CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS
CONFIDENTIAL SEPARATION AGREEMENT
AND GENERAL RELEASE OF ALL CLAIMS
AND GENERAL RELEASE OF ALL CLAIMS
This Confidential Separation Agreement and General Release of All Claims (“Separation Agreement”)
is made by and between OpenTV Corp. (“Company”) and Xxxxx Xxxxxxx (“Executive”) with respect to the
following facts:
A. Pursuant to an Employment Agreement between the above referenced parties dated March 23,
2004, (“Employment Agreement”), Executive was employed by Company as Chief Executive Officer and
served as Chairman of its Board of Directors. However, Executive and Company have agreed to the
following terms of this Separation Agreement with respect to Executive’s separation from
employment. Accordingly, Executive acknowledges and agrees that upon execution of this Separation
Agreement, the Employment Agreement shall be null and void and of no force or effect, provided,
however, the Employee Proprietary Information and Inventions Agreement, signed by Executive and
referenced therein, shall remain in full force and effect. In consideration for the benefits
offered to the Executive under this Separation Agreement, Executive waives and relinquishes any and
all rights and claims under the Employment Agreement. The parties further agree that this
Separation Agreement supersedes the Employment Agreement and any other prior agreements between the
parties which purport to govern the terms and conditions of Executive’s employment and separation
from employment with Company.
B. Executive’s employment with OpenTV ceased effective April 17, 2007 (“Separation Date”). At
that time, Executive received all wages due, including payment of all accrued but unused vacation,
and reimbursement for all expenses through the Separation Date.
C. Executive resigned his position as Chairman of the Board, but retains his position as a
Director and has been appointed as Vice Chairman of the Board.
D. Upon approval by the Board of Director’s, during Executive’s service as a Director,
Executive will receive annual Director and Vice Chairman fees in the amount of One Hundred Thousand
Dollars ($100,000.00), will be permitted to participate as a Director in Company’s group health
plan as long as he remains eligible, and will be permitted reasonable use of an office space at
Company’s San Francisco office.
E. Executive and Company are parties to two Stock Option Agreements dated March 23, 2004 (the
“Option Agreements”), granting Executive the right to purchase a combined total of one million five
hundred thousand (1,500,000) shares of Company’s Class A Ordinary Shares (collectively, the
“Option”), subject to the vesting schedules and other restrictions on exercise as set forth in the
Option Agreements and Company’s 2003 Incentive Plan (the “Stock Option Plan”).
F. The parties desire to settle all claims and issues that have, or could have been raised, in
relation to Executive’s employment with Company and arising out of or in any way related to the
acts, transactions or occurrences between Executive and Company
to date, including, but not limited to, Executive’s employment with Company or the termination
of that employment, on the terms set forth below.
THEREFORE, in consideration of the promises and mutual agreements hereinafter set forth, it is
agreed by and between the undersigned as follows:
1. Severance Package. Company agrees to provide Executive with the following
payments and benefits (“Severance Package”) to which he is not otherwise entitled. Executive
acknowledges and agrees that this Severance Package constitutes adequate legal consideration for
the promises and representations made by him in this Separation Agreement.
1.1 Severance Payment. Company agrees to pay Executive the equivalent of
12 months base salary, or Four Hundred Seventy-Five Thousand Seven Hundred
Eighty-One Dollars ($475,781.00) less all appropriate federal and state
income and employment taxes and other lawful deductions (“Severance
Payment”). The Severance Payment will be made in a lump sum payment on or
as soon as administratively practicable after January 2, 2008.
1.2 Supplemental Payment. Company agrees to provide Executive with a
supplemental severance payment in the amount of Ten Thousand Five Hundred
Seventy-Three Dollars ($10,573.00), less all appropriate federal and state
income and employment taxes and other lawful deductions, on or as soon as
administratively practicable after January 2, 2008.
1.3 Termination of Option. Executive hereby surrenders the Option to
Company and relinquishes any and all rights and claims under the Option
Agreements effective upon the Effective Date. Executive agrees that the
Option shall terminate as of the Effective Date as to all outstanding
shares (whether vested or unvested) subject to the Option. Executive
agrees that the Option and the Option Agreements shall be null and void
and of no further force or effect as of and subsequent to the Effective
Date.
1.4 Bonus Payment. Company shall make a bonus payment to Executive in the
amount of One Hundred Sixty Seven Thousand Two Hundred Nineteen Dollars
($167,219), less all appropriate federal and state income and employment
taxes and other lawful deductions, on or as soon as administratively
practicable after the Effective Date.
