SEPARATION AGREEMENT AND RELEASE
SEPARATION
AGREEMENT AND RELEASE
This
Separation Agreement and Release (“Agreement”) is made by and between Xxxxx X.
Xxxxxxxx (“Executive”) and Geeknet, Inc. (the “Company”) (collectively referred
to as the “Parties” or individually referred to as a “Party”).
RECITALS
WHEREAS,
Executive was employed by the Company as the President and Chief Executive
Officer and also served as a member of the Company’s Board of Directors (the
“Board”);
WHEREAS,
the Company and Executive have entered into an Employment Agreement, dated
December 3, 2008 (the “Employment Agreement”);
WHEREAS,
Executive signed an At-Will Employment, Confidential Information, Invention and
Assignment Agreement with the Company on
December 3, 2008 (the “Confidentiality Agreement”);
WHEREAS,
the Company and Executive have entered into stock option agreements reflecting
options granted by the Board to Executive on December 3, 2008 and April 22,
2010, respectively, granting Executive the option to purchase 2,250,000 shares
of the Company’s common stock and 200,000 shares of the Company’s common stock,
respectively subject to the terms and conditions of the Company’s 2007 Equity
Incentive Plan and the stock option agreements (collectively the “Stock
Agreements”);
WHEREAS,
Executive has agreed to resign from employment with the Company effective as of
August 4, 2010 (the “Separation Date”);
WHEREAS,
Executive has agreed to resign in all capacities from the Company’s Board of
Directors effective as of the Separation Date; and
WHEREAS, the Parties wish to resolve any and all disputes,
claims, complaints, grievances, charges, actions, petitions, and demands that
the Executive may have against the Company and any of the Releasees (as defined
below), including, but not limited to, any and all claims arising out of or in
any way related to Executive’s employment with or separation from the
Company;
NOW,
THEREFORE, in consideration of the mutual promises made herein, the Company and
Executive hereby agree as follows:
COVENANTS
1. Consideration.
a. Cash
Payment. The Company agrees to pay Executive a lump sum cash
payment equal to Seven Hundred One Thousand Two Hundred Fifty Dollars
($701,250), less applicable withholding. This payment will be made to
Employee within ten (10) business days after the Effective Date of this
Agreement.
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b. COBRA. The
Company shall reimburse Executive for the payments Executive makes for COBRA
coverage for a period of twelve (12) months, or until Executive has secured
other employment, whichever occurs first, provided Executive timely elects and
pays for continuation coverage pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”), within the time period
prescribed pursuant to COBRA. COBRA reimbursements shall be made by
the Company to Executive consistent with the Company’s normal expense
reimbursement policy, provided that Executive submits documentation to the
Company substantiating his payments for COBRA coverage.
c. Resignation. The
Company shall process the termination of Executive’s employment as a
resignation, and shall represent that Executive resigned from his employment to
any potential future employer who contacts the Company’s human resources
department and requests confirmation of this information.
2. Stock. The
Parties agree that, as of the Separation Date, Executive will have vested in One
Million Seven Hundred Nineteen Thousand Seven Hundred Ninety-Eight (1,719,798)
option shares and no more, pursuant to the Stock Agreements and this
Agreement. The exercise of Executive’s vested option shares shall
continue to be governed by the terms and conditions of the Company’s Stock
Agreements.
3. Benefits. Executive’s
health insurance benefits shall cease on the last day of August 2010, subject to
Executive’s right to continue his health insurance under COBRA. Executive’s
participation in all benefits and incidents of employment, including, but not
limited to, vesting in stock options, and the accrual of bonuses, vacation, and
paid time off, will cease as of the Separation Date.
