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EXHIBIT 10.18
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT is entered into between Xxxxxxx X. Xxxxxx
("Associate") and Xxxxxx Micro Inc., a Delaware corporation ("Ingram"),
in recognition of Associate's service to Xxxxxx and in order to induce
Associate to continue in his position as an officer and employee of
Ingram. In consideration of the mutual promises and agreements
contained in this document, intending to be legally bound, Associate
and Ingram contract and agree as follows:
1. Continued Employment. Subject to the conditions set forth in this
Agreement, Ingram will provide Associate with the benefits provided
herein if Associate elects to resign as an officer of Ingram at any
time on or after December 31, 1998 or Ingram removes Associate as an
officer of Ingram for any reason other than cause at any time after the
date hereof. The date of any such resignation or removal is hereinafter
referred to as the "Separation Date". Nothing herein shall require
Associate to resign, or refrain from resigning, as an officer of Ingram
at any time, nor shall anything herein be construed as giving Associate
the right to be retained as an officer or employee of Ingram for any
period of time. As used herein, "cause" shall exist if the Board of
Directors of Ingram, or a committee thereof, determines, in its sole
discretion, that Associate has committed acts of dishonesty or
disloyalty, or acts substantially detrimental to the welfare of Ingram.
2. Health Plan Coverage. Subject to Paragraph 12 hereof, if Associate is
eligible and elects to obtain continuation of medical and dental
insurance coverage from Ingram after the Separation Date under COBRA,
during the period from the Separation Date through June 30, 1999,
Ingram will charge Associate for such coverage only the amount which it
charges its employees for the same type of coverage.
3. 1998 Incentive Bonus. Subject to Paragraph 12 hereof, in March 1999,
Associate will receive an incentive payment per the 1998 Executive
Incentive Plan calculated on the terms of Associate's award letter
dated March 31, 1998, and prorated to reflect the period in 1998 in
which Associate was an officer of Ingram.
4. Stock Options. Subject to Paragraph 12 hereof and notwithstanding any
contrary provisions in any plan or relevant agreement, Associate's
currently existing stock options and grants will continue to vest as
scheduled after the Separation Date through June 30, 1999, but not
thereafter. Associate shall have the right to exercise all such vested
stock options and grants through August 31, 1999, unless options or
grants expire at an earlier date per the terms of the underlying
agreements for such options and grants. A list of all of Associate's
current stock options is attached as Exhibit A hereto.
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5. Key Employee Stock Purchase Plan. Subject to Paragraph 12 hereof,
notwithstanding the provisions of Section 6(b)(i) of the Acquisition
Agreement dated June 27, 1996 between Ingram and Associate relating to
Associate's purchase of 60,000 shares of Ingram Class B Common Stock
under the Ingram Key Employee Stock Purchase Plan (the "Acquisition
Agreement"), Ingram shall not exercise any right it may have to
repurchase the 25% of the Shares (as such term is defined in the
Acquisition Agreement) that become Unrestricted Shares (as such term is
defined in the Acquisition Agreement) on April 1, 1999 . Ingram shall
repurchase the remaining 25% of the Shares promptly after the
Separation Date. Except as modified hereby, the Acquisition Agreement
shall continue in full force and effect in accordance with its terms.
6. Non-disclosure. Associate acknowledges his obligation not to disclose,
during or after employment, any trade secrets or proprietary and/or
confidential data or records of Ingram or its Affiliates or to utilize
any such information for private profit. Each of the parties hereto
agrees that such party will not release, publish, announce or otherwise
make available to the public in any manner whatsoever any information
or announcement regarding this Agreement or the transactions
contemplated hereby without the prior written consent of the other
party hereto, except as required by law or legal process, including, in
the case of Ingram, filings with the Securities and Exchange
Commission. Associate agrees not to communicate with, including
responding to questions or inquiries presented by, the media, employees
or investors of Ingram, its Affiliates or any third party relating to
the terms of this Agreement, without first obtaining the prior written
consent of Ingram. Notwithstanding the foregoing, Associate may make
disclosure to his spouse, attorneys and financial advisors of the
existence and terms of this Agreement provided that they agree to be
bound by the provisions of this Paragraph 6. Each party agrees not to
make statements or take any action to disparage, dissipate or
negatively affect the reputation of the other with employees,
customers, suppliers, competitors, vendors, stockholders or lenders of
Ingram, its Affiliates or any third party.
7. Return of Property. Associate acknowledges his obligation to promptly
return to Ingram all property of Ingram and its Affiliates in his
possession, including without limitation all keys, credit cards,
computers, office equipment, documents, files and instruction manuals
on or before the Separation Date, or earlier if Ingram so requests it.
