Exhibit 10.8
SEPARATION AND NON-COMPETE AGREEMENT AND MUTUAL RELEASE
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This Separation and Non-Compete Agreement and Mutual Release ("Agreement")
is made and entered into effective as of July 27, 2006 ("Effective Date"), by
and between Xxxxxx X. Xxxxxxxx, a Minnesota resident ("Employee") and Xxxxxx
Software, Inc., a Delaware corporation (Xxxxxx Software, Inc. and its
subsidiaries are referred to as the "Company").
Background
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A. The resignation date of Employee as an employee and officer of the
Company is as of the close of business on the last day of the Employment Period
defined below;
B. Subject to the terms of this Agreement, the Company will pay Employee
the severance benefits described below; and
C. Subject to the terms of this Agreement, Employee will not compete with
the Company (for the time period and to the extent described in Section 4
below), and Employee and the Company agree to the mutual release,
indemnification and other provisions described below.
Agreement
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NOW, THEREFORE, in consideration of the mutual promises and covenants
established in this Agreement, Employee and the Company agree as follows:
1. Definitions. In addition to the other capitalized terms used in this
Agreement, the following capitalized terms have the respective meanings defined
below:
1.1 Cause. "Cause" means fraud or criminal conduct in connection with
the Company's business, unless Employee was directed by a director or
executive officer of (or a superior within) the Company to engage in such
fraud or conduct.
1.2 Planned Employment Period. "Planned Employment Period" means the
time period commencing on the Effective Date of this Agreement and ending
on October 31, 2006.
1.3 Employment Period. "Employment Period" means the time period
commencing on the Effective Date of this Agreement and ending on the
earlier of:
(a) the end of the Planned Employment Period; (b) Employee's death or
total disability; (c) termination of Employee by the Company for
Cause;
(d) Employee's material breach of this Agreement that is not cured
within five business days after written notice describing the
breach (but the Company understands that Employee will be
spending time from the Effective Date of this Agreement through
the end of the Employment Period engaged in wind-down and
transition activities, and such activities shall not be deemed a
material breach so long as Employee is working full time and
substantially consistent with his prior work as chief financial
officer and with the direction of the chief executive officer);
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(e) The Company reasonably determines that Employee is not working on
a full time basis that is substantially consistent with his prior
work as chief financial officer and with the direction of the
chief executive officer, and Employee does not return to full
time efforts within two business days after notice describing the
short fall;
(f) Employee commences employment with another employer; or (g)
voluntary resignation by Employee.
2. Employment and Employee Obligations.
2.1 Full-Time Employment With the Company. Throughout the Employment
Period, Employee shall be a full-time employee and executive officer,
employed as Executive Vice President and Chief Financial Officer of the
Company, reporting to the Company's chief executive officer, substantially
consistent with Employee's past practices as chief financial officer.
During the Employment Period Employee shall perform, on a full-time basis,
his work as chief financial officer, his transition work for the Company
and other activities directed by the chief executive officer.
2.2 Resignation as an Executive Officer of the Company. Employee
hereby confirms that Employee will be deemed to have voluntarily resigned
as an executive officer and chief financial officer of the Company and as a
director of any subsidiary of the Company as of the end of the Employment
Period. Notwithstanding the foregoing, nothing shall prevent Employee from
resigning earlier.
2.3 Employee Invention and Non-Disclosure Agreement. Employee agrees
to comply with Sections 1 and 2 of Exhibit A to this Agreement.
2.4 Surrender of Records and Property. Employee shall vacate his
office at the Company by the end of the Employment Period. On or before the
end of the Employment Period, Employee shall deliver to the Company's
Senior Vice President of Human Resources all Company records and property
possessed by Employee, including Employee's Blackberry, laptop computer,
and any other Xxxxxx property the Employee has in his possession. Employee
will have normal employee access to the Company's offices, network, e-mail
system and telephone system until the end of the Employment Period.
2.5 Cooperation. From and after the Effective Date, Employee agrees to
cooperate with the Company in the investigation, discovery and litigation
of any employment claims or other Company legal matters for which Employee
has relevant knowledge. In consideration of such cooperation: (1) the
Company will reimburse Employee for Employee's reasonable out-of-pocket
expenses incurred at the request of the Company, (2) the Company will
compensate Employee (as an independent contractor if Employee is not
employed by the Company at that time) for the reasonable time incurred at
the request of the Company, at a reasonable hourly rate and (3) the Company
will indemnify and defend Employee, in connection with such cooperation and
in connection with the terms set forth in Section 7 of this Agreement, to
the same extent as if Employee had continued to be an employee and officer
of the Company.