4. Payment of Salary and
Receipt of All Benefits. Executive acknowledges and represents
that, other than the consideration set forth in this Agreement, the Company has
paid or provided all salary, wages, bonuses, accrued vacation/paid time off,
premiums, leaves, housing allowances, relocation costs, interest, severance,
outplacement costs, fees, reimbursable expenses, commissions, stock, stock
options, vesting, and any and all other benefits and compensation due to
Executive; provided,
however, that
notwithstanding the foregoing, the Company agrees to reimburse Executive for
reasonable travel, entertainment or other expenses incurred by Executive in the
furtherance of or in connection with the performance of Executive’s duties
pursuant to the Employment Agreement, in accordance with the Company’s expense
reimbursement policy as in effect as of the date hereof (the “Expense
Policies”), provided that Executive submits to the Company all documentation and
paperwork relating to such expenses as required by the Expense Policies on or
prior to the fourteenth (14th)
calendar day following the Separation Date.
5. Mutual Release of
Claims.
a. Executive
agrees that the foregoing consideration represents settlement in full of all
outstanding obligations owed to Executive by the Company and its current and
former officers, directors, Executives, agents, investors, attorneys,
shareholders, administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, and subsidiaries, and predecessor and successor
corporations, and assigns (collectively, the “Releasees”). The
Executive, on his own behalf and on behalf of his respective heirs, family
members, executors, agents, and assigns, hereby and forever releases the
Releasees from, and agrees not to xxx concerning, or in any manner to institute,
prosecute, or pursue, any claim, complaint, charge, duty, obligation, demand, or
cause of action relating to any matters of any kind, whether presently known or
unknown, suspected or unsuspected, that Executive may possess against any of the
Releasees arising from any omissions, acts, facts, or damages that have occurred
up until and including the Effective Date of this Agreement, including, without
limitation:
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i. any
and all claims relating to or arising from Executive’s employment relationship
with the Company and the termination of that relationship, including any claims
under the Employment Agreement and Stock Agreements;
ii. any
and all claims relating to, or arising from, Executive’s right to purchase, or
actual purchase of shares of stock of the Company, including, without
limitation, any claims for fraud, misrepresentation, breach of fiduciary duty,
breach of duty under applicable state corporate law, and securities fraud under
any state or federal law;
iii. any
and all claims for wrongful discharge of employment; termination in violation of
public policy; discrimination; harassment; retaliation; breach of contract, both
express and implied; breach of covenant of good faith and fair dealing, both
express and implied; promissory estoppel; negligent or intentional infliction of
emotional distress; fraud; negligent or intentional misrepresentation; negligent
or intentional interference with contract or prospective economic advantage;
unfair business practices; defamation; libel; slander; negligence; personal
injury; assault; battery; invasion of privacy; false imprisonment; conversion;
and disability benefits;
iv. any
and all claims for violation of any federal, state, or municipal statute,
including, but not limited to, Title VII of the Civil Rights Act of 1964;
the Civil Rights Act of 1991; the Rehabilitation Act of 1973; the Americans with
Disabilities Act of 1990; the Equal Pay Act; the Fair Labor Standards Act,
except as prohibited by law; the Fair Credit Reporting Act; the Age
Discrimination in Employment Act of 1967; the Older Workers Benefit Protection
Act; the Executive Retirement Income Security Act of 1974; the Worker Adjustment
and Retraining Notification Act; the Family and Medical Leave Act, except as
prohibited by law; the Xxxxxxxx-Xxxxx Act of 2002; the Uniformed Services
Employment and Reemployment Rights Act; the California Family Rights Act; the
California Labor Code, except as prohibited by law; the California Workers’
Compensation Act, except as prohibited by law; and the California Fair
Employment and Housing Act;
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v.
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any
and all claims for violation of the federal or any state
constitution;
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vi. any
and all claims arising out of any other laws and regulations relating to
employment or employment discrimination;
vii. any
claim for any loss, cost, damage, or expense arising out of any dispute over the
non-withholding or other tax treatment of any of the proceeds received by
Executive as a result of this Agreement; and
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viii.
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any
and all claims for attorneys’ fees and
costs.