8. Associate's Obligations. In consideration of the benefits and stock
ownership rights to be received by Associate hereunder, Associate and
Ingram have further agreed as follows:
a. Associate will not directly or indirectly make known to any person,
firm, corporation, partnership or other entity any list, listing or
other compilation, whether prepared or maintained by Associate, Ingram
or any of Xxxxxx'x Affiliates, which contains information that is
confidential to Ingram or any of its Affiliates about their customers
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("Ingram Customers"), including but not limited to names and addresses,
or, at any time on or before June 30, 1999, call on or solicit, or
attempt to call on or solicit, in either case with the intent to divert
business or potential business from Ingram or any of its Affiliates,
any of the Ingram Customers with whom he has become acquainted during
his employment with Ingram or any of its Affiliates, either for his own
benefit or for the benefit of any other person, firm, corporation,
partnership or other entity.
b. Through June 30, 1999, Associate will not (i) knowingly solicit,
entice, or persuade any associates of Ingram or any of its Affiliates
("Ingram Associates") to leave the services of Ingram or any of its
Associates for any reason, or (ii) solicit for employment, hire, or
engage any Ingram Associate as an employee, independent contractor or
consultant; provided, however, that Associate shall not be prohibited
hereby from hiring, either himself or on behalf of his employer, an
Ingram Associate who independently initiates contact with Associate for
the purpose of seeking new employment.
c. Associate acknowledges that he has unique knowledge of Ingram and its
Affiliates and unique knowledge of the computer and software sales and
distribution industry. Based on his unique status, he agrees that
through June 30, 1999, he will not be employed or hired as an employee
or consultant by, or otherwise directly or indirectly provide services
for, any of Tech Data, Merisel, Inacom, Computer 0000, XxxxxXxx,
Xxxxxxxxxx, Xxxxxxxx, Xxxxx Arrow, CHS Electronics, Trilogy, PC Order,
Marshall, Hallmark, Xxxxxxxx Avnet, Daisytek, Azerti, Azlan,
Northamber, Tech Pacific, Synnex, GE Capital Information Technology
Solutions-North America, Inc. and/or Softbank, and any subsidiary or
affiliate of these entities in a business or line of business conducted
by any such entity which competes with any line of business conducted
by Ingram or any of its Affiliates. Notwithstanding the foregoing,
should Associate be employed by an entity that is not a subsidiary or
affiliate of one of these entities at the time he commences such
employment, but subsequently becomes a subsidiary or affiliate of, or
becomes merged into, one of these entities on or before June 30, 1999,
he shall not be deemed to be in breach of the provisions of this
Paragraph 8.c due to such employment provided that at the time he
commenced his employment there had been no public announcement of an
agreement pursuant to which his employer would become a subsidiary or
affiliate of, or merged into, one of these entities or discussions that
could lead to such an agreement and Associate had no knowledge of the
existence of any such agreement or discussions. Associate further
agrees that he will not own any interest in, provide financing to, be
connected with, or be a principal, partner or agent of such competitive
distributor or aggregator; provided, he may own less than 1% of the
outstanding shares of any such entity whose shares are traded in the
public market.
d. Subject to Associate's other commitments, upon request of Ingram or any
of its Affiliates through June 30, 1999, Associate will make himself
available to provide reasonable assistance to Ingram or any such
Affiliate up to a maximum of 15 hours per month and will use reasonable
efforts to arrange his commitments so as to make
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himself available for such assistance on a basis which is consistent
with the requests of Ingram or any of its Affiliates. Such assistance
may include telephone conversations, correspondence, attendance and
participation in meetings, transfer of knowledge or information
regarding operational or other issues, litigation preparation and
trials. During such period, such assistance shall be treated, and
compensated, as Consulting Services and Ingram shall reimburse
Associate for any out-of-pocket expenses he may incur in connection
with such assistance in accordance with Xxxxxx'x reimbursement
policies. After June 30, 1999, Associate shall continue to provide such
assistance as requested by Ingram and, in such event, shall be
compensated at a rate per day (minimum charge, one half day)
commensurate with the daily rate he was earning based on his current
monthly base salary.
The running of the periods prescribed in this Paragraph shall be tolled
and suspended by the length of time Associate works in circumstances
that a court of competent jurisdiction subsequently finds to violate
the terms of this partial restraint.
9. Rights in Event of Breach. In the event of Associate's breach of this
Agreement, excluding breach of this Agreement due to death or total
disability and provided that in the event of a breach of Paragraph 8.c
or 8.d such breach shall have continued for 15 days after the sooner of
Associate's discovery thereof or receipt of notice from Ingram thereof,
Ingram shall have no obligation to make any further payments hereunder
or permit any stock options to continue to vest or any vested stock
options to be exercised, and may purchase any remaining Restricted
Shares under the Acquisition Agreement. In the event that Ingram elects
to terminate such obligations, Associate's obligations under Paragraph
8.c and 8.d also will terminate.
