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EXHIBIT 10.2
SEPARATION OF EMPLOYMENT AND CONSULTING AGREEMENT
THIS SEPARATION OF EMPLOYMENT AND CONSULTING AGREEMENT ("Agreement") is
made and entered into as of May 14, 2001, to be effective as of the later of the
Effective Date or the Separation Date (as those terms are hereinafter defined),
by and between INTERNET PICTURES CORPORATION, a Delaware corporation ("Company")
and XXXXX X. XXXXXXXX ("Xxxxxxxx").
RECITALS
WHEREAS, Xxxxxxxx and the Company executed an "Executive Employment
Agreement" dated as of January 24, 1997 ("Employment Agreement"), pursuant to
which Xxxxxxxx has served as the Company's chief executive officer and a member
of its board of directors; and
WHEREAS, the parties have subsequently entered into various written
amendments to such Employment Agreement, including an amendment extending its
term through December 31, 2004; and
WHEREAS, Xxxxxxxx' Employment Agreement, and the amendments thereto,
contemplate the payment of severance and other benefits to Xxxxxxxx in the event
his employment terminates before December 31, 2004; and
WHEREAS, Xxxxxxxx and the Company have mutually agreed to terminate
their employment relationship pursuant to the terms hereof; and
WHEREAS, in consideration of Xxxxxxxx' agreement to terminate the
Employment Agreement, and his employment and benefits thereunder, the Company
intends to provide the severance and other benefits provided herein to Xxxxxxxx
as a result of his termination, and the parties agree that Xxxxxxxx shall be
retained for a period of time in the capacity of a consultant to assist with
strategic matters as well as the transition of his functions; and
WHEREAS, the Company believes that the terms of Xxxxxxxx' separation
from employment and consulting agreement set forth herein are in the best
interests of the Company and its shareholders;
NOW, THEREFORE, in consideration of the mutual promises and
understandings set forth herein, the parties agree as follows:
AGREEMENT
1. DATE OF TERMINATION FROM EMPLOYMENT. Contingent upon, and subject
to, the occurrence of the Second closing, hereinafter defined, Xxxxxxxx shall
resign his employment with the Company, and shall resign his position as an
officer and a member of the board of directors of the Company and each of its
subsidiaries, effective as of the occurrence of the Second Closing (being the
date, as defined in that certain Securities Purchase Agreement of even date
between the Company and Image Investor Portfolio, a separate series of the
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Memphis Angels, LLC (the "Purchase Agreement") on which the Second Disbursement
(as defined in the Purchase Agreement) of approximately $7,000,000 occurs)
("Separation Date").
2. ACCRUED SALARY AND VACATION. On the Separation Date, the Company
shall pay Xxxxxxxx all accrued salary through the Separation Date, and shall pay
him for all accrued and unused vacation time earned through the Separation Date,
subject to standard payroll deductions and withholdings. Xxxxxxxx shall not be
entitled to any unpaid bonus with respect to his period of employment prior to
the Separation Date or in respect of his services as a consultant during the
Consulting Period.
3. CONSULTING AGREEMENT. Xxxxxxxx agrees to serve as a consultant to
the Company under the terms specified below. This consulting relationship shall
commence on the Separation Date and shall continue until December 31, 2001,
unless terminated earlier as specified below ("Consulting Period").
(a) CONSULTING SERVICES. During the Consulting Period, as a
consultant to the Company, Xxxxxxxx shall have a title of Chairman Emeritus,
Founder. In that capacity, Xxxxxxxx' duties shall include, but not be limited
to, assisting the Company with its relationships with potential financial
investors, providing strategic planning assistance, developing outside strategic
partners, assisting in the development of the Company's entertainment division,
providing management transition, and any other similar consulting services as
reasonably requested by the Company's board of directors. During the Consulting
Period, Xxxxxxxx shall report directly to the Company's board of directors, and
shall be entitled to retain the use of his present office and secretarial
assistant. In connection with the performance of the consulting services
hereunder, Xxxxxxxx agrees to utilize his expertise and creative talents in
performing his services hereunder in a manner reasonably believed by Xxxxxxxx to
be in the interests of the Company. Xxxxxxxx agrees to make himself generally
available to perform such consulting services throughout the Consulting Period,
but shall not be required to provide such services on a full-time basis. The
performance of his services hereunder shall not require extended absences from
home or to relocation to an office outside of the Knoxville, Tennessee
metropolitan area. Xxxxxxxx shall not be prohibited from accepting other
employment, or providing services to other organizations, during the Consulting
Period subject to compliance with his non-compete restrictions herein and the
other provisions of this Agreement. Xxxxxxxx shall promptly notify the Company
of any such relationship and agrees to provide information to the Company
concerning the business and scope of services.