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3. Compensation, Benefits and Severance.
3.1 Compensation Through the end of the Employment Period. In
accordance with the Company's normal payroll practices, the Company shall
pay Employee's current full-time base salary, less applicable taxes,
through and ending on the last day of the Employment Period.
3.2 ELRP Bonus Plan. Payments of incentive compensation to Employee
are governed by the terms of the Company's Executive Leadership Results
Plan ("ELRP"). This Section 3.2 describes certain relevant terms of the
ELRP and does not modify the ELRP. If there any payouts under the ELRP for
fourth quarter ended May 31, 2006 ("Q4FY06"), Employee shall receive a
payout (less applicable taxes) to the full extent earned and accrued under
the terms of the ELRP for Q4FY06 (the payout amounts and dates will be
governed by the ELRP). If there any payouts under the ELRP for the first
quarter ending August 31, 2006 ("Q1FY07") and the Employment Period is
still in effect on August 31, 2006, Employee shall receive a payout (less
applicable taxes) to the full extent earned and accrued under the terms of
the ELRP for Q1FY07 (the payout amounts and dates will be governed by the
ELRP). If there is no payout under the ELRP for Q4FY06, Employee will not
receive any ELRP payouts or other bonuses for Q4FY06 or for the fiscal year
ending May 31, 2006. If there is no payout under the ELRP for Q1FY07 or if
Employee is not an employee of the Company on August 31, 2006, Employee
will not receive any ELRP payouts or other bonuses for Q1FY07. Employee
shall not be eligible to receive any bonuses, whether or not under the
ELRP, for the second, third or fourth quarters of the fiscal year ending
May 31, 2007 or for the fiscal year ending May 31, 2007.
3.3 Benefits. The payment and termination of employee benefits are
governed by the terms of the applicable benefit plan, based on the last day
of the Employment Period as the employment resignation date.
3.4 Release. In consideration of the severance payments to be made by
the Company to Employee pursuant to Sections 3.5 and 3.6 below, Employee
will sign and deliver to the Company within three days after the end of the
Employment Period the "Release" in the form attached as Exhibit B. Said
mutual release will be signed by Company on or before the time that it is
presented to Employee to sign.
3.5 Severance Based On One Times Annual Base Salary. If Employee has
signed and delivered the Release to the Company (and not rescinded that
release within the 15-day rescission period described in Section V of the
Release) and the Company has not, prior to the end of the Employment
Period, terminated the Employment Period for Cause, the Company shall pay
Employee $300,000.00, less applicable taxes and without interest, at the
end of the first payroll period that includes the date that is six months
plus three business days after the end of the Employment Period (for
example, if the Employment Period ends October 31, 2006, that first payroll
period would be the May 15, 2007 payroll) (that $300,000 payment represents
one times annual base salary and is in consideration of the release
described in Section II.A of the Release and the noncompete covenant in
Section 4 below).
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3.6 Severance Based On One Times Annual Target Bonus. If Employee has
signed and delivered the Release to the Company (and not rescinded that
release within the 15-day rescission period described in Section V of the
Release) and the Company has not, prior to the end of the Employment
Period, terminated the Employment Period for Cause, the Company shall pay
Employee $300,000.00, less applicable taxes and without interest, at the
end of the first payroll period that includes the date that is six months
plus three business days after the end of the Employment Period (for
example, if the Employment Period ends October 31, 2006, that first payroll
period would be the May 15, 2007 payroll) (that $300,000 payment represents
one times annual target bonus and is in consideration of the release
described in Section II.B of the Release).
3.7 IRC Section 409A and Delay of Payment. If any amounts payable to
Employee pursuant to this Agreement are subject to Xxxxxxx 000X xx xxx
Xxxxxx Xxxxxx Internal Revenue Code ("Section 409A"), and an exception to
Section 409A does not apply, then, notwithstanding any provision in this
Agreement to the contrary: (a) the payment of such amount will be made to
Employee with first payroll period that is six months plus three business
days following the end of the Employment Period (provided that at the time
of actual payment Employee has met all other requirements for that payment
under this Agreement), (b) no payment of such amount will be made to
Employee before the date described in clause (a) above, and (c) no interest
shall accrue or be payable to Employee for any payments that are delayed
pursuant to this Section 3.7. The Company assumes no obligation to pay or
reimburse Employee for any taxes incurred under Section 409A.