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Notwithstanding
any release provided for herein, the parties acknowledge and agree that
Executive is not releasing any of the following: (i) any rights or claims for
indemnification and/or defense pursuant to any applicable contract, policy,
bylaw, or law (including but not limited to the Indemnification Agreement
entered into by and between the Company and Executive on January 5, 2009, or the
Company’s D&O Insurance Policy(ies) as in effect during and applicable to
the period of Executive’s employment with the Company), (ii) any rights or
claims under any agreement or plan governing Executive’s rights in any employee
benefits in which Executive has vested as of the Separation Date (e.g.,
Executive’s vested benefits in the Company’s 401(k) plan), or (iii) any rights
or claims that may not be released as a matter of law.
b. The
Company agrees that the foregoing consideration represents settlement in full of
all outstanding obligations owed to the Company by the Executive. The
Company hereby and forever releases the Executive and his respective heirs,
family members, executors, agents, and assigns, from, and agrees not to xxx
concerning, or in any manner to institute, prosecute, or pursue, any claim,
complaint, charge, duty, obligation, demand, or cause of action relating to any
matters of any kind, whether presently known or unknown, suspected or
unsuspected, that the Company may possess against the Executive arising from any
omissions, acts, facts, or damages that have occurred up until and including the
Effective Date of this Agreement, including, without limitation, the Released
Actions. Notwithstanding any release provided for herein, this
Agreement shall not serve to release any claims by the Company against Executive
for any claims arising from fraud, embezzlement, misappropriation of the
Company’s trade secrets, or conduct that is violative of criminal
law.
6. Acknowledgment of Waiver of
Claims under ADEA. Executive acknowledges
that he is waiving and releasing any rights he may have under the Age
Discrimination in Employment Act of 1967 (“ADEA”), and that this waiver and
release is knowing and voluntary. Executive agrees that this waiver
and release does not apply to any rights or claims that may arise under the ADEA
after the Effective Date of this Agreement. Executive acknowledges
that the consideration given for this waiver and release is in addition to
anything of value to which Executive was already entitled. Executive
further acknowledges that he has been advised by this writing that: (a) he
should consult with an attorney prior to executing
this Agreement; (b) he has twenty-one (21) days within which to consider this
Agreement; (c) he has seven (7) days following his execution of this Agreement
to revoke this Agreement; (d) this Agreement shall not be effective until after
the revocation period has expired; and (e) nothing in this Agreement prevents or
precludes Executive from challenging or seeking a determination in good faith of
the validity of this waiver under the ADEA, nor does it impose any condition
precedent, penalties, or costs for doing so, unless specifically authorized by
federal law. In the event Executive signs this Agreement and returns
it to the Company in less than the 21-day period identified above, Executive
hereby acknowledges that he has freely and voluntarily chosen to waive the time
period allotted for considering this Agreement. The Parties agree
that changes, whether material or immaterial, do not restart the running of the
21-day period.
7. California Civil Code
Section 1542. Each of the Parties acknowledges that such
Party has been advised to consult with legal counsel and is familiar
with the provisions of California Civil Code Section 1542, a statute that
otherwise prohibits the release of unknown claims, which provides as
follows:
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A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
Each
Party, being aware of said code section, agrees to expressly waive any rights
such Party may have thereunder, as well as under any other statute or common law
principles of similar effect.
8. No Pending or Future
Lawsuits. Executive represents that he has no lawsuits,
claims, or actions pending in his name, or on behalf of any other person or
entity, against the Company or any of the other Releasees. Executive
also represents that he does not intend to bring any claims on his own behalf or
on behalf of any other person or entity against the Company or any of the other
Releasees.
9. Application for
Employment. Executive understands and agrees that, as a
condition of this Agreement, Executive shall not be entitled to any employment
with the Company, and Executive hereby waives any right, or alleged right, of
employment or re-employment with the Company. Executive further
agrees not to apply for employment with the Company and not otherwise pursue an
independent contractor or vendor relationship with the Company.
10. Trade Secrets and
Confidential Information/Company Property. Executive reaffirms
and agrees to observe and abide by the terms of the Confidentiality Agreement,
specifically including the provisions therein regarding nondisclosure of the
Company’s trade secrets and confidential and proprietary information, and
nonsolicitation of Company employees. Executive’s signature below
constitutes his certification under penalty of perjury that he has returned all
documents and other items provided to Executive by the Company, developed or
obtained by Executive in connection with his employment with the Company, or
otherwise belonging to the Company. Notwithstanding the foregoing, to
the extent Executive’s personal computing equipment contains Company email
correspondence and related files or documents (“Company Correspondence”) that he
is unable to delete or return to the Company, Executive agrees to provide the
Company full and complete access to such Company Correspondence for a period of
twelve (12) months from the Separation Date.