(b) CONSULTING FEES AND BENEFITS.
(i) CONSULTING FEES. During the Consulting Period,
Xxxxxxxx shall receive a consulting fee of $35,416.66 per month ("Consulting
Fee"), payable semi-monthly (and adjusted on a pro rata basis for any month that
Xxxxxxxx consults less than a full month).
(ii) INDEPENDENT CONTRACTOR RELATIONSHIP. During the
Consulting Period, Xxxxxxxx' relationship with the Company will be that of an
independent contractor and nothing in this Agreement is intended, or shall be
construed, to create a partnership, joint venture, employer-employee or other
relationship other than that of independent parties. Xxxxxxxx is not the agent
of the Company and is not authorized to make, or enter into, any contract or
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commitment on behalf of, or binding upon, the Company except as approved by the
Board. Xxxxxxxx will not be entitled to any of the benefits which the Company
may make available to its employees, such as group insurance, profit-sharing or
retirement benefits, except as provided herein.
(iii) TAXES AND WITHHOLDING. As a consultant, the
Company will not withhold from the Consulting Fees any amount for taxes, social
security or other payroll deductions. The Company will issue Xxxxxxxx an IRS
Form 1099 with respect to such Consulting Fees. Xxxxxxxx shall be responsible
for all income/withholding and other taxes (including one-half (1/2) of
self-employment taxes) payable by Xxxxxxxx in accordance with applicable law on
all payments or benefits paid or provided to Xxxxxxxx under this Agreement, and
the Consulting Fees paid hereunder. The Company agrees to reimburse Xxxxxxxx for
one-half (1/2) of the amount of self employment tax payable with respect to the
Consulting Fees hereunder (taking into accounting social security taxes paid or
withheld by the Company during his employment period prior to the Separation
Date).
(iv) COUNTRY CLUB MEMBERSHIPS. Xxxxxxxx' existing
country club memberships (Fox Den Country Club and Club Xx Xxxxx) monthly dues
(approximately $400 per month) will continue to be paid by the Company through
the Consulting Period. The Company agrees to transfer or release to Xxxxxxxx any
rights to club membership, if the membership is in Xxxxxxxx' name currently, if
such a transfer can be effectuated at no cost to the Company, and if club rules
relating to transfer of memberships so permit. There is no requirement on the
Company's part to transfer or release a corporate membership. After the
Consulting Period, the payment of all monthly dues related to such clubs shall
be Xxxxxxxx' sole responsibility.
(v) SECRETARIAL SUPPORT. Xxxxxxxx Xxxx will be
retained as Xxxxxxxx' secretarial assistant through the Consulting Period, and
remain an employee of the Company at her current annual salary. In Xxxxxxxx'
discretion, Wood will be eligible for a bonus potential for up to 10% of her
equivalent annual salary, consistent with prior practice.
(vi) OTHER BENEFITS. Xxxxxxxx shall be provided
similar travel, lodging, office, car allowance, and wireless communications
arrangements as were provided to Xxxxxxxx as Chairman/CEO of the Company prior
to the date hereof, to be paid or advanced by the Company consistent with past
practice. Xxxxxxxx shall not incur travel and lodging expenses except incident
to travel as requested or approved by the Board, or member thereof designated by
the Board, and shall comply with all travel and expense reporting policies of
the Company.
(c) TERMINATION OF CONSULTING RELATIONSHIP. The Consulting
Period, and Xxxxxxxx' consulting services hereunder, are terminable either (i)
on the date following sixty (60) days written notice of termination, which may
be given at any time by the Company to Xxxxxxxx for any reason, or (ii) on the
date following twenty (20) days written notice of termination, which may be
given at any time by Xxxxxxxx to the Company. Except as otherwise provided
herein, upon the termination of Xxxxxxxx' consulting relationship, the Company
shall have no further financial obligation to him for the payment of Consulting
Fees, club dues, or any other benefits noted herein related to his service as a
consultant.