3.8 No Claw-Back for Other Employment. Employee shall not be obligated
to payback any portion of the severance payments made pursuant to Sections
3.5 or 32.6 above, nor shall the Company be relieved of its obligation to
make said severance payments, if Employee accepts employment with another
employer at any time or if Employee voluntarily resigns prior to October
31, 2006.
3.9 COBRA Coverage. Employee (and his dependents) shall be eligible to
and may elect COBRA continuation coverage under the Company's health plans
commencing on the first day of the calendar month after the end of the
Employment Period (the "COBRA Start Date"). If Employee timely elects COBRA
continuation coverage, Employee shall pay both the employee and employee
costs of that coverage.
3.10 Stock Options. The stock options previously granted to Employee
("Options") for the purchase of shares of common stock of the Company, are
governed by the terms of the applicable Stock Incentive Plan and Grant
Notice or Option Agreement delivered to Employee when the Options were
granted (collectively, the "Option Documents"). This Agreement does not
amend any of the Option Documents. No Options will vest or first become
exercisable after the end of the Employment Period. The Company and/or
Xxxxxxx Xxxxx Xxxxxx are not obligated to remind Employee of the applicable
date when the Options terminate. If Employee provides specific written
requests to the Company (to the attention of the Corporate Secretary)
concerning the Options and Internal Revenue Code Section 409A, the Company
will make reasonable efforts to accommodate those requests so long as the
Company is not required to take any actions that would be detrimental to
the Company, including, without limitation, any actions that would result
in any adverse financial or accounting costs or charges.
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3.11 Non-Payment of Severance. Notwithstanding any provision in this
Agreement to the contrary, if Employee rescinds the Release within the
15-day rescission period described in Section V of the Release or breaches
Section 4 of this Agreement (and that breach is not timely cured within 10
days after written notice from the Company), no severance payments shall be
payable to Employee under Sections 3.5 or 3.6 above.
3.12 Form 4 and Form 144 Filings with SEC. If Employee has not made
any non-exempt purchases of Company stock during the six months before the
end of the Employment Period, no further Form 4 filings will be required
for Employee for stock transactions made after the Employment Period (other
than as required by applicable law and other than the final Form 4 filing
showing that Employee has left the SEC's Section 16 reporting system for
the Company's stock). During the 90-days after the end of the Employment
Period, Employee must file a Form 144 with the SEC for any sales of Company
stock in Employee's 401(k) plan account
3.13 Flexible Time Off (FTO). All earned but unused FTO through the
end of the Employment Period will be paid out to Employee after the end of
the Employment Period pursuant to the Company's normal payroll practices.
No FTO shall accrue after the end of the Employment Period.
3.14 Business Expense Reimbursement. The Company shall reimburse
Employee for all employment-related expenses, consistent with past
practices, through the end of the Employment Period. Employee must submit
the necessary requests for reimbursement within 30 days after the end of
the Employment Period (for proper expenses incurred before the end of the
Employment Period). Employee shall not be obligated to reimburse the
Company for any club memberships previously paid for by the Company. The
Company shall not be obligated to reimburse Employee for any country club
expenses or other expenses incurred after the end of the Employment Period.
Payment of such reimbursement amounts will be made to Employee with the
first payroll period that is six months plus three business days following
the end of the Employment Period.
3.15 Termination of Umbrella Personal Liability Insurance Coverage.
The Company previously made available to Employee, as an executive officer
of the Company, $10 million of umbrella personal liability insurance. That
umbrella personal liability insurance will be cancelled as of the end of
the Employment Period.
3.16 Termination of Employment Agreement. The Employment Agreement
dated February 15, 2001, between the Company and Employee, is hereby
terminated in its entirety and shall have no further force or effect.