2. Section 409A Compliance. The parties intend for this Separation Agreement and the
Employment Agreement (collectively, this “Agreement”) to satisfy the requirements of Section 409A
of Internal Revenue Code of 1986, as amended, and all applicable guidance promulgated thereunder
(together, “Section 409A”) by virtue of being paid at a specified time (or specified times) or
pursuant to a fixed schedule, and this Agreement shall be construed and interpreted accordingly.
This Separation Agreement shall operate as a timely amendment to the Employment Agreement to bring
the Employment
Agreement into good faith compliance with Section 409A and shall replace and supersede any
inconsistent provisions of the Employment Agreement.
2.1 To ensure satisfaction of the requirements of Section
409A(b)(3) of the Internal Revenue Code of 1986, as amended, assets shall
not be set aside, reserved in a trust or other arrangement, or otherwise
restricted for purposes of the payment of amounts payable under this
Agreement.
2.2 Company hereby informs Executive that the federal, state, local and/or foreign
tax consequences (including without limitation those tax consequences
implicated by Section 409A) of this Agreement are complex and subject to
change. Executive hereby acknowledges that Company has advised him that
he should consult with his own personal tax or financial advisor in
connection with this Agreement and its tax consequences. Executive
understands and agrees that Company has no obligation and no
responsibility to provide Executive with any tax or other legal advice in
connection with this Agreement. Executive agrees that he shall bear sole
and exclusive responsibility for any and all adverse federal, state,
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local
and/or foreign tax consequences (including without limitation those tax
consequences implicated by Section 409A) of this Agreement.
3. General Release.
3.1 Executive unconditionally, irrevocably and absolutely releases and discharges
Company, and any parent and subsidiary corporations, divisions and
affiliated corporations, partnerships or other affiliated entities of
Company, past and present, as well as Company’s employees, officers,
directors, agents, successors and assigns (collectively, “Released
Parties”), from all claims related in any way to the transactions or
occurrences between them to date, to the fullest extent permitted by law,
including, but not limited to, Executive’s employment with Company, the
termination of Executive’s employment, and all other losses, liabilities,
claims, charges, demands and causes of action, known or unknown, suspected
or unsuspected, arising directly or indirectly out of or in any way
connected with Executive’s employment with Company. This release is
intended to have the broadest possible application and includes, but is
not limited to, any tort, contract, common law, constitutional or other
statutory claims, including, but not limited to alleged violations of the
California Labor Code or the federal Fair Labor Standards Act, Title VII
of the Civil Rights Act of 1964 and the California Fair Employment and
Housing Act, the Americans with Disabilities Act, the Age Discrimination
in Employment Act of 1967, as amended, and all claims for attorneys’ fees,
costs and expenses. However, this General Release is not intended to bar
any claims that, by statute, may not be waived, such as claims for
workers’ compensation benefits, unemployment insurance benefits, statutory
indemnity, and any challenge to the validity of
Executive’s release of claims under the Age Discrimination in Employment
Act of 1967, as amended, as set forth in this Agreement.
3.2 Executive acknowledges that he may discover facts or law different from, or in
addition to, the facts or law that he knows or believes to be true with
respect to the claims released in this Separation Agreement and agrees,
nonetheless, that this Separation Agreement and the release contained in
it shall be and remain effective in all respects notwithstanding such
different or additional facts or the discovery of them.
3.3 Executive declares and represents that he intends this Separation Agreement to
be complete and not subject to any claim of mistake, and that the release
herein expresses a full and complete release and Executive intends the
release herein to be final and complete. Executive executes this release
with the full knowledge that this release covers all possible claims
against the Released Parties, to the fullest extent permitted by law.
3.4 Executive expressly waives Executive’s right to recovery of any type, including
damages or reinstatement, in any administrative or court action, whether
state or federal, and whether brought by Executive or on Executive’s
behalf, related in any way to the matters released herein.
4. California Civil Code Section 1542 Waiver. Executive expressly acknowledges and
agrees that all rights under Section 1542 of the California Civil Code are expressly waived. That
section provides:
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
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HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.
5. Representation Concerning Filing of Legal Actions. Executive represents that, as
of the date of this Separation Agreement, he has not filed any lawsuits, charges, complaints,
petitions, claims or other accusatory pleadings against Company or any of the other Released
Parties in any court or with any governmental agency.
6. Nondisparagement. Executive agrees that he will not make any voluntary statements,
written or oral, or cause or encourage others to make any such statements that defame, disparage or
in any way criticize the personal and/or business reputations, practices or conduct of Company or
any of the other Released Parties.
7. Confidentiality and Return of Company Property.
7.1 Confidential Separation Information. Executive agrees that the terms
and conditions of this Separation Agreement, as well as the discussions
that led to the terms and conditions of this Separation Agreement
(collectively referred to as the “Confidential Separation Information”)
are intended to remain confidential between Executive and Company.
