SEVERANCE AGREEMENT AND GENERAL RELEASE
Exhibit
10.7
SEVERANCE
AGREEMENT AND GENERAL RELEASE
This
SEVERANCE
AGREEMENT AND GENERAL RELEASE
(“Agreement”) is made and entered into by SMART ONLINE, INC. (the “Company”) and
Xxxx Xxxxxx (“Employee”). Throughout the remainder of the Agreement, the Company
and Employee may be collectively referred to as “the parties.”
The
Company currently employs Employee as Chief Technical Officer. The parties
desire to conclude the employment relationship, effective March 31, 2008, on
mutually agreeable terms and to avoid all litigation relating to the employment
relationship and its termination, and Employee desires severance benefits.
Accordingly, the parties have agreed upon the terms described
herein
Employee
represents that he has carefully read the entire Agreement, understands its
consequences, and voluntarily enters into it.
In
consideration of the above and the mutual promises and good and valuable
consideration set forth below, the sufficiency of which is acknowledged by
the
parties, Employee and the Company agree as follows:
1. SEPARATION.
Employee’s employment by the Company will terminate, effective March 31, 2008
(“Termination Date”).
2. SEVERANCE
BENEFITS.
The
Company will pay Employee an amount equal to three months of his current salary
(less any applicable taxes and withholdings). This amount shall be paid in
three
substantially equal installments, in accordance with the Company’s payroll
practices and schedule applicable to Employee immediately prior to the
termination of his employment, beginning with the first regularly scheduled
payday after the revocation period set forth in Paragraph 7 below expires.
In
addition, the Company shall reimburse Employee for premium payments he makes
under the Consolidated Budget Reconciliation Act (“COBRA”) to continue his and
his family’s health insurance coverage for three (3) months. All reimbursements
for COBRA payments shall be made as soon as practicable following Employee’s
submission of proof of timely payments to the Company; provided, however, that
all such claims for reimbursement shall be submitted by Employee and paid by
the
Company no later than six (6) months following Employee’s termination of
employment. Any obligation for the Company to make payments for COBRA
reimbursement under this paragraph 2 shall immediately cease when Employee
is
employed by an entity providing health insurance coverage.
The
severance and other benefits afforded under this Agreement are in lieu of any
other compensation or benefits to which Employee otherwise might be
entitled.
3. RELEASE.
In
consideration of the benefits conferred by this Agreement, EMPLOYEE
(ON BEHALF OF HIMSELF AND HIS ASSIGNS, HEIRS, AND OTHER REPRESENTATIVES)
RELEASES THE COMPANY, ITS PREDECESSORS, SUCCESSORS, AND ASSIGNS AND ITS AND/OR
THEIR PAST, PRESENT, AND FUTURE OWNERS, PARENTS, SUBSIDIARIES, AFFILIATES,
PREDECESSORS, SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS, EMPLOYEES, EMPLOYEE
BENEFIT PLANS (TOGETHER WITH ALL PLAN ADMINISTRATORS, TRUSTEES, FIDUCIARIES,
AND
INSURERS), AND AGENTS (“RELEASEES”) FROM ALL
CLAIMS AND WAIVES ALL
RIGHTS, KNOWN OR UNKNOWN, HE MAY HAVE OR CLAIM TO HAVE RELATING TO HIS
EMPLOYMENT WITH THE COMPANY, ITS PREDECESSORS, SUBSIDIARIES, OR AFFILIATES
OR
HIS SEPARATION THEREFROM
arising
before the execution of this Agreement, including, but
not limited to,
claims:
(i) for discrimination, harassment, or retaliation arising under federal,
state, or local laws prohibiting age (including, but not limited to, claims
under the Age Discrimination in Employment Act of 1967 (ADEA), as amended,
and
the Older Workers Benefit Protection Act of 1990 (OWBPA)), sex, national origin,
race, religion, disability, veteran status, or other protected class
discrimination, harassment, or retaliation for protected activity; (ii) for
compensation and benefits (including, but not limited to, claims under the
Employee Retirement Income Security Act of 1974 (ERISA), as amended, the Fair
Labor Standards Act of 1938 (FLSA), as amended, and similar federal, state,
and
local laws); (iii) arising under federal, state, or local law of any nature
whatsoever (including, but not limited to, constitutional, statutory, tort,
express or implied contract, or other common law); and (iv) for attorneys’
fees. The release of claims set forth in this paragraph does not apply to claims
for workers’ compensation benefits or unemployment benefits filed with the
applicable state agencies.