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3.17 No Participation in Change in Control Severance Pay Plan. On
January 17, 2005, the Company adopted the Executive Change in Control
Severance Pay Plan for Tier 1 Executives (the "Tier 1 Plan"). Under the
Tier 1 Plan, if the employment of a Tier 1 executive (e.g. the chief
executive officer and his or her direct reports) is terminated within two
years after a "Change in Control" of the Company (as defined in the Tier 1
Plan), the Tier 1 executive may be eligible to receive as severance two
times annual base salary and two times the average annual bonus over the
preceding three years. Employee acknowledges and agrees that: (i) this
Agreement supersedes the Tier 1 Plan to the extent described in this
Section 3.17, (ii) the Tier 1 Plan is applicable to Employee during the
Employment Period but will no longer be applicable to Employee after the
end of the Employment Period and (iii) if a Change in Control of the
Company occurs at any time after the end of the Employment Period, Employee
will not be eligible for any payments under the Tier 1 Plan.
3.18 No Other Compensation or Payments. Except to the extent expressly
set forth in this Agreement, Employee is not eligible to receive at any
time any compensation, severance or other payments from the Company.
4. Covenant Not To Compete, Hire or Solicit. In consideration of the
severance payments under Sections 3.5 and 3.6 above, Employee
covenants and agrees that from the Effective Date of this Agreement
through and ending one year after the end of the Employment Period,
Employee shall not:
(a) be employed by or retained as a consultant to SAP AG, Microsoft
Corporation, Oracle Corporation, Infor, SSA Global Technologies, Inc.,
McKesson Corporation, American Management Systems, Inc., Epicor
Software Corporation, Extensity or Workbrain, Inc. or any of their
respective subsidiaries (collectively referred to as the "Named
Competitors");
(b) directly solicit any Company clients who are clients as of the
Effective Date of this Agreement for the purpose of selling or
providing those clients any products or services which directly
compete with the Company's products or services; or
(c) directly solicit any Company employees for the purpose of hiring them
and inducing them to leave employment at the Company.
If one or more of the Named Competitors acquire one another, this Section 4
shall remain in effect pursuant to its terms for each of the resulting
successors to the Named Competitors. If a Named Competitor acquires Employee's
then current employer, that acquisition will not result in a violation of this
Section 4 (e.g., Employee may continue to work for that employer or its
successor). If another company (that is not a Named Competitor) buys one of the
Named Competitors, that acquisition will not prohibit Employee from working for
the combined company. Employee acknowledges that the violation of this Section 4
will cause irreparable harm to the Company and agrees that, in addition to any
other relief afforded by law, an injunction against any violation of this
Section 4 may issue against Employee. Both damages and injunction shall be
proper modes of relief and are not alternative remedies for Employee's violation
of this Section 4. If the Company commences any action in equity to specifically
enforce any of its rights under this Section 4, Employee waives and agrees not
to assert the defense that the Company has an adequate remedy at law.
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5. Publicity. Employee acknowledges that the Company is required to
disclose the contents of this Agreement publicly with the Securities
and Exchange Commission in a Form 8-K Report, which will include a
copy of this Agreement, and in a mutually agreed press release which
the Company provides to Employee in advance of issuance.
6. Non-disparagement. Employee agrees not to make any disparaging
remarks, either orally or in writing, regarding the Company or any of
its officers or directors. The Company agrees that no executive
officer of the Company has authorized or will authorize any employee
to make any disparaging remarks, either orally or in writing,
regarding Employee. Both the Company and the Employee acknowledge that
this provision shall not prevent the Employee or any Company
representative from providing truthful testimony in any deposition or
legally compelled proceeding.
7. Indemnification by the Company. To the extent allowed under Section
145 of the Delaware General Corporation Law (which requires that
Employee acted in good faith and in a manner Employee reasonably
believed to be in or not opposed to the best interests of the
Company), and until the last expiration date of the applicable statute
of limitations, the Company shall indemnify and defend Employee
against any claims or other actions brought against Employee in
connection with Employee's employment by the Company or status as a
former executive officer or employee, of the Company (a "Claim"),
subject to each of the following:
(a) Employee promptly notifies the Company of the Claim.
(b) The Company will provide Employee legal representation by lawyer(s)
and a law firm selected by the Company. If joint representation is not
applicable or appropriate, the Company will provide and pay for
separate legal counsel to represent Employee, subject to Employee's
continued compliance with Section 2.5 above and this Section 7.
