EXHIBIT 10.6
SEPARATION AGREEMENT AND MUTUAL RELEASE OF ALL CLAIMS
EMPLOYEE: Xxxx X. Xxxxxx
DATE OF HIRE: January 16, 1998
DATE OF TERMINATION: August 1, 2005
COMPLETION DEADLINE PER PARAGRAPH 12(E): August 9, 2005
THIS SEPARATION AGREEMENT AND MUTUAL RELEASE OF ALL CLAIMS (hereinafter
"the Agreement") is entered into by and among Interland, Inc. ("the Company"),
and the employee identified above ("Employee").
BACKGROUND
Employee and the Company are terminating their employment relationship and
desire to settle fully and finally all differences between them that may arise
out of or relate to Employee's employment with the Company and all other claims
Employee has or may have through the Effective Date.
NOW, THEREFORE, in consideration of this recital, the mutual agreements
contained herein and other good and valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties to this
Agreement hereby agree, promise and covenant as to each of the following:
1. Capacity to Execute. Each of the parties represents and warrants that
she/he or it is legally viable and competent to enter into this
Agreement, is relying on independent judgment and the advice of legal
counsel and has not been influenced, pressured or coerced to any
extent whatsoever in making this Agreement by any representations or
statements made by the Company and/or any person or persons
representing the Company, and that the individuals executing this
Agreement on her/his or its behalf are authorized to do so. Each of
the parties further represents and warrants that she/he or it has not
sold, assigned, transferred, conveyed or otherwise disposed of all or
any part of the claims released hereunder, whether known or unknown.
2. Specific Consideration Provided to Employee.
(a) In exchange for the release provided hereunder and other good and
valuable consideration, and following the Effective Date assuming
that this Agreement is not revoked pursuant to Section 12, the
Company will:
i) to the extent that Employee elects to employ separate counsel,
reimburse 50% of reasonable attorneys' fees of such counsel
actually incurred by Employee in connection with certain pending
litigation styled Xxxxxxx v. Xxxxxxxxxxx.xxx, Inc. et al. and
pending in Xxxxxxx County, Missouri (the "Xxxxxxx Litigation") in
which Employee is a defendant, up to a maximum reimbursement of
$60,000 per twelve-month period, beginning as of the Effective
Date (as defined below), subject to limits placed on such
indemnification by applicable law (including but not limited to
the Minnesota Business Corporation Act and state and federal
securities law and related regulations) ("Applicable Law") and to
Employee's continued compliance with the terms of Employee's
Employment and Noncompete Agreement dated as of January 16, 1998
(the "Employment Agreement"), including but not limited to the
terms regarding competition, solicitation of customers and
suppliers, and interference or diversion of business, and
provided that such reimbursement shall cease if the Company
becomes aware of circumstances which indicate that Employee is
not entitled to such indemnification under Applicable Law or is
in violation of the terms of the Employment Agreement. This
reimbursement does not supersede Employee's rights to
indemnification, advancement of expenses, or insurance coverage
under the Indemnification Agreement dated January 15, 1998, by
and between the Company and Employee; the Company's Bylaws; the
Minnesota Business Corporation Act; applicable insurance
policies; and any other agreement, contract, law, or otherwise
under which Employee is entitled to indemnification, advancement
of expenses, or insurance coverage, for liability, fees, and
costs associated with (i) the Xxxxxxx Litigation or any other
previously asserted or noticed claims, or (ii) claims arising
after the Effective Date. Employee shall be entitled to
reimbursement under this Section 2(a)(i) only if the Employee
delivers proof of payment of reasonable attorneys' fees in
connection with the Xxxxxxx Litigation and a request for
reimbursement of 50% of same (in such form as the Company may
reasonably require) to the Company's Legal Department, at the
address specified in Section 21(b) hereof, within thirty (30)
days of Employee's receipt of invoices for such attorneys' fees.