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4. SEVERANCE PAYMENTS. The Company shall pay Xxxxxxxx, as further
consideration for this Agreement and the termination of his Employment
Agreement, and his rights and benefits thereunder, and severance in connection
with his termination from employment, the sum of one million three hundred
thousand dollars ($1,300,000), subject to standard payroll deductions and
withholdings (the "Severance Payment").
(a) PAYMENT SCHEDULE. The Severance Payment will be paid as
follows: (i) $200,000 upon the Separation Date, (ii) $200,000 on September 1,
2001, (iii) $200,000 on or before January 1, 2002, (iv) $200,000 on or before
June 1, 2002, (v) $200,000 on or before January 1, 2003, (vi) $200,000 on or
before June 1, 2003, and (vii) $100,000 on or before September 1, 2003. These
payments shall not be subject to any contingencies.
(b) LETTERS OF CREDIT. To guarantee the timely payment of the
September 1, 2001 and January 1, 2002 installments of the Severance Payment, on
the Separation Date the Company will (i) provide to Xxxxxxxx an irrevocable bank
letter of credit ("LOC") for $400,000 in his favor, or (ii) escrow $400,000 with
an escrow agent chosen by Xxxxxxxx. To guarantee the timely payment of the June
1, 2002, and January 1, 2003 installments of the Severance Payment, on or before
September 1, 2001, the Company will provide to Xxxxxxxx a second LOC in the
amount of $400,000 in Xxxxxxxx' favor. The LOC instructions, or escrow
instructions, if applicable, shall provide that, upon written notice by Xxxxxxxx
to the issuing bank or escrow agent, as applicable, with copies to the Company,
that any installment of the Severance Payment covered by such LOC or escrow, as
applicable, has not been timely paid, the issuing bank or escrow agent, as
applicable, shall at the earliest possible time after receipt of such notice pay
to Xxxxxxxx the amount of the installment not paid when due (net of 28% federal
income tax and 7.65% combined social security (OASDI/medicare) withholdings
(reduced to 1.45% medicare withholdings upon receipt of certification from
Xxxxxxxx that his earned income for the applicable tax year has exceeded the
OASDI wage base) required under applicable law, which instructions shall further
provide that the escrow agent, in the case of funds held in escrow, shall remit
the amount of such withholdings to the Company concurrent with remittance to
Xxxxxxxx of the amounts due to him). The instructions shall not provide any
discretion to question or fail to honor notice on the part of the issuing bank
or escrow agent, and the issuing bank or escrow agent, as applicable, shall not
assume or be subject to any liability to the Company by complying the such
instructions. Xxxxxxxx agrees to give timely notice to the Company and the
issuing bank or escrow agent, as applicable, after his earned income for any tax
year in which the above payments are secured by the LOC or escrow, as
applicable, has exceeded the applicable OASDI component of the social security
wage base for such tax year.
5. HEALTH BENEFITS AND INSURANCE. The existing Company-paid life
insurance and medical, dental, hospitalization and disability benefits (which
shall include, where applicable, continuation coverage benefits under COBRA)
shall be continued at the company's expense through the Consulting Period and
the Non-compete Period (as defined below).
6. SECURITY SYSTEM. After the Tranche A Second Closing, the Company
will no longer maintain the security system installed for Xxxxxxxx during his
tenure as Chief Executive Officer of the Company. If owned by the Company, the
Company will transfer such system to Xxxxxxxx.
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7. STOCK OPTIONS. In consideration for the severance benefits and the
grant of new stock options provided herein, Xxxxxxxx shall surrender and forfeit
any outstanding stock options for Company common stock granted prior to the
Separation Date, including the option for 1,056,000 shares at the $2.688 per
share exercise price. Upon the termination of Xxxxxxxx' employment on the
Separation Date, the Company shall xxxxx Xxxxxxxx new non-qualified stock
options covering 2,000,000 shares of the Company's common stock (the "Options").