(c) Employee will not agree to any settlements, for which the Company is
obligated to indemnify Employee, unless the Company has agreed to that
settlement in writing and in advance.
8. D&O Insurance. Until the last expiration date of the applicable
statute of limitations, the Company (and its successors) shall renew,
purchase and/or maintain in effect, at the Company's expense,
directors and officers liability insurance, with carriers and
coverages that are reasonable based on the Company's then current
business (but not exceeding the current coverage), to the extent
commercially and reasonably available in the market (the "D&O
Insurance"). The D&O Insurance shall cover Employee as a former
executive officer of the Company, subject to the insurance policy
scope and limitations. From time to time upon written request from
Employee to the attention of the Company's Corporate Secretary, the
Company shall provide Employee evidence of the D&O Insurance then in
effect (as well as copies of the D&O Insurance in effect and covering
Employee at any time during his employment with the Company).
9. Limitation of Liability. In no event shall the Company or Employee be
liable to each other under this Agreement for any indirect, special,
consequential or punitive damages that arose before or on the last day
of the Employment Period.
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10. Release by the Company. Exhibit B contains a release by the Company
that will be effective pursuant to its terms.
11. General.
11.1 Governing Law. This Agreement is made under and shall be governed
by and construed in accordance with the laws of the State of Minnesota
without regard to conflicts of laws principles.
11.2 Entire Agreement. This Agreement and any other agreement
specifically mentioned in this Agreement contains the entire agreement of
the parties relating to the employment of Employee by the Company and the
other matters discussed herein and supersedes all prior promises,
contracts, agreements and understandings of any kind (other than any other
written agreement mentioned herein), whether express or implied, oral or
written, with respect to such subject matter.
11.3 Withholding Taxes. The Company may take such action as it deems
appropriate to insure that all applicable federal, state, city and other
payroll, withholding, income or other taxes ("Taxes") arising from any
compensation, benefits or any other payments made pursuant to this
Agreement, or any other contract, agreement or understanding which relates,
in whole or in part, to Employee's employment with the Company, are
withheld or collected from Employee. The Company shall have no obligation
to pay any Taxes on behalf of Employee or reimburse Employee for the
payment of any Taxes.
11.4 Amendments. No amendment or modification of this Agreement shall
be deemed effective unless made in writing and signed by Employee and the
Chief Executive Officer of the Company. The parties shall in good faith
amend this Agreement if specifically requested in writing by Employee (to
the attention of the Corporate Secretary) to the limited extent necessary
to allow Employee to comply with the requirements under Internal Revenue
Code Section 409A and avoid, to the extent lawful, having any amounts paid
or payable hereunder subject to the additional 20% income tax thereunder
while maintaining to the maximum extent practicable the original intent of
this Agreement; provided however, the Company shall not be required to
execute any amendment that would be detrimental to the Company, including,
without limitation, any amendment that would result in any financial or
accounting costs or charges. Employee acknowledges that the Company is not
obligated to pay or reimburse Employee for any taxes that are incurred by
Employee under Internal Revenue Code Section 409A.
11.5 No Waiver. No term or condition of this Agreement shall be deemed
to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by
the party against whom enforcement of the waiver or estoppel is sought.
11.6 Assignment. This Agreement may not be assigned by either party
unless the other party consents in writing, except that the Company may
assign this Agreement without Employee's consent in connection with a
merger or sale of the Company or sale of substantially all of the assets of
the Company or its applicable operating division.
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11.7 Review by Employee's Legal Counsel. The Company has informed
Employee that Employee has the right to consult with an attorney and tax
advisor (at Employee's own expense) before signing this Agreement. Except
as stated in Exhibit B (concerning payment of up to $10,000 in Employee's
legal fees), the Company is not obligated to reimburse Employee for any
legal fees incurred in the review, negotiation or preparation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date set forth in the first paragraph of this Agreement.
Xxxxxx Software, Inc.