The Company shall reimburse Employee for 50% of such attorneys'
fees within thirty (30) days of receiving from Employee such
proof of payment and request for reimbursement. Provided,
however, that the foregoing does not supersede the Employee's
rights to full indemnification, advancement of expenses, or
insurance coverage under the Indemnification Agreement dated
January 15, 1998, by and between the Company and Employee, to the
extent that Employee does not employ separate counsel as
described therein. Notwithstanding the foregoing, Employee may
submit proof of up to $12,800 in reasonable attorneys' fees
incurred prior to the Effective Date and receive reimbursement
for those fees, provided that any amount so reimbursed will count
toward the $60,000 limit for the first 12 month period.
ii) in lieu of any payments or benefits to be provided pursuant to
Section 3 of the Employment Agreement, pay Employee an amount in
cash equal to $360,000 plus an amount equal to 12 months for
COBRA reimbursement, less all legally required deductions and
withholdings. The Severance Amount will be paid out in equal
bi-weekly installments on the dates, corresponding to the
Company's normal payroll processing dates, beginning with the
first such date to occur after the Effective Date, as defined in
Section 12(e) hereof, and ending on the last such date to occur
on or before December 31, 2005. Notwithstanding the foregoing and
the terms of individual stock option grants to Employee and in
accordance with Section 3 of the Employment Agreement, Employee
may exercise during the Transition Period, as that Period is
described in Section 2(a) of the Employment Agreement, and for
thirty days following the termination of the Transition Period,
any stock options that have vested or that will vest during the
Transition Period.
(b) The severance obligations set forth in Section 2 are the total
payment and severance obligations under this Agreement, which
represent payments and obligations that Employee would not
otherwise be entitled to receive from the Company. Accordingly,
Employee understands and warrants that no further amount is or
shall be due or claimed to be due from the Company and/or from
any other person or entity released in Section 3 below with
respect to any claim or claims released in Section 3 below,
including, but not limited to, any and all claims for attorneys'
fees and the costs of litigation (other than as set forth in
Section 2(a)(i)) that she/he may have under any federal, state or
local law, common law or in equity. Provided, however, that the
severance obligations do not supersede Employee's rights to
indemnification, advancement of expenses, or insurance coverage
under the Indemnification Agreement dated January 15, 1998, by
and between the Company and Employee; the Company's Bylaws; the
Minnesota Business Corporation Act; applicable insurance
policies; and any other agreement, contract, law, or otherwise
under which Employee is entitled to indemnification, advancement
of expenses, or insurance coverage, for liability, fees, and
costs associated with (i) the Xxxxxxx litigation or any other
previously asserted or noticed claims, or (ii) claims arising
after the Effective Date.
(c) Employee agrees to be responsible for, and to pay in a timely
manner, all federal, state and local taxes that may be due on all
payments hereunder, and she/he further agrees to indemnify and
hold harmless the Company from any and all costs and expenses
that it may incur in the future if any federal, state, or local
government agency or any other person or entity asserts that any
withholding, taxes, or other amounts should have been paid by the
Company in connection with this payment, and such indemnification
shall include, but not be limited to, any taxes, interest,
penalties, and reasonable attorneys' fees incurred by the Company
in connection therewith.
3. Mutual Release of all Claims by the Parties.
(a) In consideration of the concessions provided for in Section 2 and
other good and valuable consideration, the receipt, adequacy, and
sufficiency of which is hereby acknowledged, Employee and her/his
heirs, executors, administrators, agents, assigns, receivers,
attorneys, servants, legal representatives, predecessors and
successors in interest, regardless of form, trustees in
bankruptcy or otherwise, wards, and any other representative or
entity acting on her/his or their behalf, pursuant to, or by
virtue of the rights of any of them, do hereby now and forever
unconditionally release, discharge, and acquit the Company and
any parent, subsidiary or related companies, and any and all of
their employees, agents, administrators, assigns, receivers,
attorneys, servants, legal representatives, affiliates,
predecessors and successors in interest, regardless of form, and
trustees in bankruptcy or otherwise, from any and all claims,
rights, demands, actions, suits, damages, losses, expenses,
liabilities, indebtedness, and causes of action, of whatever kind
or nature that accrued from the beginning of time through the
Effective Date, regardless of whether known or unknown, and
regardless of whether asserted by Employee to date, including,
but not limited to, all claims for or relating to assault,
battery, negligence, negligent hiring, negligent retention,
negligent supervision, negligent training, negligent or
intentional infliction of emotional distress, false imprisonment,
defamation (whether libel or slander), personal injury, bodily
injury, bad faith, pain and suffering, medical expenses, wage and
hour, lost income and earnings (including, but not limited to,
back pay, front pay and any other form of present or future
income, benefits and/or earnings), equitable reinstatement,
breach of any express or implied contract, breach of the covenant
of good faith and fair dealing, workers' compensation, wrongful
termination, wrongful demotion, wrongful failure to promote,
wrongful deprivation of a career opportunity, discrimination
(including disparate treatment and disparate impact), hostile
work environment, quid pro quo sexual harassment, retaliation,
any request to submit to a drug or polygraph test, and/or
whistleblowing, whether said claim(s) are brought pursuant to
Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, 42 U.S.C. ss. 1981, the Employee Retirement Income
Security Act of 1974, the Equal Pay Act, the Pregnancy
Discrimination Act, the Fair Labor Standards Act, the Age
Discrimination in Employment Act, the Americans with Disabilities
Act, the Family and Medical Leave Act or any other
constitutional, federal, regulatory, state or local law, or under
the common law or in equity. Provided, however, that this Section
3(a) will not terminate Employee's right to indemnification under
the Indemnification Agreement, to the extent allowed by
Applicable Law, for advancement of expenses, or insurance
coverage under the Indemnification Agreement dated January 15,
1998, by and between the Company and Employee; the Company's
Bylaws; the Minnesota Business Corporation Act; applicable
insurance policies; and any other agreement, contract, law, or
otherwise under which Employee is entitled to indemnification,
advancement of expenses, or insurance coverage, for liability,
fees, and costs associated with (i) the Xxxxxxx litigation or any
other previously asserted or noticed claims, or (ii) claims
arising after the Effective Date.