Executive further agrees that he will not disclose the Confidential
Separation Information to any other persons, except that Executive may
disclose such information to his immediate family members and to his
attorney(s) and accountant(s), if any, to the extent needed for legal
advice or income tax reporting purposes. When releasing this information
to any such person, Executive shall advise the person receiving the
information of its confidential nature. Neither Executive, nor anyone to
whom the Confidential Separation Information has been disclosed will
respond to, or in any way participate in or contribute to, any public
discussion, notice or other publicity concerning the Confidential
Separation Information. Without limiting the generality of the foregoing,
Executive specifically agrees that neither he, his immediate family, his
attorney nor his accountant, if any, shall disclose the Confidential
Separation Information to any current, former or prospective employee of
Company. Nothing in this section will preclude Executive from disclosing
information required in response to a subpoena duly issued by a court of
law or a government agency having jurisdiction or power to compel such
disclosure, or from giving full, truthful and cooperative answers in
response to a duly issued subpoena.
7.2 Confidential and Proprietary Information. Executive also agrees that
he will not use, remove from Company’s premises, make unauthorized copies
of or disclose any confidential or proprietary information of Company or
any affiliated or related entities, including but not limited to, their
trade secrets, copyrighted information, customer lists, any information
encompassed in any research and development, reports, work in progress,
drawings, software, computer files or models, designs, plans, proposals,
marketing and sales programs, financial projections, and all concepts or
ideas, materials or information related to the business or sales of
Company and any affiliated or related entities that has not previously
been released to the public by an authorized representative of those
companies.
7.3 Continuing Obligations. Executive has signed an Employee Proprietary
Information and Inventions Agreement and understands that certain terms
and conditions of that agreement survive the termination of Executive’s
employment. As such, Executive agrees to comply with the continuing
obligations set forth in the surviving provisions of the Employee
Proprietary Information and Inventions Agreement.
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7.4 Return of Company Property. By signing this Separation Agreement,
Executive represents and warrants that he has returned to
Company all Company property, including all confidential and proprietary
information, as described in paragraph 7.2 above, and all materials and
documents containing trade secrets and copyrighted materials, including
all copies and excerpts of the same.
8. Non-Solicitation. Executive understands and agrees that Company’s employees and
customers and any information regarding Company employees and/or customers is confidential and
constitutes trade secrets. As such, for a period of one year following the Separation Date,
Executive agrees not to, directly or indirectly, separately or in association with others:
8.1 Interfere with, impair, disrupt or damage Company’s business by soliciting,
encouraging or causing others to solicit or encourage any of Company’s
employees to discontinue their employment with Company.
9. Enforcement. If Executive breaches any of the terms in paragraphs 6, 7 or 8 above or
their subparts, Company will immediately cease making the separation payments described in
subparagraph 1.1 and 1.2 above, to the extent those payments have not yet been made. This shall in
no way limit Company’s right to pursue all legal and equitable remedies available to it as a result
of Executive’s breach of this Separation Agreement.
10. Arbitration of Disputes. The parties agree to arbitrate any and all disputes arising
out of or relating to the enforcement of this Separation Agreement, or for the breach hereof, or
the interpretation hereof. The arbitration will be conducted in San Francisco, California and
shall be before a single, neutral arbitrator selected by the parties. If the parties are unable to
agree on a single neutral arbitrator, the arbitrator shall be selected in accordance with the rules
of the American Arbitration Association for Employment Disputes
(available on-line at xxx.xxx.xxx). The
arbitrator shall have the power to enter any award that could be entered by a judge of a trial
court of the State of California, and only such power, and shall follow the law. The parties agree
to abide by and perform any award rendered by the arbitrator. The arbitrator shall issue the award
in writing and therein state the essential findings and conclusions on which the award is based.
Judgment on the award may be entered in any court having jurisdiction thereof. In no event shall
the demand for arbitration be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in question would be barred by the
applicable statute of limitations. This agreement to arbitrate shall be specifically enforceable
under the prevailing arbitration law, and shall be in accordance with the procedures established
for arbitration in the California Code of Civil Procedure (available on-line at
xxx.xxxxxxx.xx.xxx/xxxxx.xxxx). The parties understand that by agreeing to arbitrate their
disputes, they are giving up their right to have their disputes heard in a court of law and, if
applicable, by a jury. Company shall bear the costs of the arbitration filing and hearing fees and
the cost of the arbitrator.
11. No Admissions. By entering into this Separation Agreement, the Released Parties make
no admission that they have engaged, or are now engaging, in any unlawful conduct. The parties
understand and acknowledge that this Separation Agreement is not an admission of liability and
shall not be used or construed as such in any legal or administrative proceeding.