By /s/ Xxxxx Xxxxx
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Xxxxx Xxxxx,
Chief Executive Officer
Employee Name: Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxxxxx
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Employee Signature
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EXHIBIT A
XXXXXX SOFTWARE, INC, , or any of its subsidiaries, (hereinafter "COMPANY") and
Employee (hereinafter "I" or "me"), agree as follows:
1. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. I agree that Confidential
Information related to COMPANY's business, or the business of any of its
clients, customers, suppliers, partners or third parties, I acquire during my
employment by COMPANY is the property of COMPANY or is held in trust by COMPANY,
will be held in trust by me, and shall be regarded and treated as confidential
and solely for the benefit of COMPANY. Such "Confidential Information" for
purpose of this Agreement shall mean all information maintained in confidence by
COMPANY. Confidential Information includes, but is not limited to: (1) all
information that derives independent economic value, actual or potential, from
not being generally known to, and not being readily ascertainable through proper
means by, other persons who can derive economic value from its disclosure or
use, (2) trade secrets and (3) computer programs and passwords; customer lists,
sales lists and supplier lists; pricing, licenses, costs, budgets, financial
information and financing plans; marketing and sales statistics and studies;
projections, strategies, forecasts, new products and marketing and business
plans; merger and acquisition plans; formulas, processes, data procedures,
techniques and improvements; inventions, product designs, discoveries and
developments; and employee data, files and compensation. Such information may be
marked as confidential or proprietary, or received under circumstances
reasonably interpreted as imposing an obligation of confidentiality. Such
information does not lose its status as Confidential Information merely because
it was known by a limited number of persons or entities or because it was not
entirely originated by COMPANY. I acknowledge that the Confidential Information
of COMPANY is a valuable, special and unique asset of COMPANY, and that any
disclosure of such Confidential Information may be materially damaging to
COMPANY. The obligation of confidence under this Agreement shall not apply to
any portion of information which I can show from documented records is or
becomes generally available to the public without fault of mine, or which is
obtained without restriction on publication or use from a third party having the
right to disclose the same.
I agree that I shall not, except as necessary in the course of conducting
business for COMPANY, use such Confidential Information myself or disclose such
information to any other person or entity, directly or indirectly, either during
my employment or at any time thereafter, without the prior written consent of
COMPANY. I agree that I shall not remove any records, documents, or other
Confidential Information from the premise of COMPANY in either original,
duplicate or copied form, except as necessary in the course of conducting
business for COMPANY. I agree to return to COMPANY all Confidential Information
in my possession, including duplicates and copies, upon request by COMPANY, or
at the time my employment is terminated.
2. INVENTIONS AND PROPRIETARY INFORMATION. I represent to COMPANY that I am
not a party to any other agreement that conflicts with this Agreement or which
would restrict or prevent me from performing my duties as an employee of
COMPANY. I agree that I will promptly disclose to and immediately assign and
transfer to COMPANY in writing all my right, title, and interest in all
inventions, works of authorship, improvement, designs, developments, and
discoveries created by me individually or with others that relate in any manner
to the present or prospective business or research of COMPANY.
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"Inventions" means discoveries, concepts, and ideas, whether patentable or
not, relating to any present or prospective product, service, business, research
or development of COMPANY. Works of authorship means all forms of original
expression fixed in any tangible medium. Examples of works of authorship
include, without limitation, programs, programming tools and designs, program
documentation, training materials, marketing materials and business plans.
At COMPANY's request, I will sign all papers COMPANY considers necessary or
advisable to patent any invention or improvement or to register any copyright,
trademark or domain name, each in the name of COMPANY. I agree to take these
steps both during and after my employment with COMPANY.
The provisions of this Section 2 do not apply to created works for which no
equipment, supplies, facility or trade secret information of COMPANY was used
and which were developed entirely on my own time, and (a) which do not relate
(1) directly to the business of COMPANY, or (2) to COMPANY's actual or
demonstrably anticipated research or development, or (b) which do not result
from any work performed by me for COMPANY.
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Exhibit B
General Release and Agreement
("Release")
This General Release and Agreement ("General Release and Agreement") is
made and entered into as of ___________, 2006 between Xxxxxx Software, Inc.
("the Company") and Xxxxxx X. Xxxxxxxx ("Employee").
WHEREAS, the Company and Employee are parties to a Separation and
Noncompete Agreement and Mutual Release dated effective as of July 27, 2006 (the
"Separation Agreement");
WHEREAS, Employee intends to release any and all claims that Employee has
or may have against the Company as a result of Employee's employment with the
Company; and
WHEREAS, under the terms of the Separation Agreement, which Employee agrees
are fair and reasonable, Employee agreed to enter into this General Release and
Agreement as a condition precedent to the payments described in Sections 3.5 and
3.6 of the Separation Agreement.