10. Confidential Information. This Agreement will in no way void or
diminish Associate's obligation to protect and keep confidential any
and all proprietary and/or confidential information of Ingram and its
Affiliates which Associate may have or acquire in the future.
11 Injunctive Relief. Irreparable harm will be presumed if Associate
breaches any covenant in this Agreement and damages may be very
difficult to ascertain. In light of these facts, Associate agrees that
any court of competent jurisdiction should immediately enjoin any
breach of this Agreement upon the request of Ingram, and Associate
specifically releases Ingram from the requirement of posting any bond
in connection with temporary or interlocutory injunctive relief, to the
extent permitted by law. The granting of injunctive relief by any court
shall not limit Xxxxxx'x right to recover any amounts previously paid
to Associate under this Agreement or any damages incurred by it due to
a breach of this Agreement by Associate.
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12. Release by Associate. As a condition to Xxxxxx'x obligations pursuant
to Paragraphs 2, 3, 4 and 5, Associate shall deliver an executed
release and waiver as of the Separation Date in the form of Exhibit B
hereto.
13. Right to Revoke. Associate acknowledges that he has the right to seek
legal counsel, and was advised to seek such counsel, before entering
into this Agreement. Associate shall have 21 days from the date on
which this Agreement was delivered to him in which to execute and
return this Agreement to Ingram. In the event that Associate does not
execute and return this Agreement within such 21 day period, the offer
contained in this Agreement shall be revoked and Ingram shall not be
bound by any terms or conditions contained herein. Associate further
understands he has the right to revoke this Agreement at any time
within seven days of execution of this Agreement by written notice sent
by certified mail and received by Ingram prior to expiration of the
seventh day, whereupon this Agreement shall be null and void as of its
inception.
14. Sole Remedy. Associate agrees that, in the event Ingram breaches any
provision of this Agreement, his sole remedy for such breach shall be
enforcement of the terms of this Agreement or, in the case of a breach
of Paragraph 4 or 5 hereof, at Associate's election, recovery of any
provable damages as a result of such breach.
15. Attorney Fees. In the event that either party hereto files suit to
enforce or interpret the provisions of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees and costs
incurred therewith.
16. Definition of Affiliate. An "Affiliate" of Ingram for purposes of this
Agreement shall include any corporation or business entity in which
Ingram owns, directly or indirectly, at least 15% of the outstanding
equity interest.
17. Enforceability. If any provision of this Agreement shall be held
invalid or unenforceable, the remainder of this Agreement shall
nevertheless remain in full force and effect. If any provision is held
invalid or unenforceable with respect to a particular circumstance, it
shall nevertheless remain in full force and effect in all other
circumstances.
18. Entire Agreement. This instrument contains and accurately recites the
complete and entire agreement among the parties, and it expressly
terminates, cancels, and supersedes any and all prior agreements or
understandings, if any, among the parties. This Agreement may not be
modified except in writing signed by the parties.
19. Governing Law. This Agreement shall be governed by California law,
without regard to the choice or conflict of law provisions thereof.
20. Paragraph Titles. The paragraph titles used in this Agreement are for
convenience only and do not define or limit the contents of any
paragraph.
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21. Successors and Assigns. This Agreement shall be binding upon, and shall
inure to the benefit of, the heirs of Associate and the successors and
assigns of Ingram.
Executed and delivered to Associate by Ingram on May 15, 1998 and
executed by Associate on the date set out below.
"Ingram"
XXXXXX MICRO INC..
