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EXHIBIT 10.03
[Confidential Treatment Requested]
SETTLEMENT, CONSULTING AND RELEASE AGREEMENT
This Settlement and Release Agreement (hereafter "Settlement Agreement")
is made as of the date of execution set forth below, by and between Xxxxxx
Xxxxxxx ("Xx. Xxxxxxx") and Worldtalk Communications Corporation, doing business
as Worldtalk Communications Corporation ("Worldtalk") (jointly referred to as
the "Parties").
RECITALS
WHEREAS, Xx. Xxxxxxx was employed by Worldtalk since October 17, 1994,
and currently holds the position of Vice President, Engineering.
WHEREAS, Xx. Xxxxxxx and Worldtalk now desire to discontinue the
employment relationship between them.
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein, the Parties agree as follows:
1. Xx. Xxxxxxx has submitted his resignation as an employee of Worldtalk
and from all other positions at Worldtalk, and Worldtalk has accepted such
resignation, effective July 14, 1997. Xx. Xxxxxxx affirms and acknowledges that
he has received payment for all salary, bonuses, and other compensation,
including accrued but unused vacation, owed to him as of July 14, 1997. Xx.
Xxxxxxx acknowledges that Worldtalk has fully paid on a timely basis all amounts
owed to him as of July 14, 1997.
2. As consideration for the promises herein, Worldtalk agrees as
follows:
(a) Worldtalk will engage Xx. Xxxxxxx as a Consultant through [ ** ].
From July 15, 1996 through [ ** ], (the First Period), Xx. Xxxxxxx will perform
such consulting services, consisting of no more than 5 hours per week, in the
area of his expertise as are reasonably requested in writing by Worldtalk's
President. For his services during the First Period, Xx. Xxxxxxx will receive
consulting fees equal to [ ** ] semi-monthly (subject to reduction due to
applicable tax and other normal payroll withholdings), paid on the 8th and the
22nd of each month. Worldtalk will continue to employ Xx. Xxxxxxx
[**Confidential treatment has been requested with respect to certain portions of
this Exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission. ]
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as a consultant in the area of his expertise from [ ** ] through [ ** ] (the
Second Period) at an hourly rate of [ ** ]/hour, payable for actual hours worked
at the written request of Worldtalk's President, payable in each case,
semi-monthly as earned. However, Xx. Xxxxxxx will not be obligated to work more
than 5 hours in any one calendar week during the Second Period, and will be
obligated to work only at such times and places as shall not interfere with his
then current employment, if any.
(b) Xx. Xxxxxxx may terminate his relationship with Worldtalk at any
time by sending written notice of termination to a Worldtalk Officer. Worldtalk
may likewise terminate Xx. Xxxxxxx'x relationship, but only subsequent to a
material breach of this Agreement by Xx. Xxxxxxx that is not cured by Xx.
Xxxxxxx within 30 days after Worldtalk's written notice of such breach is sent
or personally delivered to Xx. Xxxxxxx. Termination by Worldtalk or Xx. Xxxxxxx
will also terminate Xx. Xxxxxxx'x right to receive the compensation provided for
in this Section 2 for any period after the effective date of notice, July 14,
1997.
Worldtalk will pay the cost of COBRA continuation coverage through
October 31, 1997 under Worldtalk's medical/dental benefit plans, should Xx.
Xxxxxxx elect such coverage. Any additional coverage will be at Xx.
Xxxxxxx'x expense.
Xx. Xxxxxxx understands and agrees that he will continue to comply with
the Statement of Company Policy on Securities Trades by Company Personnel
throughout the duration of his Consulting Services.
(e) Xx. Xxxxxxx has been granted options for the purchase of Worldtalk
Common Stock and has no other right to purchase or acquire, and has not
purchased or acquired from Worldtalk any capital stock of Worldtalk or any
securities convertible into, or exercisable for, any capital stock of Worldtalk.
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[**Confidential treatment has been requested with respect to certain portions of
this Exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission. ]
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Since Xx. Xxxxxxx will be performing substantial services on Worldtalk's behalf,
his existing options will continue to vest in accordance with their terms
through the termination of Xx. Xxxxxxx'x consulting relationship with Worldtalk.
Xx. Xxxxxxx will have until 60 days after termination of his consulting
relationship described above in this Section 2 to exercise his vested and
unexercised options.