NOW, THEREFORE, in consideration of the provisions and the mutual covenants
herein contained, the parties agree as follows:
X. XXXXXXXXX BENEFITS.
A. The Company agrees to pay Employee $300,000.00 (less applicable taxes),
pursuant to Section 3.5 of the Separation Agreement, in consideration of the
release set forth in Section II(A) below.
B. The Company agrees to pay Employee an additional $300,000.00 (less
applicable taxes), pursuant to Section 3.6 of the Separation Agreement, in
consideration of the release set forth in Section II(B) below.
C. Promptly after expiration of the rescission period in Section V below,
the Company will pay Employee's reasonable attorneys' fees in preparing and
negotiating the Separation Agreement and ancillary documents relating thereto in
an aggregate amount not to exceed $10,000.00.
II. RELEASE OF CLAIMS ("Release"). The following Release does not apply to the
Company's obligations to Employee, or to Employee's obligations to the Company,
as described and contained in the Separation Agreement.
A. In consideration of the benefits listed in Section I(A) above, Employee,
on behalf of himself, his heirs, executors, family members, beneficiaries,
assignees, administrators, successors, and executors or anyone acting or
claiming to act on his behalf, hereby releases and forever discharges, in full
and final settlement, Xxxxxx Software, Inc. and its predecessor the Xxxxxx
Associates, Inc. and all of their respective divisions, parent, subsidiaries,
predecessors and successors, and all affiliated organizations, companies,
foundations, and other corporations as well as past and present employees,
agents, officials, officers, directors, and representatives, both individually
and in their representative capacities, from any and all claims or
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causes of action of any type, both known or unknown, asserted and unasserted,
direct and indirect, and of any kind, nature, or description whatsoever, under
any local, state, or federal law(s), or the common law of the State of
Minnesota, arising or which may have arisen at any time prior to the date of
this General Release and Agreement. This Release includes, but is not limited
to, any and all claims arising from Employee's employment with the Company or
any business entity related to or acting on behalf of the Company, including
claims arising under the Minnesota Human Rights Act, Minnesota Law Against
Discrimination, Title VII of the 1964 Civil Rights Act, as amended, the
Americans with Disabilities Act, the Federal and State of Minnesota Fair Labor
Standards Acts, the Employee Retirement Income Security Act, and any other
local, state, or federal law(s) relating to illegal discrimination in the
workplace on the basis of race, religion, disability, sex, age, or other
characteristics of traits, as well as any claims that Employee may have been
wrongfully discharged, that a employment contract has been breached, that
Employee has been harassed or otherwise treated unfairly during his employment,
or that he has been defamed in any fashion. This Release also includes any
claims based upon (a) the value of stock options that have not vested or are
unexercisable after the date of termination of Employee's employment with the
Company pursuant to the applicable stock option agreements, grant notices or
stock option plans, and (b) the value of stock options previously granted to
Employee and that have vested and are exercisable as of the date of termination
of Employee's employment with the Company, but that Employee elects not to
exercise and pay for within the applicable period after the date of termination
of Employee's employment with the Company pursuant to the express terms of the
applicable stock option agreements, grant notices or stock option plans. This
Release also includes any claims for libel or slander, claims for assault or
battery, claims for infliction of emotional distress whether intentional or
negligent, claims of negligence (including negligent hiring, negligent
supervision, and negligent retention), or any and all other claims arising out
of Employee's employment relationship with the Company. This Release also
includes any claims for attorney's fees that Employee has or may have had for
any claim identified above. Employee acknowledges that the severance benefits
set forth in Section I(A) above constitute adequate consideration for this
Release.
B. In consideration of the benefits listed in Section I(B) above, Employee
hereby releases and forever discharges the Company and all of their respective
divisions, parent, subsidiaries, predecessors and successors, and all affiliated
organizations, companies, foundations, and other corporations, as well as past
and present employees, agents, officials, officers, directors, and
representatives, both individually and in their representative capacities, from
any and all claims or causes of action of any type, both known and unknown,
arising under or relating to the Age Discrimination in Employment Act, as
amended.
