January 5, 2007 Tom Gallivan Dear Tom:
Exhibit
10.1
January
5, 2007
Xxx
Xxxxxxxx
Dear
Xxx:
This
letter sets forth the substance of the separation agreement (the “Agreement”)
that Rackable
Systems, Inc.
(the
“Company”) is offering to you to aid in your employment transition.
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1.
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Separation.
Your last day of work with the Company and your employment termination
date will be January 5, 2007 (the “Separation Date”).
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2.
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Accrued
Salary And Paid Time Off.
On the Separation Date, the Company will pay you all accrued salary,
commission and all accrued and unused PTO earned
through January 5, 2007, subject to standard payroll deductions and
withholdings. You are entitled to these payments by
law.
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3.
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Severance
Payment.
Although the Company has no obligation to do so, if you sign this
Agreement, then the Company will pay you, as severance, the
following:
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Three
monthly severance payments of $56,666.67, subject to standard payroll deductions
and withholdings. These monthly severance payments shall cease upon you
obtaining fulltime employment. You agree to promptly notify the Company if
you
obtain fulltime employment.
The
first
severance payment will be paid within ten (10) days after the Effective Date
(as
defined in paragraph 14 below) and subsequent severance payments on the first
day of each month thereafter.
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4.
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Health
Insurance.
To
the extent provided by the federal COBRA law or, if applicable, state
insurance laws, and by the Company’s current group health insurance
policies, you will be eligible to continue your group health insurance
benefits at your own expense following January 31, 2007. Later, you
may be
able to convert to an individual policy through the provider of the
Company’s health insurance, if you wish. You will be provided with a
separate notice describing your rights and obligations under COBRA.
If you
elect continued coverage under COBRA, as part of this Agreement,
the
Company will pay your COBRA premiums through July 31,
2007.
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5.
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Stock
Options.
Under the terms of your stock option agreement and the applicable
plan
documents, vesting of your stock options will cease as of the Separation
Date. Your right to exercise any vested shares, and all other rights
and
obligations with respect to your stock options(s), will be as set
forth in
your stock option agreement, grant notice and applicable plan
documents.
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6.
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Other
Compensation Or Benefits.
You acknowledge that, except as expressly provided in this Agreement,
you
will not receive any additional compensation, severance, or benefits
after
the Separation Date.
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7.
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Expense
Reimbursements.
You agree that, within ten (10) days of the Separation
Date, you will submit your final documented expense reimbursement
statement reflecting all business expenses you incurred through the
Separation Date, if any, for which you seek reimbursement. The Company
will reimburse you for these expenses pursuant to its regular business
practice.
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8.
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Return
Of Company Property.
You agree that, within five (5) days of the Separation Date, you
agree to
return to the Company all Company documents (and all copies thereof)
and
other Company property that you have had in your possession at any
time,
including, but not limited to, Company files, notes, drawings, records,
business plans and forecasts, financial information, specifications,
computer-recorded information, tangible property (including, but
not
limited to, computers), credit cards, entry cards, identification
badges,
and keys; and, any materials of any kind that contain or embody any
proprietary or confidential information of the Company (and all
reproductions thereof). Your timely return of all such Company documents
and other property is a condition precedent to your receipt of the
severance benefits provided under this
Agreement.
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9.
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Proprietary
Information Obligations.
You acknowledge your continuing obligations under your Proprietary
Information and Inventions Agreement, a copy of which is attached
hereto
as Exhibit A.
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10.
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Confidentiality.
The provisions of this Agreement will be held in strictest confidence
by
you and the Company and will not be publicized or disclosed in any
manner
whatsoever; provided,
however,
that:
(a) you
may disclose this Agreement in confidence to your immediate
family;
(b)
the parties may disclose this Agreement in confidence to their respective
attorneys, accountants, auditors, tax preparers, and financial
advisors;
(c) the
Company may disclose this Agreement as necessary to fulfill standard
or
legally required corporate reporting or disclosure requirements;
and
(d) the
parties may disclose this Agreement insofar as such disclosure may
be
necessary to enforce its terms or as otherwise required by law. In
particular, and without limitation, you agree not to disclose the
terms of
this Agreement to any current or former Company
employee.
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11.
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Nondisparagement.
You
agree not to disparage the Company, its officers, directors, employees,
shareholders, and agents, in any manner likely to be harmful to its
or
their business, business reputation, or personal reputation; provided
that
you will respond accurately and fully to any question, inquiry or
request
for information when required by legal
process.
