EXHIBIT 10.26
SEPARATION AND NON-COMPETE AGREEMENT BETWEEN
XXXXXXX XXXXXXXXXX AND XXXXXX INTERACTIVE SYSTEMS, INC.
This Separation and Non-Compete Agreement ("Agreement") is entered into
between Xxxxxxx Xxxxxxxxxx ("Executive") and Xxxxxx Interactive Systems, Inc.
(the "Company") to become effective on the Effective Date as defined in Section
[11.2] of this Agreement.
WITNESSETH
WHEREAS, on November 15, 1999 ("Resignation Date") Executive resigned from
the Company effective January 31, 2000 ("Separation Date"); and
WHEREAS, the Company desires that Executive's services to the Company
continue through the Separation Date; and
WHEREAS, the Company wishes to assist Executive in the transition of his
employment, and Executive wishes to provide services and other consideration to
the Company in exchange for transition assistance;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto:
1. RESIGNATION AND SEPARATION. Executive hereby resigns as an employee
and officer of the Company, effective as of the Separation Date.
2. CONTINUED SERVICES. Executive agrees to continue to provide full-
time services as the Company's Chief Financial Officer, and to execute the
responsibilities and duties of that office to the best of his professional
expertise, until the Separation Date.
3. CONTINUED SALARY AND BENEFITS. While Executive continues providing
services in compliance with this Agreement, the Company shall continue
Executive's current compensation and benefits, until the Separation Date.
4. STOCK OPTIONS.
4.1 Accelerated Vesting of Stock Options. Subject to the approval of
the Company's Board of Directors ("Board"), the vesting of Executive's incentive
stock option under Option Grant No. 950671 (the "Option"), totaling one hundred
twenty thousand (120,000) shares, shall be accelerated such that as of the
Separation Date, the portion of the Option that would have vested on or before
January 31, 2001, had Executive remained employed at the Company, shall
accelerate and immediately become vested and exercisable.
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4.2 Cease Vesting on Separation Date. Continued vesting of shares
under each of Executive's stock option grants will cease as of the Separation
Date.
4.3 Extended Exercise Period For Vested Stock Options. Subject to the
approval of the Board, the period during which Executive may exercise any and
all stock options deemed vested as of the Separation Date shall be extended such
that Executive will have twelve (12) months after the Separation Date to
exercise such options. All unexercised options will terminate after such twelve
(12)-month period.
4.4 Tax Treatment. Executive acknowledges that any stock options
which Executive has been granted which may originally have been intended to
qualify as incentive stock options under section 422 of the Internal Revenue
Code may lose that status upon Executive's execution of this Agreement because
of the improvements in their terms contained in this Agreement. Executive
further acknowledges that the Company is not making any representation regarding
the tax treatment of any of Executive's stock options and that Executive has
been advised by the Company to seek independent tax advice on that matter.
5. SEVERANCE PAYMENTS. Provided that Executive remains in compliance with
all terms of this Agreement, the Company shall pay severance to Executive by
continuing his base salary from the Separation Date until November 15, 2000.
Severance payments shall be subject to standard payroll deduction and
withholding, and shall be made according to the Company's regular payroll
schedule.
6. COBRA CONTINUATION. As permitted by the federal COBRA law and the
Company's health care plans, Executive and Executive's covered dependents who
are enrolled in a health or dental plan sponsored by the Company may be eligible
to continue coverage under such health or dental plan, at Executive's own
expense. Executive shall receive separate notice of any such right to continue
health coverage. The Company will pay an amount equal to its current share of
Executive's monthly health insurance premium ("COBRA Contribution") for three
(3) months after the Separation Date, provided that Executive elects to continue
coverage under COBRA. The Company's payment of the COBRA Contribution during
such three-month period will be credited as payment by Executive for purposes of
Executive's total payment required under COBRA. No provision of this Agreement
will delay Executive's COBRA qualifying event past the Separation Date.
7. ACCRUED VACATION PAY. In addition to any other amount payable under
this Agreement, Executive will be entitled to receive upon the Separation Date
any accrued vacation pay, in accordance with the Company's vacation pay policy
then in effect for employees generally.