The Options will have an exercise price as follows: (i) 1,000,000 shares at the
fair market value of the Company's common stock on the Separation Date, and (ii)
the remaining 1,000,000 shares at 15% above the fair market value of the
Company's common stock on the Separation Date. Fair market value for this
purpose shall be the closing price of the Company's common stock on the
Separation Date. The Options shall have a term of four (4) years and will
expire, to the extent not exercised prior thereto, on the fourth (4th)
anniversary of the Separation Date. The vesting of the 2,000,000 shares subject
to the Option is as follows: 650,000 shares will vest on the Separation Date;
650,000 shares will vest on December 31, 2001; 500,000 shares will vest on June
1, 2002; and 200,000 shares will vest on December 31, 2002. The exercise price
of the Options vesting on each vesting date will be pro-rata as to exercise
prices of the Options (i.e., one-half of the Options vesting on each vesting
date shall be at fair market value exercise price and one-half shall be at the
fair market value plus 15% exercise price, as aforesaid).
Additional terms and conditions of the Options shall be established
and set forth in a separate stock option agreement consistent with the terms of
Xxxxxxxx' existing non-qualified stock options, to the extent not inconsistent
herewith, which Xxxxxxxx agrees to sign, and shall provide for exercise in whole
or in part, proportionate anti-dilution adjustments in the event of any increase
or decrease in the number of outstanding shares of common stock resulting from
stock splits, share dividends or similar events, and for exercise of the Options
by Xxxxxxxx' estate, heirs or legal representatives in the case of the death or
disability of Xxxxxxxx
8. LOAN FORGIVENESS. As further consideration for this Agreement, on
the Separation Date, the Company shall cancel and forgive the repayment of any
disbursed principal and accrued interest under the line of credit established
for Xxxxxxxx pursuant to Section 7(h) of his Employment Agreement, and Xxxxxxxx
shall be released from any and all liability thereon, and shall have no further
obligation with respect thereto. The 13,519 shares of common stock currently
beneficially owned by Xxxxxxxx shall no longer serve as collateral or security
for such line of credit, nor shall the Options granted herein, or any stock
issuable upon exercise thereof, constitute collateral for the line of credit.
The parties further acknowledge that the line of credit shall be cancelled on
the Separation Date.
9. OTHER COMPENSATION OR BENEFITS. Xxxxxxxx acknowledges that, except
as expressly provided in this Agreement, he shall not receive any additional
compensation, severance or benefits after the Separation Date.
10. PROFESSIONAL ADVISOR FEES. The Company shall pay Xxxxxxxx'
attorneys' fees at standard hourly rates and any financial counseling fees
incurred in connection with his separation of service, and the negotiation of
this Agreement, in an amount not to exceed $25,000. Xxxxxxxx shall provide the
Company with a copy of the xxxx from his advisors.
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11. DIRECTORS AND OFFICERS INSURANCE AND INDEMNITY. The Company shall
continue to provide coverage for Xxxxxxxx under the existing directors and
officers insurance policy under the terms of such policy, or provide equivalent
coverage if a new policy is obtained. All indemnification or contribution
agreements of the Company applicable to officers and directors of the Company
shall continue to apply to Xxxxxxxx as a former officer or director in
accordance with the terms of such agreements.
12. PRESS RELEASE. Subject to the Company's obligations to provide all
required or appropriate disclosures to governmental and regulatory agencies, the
parties shall use reasonable efforts to agree upon the content of a dignified,
appropriate, mutually agreeable press release relating to Xxxxxxxx' change of
responsibilities, title and role with the Company.
13. RETURN OF COMPANY PROPERTY. On or before the termination of the
Consulting Period, Xxxxxxxx shall return to the Company all tangible Company
property in his possession (including, but not limited to, computers, credit
cards, entry cards, identification badges and keys), and all confidential,
proprietary Company documents ("Confidential Information" ), including, but not
limited to, Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded information,
and any materials of any kind that contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof), other
than personal documents of Xxxxxxxx which do not contain any Confidential
Information; provided, however, Xxxxxxxx may purchase the Company Sony laptop
computer and home desktop computer provided for his use at their respective
depreciated value and, subject to the provisions of Sections 14 and 18 below,
may retain copies of e-mails, presentations and images for his personal use.