4. COVENANT
NOT TO XXX.
Employee
will not xxx Releasees on any matters relating to his employment arising before
the execution of this Agreement, including, but not limited to, claims under
the
ADEA, or join as a party with others who may xxx Releasees on any such claims;
provided, however, this paragraph will not bar a challenge under the OWBPA
to
the enforceability of the waiver and release of ADEA claims set forth in this
Agreement or claims for workers’ compensation or unemployment benefits
referenced in paragraph 3 above, and this paragraph will not apply when
prohibited by law. If Employee does not abide by this paragraph, then:
(i) he will return all monies received under this Agreement and indemnify
Releasees for all expenses they incur in defending the action; and
(ii) Releasees will be relieved of their obligations hereunder.
5. AGENCY
CHARGES/INVESTIGATIONS.
Nothing
in this Agreement shall prohibit Employee from filing a charge or participating
in an investigation or proceeding conducted by the U.S. Equal Employment
Opportunity Commission or other governmental agency with jurisdiction concerning
the terms, conditions, and privileges of his employment; provided, however,
that
by signing this Agreement, Employee waives his right to, and shall not seek
or
accept, any monetary or other relief of any nature whatsoever in connection
with
any such charges, investigations, or proceedings.
6. COMPANY
INFORMATION AND PROPERTY.
Employee
shall not at any time after his employment terminates disclose, use, or aid
third parties in obtaining or using any confidential or proprietary Company
information. Confidential or proprietary Company information is information
relating to the Company, the Company’s parents, subsidiaries, or affiliates, or
any aspect of their business that is not generally available to the public,
their competitors, or other third parties or ascertainable through common sense
or general business or technical knowledge. Nothing in this Agreement shall
relieve Employee from any confidentiality, proprietary information, secrecy,
non-compete, non-disclosure, non-solicitation, or invention rights and
assignment obligations under any previously executed agreements.
All
records, files, or other materials maintained by or under the control, custody,
or possession of the Company or its agents in their capacity as such shall
be
and remain the Company’s property. Before the Termination Date, Employee shall:
(i) return all Company property (including, but not limited to, credit cards;
keys; company car; cell phones; computer hardware and software; records; files;
documents; company manuals; and other documents in whatever form they exist,
whether electronic, hard copy, or otherwise and all copies, notes, or summaries
thereof) that he received in connection with his employment and (ii) bring
all
such records, files, and other materials up to date before returning them.
In
addition, Employee shall fully cooperate with the Company in winding up his
work
and transferring that work to those individuals designated by the
Company
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7. RIGHT
TO REVIEW AND REVOKE.
The
Company hand delivered this Agreement to Employee on March 25, 2008 and
desires that he have adequate time and opportunity to review and understand
the
consequences of entering into it. Accordingly, the Company advises him to
consult with an attorney prior to executing it, that he has twenty-one days
within which to consider it, and that he may not execute it prior to the
Termination Date. In the event that he does not return an executed copy of
the
Agreement to the Company by no later than the 22nd
calendar
day after receiving it, it and the obligations of the Company herein shall
become null and void. Employee may revoke the Agreement during the seven day
period immediately following his execution of it. The Agreement will not become
effective or enforceable until the revocation period has expired. To revoke
the
Agreement, a written notice of revocation must be delivered to Xxxxxx Xxx,
Smart
Online, Inc., 0000 Xxxxxxxx Xxxxxxx, 0xx
Xxxxx,
Xxxxxx, Xxxxx Xxxxxxxx 00000.
8. CONFIDENTIALITY
AND NONDISPARAGEMENT.