(b) In consideration of the concessions provided for in Section 3(a)
and other good and valuable consideration, the receipt, adequacy,
and sufficiency of which is hereby acknowledged, the Company and
any parent, subsidiary or related companies, and any and all of
their employees, agents, administrators, assigns, receivers,
attorneys, servants, legal representatives, affiliates,
predecessors and successors in interest, regardless of form,
trustees in bankruptcy or otherwise, and any other representative
or entity acting on its or their behalf, do hereby now and
forever unconditionally release, discharge, and acquit Employee
and his heirs, executors, administrators, agents, receivers,
attorneys, servants, legal representatives, predecessors and
successors in interest, regardless of form, trustees in
bankruptcy or otherwise, wards, pursuant to, or by virtue of the
rights of any of them, from any and all claims, rights, demands,
actions, suits, damages, losses, expenses, liabilities,
indebtedness, and causes of action, of whatever kind or nature,
of which the Company presently has knowledge, arising out of or
related to acts commencing from the beginning of time through the
Effective Date, including, but not limited to, any claims under
other constitutional, federal, regulatory, state or local law, or
under the common law or in equity. The burden of proving the
actual knowledge of the Company of such events, occurrences or
omissions giving rise to a claim against Employee shall be the
Employee's burden, and shall only be established by the actual,
conscious knowledge of (a) an officer of the Company who is a
Vice President of the Company or higher, or (b) the General
Counsel of the Company, or (c) the Board of Directors of the
Company, or (d) an appropriate committee of the Board of
Directors constituted for a purpose related to the events,
occurrences or omissions at issue. Provided, however, that this
Section 3(b) will not terminate the Company's right to defend
against any claims asserted pursuant to the rights reserved by
Employee in Section 3(a).
4. Covenant Not-to-Xxx.
(a) Employee covenants and agrees not to file or initiate a lawsuit
against the Company in regard to any claims, demands, causes of
action, suits, damages, losses and expenses released pursuant to
Section 3(a), and Employee will ask no other person or entity to
initiate such a lawsuit on her/his behalf. If Employee breaches
this covenant and agreement, Employee must immediately repay and
refund to the Company all payments she/he received pursuant to
Section 2, and Employee shall also indemnify and hold harmless
the Company, any related companies, and any of their officers,
owners, directors, employees and agents from any and all costs
incurred by any and all of them, including their reasonable
attorneys' fees, in defending against any such lawsuit.
Notwithstanding the foregoing, Employee retains the right to
bring suit against the Company to enforce the provisions of this
Agreement and to enforce his rights to indemnification,
advancement of expenses, or insurance coverage under the
Indemnification Agreement dated January 15, 1998, by and between
the Company and Employee; the Company's Bylaws; the Minnesota
Business Corporation Act; applicable insurance policies; and any
other agreement, contract, law, or otherwise under which Employee
is entitled to indemnification, advancement of expenses, or
insurance coverage, for liability, fees, and costs associated
with (i) the Xxxxxxx litigation or any other previously asserted
or noticed claims, or (ii) claims arising after the Effective
Date.
(b) The Company covenants and agrees not to file or initiate a
lawsuit against Employee in regard to any claims, demands, causes
of action, suits, damages, losses and expenses released pursuant
to Section 3(b) and the Company will ask no other person or
entity to initiate such a lawsuit on her/his behalf. If the
Company breaches this covenant and agreement, the Company shall
also indemnify and hold harmless Employee, any related entities,
and any of their officers, owners, directors, employees and
agents from any and all costs incurred by any and all of them,
including their reasonable attorneys' fees, in defending against
any such lawsuit. Provided, however, that this Section 3(b) will
not terminate the Company's right to defend against any claims
asserted pursuant to the rights reserved by Employee in Sections
3(a) and 4(a).