14. PROPRIETARY INFORMATION OBLIGATIONS. Except as appropriate in
connection with the performance of Xxxxxxxx' consulting services hereunder,
Xxxxxxxx shall refrain from any unauthorized use or disclosure of any
Confidential Information of the Company and acknowledges his continuing
obligations not to use or disclose any Confidential Information of the Company
without prior written authorization from a duly authorized representative of the
Company.
15. NONDISPARAGEMENT. Both Xxxxxxxx and the Company agree not to
publicly disparage the other party, and the other party's officers, directors,
employees, shareholders and agents, in any manner likely to be harmful to them
or their business, business reputation or personal reputation; provided that the
foregoing shall not prohibit Xxxxxxxx or the Company from responding accurately
and fully to any question, inquiry or request for information when required by
legal process. The Company shall take reasonable steps to inform its officers,
directors and members of senior management of the Company's obligations under
this section.
16. ARBITRATION. All claims, disputes and controversies arising out of,
relating to, or in connection with Xxxxxxxx' employment, benefits, consulting
services, or this Agreement, or the breach thereof ("Dispute"), shall be
resolved by final and binding arbitration before the American Arbitration
Association ("AAA") in accordance with the commercial arbitration rules of the
AAA then in effect. The AAA arbitration shall be conducted in Knoxville,
Tennessee, by three AAA arbitrators to be selected by the parties to the
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Dispute. If the parties are not able to agree on the selection of the AAA
arbitrators, they shall follow the AAA's arbitrator selection process. In either
event, except in the case of a request for injunctive relief under the expedited
procedures below, the AAA arbitrators shall be selected no later than thirty
days following the filing of Claimant's demand for arbitration.
In the event of a request for injunctive relief, the parties agree that
the AAA shall be entitled to appoint a single arbitrator to provide the parties
with a hearing on such claims at the earliest practicable time (within 1 to 3
business days). The parties shall be entitled to submit affidavits in connection
with such injunctive relief hearing and, if deemed appropriate by such
injunctive relief arbitrator, submit oral testimony at a telephonic hearing. The
injunctive relief arbitrator shall endeavor to issue a ruling on injunctive
relief requests at the earliest practicable time and such ruling shall remain in
effect until the full panel has had an opportunity to hold a hearing on the
issue injunctive relief issue or to hold a hearing on the entire dispute (in the
event other issues are involved).
The AAA arbitrators shall make detailed written findings to support
their final award and such final award shall be delivered to the parties no
later than thirty calendar days following the conclusion of the Hearing.
Judgment upon the final arbitration award may be entered in any court having
jurisdiction. The prevailing party in any Dispute between the parties shall be
entitled to an award of attorneys fees against the other party.
The parties' obligations under Sections 4, 5, 7, 11, 13, 14, 15, 16,
18, 19 and 20 of this Agreement are of a unique character that gives them
particular value; breach of any of such obligations will result in irreparable
and continuing damage to Xxxxxxxx or the Company, as the case may be, for which
there will be no adequate remedy at law; and, in the event of such breach, the
Company or Xxxxxxxx, as the case may be, will be entitled to injunctive relief
and/or a decree for specific performance, and such other and further relief as
may be proper (including monetary damages if appropriate).
17. NO SOLICITATION OF EMPLOYEES, CONSULTANTS, CONTRACTORS OR
CUSTOMERS. Xxxxxxxx agrees that through the Non-Compete Period (defined below),
Xxxxxxxx shall not, either directly or through others, (i) solicit or attempt to
solicit any employee of the Company to end their relationship with the Company;
or (ii) solicit any consultant, contractor, or customer or prospective customer
of the Company to diminish or materially alter its relationship with the
Company.
18. NON-COMPETE PROVISION. Xxxxxxxx agrees that during the Consulting
Period and through the later of December 31, 2002 or one year after the
cessation of his consulting relationship with the Company (the "Non-Compete
Period"), except as provided below, Xxxxxxxx will not compete with, or provide
services (whether as employee, consultant or other capacity) to any Competing
Business (as defined below) with the Business (as defined below) of the Company
or its subsidiaries within any state, province, or similar political unit in
which the Company or any of its subsidiaries has conducted business or provides
or solicits products or services. The parties acknowledge that the Company
provides or solicits products and services, and has or solicits employees,
consultants, contractors and customers, through the Internet and wireless
technology, and that the geographic scope of this provision is therefore
co-extensive with the geographic scope of the Company's business through the
Internet and wireless technology. The parties agree that the geographic scope of
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the noncompete is reasonable in light of the geographically broad scope of doing
business through the Internet and wireless technology.