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12.
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No
Admissions. You
understand and agree that the promises and payments in consideration
of
this Agreement shall not be construed to be an admission of any liability
or obligation by the Company to you or to any other person, and that
the
Company makes no such admission.
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13.
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Release
of Claims.
In exchange for the consideration under this Agreement to which you
would
not otherwise be entitled, you
hereby generally
and completely release the Company and its directors, officers, employees,
shareholders, partners, agents, attorneys, predecessors, successors,
parent and subsidiary entities, insurers, affiliates, and assigns
from any
and all claims, liabilities and obligations, both known and unknown,
that
arise out of or are in any way related to events, acts, conduct,
or
omissions occurring at any time prior to and including the date you
sign
this Agreement. This general release includes, but is not limited
to: (a)
all claims arising out of or in any way related to your employment
with
the Company or the termination of that employment; (b) all claims
related
to your compensation or benefits from the Company, including salary,
bonuses, commissions, vacation pay, expense reimbursements, severance
pay,
fringe benefits, stock, stock options, or any other ownership interests
in
the Company; (c) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and
fair
dealing; (d) all tort claims, including claims for fraud, defamation,
emotional distress, and discharge in violation of public policy;
and (e)
all federal, state, and local statutory claims, including claims
for
discrimination, harassment, retaliation, attorneys’ fees, or other claims
arising under 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”), and the
California Fair Employment and Housing Act (as amended).
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14.
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ADEA
Waiver. You
acknowledge that you are knowingly and voluntarily waiving and releasing
any rights you may have under the ADEA (“ADEA Waiver”). You also
acknowledge that the consideration given for the ADEA Waiver is in
addition to anything of value to which you were already entitled.
You
further acknowledge that you have been advised by this writing, as
required by the ADEA, that: (a) your ADEA Waiver does not apply to
any
rights or claims that arise after the date you sign this Agreement;
(b)
you should consult with an attorney prior to signing this Agreement;
(c)
you have twenty-one (21) days to consider this Agreement (although
you may
choose to voluntarily sign it sooner); (d) you have seven (7) days
following the date you sign this Agreement to revoke the ADEA Waiver
(in a
written revocation sent to me); and (e) the ADEA Waiver will not be
effective until the date upon which the revocation period has expired,
which will be the eighth day after you sign this Agreement (the “Effective
Date”). Nevertheless, your general release of claims, except for the ADEA
Waiver, is effective immediately and not
revocable.
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15.
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Section
1542 Waiver.
In
granting the release herein, which includes claims which may be unknown
to
you at present, you acknowledge that you have read and understand
Section
1542 of the California Civil Code: “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.”
You hereby expressly waive and relinquish all rights and benefits
under
that section and any law or legal principle of similar effect in
any
jurisdiction with respect to the releases granted herein, including
but
not limited to the release of unknown and unsuspected claims granted
in
this Agreement.
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16.
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Miscellaneous.
This Agreement, including Exhibit A, constitutes the complete, final
and
exclusive embodiment of the entire agreement between you and the
Company
with regard to its subject matter. It is entered into without reliance
on
any promise or representation, written or oral, other than those
expressly
contained herein, and it supersedes any other such promises, warranties
or
representations. This Agreement may not be modified or amended except
in a
writing signed by both you and a duly authorized officer of the Company.
This Agreement will bind the heirs, personal representatives, successors
and assigns of both you and the Company, and inure to the benefit
of both
you and the Company, their heirs, successors and assigns. If any
provision
of this Agreement is determined to be invalid or unenforceable, in
whole
or in part, this determination will not affect any other provision
of this
Agreement and the provision in question will be modified so as to
be
rendered enforceable. This Agreement will be deemed to have been
entered
into and will be construed and enforced in accordance with the laws
of the
State of California as applied to contracts made and to be performed
entirely within California. Any ambiguity in this Agreement shall
not be
construed against either party as the drafter. Any waiver of a breach
of
this Agreement shall be in writing and shall not be deemed to be
a waiver
of any successive breach. This Agreement may be executed in counterparts
and facsimile signatures will suffice as original
signatures.
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If
this
Agreement is acceptable to you, please sign below and return the original to
me.
We
wish
you the best in your future endeavors.
