EXHIBIT 10.69
SETTLEMENT AND RELEASE AGREEMENT
THIS SEVERANCE AND RELEASE AGREEMENT (the "AGREEMENT") is entered in to this
20th day of December, 2002 (the "Notice Date") by and between XXXXXX
TECHNOLOGIES, INC., a Delaware corporation ("Company") and Xxxxx Xxxxxx ("Team
Member") relating to Team Member's termination of employment and separation from
the company effective December 31, 2002, (the "Separation Date"). When used
herein the term "Company" includes any or all current or former affiliated
corporations, parent corporations, partnerships, divisions, and subsidiaries,
and the officers, directors, shareholders, employees, agents, attorneys,
successors and assigns of the Company.
SECTION 1. SEPARATION FROM EMPLOYMENT AND SEVERANCE PAYMENT.
A. Team Member's termination as an employee of the Company will begin
and be effective on the Separation Date. Team Member will be paid
remaining standard gross wages less applicable taxes and
withholdings in accordance with standard payroll practices through
the Separation Date. Team Member will also be reimbursed for all
legitimate business expenses incurred on Company's behalf that have
been approved and are otherwise in accordance with the Company's
written policies. Team Member acknowledges that he has no accrued
and unused personal time as of the Separation Date.
B. In exchange for the promises of the Team Member as set forth or
otherwise described in this Agreement, the Company agrees to
provide Team Member the severance as described below. This Section
sets forth the entire and complete description of the severance to
be paid to the Team Member by the Company. These payments are
conditioned upon compliance with the post-termination obligations
set forth in the Amended and Restated Employment Agreement between
Company and Team Member ("Employment Agreement"), including without
limitation Exhibits A and B thereto, and all other post-termination
obligations to which Team Member is subject.
i. Company will pay Team Member a lump sum payment of $328,900
(which is equal to twelve (12) months of Team Member's current
base salary), to be paid on the Separation Date.
ii. Company will pay Team Member a separation payment equal to
$328,900, to be paid in equal installments on a monthly basis
over a period of twenty-four (24) months, beginning on the first
day of the thirteenth month following the Separation Date and
ending on the first day of the thirty-sixth month following the
Separation Date.
iii. Company will pay the Cobra premiums for Team Member's health
and dental benefit programs in accordance with the Team Member's
current participation for a period of eighteen (18) months
beginning on the Separation Date.
iv. In the event of any Liquidity Event (as defined below), whether
voluntary or involuntary, that occurs prior to the payment of
all or part of the amounts payable pursuant to Section B(ii)
hereof, the Company shall pay Team Member a lump sum payment
equal to $657,800 less all amounts previously paid to Team
Member pursuant to Section B(i)-(iii) hereof. Such lump sum
payment shall be made no later than the date of the final
distribution of assets on the shares of capital stock of the
Company in accordance with the provisions of the Certificate of
Incorporation of the Company, as amended, in connection with the
Liquidity Event and, shall constitute full satisfaction of the
Company's obligations under this Agreement. For purposes of this
Agreement, a "Liquidity Event" shall mean any (i) liquidation,
dissolution or winding up of the Company; (ii) a sale of all or
substantially all of the assets and liabilities of the Company
to a third party or (iii) a merger or consolidation of the
Company with or into another entity pursuant to which (a) the
capital stock of the Company outstanding immediately prior to
the merger or consolidation is converted into or exchanged for
securities of another entity or cash or property and (b) the
stockholders of the Company immediately prior to the merger or
consolidation own less than 50% of the combined voting stock of
the surviving company (or the parent of the surviving company)
in the merger or consolidation.
v. If (i) a Liquidity Event occurs within five (5) years of the
Separation Date, and (ii) upon the distribution of assets on the
shares of capital stock of the Company in accordance with the
provisions of the Certificate of Incorporation of the Company,
as amended, in connection therewith, the Liquidity Event
constitutes a Qualified Liquidity Event (as defined below), then
the Company shall pay Team Member a lump sum payment equal to
(i) $328,900, and (ii) any amounts remaining due pursuant to
Sections B(i)-(iii), to be paid no later than the date of the
final distribution of assets or other consideration to the
stockholders of the Company. For purposes of this Agreement, a
"Qualified Liquidity Event" shall mean a Liquidity Event that
(i) results in a distribution on the shares of capital stock of
the Company in accordance with the provisions of the Certificate
of Incorporation of the Company, as amended, of assets valued at
a minimum of $10 million, after payment or reservation of funds
sufficient for payment of claims of all unsecured creditors and
reservation of funds sufficient for payment of any amounts
remaining due pursuant to Section B(i)-(iii) hereof or (ii) in
the case of a merger or consolidation, results in consideration
(including any cash, securities of another entity or property)
to the holders of shares of capital stock of the Company valued
at a minimum of $10 million. If some or all of such distribution
or consideration is paid in property other than cash, the value
of the portion of such distribution or consideration not paid in
cash shall be the fair market value of such property as
determined in good faith by the Board of Directors of the
Company.
vi. If Team Member's death occurs at any time after the Separation
Date, then the Company shall pay Team Member's estate all
remaining amounts payable to Team Member under this Section,
which payments shall be made at the time and in the manner set
forth in this Section.
