting the proposed offering, then the
amount
of shares that may be offered by Employee for offering, as well as the number
of
securities of any other selling stockholders participating in the registration,
shall not be included or shall be proportionally reduced to a number deemed
satisfactory by such managing underwriter or investment bank. The
Company’s obligations in this subsection (f) shall be contingent upon your full
and timely cooperation in connection with such offering, including without
limitation your provision of any information and/or execution and compliance
with agreements that are standard and/or necessary for the Company to finalize
the offering, to be determined in the sole and exclusive discretion of the
Company.
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7. Employee
and his successors and assigns release the Company, and Administaff, and
their
related entities, past and present affiliates, shareholders, investors,
directors, officers, employees, agents, attorneys, insurers, legal successors
and assigns (the “Released Parties”) 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 out of any matter, cause, fact, thing, act or omission
whatsoever occurring or existing at any time up to and including the Termination
Date, 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, as amended, the Older Workers Benefit
Protection Act, the Americans with Disabilities Act, the Fair Employment
and
Housing Act or any other applicable law. However, this Release is not
intended to bar any claims that, by statute, may not be waived, such as claims
for workers’ compensation benefits, unemployment insurance benefits, and any
challenges to the validity of Employee’s release of claims under the Age
Discrimination in Employment Act of 1967, as amended, as set forth in this
Agreement.
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 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.
Employee
waives any right which 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.
9. This
Agreement is intended to satisfy the requirements of the Older Workers’ Benefit
Protection Act, 29 U.S.C. sec. 626(f). Employee, by this Agreement,
is advised to consult with an attorney before executing this
Agreement.
Employee
acknowledges and agrees that
(a) Employee has read and understands the terms of this Agreement;
(b) Employee has been advised in writing to consult with an attorney before
executing this Agreement; (c) that Employee has obtained and considered
such legal counsel as Employee deems necessary; (d) that Employee has been
given up to twenty-one (21) days to consider whether or not to enter into
this
Agreement (although Employee may elect not to use the full 21 -day period
at
Employee’s option); and (e) that by signing this Agreement, Employee
acknowledges that Employee does so freely, knowingly, and
voluntarily.
This
Agreement shall not become effective or enforceable until the eighth day
after
Employee signs this Agreement (the “Effective Date”). In other words,
Employee may revoke Employee’s acceptance of this Agreement within seven (7)
days after the date Employee signs it. Employee’s revocation must be
in writing and received by Xxxx XxXxxxx-Xxxxxx, at the law offices of DLA
Piper,
0000 Xxxxxxxxxx Xxxxxx, Xxxx Xxxx Xxxx, Xxxxxxxxxx 00000, by 5:00 p.m. Pacific
Time on the seventh day in order to be effective. If Employee does
not revoke acceptance within the seven (7) day period, Employee’s acceptance of
this Agreement shall become binding and enforceable on the Effective
Date. The benefits described above shall become due and payable in
accordance with paragraph 6, provided this Agreement has not been
revoked.
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This
Agreement does not waive or
release any rights or claims that Employee may have under the Age Discrimination
in Employment Act that arise after the execution of this
Agreement. In addition, this Agreement does not prohibit Employee
from challenging the validity of this Agreement’s waiver and release of claims
under the Age Discrimination in Employment Act of 1967, as amended.
10. Employee
acknowledges and agrees that he shall continue to be bound by and comply
with
the terms of any proprietary rights, non-disclosure, confidentiality, and/or
non-interference with business relations agreements between the Company and
Employee, including without limitation the provisions in Sections 9 and 10
set
forth in the Employment Agreement (the “Surviving Terms”). On or
before the Termination Date, Employee will return to the Company, in good
working condition, all Company property and equipment that is in Employee’s
possession or control, including, but not limited to, any files, records,
computers, computer equipment, cell phones, credit cards, keys, programs,
manuals, business plans, financial records, and all documents (and any copies
thereof) that Employee prepared or received in the course of he employment
with
the Company.
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. Employee further agrees that he
will not, at any time in the future, make any critical or disparaging statements
about the Company, its products, services or its directors, officers and/or
employees, unless such statements are made truthfully in response to a subpoena
or other legal process. Employee also agrees that he will defer all
inquiries relating to the Company, its products, services, directors, officers
and/or employees, or relating to his termination, including without limitation,
inquiries from stockholders, analysts, prospective investors, customers,
vendors, suppliers or other business partners or parties, to the Chief Financial
Officer of the Company, and further that he will not contact, by phone, email
or
otherwise, any such parties, unless specifically requested in each instance
by
the Company.
12. Employee
agrees that for a period of one (1) year following the Termination Date,
he will
not, on behalf of himself or any other person or entity, directly or indirectly
solicit any employee of the Company to terminate his employment with the
Company.
13. In
the event of any legal action relating to or arising out of this Agreement,
the
prevailing party shall be entitled to recover from the losing party its
attorneys’ fees and costs incurred in that action.
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14. Employee
and the Company understand and acknowledge that this Agreement constitutes
a
compromise and settlement of disputed claims. No action taken by the
parties hereto, or either of them, either previously or in connection with
this
Agreement, shall be deemed or construed to be (a) an admission of truth or
falsity of any claims heretofore made or (b) an acknowledgement or
admission by either Party of any fault or liability whatsoever to the other
party or to any third party.
15. Each
party represents that it has been advised of its right to consult with an
attorney and to seek legal representation of its choosing in the execution
of
this Agreement, and has carefully read and understands the scope and effect
of
the provisions of this Agreement. Neither party has relied upon any
representations or statements made by the other party hereto which are not
specifically set forth in this Agreement.
16. This
Agreement 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 7 and the Option Agreement. This Agreement may be
modified or amended only with the written consent of Employee and an authorized
officer of the Company, provided, however, that the Company may amend or
modify
this Agreement in order to comply with the provisions of, or to be exempt
from
the application of, Section 409A of the Internal Revenue Code, to the
extent applicable. Notwithstanding the preceding sentence, the
Company will have no obligation to amend or modify this Agreement to provide
that any payment or benefit hereunder will comply with, or be exempt from,
Section 409A, and the Company makes no representation or warranty regarding
compliance with, or exemption from, Section 409A with respect to any payment
or
benefit provided by this Agreement. Employee agrees that Employee
shall bear sole and exclusive responsibility for any and all federal, state,
local and/or foreign tax consequences (including, without limitation, any
and
all tax liability under Section 409A) of this Agreement, and fully indemnifies
and holds the Company harmless therefor. Employee should consult with
his own tax advisor in connection with this Agreement and its tax
consequences. No oral waiver, amendment or modification will be
effective under any circumstances whatsoever.
EMPLOYEE
UNDERSTANDS THAT HE SHOULD CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS
AGREEMENT AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINST THE PARTIES
RELEASED ABOVE BY SIGNING THIS AGREEMENT. EMPLOYEE ACKNOWLEDGES THAT
HE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE
FOR THE BENEFITS DESCRIBED IN PARAGRAPH 6.
| Dated:__________________, 2007 | ||||
|
Xxxx
Xxxxxxxxxxxx
|
| PUREDEPTH, INC. | |||||
| Dated:__________________, 2007 | By: | ||||
|
|
Its:
|
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