As used herein, the term "Business" of the Company and its subsidiaries
shall have the meaning set forth on Exhibit A attached hereto and incorporated
herein. The term "Competing Business" shall mean any person or entity which
provides similar products or services in competition with the Business of the
Company. The parties understand that the scope and nature of the Company's
business, products or services may change as the Company develops. The parties
agree that the scope of this provision will change to cover any changes in the
Company's business, products or services, during the Consulting Period, but only
to the extent that Xxxxxxxx is directly or materially involved in such changes.
Notwithstanding the foregoing, it is acknowledged and agreed that this provision
shall not prohibit Xxxxxxxx from seeking or obtaining employment with any
division or subsidiary of a Competing Business, which division or subsidiary is
not in competition with the Business of the Company provided (i) Xxxxxxxx is not
employed by, provides services to or in connection with, or is involved, whether
directly or indirectly, with the business or activities of any division or
subsidiary of any such Competing Business which is in competition with the
Business of the Company, and (ii) nothing in the foregoing clause (i) shall
relieve Xxxxxxxx of his obligations with respect to non-disclosure or use of
Confidential Information under Section 14 hereof.
19. PROHIBITION ON HIRING. Xxxxxxxx shall not hire any Company
employees prior to the expiration of the Non-Compete Period, except that he may
hire (i) Xx Xxxxx or, after the Consulting Period, his assistant, Xxxxxxxx Xxxx,
(ii) other employees following six months after the termination of employment of
any such employee, and (iii) any terminated or former employees (subject to the
general non-solicitation provision above) upon request to the Board of
Directors, approval of which request shall not be unreasonably withheld.
20. RELEASE. Except for claims arising out of or related to the
Company's obligations under this Agreement, including Xxxxxxxx' rights to
indemnification and contribution related to his service as an officer or
director of the Company, or as otherwise set forth in this Agreement, Xxxxxxxx
hereby releases, acquits and forever discharges the Company, its parents and
subsidiaries, and their officers, directors, agents, servants, employees,
attorneys, shareholders, successors, assigns and affiliates, of and from any and
all claims, liabilities, demands, causes of action, costs, expenses, attorneys
fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, known and unknown, suspected and unsuspected, disclosed
and undisclosed, arising out of or in any way related to or in any way connected
with Xxxxxxxx employment with the Company, the termination of Xxxxxxxx'
Employment Agreement, or the termination of that employment; claims or demands
related to salary, bonuses, commissions, stock, stock options, or any other
ownership interests in the Company, vacation pay, fringe benefits, expense
reimbursements, severance pay, or any other form of compensation; claims
pursuant to any federal, state or local law, statute, or cause of action
including, but not limited to, the federal Civil Rights Act of 1964, as amended;
the federal Americans with Disabilities Act of 1990; the federal Age
Discrimination in Employment Act of 1967, as amended ("ADEA"); tort law;
contract law; wrongful discharge; discrimination; harassment; fraud; defamation;
emotional distress; and breach of the implied covenant of good faith and fair
dealing.