3. Xx. Xxxxxxx acquired 149,377 shares of the Company's Common Stock
(computed on a post-split basis) on November 29, 1995 pursuant to two Stock
Option Exercise Agreements. Under Section 9 of each Stock Option Agreement, the
Company retained a Repurchase Option with respect to certain of these shares.
The Company hereby exercises its Repurchase Option to repurchase an aggregate of
35,168 shares at the original exercise price of $0.20 per share (17,269 shares
from Xx. Xxxxxxx'x Stock Option Grant dated October 25, 1994 and 17,899 shares
from the Stock Option Grant dated March 28, 1995. Xx. Xxxxxxx acknowledges and
consents to this repurchase.
The Company will pay the repurchase price for the 35,168 shares by
canceling a portion of the principal amount of the Secured Full Recourse
Promissory Note dated December 29, 1996 (the "Note") equal to $7,033.60 The
remaining $21,966.40 of principal plus all accrued interest on the Note will be
due and payable on November 15, 1997 in accordance with Section 3 of the Note.
4. Xx. Xxxxxxx agrees that the payments set forth in the preceding
paragraph and other consideration given to him his pursuant to this Settlement
Agreement, shall constitute a retainer for Xx. Xxxxxxx'x consulting services to
be rendered to Worldtalk as needed through and until [ ** ] ("the Consulting
Period). Xx. Xxxxxxx agrees that during the Consulting Period, he shall not
become employed by or render consulting services to Control Data Systems,
ISOCOR, Netscape, Microsoft/Linkage or IBM/Softswitch, which Worldtalk considers
entities in competition with Worldtalk. Xx. Xxxxxxx and Worldtalk agree that Xx.
Xxxxxxx may, during the Consultation Period, seek employment in competition with
Worldtalk to the extent the employment would commence after the termination of
the Consulting Period.
5. Release: Xx. Xxxxxxx, on behalf of himself, his representatives,
heirs, executors, attorneys, agents, and each of the foregoing, hereby forever
releases and
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[**Confidential treatment has been requested with respect to certain portions of
this Exhibit. Confidential portions have been omitted from the public filing and
have been filed separately with the Securities and Exchange Commission. ]
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discharges Worldtalk and its representatives, heirs, executors, attorneys,
agents, partners, officers, shareholders, directors, employees, parents,
subsidiaries, affiliates, divisions, successors and assigns, and each of the
foregoing, of and from any and all manner of action, claim or cause of action,
in law or in equity, suits, debts, liens, contracts, agreements, promises,
liabilities, demands, losses, damages, costs or expenses, including without
limitation court costs and attorneys' fees, which they may have against each
other at the time of the execution of this Settlement Agreement, known or
unknown, arising out of, or in connection with, or relating directly or
indirectly to Xx. Xxxxxxx'x employment with Worldtalk and/or the termination of
Xx. Xxxxxxx'x employment with Worldtalk ("Released Matters").
6. Unknown Claims: The release set forth above shall extend to claims
which Xx. Xxxxxxx does not know or suspect to exist in his favor, which if known
by him would have materially affected his decision to enter into this release.
Xx. Xxxxxxx acknowledges that he is familiar with Section 1542 of the Civil Code
of the State of California, which provides 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."
Xx. Xxxxxxx expressly waives and relinquishes any right or benefit which
he has or may have under Section 1542 of the Civil Code of the State of
California, or any other statute or legal principle with similar effect.
In connection with such waiver and relinquishment, Xx. Xxxxxxx
acknowledges that he is aware that, after executing this Settlement Agreement,
he or his attorneys or agents may discover claims or facts in addition to or
different from those which he now knows or believes to exist with respect to the
Released Matters, this Settlement Agreement, or the parties hereto but that it
is his intention hereby fully, finally and forever to settle and release all of
the claims, matters, disputes, and differences known or unknown, suspected or
unsuspected, which
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now exist, may exist, or heretofore may have existed against Worldtalk in
connection with the Released Matters. In furtherance of this intention, the
release herein given shall be and remain in effect as a full and complete
release notwithstanding the discovery or existence of any such additional or
different claim or fact.
Xx. Xxxxxxx acknowledges that he was offered a period of at least
twenty-one (21) days to consider the terms of this Agreement. For a period of
seven (7) days following execution of this Agreement, Xx. Xxxxxxx may revoke
said Agreement. This Agreement shall not become effective or enforceable until
the seven (7) day period has expired.