Sincerely,
By: /s/
Xxx
Xxxxxx
Xxx
Xxxxxx
Chief
Executive Officer
I
have
read, understand and agree fully to the foregoing Agreement:
By:
/s/
Xxx
Xxxxxxxx
Xxx
Xxxxxxxx
Date:
December
7,
2006
Exhibit
A
PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT
EMPLOYEE
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
In
consideration of my employment by Rackable Systems, Inc., a Delaware
corporation (the "Company"), I hereby agree to the following with respect to
my
use and development of information and technology of the Company, as more fully
set out below.
Proprietary
Information.
Confidential
Restrictions.
I agree
to hold in strict confidence and in trust for the sole benefit of the Company
all Proprietary Information (as defined below) that I may have access to during
the course of my employment with the Company and will not disclose any
Proprietary Information, directly or indirectly, to anyone outside of the
Company, or use, copy, publish, summarize, or remove from Company premises
such
information (or remove from the premises any other property of the Company)
except (i) during my employment to the extent necessary to carry out my
responsibilities as an employee of the Company or (ii) after termination of
my employment, as specifically authorized by the President of the Company.
I
further understand that the publication of any Proprietary Information through
literature or speeches must be approved in advance in writing by the President
of the Company. "Proprietary Information" shall mean all information and any
idea in whatever form, tangible or intangible, whether disclosed to or learned
or developed by me, pertaining in any manner to the business of the Company
(or
any affiliate of it that might be formed) or to the Company's customers,
suppliers, licensors and other commercial partners unless: (i) the
information is or becomes publicly known through lawful means; (ii) the
information was rightfully in my possession or part of my general knowledge
prior to my employment by the Company; or (iii) the information is
disclosed to me without confidential or proprietary restriction by a third
party
who rightfully possesses the information (without confidential or proprietary
restriction) and did not learn of it, directly or indirectly, from the Company.
Third
Party Information.
I
recognize that the Company has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty
on
the Company's part to maintain the confidentiality of such information and
to
use it only for certain limited purposes. I agree that I owe the Company and
such third parties, during the term of my employment and thereafter, a duty
to
hold all such confidential or proprietary information in the strictest
confidence and not to disclose it to any person, firm, or corporation (except
as
necessary in carrying out my work for the Company consistent with the Company's
agreement with such third party) or to use it for the benefit of anyone other
than for the Company or such third party (consistent with the Company's
agreement with such third party) without the express written authorization
of
the President of the Company.
Interference
with Business.
I
hereby acknowledge that pursuit of the activities forbidden by this
Section 1(c) would necessarily involve the use or disclosure of Proprietary
Information in breach of Section 1, but that proof of such breach would be
extremely difficult. To forestall such disclosure, use, and breach, I agree
that
for the term of this Agreement and for a period of one (1) year after
termination of my employment with the Company, I shall not, for myself or any
third party, directly or indirectly (i) divert or attempt to divert from
the Company (or any affiliate of it that might be formed) any business of any
kind in which it is engaged, including, without limitation, the solicitation
of
or interference with any of its suppliers or customers; (ii) employ,
solicit for employment, or recommend for employment any person employed by
the
Company (or by any affiliate of it that might be formed) during the period
of
such person's employment and for a period of one (1) year thereafter; or (iii)
engage in any business activity that is or may be competitive with the Company
(or any affiliate of it that might be formed). I understand that none of my
activities will be prohibited under this Section 1(c) if I can prove that the
action was taken without the use in any way of Proprietary
Information.
Inventions.
Defined;
Statutory Notice.
I
understand that during the term of my employment, there are certain restrictions
on my development of technology, ideas, and inventions, referred to in this
Agreement as "Invention Ideas." The term Invention Ideas means any and all
ideas, processes, trademarks, service marks, inventions, technology, computer
programs, original works of authorship, designs, formulas, discoveries, patents,
copyrights, and all improvements, rights, and claims related to the foregoing
that are conceived, developed, or reduced to practice by me alone or with others
except to the extent that California Labor Code Section 2870 lawfully
prohibits the assignment of rights in such ideas, processes, inventions, etc.
I
understand that Section 2870(a) provides:
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Any
provision in an employment agreement which provides that an employee
shall
assign, or offer to assign, any of his or her rights in an invention
to
his or her employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except
for
those inventions that either:
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Relate
at
the time of conception or reduction to practice of the invention to the
employer's business, or actual or demonstrably anticipated research or
development of the employer.