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XXXXXXXX ACKNOWLEDGES THAT HE IS KNOWINGLY AND VOLUNTARILY WAIVING AND
RELEASING ANY RIGHTS HE MAY HAVE UNDER THE ADEA, AS AMENDED. XXXXXXXX ALSO
ACKNOWLEDGES THAT THE CONSIDERATION GIVEN FOR THE WAIVER AND RELEASE IN THE
PRECEDING PARAGRAPH HEREOF IS IN ADDITION TO ANYTHING OF VALUE TO WHICH HE WAS
ALREADY ENTITLED. XXXXXXXX FURTHER ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THIS
WRITING, AS REQUIRED BY THE ADEA, THAT: (A) HIS WAIVER AND RELEASE DO NOT APPLY
TO ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE EXECUTION DATE OF THIS
AGREEMENT; (B) HE HAS BEEN ADVISED HEREBY THAT HE SHALL HAVE THE RIGHT TO
CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS AGREEMENT; (C) HE HAS
TWENTY-ONE (21) DAYS TO CONSIDER THIS AGREEMENT (ALTHOUGH HE NEED NOT TAKE ALL
21 DAYS AND MAY CHOOSE TO VOLUNTARILY EXECUTE THIS AGREEMENT EARLIER); (D) HE
HAS SEVEN (7) DAYS FOLLOWING THE EXECUTION OF THIS AGREEMENT BY THE PARTIES TO
REVOKE THE AGREEMENT; AND (E) THIS AGREEMENT WILL NOT BE EFFECTIVE UNTIL THE
DATE UPON WHICH THE REVOCATION PERIOD HAS EXPIRED (THE "EFFECTIVE DATE"), WHICH
WILL BE THE EIGHTH DAY AFTER THIS AGREEMENT IS EXECUTED BY HIM.
The Company acknowledges and affirms to Philips that the Company has no
present knowledge of any claim, demand or cause of action against Xxxxxxxx
arising out of or related to his past or present employment with the Company.
The Company further agrees that, in the event the Company shall hereafter assert
a claim against Xxxxxxxx arising out of or related to his past or present
employment the foregoing release shall not (i) prevent Xxxxxxxx from asserting
any defense to, or raising any matter in defense of, such claim in any
proceeding relating thereto, or (ii) except with respect to claims related to
alleged breaches of fiduciary duty as an officer or director of the Company for
which Xxxxxxxx is not, or is determined to be not, entitled to indemnification
or contribution by the Company under Delaware law and the Company's officer and
director indemnification policies and E & O insurance, be effective with respect
to any claims (except for claims under ADEA) asserted by Xxxxxxxx as a
counter-claim in any proceeding relating to any claims brought by the Company.
21. MISCELLANEOUS. This Agreement constitutes the complete, final and
exclusive embodiment of the entire agreement between Xxxxxxxx and the Company
with regard to this subject matter. It is entered into without reliance on any
promise or representation, written or oral, other than those expressly contained
herein, and it supersedes any other such promises, warranties or
representations. This Agreement supersedes the Employment Agreement between
Xxxxxxxx and the Company, and all amendments thereto. This Agreement may not be
modified or amended except in a writing signed by both Xxxxxxxx and a duly
authorized officer of the Company. This Agreement will bind the heirs, personal
representatives, successors and assigns of both Xxxxxxxx and the Company, and
inure to the benefit of both Xxxxxxxx and the Company, their heirs, successors
and assigns. If any provision of this Agreement is determined to be invalid or
unenforceable, in whole or in part, this determination will not affect any other
provision of this Agreement and the provision in question will be modified by
the court so as to be rendered enforceable. This Agreement will be deemed to
have been entered into and will be construed and enforced in accordance with the
laws of Tennessee as applied to contracts made and to be performed entirely
within Tennessee without giving effect to its conflicts of laws doctrine. This
Agreement may be executed in multiple counterparts, or counterpart signature
pages, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument; and may be delivered by
one party to the other by delivery of an executed signature page by facsimile.
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SIGNATURE PAGE
to
SEPARATION OF EMPLOYMENT AND CONSULTING AGREEMENT
INTERNET PICTURES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief Operating Officer
/s/ Xxxxx X. Xxxxxxxx
----------------------------------------------------
Xxxxx X. Xxxxxxxx
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EXHIBIT A
As used in the Separation and Consulting Agreement to which this Exhibit A is
attached, the term Business of the Company shall mean the provision of immersive
images and digital media formatting and infrastructure products and services
presently offered by the Company and its subsidiaries. As examples for purposes
of clarification, such products and services include:
1. camera kits and wide angle lenses (having a field of view
greater than 120 degrees), for still and/or video capture,
2. software and services for dewarping and perspectively
correcting images taken with wide angle lenses, for still
and/or video capture,
3. software and services for seaming images together taken with
wide angle lenses, for still and/or video capture,
4. iPIX Video image capture and production services, and
5. the "Rimfire" system that services eBay, Polaroid, Homestore
and other customers.