By: /s/ Sanat Dutta
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Sanat Dutta
President, Xxxxxx Micro US
"Associate"
/s/ Xxxxxxx X. Xxxxxx
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Date Xxxxxxx X. Xxxxxx
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EXHIBIT B
RELEASE AND WAIVER
The undersigned, Xxxxxxx X. Xxxxxx, in consideration of the payments
and benefits to be received from Xxxxxx Micro Inc., a Delaware corporation
("Ingram"), pursuant to the terms of that certain Separation Agreement dated as
of May 15, 1998, by and between the undersigned and Ingram (the "Separation
Agreement") after the Separation Date, as such term is defined in the Separation
Agreement, does hereby covenant and agree with Ingram as follows:
1. Release. The undersigned hereby fully, finally and irrevocably
discharges Ingram and each of its Affiliates, and each present, former
and future director, officer and employee of Ingram and its Affiliates
and any parent, subsidiary, affiliate or shareholder thereof (the
"Ingram Released Parties") from all manner of claims, actions, causes
of action or suits, in law or in equity, which the undersigned has or
may have, known or unknown, against the Ingram Released Parties, or any
of them, by reason of any matter, cause or thing whatsoever, including
any action arising from or during his employment with Ingram and any of
its Affiliates, resulting from or relating to his employment or the
termination thereof, or relating to his status as an officer, director,
employee or participant in any employee benefit plan of Ingram or any
of its Affiliates; provided, however, that the foregoing (a) is not
intended to be, and shall not constitute, a release of any right of the
undersigned to obtain indemnification and reimbursement of expenses
from Ingram or any of its Affiliates with respect to claims based upon
or arising from alleged or actual acts or omissions of the undersigned
as an officer, director or employee of Ingram or any of its Affiliates
to the fullest extent provided by law or in any applicable certificate
of incorporation, bylaw or contract, and (b) shall not release Ingram
from liability for violations of the Separation Agreement after the
date hereof. From and after the date hereof, the undersigned agrees and
covenants not to xxx, or threaten suit against, or make any claim
against, any Ingram Released Party for or alleging any of the claims,
actions, causes of action or suits as discussed above. The undersigned
acknowledges that this release includes, but is not limited to, all
claims arising under federal, state, local or foreign laws prohibiting
employer discrimination and all claims growing out of any legal
restrictions on the right of Ingram or any of its Affiliates to
terminate its employees. The undersigned also specifically waives and
releases all claims of employment discrimination and all rights
available to him under Title VII of the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act (ADEA), as well as
all claims or rights under the California Fair Employment and Housing
Act, or any similar law of any jurisdiction. The undersigned
specifically agrees that he will not institute litigation in any forum,
including any filing with any regulatory commission or agency, against
any Ingram Released Party based on any allegations or circumstances
that are in any way connected with his employment or the termination of
his employment with Ingram and its Affiliates.
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2. Waiver. The undersigned hereby expressly waives and relinquishes all
rights and benefits under Section 1542 of the California Civil Code
which provides:
"Section 1542. General Release--Claim extinguished. 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."
The undersigned understands and acknowledges that the significance and
consequence of this waiver of Section 1542 of the Civil Code is that
even if the undersigned should eventually suffer damages arising out of
his employment relationship with Ingram and its Affiliates, or
termination of such employment, the undersigned will not be permitted
to make any claim for those damages except as expressly permitted by
this Release and Waiver. Furthermore, the undersigned acknowledges that
he intends these consequences even as to claims for injuries and/or
damages that may exist as of the date of this Release and Waiver but
which the undersigned does not know exist, and which, if known, would
materially affect his decision to execute this Release and Waiver.
3. An "Affiliate" of Ingram for purposes of this Release and Waiver
shall include any corporation or business entity in which Ingram owns,
directly or indirectly, at least 15% of the outstanding equity
interest.
IN WITNESS WHEREOF, the undersigned has signed and delivered to Ingram
this Release and Waiver this _____ day of _____, 199___.
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Xxxxxxx X. Xxxxxx
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FIRST AMENDMENT TO SEPARATION AGREEMENT
This First Amendment to Separation Agreement amends the Separation
Agreement entered into between Xxxxxxx X. Xxxxxx ("Associate") as of May 15,
1998 and Xxxxxx Micro Inc., a Delaware corporation ("Ingram"), as of May 1, 1998
(the "Separation Agreement"). Capitalized terms not otherwise defined herein
shall have the same meanings ascribed to them in the Separation Agreement.
For good and valuable consideration, the sufficiency of which is
acknowledged by both parties, and intending to be legally bound, Associate and
Ingram contract and agree as follows:
1. Paragraph 1 of the Separation Agreement is hereby amended to
read in its entirety as follows:
"Subject to the conditions set forth in this
Agreement, Ingram will provide Associate with the
benefits provided herein if Ingram removes Associate
as an officer of Ingram for any reason other than
cause at any time after the date hereof and prior to
June 30, 1999. The date of any such removal is
hereinafter referred to as the "Separation Date".
Nothing herein shall be construed as giving Associate
the right to be retained as an officer or employee of
Ingram for any period of time. As used herein,
"cause" shall exist if the Board of Directors of
Ingram, or a committee thereof, determines, in its
sole discretion, that Associate has committed acts
of dishonesty or disloyalty, or acts substantially
detrimental to the welfare of Ingram."
2. Except as set forth in Paragraph 1 above, the Separation
Agreement shall be unamended. The Separation Agreement, as
amended herein, is hereby ratified and confirmed and shall
continue in full force and effect.
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In witness whereof, the parties have executed and delivered this First
Amendment to Separation Agreement as of the respective dates set forth opposite
their signature lines below.
XXXXXX MICRO INC.
Date: October 28, 1998 By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
President and Worldwide
Chief Operating Officer
Date: __________________________ /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
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