C. Team Member acknowledges that the monies (described in this
Agreement) represent all monies to which Team Member may now or may
hereafter be entitled from the Company (except as set forth in this
Section 1 D and E). This includes but is not limited to back-pay,
severance pay, wages, overtime pay, commissions, bonuses, vacation
pay, relocation fees, benefits, attorneys' fees and damages of any
nature whatsoever. Team Member agrees that the above referenced
amount paid to Team Member by Company represents the severance
benefits as provided for in Team Member's Amended and Restated
Employment Agreement (the "Employment Agreement").
D. Company and Team Member acknowledge and agree that as of the date
of this Agreement, Team Member is the Chairman of the Board of
Directors of the Company that the Indemnification Agreement entered
into between Company and Team Member shall remain in effect and
that nothing contained in this Agreement shall be construed to
amend or negate any rights or obligations of either party under
either the Indemnification Agreement. The parties further agree
that the releases contained herein shall not be effective as to the
rights and obligations of the parties under the Indemnification
Agreement.
E. Company and Team Member acknowledge and agree that the Independent
Consultant Agreement between Company and Team Member shall become
effective January 1, 2003. The parties further agree that nothing
contained in the Consultant Agreement or in this Agreement shall be
construed to amend or negate any rights or obligations of either
party under either the Consultant Agreement or this Agreement. The
parties further agree that the releases contained herein shall not
be effective as to the rights and obligations of the parties under
the Consultant Agreement.
SECTION 2. COVENANTS OF TEAM MEMBER.
A. Team Member (on his own behalf and on behalf of his heirs, personal
representatives, and any other person who may be entitled to make a
claim on his behalf) (except as set forth in Section 1 D and E)
hereby agrees to remise, release, acquit, satisfy, and forever
discharge Company, of and from all, and all manner of action and
actions, cause and causes of action, suits, debts, dues, sums of
money, accounts, bills, contracts, controversies, agreements,
promises, variances, claims and demands whatsoever, in law or in
equity, which Team Member ever had, now has, or which any
representative of Team Member, hereafter can, shall or may have,
against Company, for, upon or by reason of any matter, cause or
thing whatsoever, from the beginning of time to the day of this
Agreement. Team Member represents that Team Member does not
currently have on file, and has
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not made in any forum, any complaints, charges, or claims (whether
civil, administrative, or criminal) against Company. Team Member
agrees not to bring any charges, claims, or actions against Company
in the future, except claims that Company has breached its
obligations set forth in this Agreement (except as set forth in
Section 1 D and E).
B. The rights and claims which Team Member waives and releases in this
Agreement include, to every extent allowed by law, those arising
under the Team Member Retirement Income Security Act of 1974, the
Civil Rights Acts of 1866, 1871, 1964 and 1991, the Rehabilitation
Act of 1973, the Equal Pay Act of 1963, the Vietnam Era Veteran's
Readjustment Assistance Act of 1974, the Occupational Safety and
Health Act, the Immigration reform and Control Act of 1986, the
Americans with Disabilities Act, the Age Discrimination in
Employment Act of 1967, the Older Worker's Benefit Protection Act,
and the Florida Civil Rights Act. This is not a complete list, and
Team Member waives and releases all similar rights and claims under
all other federal, state and local discrimination provisions and
all other statutory and common law causes of action, to the extent
allowed by law, relating in any way to Team Member's employment or
separation from employment with Company.
C. Team Member agrees to the following Non-Solicitation and
Confidentiality Provisions:
i. Without limitation of any other agreement between Team Member
and Company, Team Member shall not employ or engage or attempt
to employ or engage the services of any Team Member of Company,
either directly or through the agency of a third party for a
period of one year after the date of this Agreement.
ii. During the Severance Period, Team Member shall not directly or
indirectly, as owner, director, employee or agent conduct or be
related to any business in direct competition with any business
of Company.
iii. In addition to, and not in limitation of the other provisions
hereof or of any other agreement between Team Member and
Company, Team Member shall not at any time in any manner
interfere with, or otherwise jeopardize the business of Company
or do or permit to be done anything which may tend to take away
or diminish the trade, business or good will of Company or give
to any person the benefit or advantage of Company's methods of
operation, advertising, publicity, training, business customers
or accounts, or any other information relating or useful to
Company's business. Team Member agrees to preserve as
confidential or proprietary, technical and business information
to include, but not limited to, the Company's past, present,
and future business, developments, technical data,
specifications, designs, concepts, discoveries, copyrights,
improvements, product plans and information, research and
development plans and product roadmaps, personal information,
personnel information, financial information, customer or
business alliance partner lists, customer and business alliance
leads, and/or marketing programs (the "Confidential
Information").
iv. The existence of any claim or cause of action by Team Member
against Company predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Company of
these covenants.
v. Team Member acknowledges and confirms that the restrictions
contained herein are fair and reasonable and not the result of
overreaching, duress, or coercion of any kind.