12. Older Workers’ Benefit Protection Act. This Separation Agreement is intended to
satisfy the requirements of the Older Workers’ Benefit Protection Act, 29 U.S.C. sec. 626(f).
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Employee, by this Separation Agreement, is advised to consult with an attorney before executing
this Separation Agreement.
12.1 Acknowledgments/Time to Consider. Executive acknowledges and agrees
that (a) Executive has read and understands the terms of this Separation
Agreement; (b) Executive has been advised in writing to consult with an
attorney before executing this Separation Agreement; (c) that Executive
has obtained and considered such legal counsel as Executive deems
necessary; (d) that Executive has been given twenty-one (21) days to
consider whether or not to enter into this Separation Agreement (although
Executive may elect not to use the full 21-day period at Executive’s
option); and (e) that by signing this Separation Agreement, Executive
acknowledges that Executive does so freely, knowingly, and voluntarily.
12.2 Revocation/Effective Date. This Separation Agreement shall not become
effective or enforceable until the eighth day after Executive signs this
Separation Agreement. In other words, Executive may revoke Executive’s
acceptance of this Separation Agreement within seven (7) days after the
date Executive signs it. Executive’s revocation must be in writing and
received by Xxxx Xxxxxxxxx, General Counsel, OpenTV, 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, XX 00000-0000, by 5:00 p.m. Pacific Time on the
seventh day in order to be effective. If Executive does not revoke
acceptance within the seven (7) day period, Executive’s acceptance of this
Separation Agreement shall become binding and enforceable on the eighth
day (“Effective Date”). The Severance Package shall become due and
payable in accordance with paragraph 1, provided this Separation Agreement
has not been revoked.
12.3 Preserved Rights of Executive. This Separation Agreement does not
waive or release any rights or claims that Executive may have under the
Age Discrimination in Employment Act that arise after the execution of
this Separation Agreement. In addition, this Separation Agreement does
not prohibit Executive from challenging the validity of this Separation
Agreement’s waiver and release of claims under the Age Discrimination in
Employment Act of 1967, as amended.
13. Severability. In the event any provision of this Separation Agreement shall be found
unenforceable by an arbitrator or a court of competent jurisdiction, the provision shall be deemed
modified to the extent necessary to allow enforceability of the provision as so limited, it being
intended that Company shall receive the benefits contemplated herein to the fullest extent
permitted by law. If a deemed modification is not satisfactory in the judgment of such arbitrator
or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability
of the remaining provisions shall not be affected thereby.
14. Applicable Law. The validity, interpretation and performance of this Separation
Agreement shall be construed and interpreted according to the laws of the United States of America
and the State of California.
15. Binding on Successors. The parties agree that this Separation Agreement shall be
binding on, and inure to the benefit of, his or its successors, heirs and/or assigns.
16. Full Defense. This Separation Agreement may be pled as a full and complete defense
to, and may be used as a basis for an injunction against, any action, suit or other proceeding that
may be prosecuted, instituted or attempted by Executive in breach hereof.
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17. Good Faith. The parties agree to do all things necessary and to execute all further
documents necessary and appropriate to carry out and effectuate the terms and purposes of this
Separation Agreement.
18. Entire Agreement; Modification. This Separation Agreement, including the Stock Option
Plan and associated grant documents herein incorporated by reference and the Employee Proprietary
Information and Inventions Agreement signed by Executive, is intended to be the entire agreement
between the parties and supersedes and cancels any and all other and prior agreements, written or
oral, between the parties regarding this subject matter. It is agreed that there are no collateral
agreements or representations, written or oral, regarding the terms and conditions of Executive’s
separation of employment with Company and settlement of all claims between the parties other than
those set forth in this Separation Agreement. This Separation Agreement may be amended only by a
written instrument executed by all parties hereto.
THE PARTIES TO THIS SEPARATION AGREEMENT HAVE READ THE FOREGOING SEPARATION AGREEMENT AND
FULLY UNDERSTAND EACH AND EVERY PROVISION CONTAINED HEREIN. WHEREFORE, THE PARTIES HAVE EXECUTED
THIS SEPARATION AGREEMENT ON THE DATES SHOWN BELOW.
Dated: June 27, 2007
|
By: | /s/ Xxxxx Xxxxxxx | ||||
| Xxxxx Xxxxxxx | ||||||
| OpenTV Corp. | ||||||
Dated: June 27, 2007
|
By: | /s/ Xxxxx Xxxxxxxx | ||||
| Xxxxx Xxxxxxxx | ||||||
| Executive Chairman | ||||||
| By: | /s/ Xxxx X. Xxxxxxxxxx | |||||
| Xxxx X. Xxxxxxxxxx | ||||||
| Chief Executive Officer | ||||||
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