8. NO ADDITIONAL COMPENSATION. Executive acknowledges and agrees that
after the Separation Date he will not be entitled to or receive any
compensation, bonuses, stock, stock options or other benefits as a consequence
of his Employment, except as expressly set forth in this Agreement.
9. PROPRIETARY INFORMATION OBLIGATIONS. Executive acknowledges his
continuing, post-Employment obligations under that certain Proprietary
Information and
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Confidentiality Agreement dated April 16, 1999, between Executive and the
Company ("Proprietary Information Agreement"), a copy of which is attached
hereto as Exhibit A.
10. LIMITATION ON ACTIVITIES (NON-COMPETE). In exchange for the stock
option vesting, extension of option exercise period, severance payments, COBRA
Contribution, and other consideration under this Agreement, to which he would
not otherwise be entitled, Executive agrees that, for twelve (12) months
following the "Resignation date", he will not directly or indirectly (whether
for compensation or without compensation), as an individual proprietor, partner,
stockholder, officer, employee, consultant, director, joint venturer, investor,
lender, or in any other capacity whatsoever (other than as the holder of not
more than one percent (1%) of the total outstanding stock of a publicly held
company), engage in any business activity that is directly competitive with the
business of the Company ("Competitive Activity"). For purposes of this
Agreement, "Competitive Activity" shall be limited to (a) obtaining employment,
performing work or providing services directly and specifically to SAP,
PeopleSoft, Oracle, Hyperion, QSP, BAAN, Xxxxxx, CODA (or any related controlled
corporation or majority interest in a partnership). These competitive activities
are in addition to the limitations on Executive's activities set forth in his
Proprietary Information Agreement, and they are considered by the parties to
constitute a reasonable restriction for the purpose of protecting the business
and trade secrets of the Company. However, if any such limitation is found by a
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
11. RELEASES. In exchange for the stock option vesting, extension of
option exercise period, severance payments, COBRA Contribution, and other
consideration under this Agreement to which he would not otherwise be entitled,
Executive agrees to provide the Company and its affiliates with the following
releases:
11.1 Executive's General Release. Except as otherwise set forth in
this Agreement, Executive hereby releases, acquits and forever discharges the
Company, its parents and subsidiaries, and its and their respective officers,
directors, employees, shareholders, agents, attorneys, servants, 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 agreements, events, acts or conduct at any time prior to
and including the execution date hereof, including but not limited to: any and
all such claims and demands directly or indirectly arising out of or in any way
connected with Executive's employment with the Company 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, sabbatical benefits, severance
benefits, or any other form of compensation; claims arising from that certain
Executive Severance Benefits Agreement between Executive and the Company signed
August __, 1999 ("Severance Agreement"); claims pursuant to any federal, state,
local law, statute or cause of action including, but not limited to, the federal
Civil Rights Act of 1964, as amended; the federal Age Discrimination in
Employment Act of 1967, as amended ("ADEA"); the federal Americans with
Disabilities Act of 1990; the California Fair
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Employment and Housing Act, as amended; tort law; contract law; wrongful
discharge; discrimination; fraud; defamation; harassment; emotional distress;
and breach of the implied covenant of good faith and fair dealing.
11.2 Acknowledgement of Age Discrimination Waiver Disclosures.
Executive acknowledges that he is knowingly and voluntarily waiving and
releasing any rights he may have under the ADEA, as amended. He also
acknowledges that the consideration given for the waiver and release in the
above paragraph is in addition to anything of value to which he was already
entitled. He 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 should consult with an attorney prior to
executing this Agreement; (c) he has twenty-one (21) days to consider this
Agreement (although he may choose to voluntarily execute this Agreement
earlier); (d) he has seven (7) days following execution of this Agreement to
revoke the Agreement; and (e) this Agreement shall not be effective until the
date upon which the revocation period has expired, which shall be the eighth day
after this Agreement is executed by Executive, provided that the Company has
also signed the Agreement by that date ("Effective Date").
11.3 Executive's Release of Unknown Claims. Executive acknowledges
that he has read and understands Section 1542 of the Civil Code of the State of
California which reads as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.
Executive hereby expressly waives and relinquishes all rights and benefits
under that section and any law or legal principle of similar effect in any
jurisdiction with respect to the release of unknown and unsuspected claims
granted in this Agreement.