D. Team Member and Company agree that each will refrain from making
any written or oral statement or taking any action, directly or
through others, which either knows or reasonably should know to be
disparaging or negative concerning the Company or its officers,
directors, team members or agents or the Team Member.
E. Team Member agrees that Team Member will be responsible for Team
Member's own attorneys' fees incurred in connection with the
negotiation, preparation and execution of this Agreement and that
Team Member unconditionally releases and discharges Employer from
any claim for such attorneys' fees incurred by Team Member or on
Team Member's behalf.
F. Team Member agrees and acknowledges that this Agreement does not
constitute an admission by Employer of any violation of any
federal, state, or local statue or regulation, or any violation of
any of Team Member's rights or of any duty owed by Employer to Team
Member.
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G. Team Member warrants that, except for information and materials
retained for use under the Consultant Agreement and in his position
as Chairman of the Board of Directors of the Company, Team Member
has surrendered to the Company, in good condition, all material
records (and copies thereof) pertaining to Company's business
operations and related to any work performed for Company, all
Company property, and any and all third party property, including
all confidential and/or proprietary information, drawings, computer
programs or copies thereof, documentation, notebooks and notes,
reports and any other materials on electronic or printed media.
Included are any documents or media containing the names,
addresses, and other information with regard to Confidential
Information.
H. It is recognized and acknowledged that a breach by the Team Member
or the Company of any of the covenants in Section 2 of this
Agreement will cause irreparable harm and damage to the other
party, the monetary amount of which may be virtually impossible to
ascertain. As a result, each recognizes and acknowledges that the
other party shall be entitled to, in addition to any other remedies
available to the other party, an injunction from any court of
competent jurisdiction enjoining and restraining any violation of
any or all of the covenants contained in Section 2 of this
Agreement by Team Member or Company and such right to an injunction
shall be cumulative and in addition to whatever other remedies the
Company or the Team Member (as the case may be) may possess.
I. Team Member agrees and acknowledges that Team Member will be
responsible for payment of any outstanding balance on Team Member's
company-issued or company-guaranteed American Express account. Team
Member agrees that Company will be entitled to deduct from Team
Member's first payment an amount equal to the unpaid balance on the
American Express account as of the Separation Date. If the amount
of the outstanding balance on Team Member's American Express
account exceeds the amount of Team Member's first payment, then
Company will be entitled to deduct from Team Member's subsequent
payments an amount equal to the remaining balance on the American
Express account. Notwithstanding, Team Member acknowledges that
Company is entitled to deduct from any of Team Member's payments an
amount equal to any remaining balance on Team Member's
company-issued or company-guaranteed American Express account.
SECTION 3. INFORMED, VOLUNTARY SIGNATURE.
Company has informed Team Member that he may consult counsel
before executing this Agreement. Team Member agrees that Team
Member has had a full and fair opportunity to review this
Agreement with counsel and signs it knowingly, voluntarily, and
without duress or coercion. Further, in executing this Agreement,
Team Member agrees that Team Member has not relied on any
representation or statement not set forth in this Agreement.
SECTION 4. MISCELLANEOUS.
This Agreement shall be interpreted and enforced in accordance
with the laws of the State of Florida. Each of the parties submits
to the jurisdiction of any state or federal court sitting in Palm
Beach County, Florida, in any action or proceeding arising out of
or relating to this Agreement and agrees that all claims in
respect of the action or proceeding may be heard and determined by
any such court. In addition, the parties agree to waive any rights
to a jury trial should any dispute arise under this Agreement or
related in any way to Team Member's employment with Company. This
Agreement represents the sole and entire agreement between the
parties and supersedes any and all prior agreements (except as set
forth in Section 1 D and E), negotiations, and discussions between
the parties or their respective counsel with respect to the
subject matters covered herein. If either party initiates
proceedings for the other's breach of this Agreement, the
prevailing party shall recover attorneys' fees and costs,
including such fees and costs on any enforcement or appeal
proceedings. If one or more paragraphs of this Agreement are ruled
invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision of the Agreement, which shall
remain in full force and effect. This Agreement may be modified
only in writing signed by both parties. Both parties agree that,
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unless required by law or by a court of competent jurisdiction,
this Agreement shall remain confidential and will not be used for
any purpose other than enforcing its specific terms in any
proceeding between the parties. If this document must be filed in
any court proceeding, the person seeking to file it will do so
only under seal, unless expressly prohibited by the court. This
Agreement may be executed in two counterparts, each of which shall
constitute an original, but all of which together shall constitute
one and the same document.
IN WITNESS WHEREOF, Team Member and Company have agreed upon and executed this
Agreement as of the date first set forth above.
TEAM MEMBER: XXXXXX TECHNOLOGIES, INC.:
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Quick
-------------------------------------- --------------------------------
Signature of Team Member Title: President and Chief Executive
Officer
Date: December 30, 2002 Date: December 30, 2002
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