11. No
Cooperation. Executive agrees that he will not knowingly
encourage, counsel, or assist any attorneys or their clients in the presentation
or prosecution of any disputes, differences, grievances, claims, charges, or
complaints by any third party against any of the Releasees, unless under a
subpoena or other court order to do so or as related directly to the ADEA waiver
in this Agreement. Executive agrees both to immediately notify the
Company upon receipt of any such subpoena or court order, and to furnish, within
three (3) business days of its receipt, a copy of such subpoena or other court
order. If approached by anyone for counsel or assistance in the
presentation or prosecution of any disputes, differences, grievances, claims,
charges, or complaints against any of the Releasees, Executive shall state no
more than that he cannot provide counsel or assistance.
12. Mutual
Nondisparagement. Executive agrees to refrain from any
disparagement, defamation, libel, or slander of any of the Releasees, and agrees
to refrain from any tortious interference with the contracts and relationships
of any of the Releasees. The Company agrees to refrain from any
disparaging statements about Executive. Executive understands that
the Company’s obligations under this paragraph extend only to the Company’s
current executive officers and members of its Board of Directors and only for so
long as each officer or member is an employee or Director of the
Company. Executive shall direct any inquiries by potential future
employers to the Company’s human resources department.
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13. Breach. In
addition to the rights provided in the “Attorneys’ Fees” section below,
Executive acknowledges and agrees that any material breach of this Agreement,
unless such breach constitutes a legal action by Executive challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, or of any provision of the Confidentiality Agreement shall entitle the
Company immediately to recover and/or cease providing the consideration provided
to Executive under this Agreement and to obtain damages, except as provided by
law.
14. No Admission of
Liability. Executive understands and acknowledges that this
Agreement constitutes a compromise and settlement of any and all actual or
potential disputed claims by Executive. No action taken by the
Company hereto, either previously or in connection with this Agreement, shall be
deemed or construed to be (a) an admission of the truth or falsity of any
actual or potential claims or (b) an acknowledgment or admission by the
Company of any fault or liability whatsoever to Executive or to any third
party.
15. Nonsolicitation. Executive
agrees that for a period of twelve (12) months immediately following the
Effective Date of this Agreement, Executive shall not directly or indirectly
solicit any of the Company’s employees to leave their employment at the
Company.
16. Costs. The
Parties shall each bear their own costs, attorneys’ fees, and other fees
incurred in connection with the preparation of this Agreement.
17. Arbitration. The
parties agree that any and all disputes arising out of the terms of this
agreement, their interpretation, and any of the matters herein released, shall
be subject to arbitration in Santa Xxxxx County, before Judicial Arbitration
& Mediation Services (“JAMS”), pursuant to its Employment Arbitration Rules
& Procedures (“JAMS Rules”). Such arbitration shall be conducted
by a single arbitrator chosen by mutual agreement of the Parties, or if the
Parties do not reach such an agreement, the arbitrator shall be determined as
specified in the applicable JAMS rules. The arbitrator may grant
injunctions and other relief in such disputes. The arbitrator shall
administer and conduct any arbitration in accordance with California law,
including the California code of civil procedure, and the arbitrator shall apply
substantive and procedural California law to any dispute or claim, without
reference to any conflict-of-law provisions of any jurisdiction. To
the extent that the JAMS rules conflict with California law, California law
shall take precedence. The decision of the arbitrator shall be final,
conclusive, and binding on the parties to the arbitration. The
parties agree that the prevailing party in any arbitration shall be entitled to
injunctive relief in any court of competent jurisdiction to enforce the
arbitration award. The parties to the arbitration shall each pay an
equal share of the costs and expenses of such arbitration, and each party shall
separately pay for its respective counsel fees and expenses; provided, however,
that the arbitrator shall award attorneys’ fees and costs to the prevailing
party, except as prohibited by law. The parties hereby agree to waive
their right to have any dispute between them resolved in a court of law by a
judge or jury. Notwithstanding the foregoing, this section will not
prevent either party from seeking injunctive relief (or any other provisional
remedy) from any court having jurisdiction over the parties and the subject
matter of their dispute relating to this agreement and the agreements
incorporated herein by reference. Should any part of the arbitration
agreement contained in this paragraph conflict with any other arbitration
agreement between the parties, the parties agree that this arbitration agreement
shall govern.