11.4 Separation Date Release and Waiver. Executive agrees to execute
a second general release and waiver, a form of which is attached hereto as
Exhibit B, upon the Separation Date.
12. Miscellaneous.
12.1 Confidentiality. Executive shall hold the provisions of this
Agreement in strictest confidence and not publicize or disclose them in any
manner whatsoever; provided, however, that Executive may disclose this Agreement
to his immediate family, attorneys, accountants, tax preparers and financial
advisers, provided the person to whom he intends to make such disclosure first
agrees to be bound by this provision, and he may also disclose this Agreement
insofar as such disclosure is required by law .
12.2 Binding Effect; Non-Assignability. The rights and obligations of
the parties hereto shall bind and inure to the benefit of their respective
successors, assigns, heirs, executors and administrators, as the case may be.
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12.3 Complete Understanding; Modification. This Agreement, including
Exhibits A and B, constitutes the complete, final and exclusive embodiment of
the entire agreement between the parties hereto with respect to the subject
matter hereof, and is entered into without reliance on any promise written or
oral, other than those expressly contained herein, and it supersedes any other
such promises and representations including the Severance Agreement. Any
modification or amendment of this Agreement shall be effective only if in
writing and signed by the Executive and an authorized officer of the Company.
12.4 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction so as to conform to the
intentions of the parties to the greatest extent permitted by law.
12.5 Waiver. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
12.6 Headings. The headings of the Articles and Sections hereof are
inserted for convenience only and shall not be deemed to constitute a part
hereof or to affect the meaning thereof.
In Witness Whereof, the parties have executed this Agreement on the
respective dates written below.
XXXXXX INTERACTIVE SYSTEMS, INC. XXXXXXX XXXXXXXXXX
By:
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Title: Date:
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Date:
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EXHIBIT A
PROPRIETARY INFORMATION AND CONFIDENTIALITY AGREEMENT
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EXHIBIT B
GENERAL RELEASE AND WAIVER
(To be signed January 31, 2000)
In consideration for stock option vesting, extension of option exercise
period, severance payments, COBRA Contribution, and other consideration to which
Executive would not otherwise be entitled, Executive agrees to execute the
following General Release and Waiver ("Release") on the Separation Date.
Except as otherwise set forth in this Agreement, Executive hereby releases,
acquits and forever discharges the Company, its parents and subsidiaries, its
and their respective officers, directors, employees, shareholders, agents,
attorneys, servants, 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 agreements, events,
acts, or conduct at any time prior to the execution date hereof, including but
not limited to: any and all such claims and demands directly or indirectly
arising out of or in any way connected with Executive's employment with the
Company 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,
sabbatical benefits, severance benefits, or any other form of compensation;
claims under the Severance Agreement; 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"); the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; harassment;
fraud; defamation; emotional distress; and breach of the implied covenant of
good faith and fair dealing.
Executive acknowledges that he is knowingly and voluntarily waiving and
releasing any rights he may have under the ADEA. Executive also acknowledges
that the consideration given for the release in the preceding paragraph hereof
is in addition to anything of value to which he was already entitled. Executive
further acknowledges that he has been advised by this writing, as required by
the ADEA, that: (a) this Release does not apply to any rights or claims that may
arise after the execution date of this Release; (b) he has been advised hereby
that he should consult with an attorney prior to executing this Release; (c) he
has twenty-one (21) days to consider this Release; (d) he has seven (7) days
following his execution of this Release to revoke the Release; and (e) this
Release shall not be effective until the date upon which the revocation period
has expired, which shall be the eighth day after this Release is executed by
Executive ("Effective Date of this Release").
In giving this Release, which includes claims which may be unknown to
Executive at present, Executive acknowledges that he has read and understands
Section 1542 of the California Civil Code which reads as follows: "A general
release does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release,
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which if known by him must have materially affected his settlement with the
debtor." Executive hereby expressly waives and relinquishes all rights and
benefits under that section and any law of any jurisdiction of similar effect
with respect to the release of any claims he may have against the Company.
By:
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Xxxxxxx Xxxxxxxxxx
Date:
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