7. Return of Property: Xx. Xxxxxxx understands and agrees that prior to
the legal effective date of this Settlement Agreement he will identify to
Worldtalk and turn over to Worldtalk any and all files, memoranda, records,
credit cards, and other documents and physical or personal property, including
one Macintosh Laptop, which Xx. Xxxxxxx received from Worldtalk and which are
the property of Worldtalk, along with any and all copies thereof in any medium
or form. Worldtalk agrees to lend Xx. Xxxxxxx a Deskpro XL560 computer and a
Nanao Flex Scan monitor for a period of up to four (4) months. Both PC and
monitor shall be returned to Worldtalk on or before November 15, 1997.
Worldtalk will also provide a voice mail box for Xx. Xxxxxxx for a
period of one (1) month following his termination date.
8. Trade Secrets: Xx. Xxxxxxx understands and agrees that in the course
of his employment with Worldtalk, he acquired confidential or proprietary
information and trade secrets concerning Worldtalk's operations, its future
plans and its methods of doing business, including by way of example, but by no
means limited to, information about Worldtalk's customers, product development,
research, technology, financial, marketing, pricing, costs, compensation and
other matters (hereinafter collectively "Trade Secrets"), all of which
information Xx. Xxxxxxx understands and agrees would be extremely damaging to
Worldtalk if disclosed to a competitor or made available to any other person or
corporation. As used herein, the term "Competitor" includes but is not limited
to any corporation, firm or business engaged in a business similar to that of
Worldtalk or its subsidiary
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companies. Xx. Xxxxxxx understands and agrees that Trade Secrets have been
divulged to Xx. Xxxxxxx in confidence, and Xx. Xxxxxxx understands and agrees
that he will keep such information secret and confidential. Xx. Xxxxxxx further
understands and agrees that, at all times, he will not disclose or communicate
Trade Secrets to either a Competitor or any other person or in any way make such
information available to others, or make use of such information on Xx.
Xxxxxxx'x own behalf, or on behalf of any Competitor. In view of the nature of
Xx. Xxxxxxx'x employment and the Trade Secrets which Xx. Xxxxxxx has received
during the course of his employment, Xx. Xxxxxxx likewise agrees that Worldtalk
would be irreparably harmed by any violation or threatened violation of this
Paragraph and that, therefore, Worldtalk shall be entitled to an injunction
prohibiting Xx. Xxxxxxx from any violation or threatened violation of this
Paragraph. The undertakings set forth in this paragraph shall survive the
termination of other arrangements contained in this Settlement Agreement and is
in addition to the terms and conditions of any Proprietary Rights and
Confidentiality Agreement Xx. Xxxxxxx may have entered into with Worldtalk,
which Agreement shall also survive such termination.
Xx. Xxxxxxx further represents that he has not shown, transferred or
disclosed the contents of any Worldtalk documents to any individual or entity.
Xx. Xxxxxxx further represents that he has not disclosed any of Worldtalk's
Trade Secrets to any individual or entity or used such information for his or
any other individual's or entity's benefit.
9. Waiver: Xx. Xxxxxxx understands that various federal, state and local
laws prohibit age, sex, race, disability, benefits, pension, health and other
forms of discrimination and that these laws can be enforced through the U.S.
Equal Employment Opportunity Commission, California state and local human rights
agencies and federal and state courts. Xx. Xxxxxxx understands that if he
believes his treatment by Worldtalk was discriminatory, he has the right to
consult with these agencies and to file a charge with them or file a lawsuit.
Xx. Xxxxxxx has decided voluntarily to enter into this Settlement Agreement, and
waive the right to recover any amounts to which he may have been entitled under
such laws, including, but not limited to: the California Fair Employment and
Housing Act, California Government Code * 12900 et seq.; the Employee Retirement
Income
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Security Act (ERISA), 29 U.S.C. * 1001 et seq.; Title VII of the Civil Rights
Act of 1964, 42 U.S.C. * 2000e et seq.; and 42 U.S.C. * 1981.
10. Successors and Assigns: The provisions of this Settlement Agreement
and the release contained herein shall extend and inure to the benefit of and be
binding upon, in addition to the Parties hereto, just as if they had executed
this Settlement Agreement, the respective legal heirs and assigns of each of the
Parties hereto and their spouses, descendants, ancestors, dependents, heirs,
executors, administrators, directors, officers, partners, attorneys, agents,
servants, employees, representatives, affiliates, parents, subsidiaries,
shareholders, predecessors, successors and assigns, and each of the foregoing.