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18. Authority. The
Company represents and warrants that the undersigned has the authority to act on
behalf of the Company and to bind the Company and all who may claim through it
to the terms and conditions of this Agreement. Executive represents
and warrants that he has the capacity to act on his own behalf and on behalf of
all who might claim through him to bind them to the terms and conditions of this
Agreement. Each Party warrants and represents that there are no liens
or claims of lien or assignments in law or equity or otherwise of or against any
of the claims or causes of action released herein.
19. No
Representations. Executive represents that he has had an
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Executive
has not relied upon any representations or statements made by the Company that
are not specifically set forth in this Agreement.
20. Severability. In
the event that any provision or any portion of any provision hereof or any
surviving agreement made a part hereof becomes or is declared by a court of
competent jurisdiction or arbitrator to be illegal, unenforceable, or void, this
Agreement shall continue in full force and effect without said provision or
portion of provision.
21. Attorneys’
Fees. Except with regard to a legal action challenging or
seeking a determination in good faith of the validity of the waiver herein under
the ADEA, in the event that either Party brings an action to enforce or effect
its rights under this Agreement, the prevailing Party shall be entitled to
recover its costs and expenses, including the costs of mediation, arbitration,
litigation, court fees, and reasonable attorneys’ fees incurred in connection
with such an action.
22. Entire
Agreement. With the exception of the Confidentiality Agreement
and the Stock Agreements, this Agreement represents the entire agreement and
understanding between the Company and Executive concerning the subject matter of
this Agreement and Executive’s employment with and separation from the Company
and the events leading thereto and associated therewith, and supersedes and
replaces any and all prior agreements and understandings concerning the subject
matter of this Agreement and Executive’s relationship with the Company,
including the Employment Agreement.
23. No Oral
Modification. This Agreement may only be amended in a writing
signed by Executive and the Company’s Chief Executive Officer.
24. Governing
Law. This Agreement shall be governed by the laws of the State
of California, without regard for choice-of-law provisions. Executive
consents to personal and exclusive jurisdiction and venue in the State of
California.
25. Effective
Date. Executive understands that this Agreement shall be null
and void if not executed by him within twenty one (21)
days. Executive has seven (7) days after Executive signs this
Agreement to revoke it. This Agreement will become effective on the
eighth (8th) day after Executive signed this Agreement, so long as it has been
signed by the Parties and has not been revoked by Executive before that date
(the “Effective Date”).
26. Counterparts. This
Agreement may be executed in counterparts and by facsimile, and each counterpart
and facsimile shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
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27. Voluntary Execution of
Agreement. Executive understands and agrees that he executed
this Agreement voluntarily, without any duress or undue influence on the part or
behalf of the Company or any third party, with the full intent of releasing all
of his claims against the Company and any of the other
Releasees. Executive acknowledges that:
(a) he
has read this Agreement;
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(b)
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he
has been represented in the preparation, negotiation, and execution of
this Agreement by legal counsel of his own choice or has elected not to
retain legal counsel;
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(c)
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he
understands the terms and consequences of this Agreement and of the
releases it contains; and
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(d) he
is fully aware of the legal and binding effect of this Agreement.
IN
WITNESS WHEREOF, the Parties have executed this Agreement on the respective
dates set forth below.
| XXXXX X. XXXXXXXX, an individual | |||
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Dated: August
4, 2010
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| Xxxxx X. Xxxxxxxx | |||
| GEEKNET, INC. | |||
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Dated: August
4, 2010
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By:
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Xxxxxxx
Xxxxxxx
Chairman,
Geeknet, Inc. Board of Directors
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