The
terms and provisions of this Agreement are confidential, and Employee represents
and warrants that since receiving this Agreement he has not disclosed, and
going
forward will not disclose, the terms and conditions of this Agreement to third
parties, except as required by law. Notwithstanding the above, he may reveal
the
terms and provisions of this Agreement to members of his immediate family or
to
an attorney whom he may consult for legal advice, provided that such persons
agree to maintain the confidentiality of the Agreement. Employee represents
and
warrants that since receiving this Agreement, he: (i) has not made, and
going forward will not make, disparaging, defaming, or derogatory remarks about
the Company or its products, services, business practices, directors, officers,
managers, or employees to anyone; and (ii) has not taken, and going forward
will not take, any action that may impair the relations between the Company
and
its vendors, customers, employees, or agents or that may be detrimental to
or
interfere with the Company or its business.
9. STIPULATION.
Employee
acknowledges, agrees, and hereby stipulates to the following facts:
(i) during his employment with the Company, Employee was allowed to take
all leave and afforded all other rights to which he was entitled under the
Family and Medical Leave Act (FMLA); and (ii) the Company has not in any
way interfered with, restrained, or denied Employee’s exercise of (or attempt to
exercise) any FMLA rights and has not terminated or otherwise discriminated
or
retaliated against Employee for exercising (or attempting to exercise) any
such
rights.
10. CONSULTING.
Employee
and the Company acknowledge and agree that, after the Termination Date, the
Company might need assistance from Employee from time to time. Employee agrees
that he will comply with reasonable requests for such assistance as follows:
(a)
for any requests relating to projects or technology existing at the Company
as
of March 31, 2008, including knowledge transfer (“Current Project Assistance”),
Employee shall provide assistance up to 10 hours a month free of charge until
October 1, 2008, at which the Company agrees that Employee will be paid for
such
assistance at a rate of $75/hour and (b) for any requests unrelated to Current
Project Assistance, the Company agrees that Employee will be paid for such
assistance at a rate of $75/hour, provided that if such assistance is estimated
to be beyond 5 hours a month, the Company and Employee shall enter into a
written Statement of Work setting forth the terms and conditions governing
such
project. All such assistance, unless otherwise agreed by the parties, shall
be
provided via email, facsimile and telephone conference ans shall not require
Employee to travel to the Company’s physical location in North
Carolina.
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11. OTHER.
Except
as expressly provided in this Agreement, this Agreement supersedes all other
understandings and agreements, oral or written, between the parties and
constitutes the sole agreement between the parties with respect to its subject
matter. Each party acknowledges that no representations, inducements, promises,
or agreements, oral or written, have been made by any party or by anyone acting
on behalf of any party, that are not embodied in this Agreement, and no
agreement, statement, or promise not contained or described in this Agreement
shall be valid or binding on the parties. No change or modification of this
Agreement shall be valid or binding on the parties unless such change or
modification is in writing and is signed by the parties. Employee’s or the
Company’s waiver of any breach of a provision of this Agreement shall not waive
any subsequent breach by the other party. If a court of competent jurisdiction
holds that any provision or sub-part thereof contained in this Agreement is
invalid, illegal, or unenforceable, that invalidity, illegality, or
unenforceability shall not affect any other provision in this
Agreement.
This
Agreement is intended to avoid all litigation relating to Employee’s employment
with the Company and his separation therefrom; therefore, it is not to be
construed as the Company’s admission of any liability to him - liability that
the Company denies.
This
Agreement shall apply to, be binding upon, and inure to the benefit of the
parties’ successors, assigns, heirs, and other representatives and be governed
by North Carolina law and the applicable provisions of federal law, including
but not limited to the ADEA.
CAUTION!
READ BEFORE SIGNING. THIS AGREEMENT CONTAINS A RELEASE OF ALL
CLAIMS.
IN
WITNESS WHEREOF,
the
parties have entered into this Agreement on
the
day and year written below.
EMPLOYEE
REPRESENTS THAT HE HAS CAREFULLY READ THE ENTIRE AGREEMENT,
UNDERSTANDS
ITS CONSEQUENCES, AND VOLUNTARILY ENTERS INTO IT.
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04/01/2008
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Xxxx
Xxxxxx
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Date
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| SMART ONLINE, INC. | |||
| By: |
/s/
Xxxxx X. Xxxxxxx
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4/1/08
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Xxxxx
X. Xxxxxxx
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Date
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Title:
Chief Executive Officer
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