C. Except only for criminal conduct, violation of the Company's expense
reimbursement policy or violations of the federal securities laws, the Company
hereby releases and forever discharges Employee from any and all claims or
causes of action of any type, both known or unknown, asserted and unasserted,
direct and indirect, and of any kind, nature, or description whatsoever, under
any local, state, or federal law(s), or the common law of any state arising or
which may have arisen at any time on or before the date first set forth above in
this General Release and Agreement. This Section II.C shall automatically become
null and void if Employee rescinds the Release under Section V below.
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III. NON-ADMISSION.
It is understood and agreed that this General Release and Agreement does
not constitute an admission by the Company of any liability, wrongdoing, or
violation of any law. Further, the Company expressly denies any wrongdoing of
any kind whatsoever in its actions and dealings with Employee. Employee
acknowledges and agrees that the Company has no obligation to hire or employ
Employee in the future.
IV. OPPORTUNITY TO SEEK ADVICE AND CONFIRMATION OF UNDERSTANDING.
Employee acknowledges that Employee received this General Release and
Agreement on ____________, 2006. Employee has been informed by the Company that
Employee has the right to consult with an attorney (at Employee's own expense)
before signing this General Release and Agreement, and that Employee has
twenty-one (21) days after the date on which Employee received this General
Release and Agreement to consider whether or not Employee wishes to sign it.
Employee acknowledges that Employee has read and understands this entire
General Release and Agreement, and has had sufficient opportunity to ask the
Company any questions about this General Release and Agreement. If Employee has
asked the Company any questions about this General Release and Agreement, all
questions have been answered and Employee understands and is satisfied with all
of those answers.
V. OPPORTUNITY TO CONSIDER.
Employee understands that Employee may cancel and rescind this General
Release and Agreement for any reason within fifteen (15) days after Employee has
signed it. If Employee decides to cancel and rescind this General Release and
Agreement, Employee must provide written notice of cancellation, and that notice
must be addressed to Senior Vice President - Human Resources, Xxxxxx Software,
Inc., 000 Xx. Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000. The notice must be
hand-delivered or sent by certified mail, return receipt requested, and
postmarked within the 15-day period.
VI. COMPREHENSIVE NATURE OF AGREEMENT.
The Separation Agreement, the exhibits to the Separation Agreement,
existing written stock option agreements and options plans and this General
Release and Agreement contain the entire agreement between the Company and
Employee. No other agreements, except the employee benefit plans in which
Employee participated, are in full force and effect. Employee acknowledges that
Employee has been advised in writing to consult Employee's own attorney, and
that Employee has had an opportunity to be represented by Employee's own
attorney, and that Employee has read and understands the terms of this General
Release and Agreement, and that Employee is voluntarily entering this General
Release and Agreement to take advantage of the benefits offered, and that there
have been no promises leading to the signing of this General Release and
Agreement except those that have been expressly contained in this written
document.
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VII. NON-ASSIGNMENT.
Employee and the Company agree that this General Release and Agreement may
not be assigned by either party unless the other party consents in writing,
except that the Company may assign this General Release and Agreement without
Employee's consent in connection with a merger or sale of the Company or sale of
substantially all of the assets of the Company or its applicable operating
division.
VIII. SAVINGS CLAUSE.
If any provision of this General Release and Agreement is determined later
to be unenforceable or illegal, the remaining provisions shall remain in full
force and effect.
IX. REMEDIES.
Employee and the Company each acknowledge that the violation of any of the
terms of this General Release and Agreement will cause irreparable harm to the
other party and agrees that, in addition to any other relief afforded by law, an
injunction against the violation of the General Release and Agreement may issue
against the violating party. Both damages and injunction shall be proper modes
of relief and are not alternative remedies. If Employee or the Company commences
any action in equity to specifically enforce any of that party's respective
rights under this General Release and Agreement, the other party waives and
agrees not to assert the defense that that party has an adequate remedy at law.
X. GOVERNING LAW.
This General Release and Agreement will be construed and interpreted in
accordance with the laws of the State of Minnesota. The parties to this General
Release and Agreement agree and acknowledge that this General Release and
Agreement shall be considered to have been drafted equally by each of the
parties.
XXXXXX SOFTWARE, INC.
Dated: By:
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Its:
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Dated: Employee Name: Xxxxxx X. Xxxxxxxx
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Employee Signature