Result
from any work performed by the employee for the employer.
Records
of Invention Ideas.
I agree
to maintain adequate and current written records on the development of all
Invention Ideas and to disclose promptly to the Company all Invention Ideas
and
relevant records, which records will remain the sole property of the Company.
I
further agree that all information and records pertaining to any idea, process,
trademark, service xxxx, invention, technology, computer program, original
work
of authorship, design, formula, discovery, patent, or copyright that I do not
believe to be an Invention Idea, but is conceived, developed, or reduced to
practice by me (alone or with others) during my period of employment or during
the one-year period following termination of my employment, shall be promptly
disclosed to the Company (such disclosure to be received in confidence). The
Company shall examine such information to determine if in fact the idea,
process, or invention, etc., is an Invention Idea subject to this
Agreement.
Assignment.
I agree
to assign to the Company, without further consideration, my entire right, title,
and interest (throughout the United States and in all foreign countries), free
and clear of all liens and encumbrances, in and to each Invention Idea, which
shall be the sole property of the Company, whether or not patentable. In the
event any Invention Idea shall be deemed by the Company to be patentable or
otherwise registrable, I will assist the Company (at its expense) in obtaining
letters patent or other applicable registrations thereon and I will execute
all
documents and do all other things (including testifying at the Company's
expense) necessary or proper to obtain letters patent or other applicable
registrations thereon and to vest the Company with full title thereto. Should
the Company be unable to secure my signature on any document necessary to apply
for, prosecute, obtain, or enforce any patent, copyright, or other right or
protection relating to any Invention Idea, whether due to my mental or physical
incapacity or any other cause, I hereby irrevocably designate and appoint the
Company and each of its duly authorized officers and agents as my agent and
attorney-in-fact, to act for and in my behalf and stead, to execute and file
any
such document, and to do all other lawfully permitted acts to further the
prosecution, issuance, and enforcement of patents, copyrights, or other rights
or protections with the same force and effect as if executed and delivered
by
me.
Exclusions.
Except
as disclosed in Exhibit A, there are no ideas, processes, trademarks,
service marks, inventions, technology, computer programs, original works of
authorship, designs, formulas, discoveries, patents, copyrights, or improvements
to the foregoing that I wish to exclude from the operation of this Agreement.
Post-Termination
Period.
I
acknowledge that because of the difficulty of establishing when any idea,
process, invention, etc., is first conceived or developed by me, or whether
it
results from access to Proprietary Information or the Company’s equipment,
facilities and data, I agree that any idea, process, trademark, service xxxx,
invention, technology, computer program, original work of authorship, design,
formula, discovery, patent, copyright, or any improvement, rights, or claims
related to the foregoing shall be presumed to be an Invention Idea if it is
conceived, developed, used, sold, exploited, or reduced to practice by me or
with my aid within one (1) year after my termination of employment with the
Company. I can rebut the above presumption if I prove that the invention, idea,
process, etc., is not an Invention Idea as defined in paragraph 2(a).
I
hereby
acknowledge that pursuit of the activities forbidden by this Section 1(c)
would necessarily involve the use or disclosure of Proprietary Information
in
breach of Section 1, but that proof of such breach would be extremely
difficult. To forestall such disclosure, use, and breach, I agree that for
the
term of this Agreement and for a period of two (2) years after termination
of my employment with the Company, I shall not, for myself or any third party,
directly or indirectly (i) divert or attempt to divert from the Company (or
any affiliate of it that might be formed) any business of any kind in which
it
is engaged, including, without limitation, the solicitation of or interference
with any of its suppliers or customers; (ii) employ, solicit for
employment, or recommend for employment any person employed by the Company
(or
by any affiliate of it that might be formed) during the period of such person's
employment and for a period of one (1) year thereafter; or (iii) engage in
any
business activity that is or may be competitive with the Company (or any
affiliate of it that might be formed). I understand that none of my activities
will be prohibited under this Section 1(c) if I can prove that the action was
taken without the use in any way of Proprietary Information.
I
understand that nothing in this Agreement is intended to expand the scope of
protection provided me by Sections 2870 through 2872 of the California Labor
Code.
Former
or Conflicting Obligations.