11. Representations as to Authority: Each of the Parties hereto
represents and warrants that he or it has the sole right and exclusive authority
to execute this Settlement Agreement and that he or it has not sold, assigned,
transferred, conveyed, or otherwise disposed of any claim or demand, or any
portion of or interest in any claim or demand, relating to any matter covered by
this Settlement Agreement.
12. Entire Agreement: This Settlement Agreement constitutes the entire
agreement among the Parties hereto with respect to the subject matter hereof and
supersedes all prior negotiations and agreements, whether written or oral,
relating to such subject matter. Each of the Parties acknowledges to the other
that neither one, nor his or its agent or attorney, has made any promise,
representation or warranty whatsoever, either express or implied, written or
oral, which is not contained in this Settlement Agreement for the purpose of
inducing that Party to execute the Settlement Agreement, and each of the Parties
acknowledges that she or it has executed this Settlement Agreement in reliance
only upon such promises, representations and warranties as are contained herein.
13. Modification: It is expressly agreed that this Settlement Agreement
may not be altered, amended, modified, or otherwise changed in any respect
except by another written agreement that specifically refers to this Settlement
Agreement, duly executed by authorized representatives of each of the Parties
hereto.
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14. Notices: Any notices required or permitted hereunder shall be in
writing and will be effective when personally delivered or when deposited in the
U.S. mails, certified mail return receipt requested, postage prepaid, to the
address specified for the receiving party on the signature page hereto, or to
such other address as may be noted to the sending party hereafter.
15. No Evidence of Liability: This Settlement Agreement shall be
afforded the maximum protection allowable under California Evidence Code Section
1152 and/or any other state or federal provisions of similar effect.
16. Representation by Counsel: Each of the Parties hereto acknowledges
that she or it has been represented by counsel or has had the opportunity to
consult with counsel throughout all negotiations which preceded the execution of
this Settlement Agreement. Each Party further acknowledges that she or it and/or
counsel have had adequate opportunity to make whatever investigation or inquiry
deemed necessary or desirable in connection with the subject matter of this
Settlement Agreement prior to the execution hereof and the acceptance of the
consideration specified herein.
17. Interpretation: This Settlement Agreement shall be enforced,
interpreted and construed in accordance with California law. Counsel for the
Parties have negotiated, read and approved the language of this Settlement
Agreement, which language shall be construed in its entirety according to its
fair meaning and not strictly for or against either of the Parties.
18. Confidentiality: The contents, terms and conditions of this
Settlement Agreement shall be kept confidential by the Parties and shall not be
disclosed by the Parties except pursuant to subpoena or court order or to their
respective tax or financial advisors for the sole purpose of preparing tax
returns. However, Worldtalk reserves the right to disclose the contents of this
Settlement Agreement to potential investors or buyers of Worldtalk or to any
person or entity when necessary to comply with federal securities laws. In
addition, liquidated damages in the amount of $2,500 will be assessed for each
violation of this provision upon an adequate showing of proof to an arbitration
judge. This provision shall be enforced by binding arbitration by a judge
appointed by Judicial Arbitration and Mediation Services, Inc. The arbitration
Judge shall have the
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authority to award liquidated damages as set forth above and, in the arbitration
judge's discretion, to provide injunctive relief to prevent further breach. A
decision by the arbitration judge awarding either liquidated damages or
injunctive relief or both may be enforced as a judgment in any court of
competent jurisdiction.
19. Non-disparagement: The Parties each agree not to engage in conduct
or undertake speech derogatory about or detrimental to the other.
20. Counterparts: This Settlement Agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute one and the same document. A photocopy of the Settlement Agreement
may be used in lieu of an original in any proceeding or action brought to
enforce or construe this Settlement Agreement.
21. Attorney's Fees: If any action at law or in equity is brought to
enforce the terms of this Settlement Agreement, the prevailing party shall be
entitled to recover its reasonable attorneys' fees, costs and expenses from the
other party, in addition to any other relief to which such prevailing party may
be entitled.
IN WITNESS WHEREOF, each of the Parties hereto has duly executed this
Settlement Agreement as of the date and year set forth below.
Executed at Santa Clara, California, this 15 day of July, 1997.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx Xxxxxxx
Executed at Santa Clara, California, this 15 day of July, 1997.
By: /s/ Xxxxxxx Xxxxxxxxxxxx
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Xxxxxxx Xxxxxxxxxxxx
Worldtalk Communications Corporation
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