5. No Proceedings Initiated. Employee represents and warrants that neither
she/he nor anyone acting on her/his behalf has filed or initiated any charge or
claim against the Company in any administrative or judicial proceeding.
6. Return of Company Property. Employee further promises, represents and
warrants that she/he has returned or will return to the Company, upon the
execution of this Agreement: (a) all property of the Company, including, but not
limited to, any and all files, records, credit cards, keys, identification
cards/badges, computer access codes, computer programs, instruction manuals,
equipment (including computers) and business plans; (b) any other property which
Employee prepared or helped to prepare in connection with Employee's employment
with the Company; and (c) all documents, including logs or diaries (except
personal diaries), all tangible materials, including audio and video tapes, all
intangible materials (including computer files), and any and all copies or
duplicates of any such tangible or intangible materials, including any
duplicates, copies, or transcriptions made of audio or video tapes, whether in
handwriting or typewritten, that are in the possession, custody or control of
Employee or her/his attorneys, agents, family members, or other representatives,
which are alleged to support in any way any of the claims Employee has released
under this Agreement, including but not limited to, all audio and videotapes
involving any officer, director, shareholder, executive, manager, employee,
agent, representative or attorney of the Company; provided that Employee has
retained copies of the items described on Schedule 6 attached hereto.
7. No Voluntary Assistance. Employee hereby covenants and agrees that
she/he will not voluntarily assist, support, or cooperate with, directly or
indirectly, any entity or person alleging or pursuing any claim, administrative
charge, or cause of action against the Company, including without limitation by
providing testimony or other information, audio or video recordings, or
documents, except under compulsion of law. If compelled to testify, nothing
contained herein shall in any way inhibit or interfere with Employee providing
completely truthful testimony. Nor shall anything herein prevent Employee's full
cooperation with any investigation or other proceeding by the EEOC or any other
federal, state or local governmental agency.
8. Attorneys' Fees and Costs. Other than as set forth in Section 2(a)(i),
the parties to this Agreement, individually and collectively, shall be
responsible for their own attorneys' fees and costs, and for extinguishing any
attorneys' liens filed by their counsel of record. Employee understands and
agrees that the payments contemplated in Section 2 include and encompass any and
all claims with respect to attorneys' fees, costs, and expenses for and by any
and all attorneys who have represented her/him, with whom she/he has consulted
or who have done anything in connection with the subject matter of this
Agreement or any of the claims being released hereunder. Provided, however, that
the foregoing does not supersede Employee's rights to indemnification,
advancement of expenses, or insurance coverage under the Indemnification
Agreement dated January 15, 1998, by and between the Company and Employee; the
Company's Bylaws; the Minnesota Business Corporation Act; applicable insurance
policies; and any other agreement, contract, law, or otherwise under which
Employee is entitled to indemnification, advancement of expenses, or insurance
coverage, for liability, fees, and costs associated with (i) the Xxxxxxx
litigation or any other previously asserted or noticed claims, or (ii) claims
arising after the Effective Date.
9. No Admission of Liability. The parties agree and acknowledge that this
Agreement is a full and complete compromise of the matters released herein
between the parties hereto; that neither the releases nor the negotiations for
this Agreement and the settlement embodied herein, including all statements or
communications made to date, shall be considered admissions by them.
10. Noncompete Acknowledgment. Employee has disclosed to Xx. Xxxxxx Xxx a
potential business venture in which he plans to engage following termination of
the employment relationship, i.e. xxx.XxxXxxxx.xxx, as described on Schedule 10
attached hereto. Employee represents that he will not breach the provisions of
the Employment and Noncompete Agreement dated January 16, 1998. In return, the
Company acknowledges that Employee's involvement and participation in this
venture, to the extent described in Schedule 10, will not be in breach of the
Employment and Noncompete Agreement.
11. Enforcement of this Agreement.
(a) In the event of a default or breach of this Agreement, each party is
free to pursue whatever legal or equitable remedies that may be
available to her/him or it to seek judicial enforcement of this
Agreement, whether by injunction, specific performance, an action for
damages or otherwise.