During
my employment with the Company, I will not disclose to the Company, or use,
or
induce the Company to use, any proprietary information or trade secrets of
others. I represent that my performance of this Agreement will not breach any
agreement to keep in confidence proprietary information acquired by me in
confidence or in trust prior to my employment by the Company. I certify that
I
have no outstanding agreement or obligation that is in conflict with any of
the
provisions of this Agreement, or that would preclude me from complying with
the
provisions hereof. I further certify that during the term of my employment
with
the Company, I will not engage in any other employment, occupation, consulting
or other business activity directly related to the business in which the Company
is now involved or becomes involved during the term of such
employment.
Government
Contracts. I
understand that the Company has or may enter into contracts with the government
under which certain intellectual property rights will be required to be
protected, assigned, licensed, or otherwise transferred and I hereby agree
to
execute such other documents and agreements as are necessary to enable the
Company to meet its obligations under any such government
contracts.
Termination.
I hereby
acknowledge and agree that all personal property, including, without limitation,
all books, manuals, records, models, drawings, reports, notes, contracts, lists,
blueprints, and other documents or materials or copies thereof, Proprietary
Information, and equipment furnished to or prepared by me in the course of
or
incident to my employment, belong to the Company and will be promptly returned
to the Company upon termination of my employment with the Company. Following
my
termination, I will not retain any written or other tangible material containing
any Proprietary Information or information pertaining to any Invention Idea.
I
understand that my obligations contained herein will survive the termination
of
my employment. In the event of termination of my employment, I agree to sign
and
deliver to the Company a Termination Certificate in the form attached hereto
as
Exhibit B.
Miscellaneous
Provisions.
Assignment.
I agree
that the Company may assign to another person or entity any of its rights under
this Agreement, including, without limitation, any successor in interest to
the
Company or its business operations. This Agreement shall be binding upon me
and
my heirs, executors, administrators, and successors, and shall inure to the
benefit of the Company's successors and assigns.
Governing
Law; Severability.
The
validity, interpretation, enforceability, and performance of this Agreement
shall be governed by and construed in accordance with the laws of the State
of
California. If any provision of this Agreement, or application thereof to any
person, place, or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the remainder of this
Agreement and such provisions as applied to other persons, places, and
circumstances shall remain in full force and effect.
Entire
Agreement.
The
terms of this Agreement are the final expression of my agreement with respect
to
the subject matter hereof and may not be contradicted by evidence of any prior
or contemporaneous agreement. This Agreement shall constitute the complete
and
exclusive statement of its terms and no extrinsic evidence whatsoever may be
introduced in any judicial, administrative, or other legal proceeding involving
this Agreement.
Application
of this Agreement.
I
hereby agree that my obligations set forth in Sections 1 and 2 hereof and
the definitions of Proprietary Information and Invention Ideas contained therein
shall be equally applicable to Proprietary Information and Invention Ideas
relating to any work performed by me for the Company prior to the execution
of
this Agreement.
| Date: 9/13/04 |
/s/
Xxx
Xxxxxxxx
Signature
Xxx
Xxxxxxxx
Printed
Name
|
EXHIBIT
A
Employee's
Prior Inventions
Except
as
set forth below, there are no ideas, processes, trademarks, service marks,
inventions, technology, computer programs, original works of authorship,
designs, formulas, discoveries, patents, copyrights, or any claims, rights,
or
improvements to the foregoing that I wish to exclude from the operation of
this
Agreement:
EXHIBIT
B
TERMINATION
CERTIFICATE CONCERNING
PROPRIETARY
INFORMATION AND INVENTIONS
This
is
to certify that I have returned all personal property of the Company, including,
without limitation, all books, manuals, records, models, drawings, reports,
notes, contracts, lists, blueprints, and other documents and materials,
Proprietary Information, and equipment furnished to or prepared by me in the
course of or incident to my employment with the Company, and that I did not
make
or distribute any copies of the foregoing.
I
further
certify that I have reviewed the Employee Proprietary Information and Inventions
Agreement signed by me and that I have complied with and will continue to comply
with all of its terms, including, without limitation, (i) the reporting of
any invention, process, or idea, etc. conceived or developed by me and covered
by the Agreement and (ii) the preservation as confidential of all
Proprietary Information pertaining to the Company. This certificate in no way
limits my responsibilities or the Company’s rights under the
Agreement.
On
termination of my employment with the Company, I will be employed by
[name
of new employer]
________________________________________________
[in the
________
division] and I will be working in connection with the following
projects:
[generally
describe the projects]
| Dated: ________________________ |
__________________________________
Signature
__________________________________
Printed
Name
|