(b) Notwithstanding Section 8 above, the parties expressly acknowledge
that any and all attorneys' fees and expenses incurred in any
proceeding brought to enforce this Agreement as a result of a breach
thereof shall constitute part of the damages recoverable for any such
breach. Therefore, the prevailing party in any action to enforce this
Agreement, in addition to any other relief granted, shall be entitled
to recover its reasonable costs, including, without limitation,
attorneys' fees, expenses and costs.
12. OWBPA Rights.
(a) Employee is advised to seek legal counsel regarding the terms of this
Agreement. Employee acknowledges that he/she has either sought legal
counsel or has consciously decided not to seek legal counsel, contrary
to the Company's advice, regarding the terms and effect of this
Agreement.
(b) Employee acknowledges that this Agreement releases only those claims
that exist as of the date of Employee's execution of this Agreement.
(c) Employee acknowledges that he/she may take a period of 21 (twenty-one)
days from the date of receipt of this Agreement within which to
consider and sign this Agreement. If Employee fails to sign this
Agreement, Employee shall not be entitled to the consideration
provided in Section 2.
(d) Employee acknowledges that he/she will have seven (7) days from the
date of signing this Agreement to revoke the Agreement in writing in
its entirety ("Revocation Period"). Employee acknowledges that the
Agreement will not become effective or enforceable until the
Revocation Period has expired. In the event the Employee chooses to
revoke this Agreement, within the Revocation Period, he or she will:
(1) Revoke the entire Agreement in a signed writing, delivered to the
following person on or before the seventh (7th) day after he/she
executed the Agreement:
Interland Human Resources
000 Xxxxxxxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
(2) Forfeit all severance and payment rights of the Company that are
contemplated by this Agreement; and
(3) Return the full amount of consideration received, if any, to the
Company along with the signed writing.
(e) The "EFFECTIVE DATE" of this Agreement shall be the eighth (8th) day
after the date Employee signs the Agreement, assuming the Employee has
not revoked the Agreement in writing within the Revocation Period.
13. Employee expressly acknowledges that the payments and the other
consideration that he/she is receiving under this Agreement constitute material
consideration for his/her execution of this Agreement, and represent valuable
consideration to which he/she would not otherwise be entitled.
14. Jurisdiction. The laws of the State of Georgia shall govern this
Agreement, unless pre-empted by any applicable federal law controlling the
review of this Agreement.
15. Advice of Attorneys. The parties acknowledge that they have fully read,
understood and unconditionally accepted this Agreement after consulting with
their attorneys or having the opportunity to consult with an attorney, and
acknowledge that this Agreement is mutual and binding upon all parties hereto
regardless of the extent of damages allegedly suffered by any of the parties
hereto.
16. Counterparts. This Agreement may be signed in counterpart originals
with the same force and effect as if signed in a single original document.
17. Cooperation of the Parties. The parties to this Agreement agree to
cooperate fully and to execute any and all supplementary documents and to take
all additional actions that may be necessary or appropriate to give full force
and effect to the basic terms and intent of this Agreement and the settlement
embodied herein. Employee further agrees to fully cooperate with the Company in
any and all investigations, inquiries or litigation whether in any judicial,
administrative, or public, quasi-public or private forum, in which the Company
is involved, whether or not Employee is a defendant in such investigations,
inquiries, proceedings or litigation. Employee shall provide truthful and
accurate testimony, background information, and other support and cooperation as
the Company may reasonably request.
18. Modification in Writing Only. Neither this Agreement nor any provision
of this Agreement may be modified or waived in any way except by an agreement in
writing signed by each of the parties hereto consenting to such modification or
waiver.
19. No False Statements or Misrepresentation. Employee and the Company
hereby warrant and represent that they have not made any false statements or
misrepresentations in connection with this Agreement.
20. Headings and Captions. The headings and captions used in the Agreement
are for convenience of reference only, and shall in no way define, limit,
expand, or otherwise affect the meaning or construction of any provision of this
Agreement.
21. Miscellaneous. Any notice required or permitted to be given by either
party to the other party may be given by certified mail or overnight courier if
to Employee to Employee's home address identified above and if to the Company to
the Company at the following address or to the Company's headquarters address
(if it should cease to be at the following address):
Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Human Resources Department
With a copy to:
Interland, Inc.
000 Xxxxxxxxx Xxxxxx Xxx., Xxxxx 000
Xxxxxxx, XX 00000
Attn: Legal Department
IN WITNESS WHEREOF, the undersigned have executed this Agreement.
EMPLOYEE:
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Xxxx X. Xxxxxx
Date:
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INTERLAND, INC.
By:
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Its:
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Date:
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