EXHIBIT 10.38
[XXXXXXXX.XXX LOGO LETTERHEAD]
November 16, 2001
Xxxxx Xxx Xxxx
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Re: Separation from Xxxxxxxx.Xxx, Inc.
Dear Xxxxx:
In accordance with our recent discussions, the following shall constitute our
agreement ("Agreement") regarding your termination of employment from
Xxxxxxxx.Xxx, Inc., effective November 23, 2001 (the "Effective Date").
For good and valuable consideration, the sufficiency of which is hereby
acknowledged, Xxxxx Xxx Xxxx ("Employee") and Xxxxxxxx.Xxx, Inc.
("Xxxxxxxx.Xxx") (Employee and Xxxxxxxx.Xxx are sometimes hereinafter referred
to collectively as the "Parties") agree as follows:
TERMINATION OF EMPLOYMENT. The Parties acknowledge that Employee's
employment with Xxxxxxxx.Xxx terminates as of November 23, 2001. The
Parties further agree that after such date Employee will have no
further right to employment with Xxxxxxxx.Xxx and shall not be entitled
to receive from Xxxxxxxx.Xxx any further compensation, benefits, or
other form of remuneration except as provided herein.
SEVERANCE BENEFITS. Provided that Employee satisfies the conditions of
this Agreement and does not revoke this Agreement, Xxxxxxxx.Xxx will,
in consideration of the promises, covenants and warranties contained
herein:
Separation Payments. On the eighth day after Employee signs
and returns this Agreement, commence payments to Employee at a
pay rate equal to Employee's annual base salary on the
Effective Date divided by 12, plus total bonuses earned by
Employee in 2001 under the executive bonus plan divided by
10.77 for a period of 5.32 months (the "Separation Pay
Period") as per your Employment Agreement. Such severance
shall be paid in accordance with Xxxxxxxx.Xxx's regular
payroll
practices of two times per month. The total amount paid will
be $120,087.51, which payment shall be subject to all state
and federal withholdings as may be required by law;
Paid Time Off. Pay Employee $10,095.60 as payment for her
accrued paid time off as of the Effective Date. Such payment
shall be paid on the first scheduled pay period of the
Separation Pay Period;
Quarterly Bonus Payment. Pay Employee her prorated quarterly bonus for
the fourth quarter of 2001 and special merger and acquisition bonus.
Such payment will be made on November 16, 2001; and
Medical Coverage. Continue Employee's health insurance coverage for a
period of 5.32 months. Coverage will be provided to Employee and
Employee's eligible dependents at the same cost such coverage is
offered to Xxxxxxxx.Xxx's employees. At the end of the Separation Pay
Period, employee benefits under the group plan will be terminated and
employee will be notified of her COBRA conversion options. The type of
health insurance is subject to change with or without notice, but will
be consistent with the coverage offered to Xxxxxxxx.Xxx's employees.
Employee represents and warrants that inasmuch as the severance benefit to
Employee as described herein is conditioned upon Employee's compliance with her
promises, waivers and releases contained in this Agreement, if Employee breaches
any of the provisions of this Agreement, Xxxxxxxx.Xxx shall be entitled to
recover from Employee, as damages, all amounts paid pursuant to this Agreement
in addition to all other available damages and remedies, including, but not
limited to, the recovery of reasonable attorneys' fees, unless prohibited by
applicable law.
RELEASE OF XXXXXXXX.XXX BY EMPLOYEE. For and in consideration of the promises,
covenants and warranties contained herein, and other good and valuable
consideration the sufficiency of which is acknowledged, on behalf of herself,
her heirs, executors, administrators, successors and assigns, Employee does
hereby release, remise, acquit and forever discharge Xxxxxxxx.Xxx and each and
all of Xxxxxxxx.Xxx's subsidiaries, affiliates, respective past and present
officers, directors, agents, servants, employees, and attorneys, from any and
all rights, demands, claims, damages, losses, costs, expenses, actions, and
causes of action whatsoever, whether in tort or in contract, at law or equity,
known or unknown, contingent or fixed, suspected or unsuspected, foreseen or
unforeseen, arising out of, asserted in, assertable in, or any way related to
Employee's employment at Xxxxxxxx.Xxx, termination therefrom, and/or Employee's
layoff, or any other matter occurring or existing at any time from the beginning
of time through the date of the execution of this Agreement. The rights,
demands, claims, damages, losses, costs, expenses, actions and causes of action
which Employee waives and releases in this Agreement include, to every extent
allowed by law, but is not limited to, those arising under any commission or
compensation agreements between Employee and Xxxxxxxx.Xxx, the Worker Adjustment
and Retraining Notification Act, the Employee Retirement Income Security Act of
1974, the Civil Rights Acts of 1866, 1871, 1964 and 1991, the Rehabilitation Act
of 1973, the Equal Pay Act of 1963, the Vietnam Era Veteran's Readjustment
Assistance Act of 1974, as amended, the Immigration Reform and Control Act of
1986, the Americans with Disabilities Act, the Fair
Labor Standards Act of 1938, the Family and Medical Leave Act, and/or any other
federal or state statute, law or regulation.
EXERCISE OF STOCK OPTIONS. Pursuant to Xxxxxxxx.Xxx's Stock Option Agreement,
Employee's option(s) to acquire shares of Xxxxxxxx.Xxx's common stock (the
"Options") granted to Employee pursuant to a Stock Option Grant or Stock
Incentive Agreement, as the case may be (in either case, the "Option
Agreement"), incorporated herein by reference, that. have vested as of the
Effective Date shall be exercisable for eighteen (18) months after the
consummation of Xxxxxxxx.Xxx's proposed merger with a wholly-owned subsidiary of
Verso Technologies, Inc. (the "Merger"), subject to the Affiliate Agreement. In
addition, consistent with the terms of the Option Agreement, as governed by the
applicable Xxxxxxxx.Xxx stock incentive plan, Employee's unvested Options will
vest upon the consummation of the Merger. However, Employee hereby acknowledges
and affirms that, consistent with the terms of the Merger, any of Employee's
unvested Options that are not "in-the-money" at the effective time of the Merger
will be cancelled. Except as provided in this, paragraph, the Options will
continue to be governed by the Option Agreement.
COOPERATION. Employee agrees to cooperate with Xxxxxxxx.Xxx in any pending or
future matters, including, but not limited to, the Merger and any litigation,
investigation or other dispute in which Employee has knowledge or information.
Employee agrees to execute an Affiliate Agreement if so requested by
Xxxxxxxx.Xxx in connection with the Merger, and do all such acts to facilitate
the consummation of the Merger as Xxxxxxxx.Xxx may reasonably request. In
connection with any investigation, lawsuit or dispute in which Employee has
knowledge or information, if Employee has any contact with any party known by
Employee to be adverse to Xxxxxxxx.Xxx in such investigation, lawsuit or
dispute, Employee agrees to immediately notify Xxxxxxxx.Xxx's Chief Executive
Officer first by telephone and as soon as possible thereafter in writing. If
Employee has any contact with any party not known by Employee at the time of
such contact to be adverse to Xxxxxxxx.Xxx in any investigation, lawsuit or
dispute, Employee agrees to notify Xxxxxxxx.Xxx's Chief Executive Officer, first
by telephone and as soon as possible thereafter in writing, immediately upon
Employee becoming aware that such party is adverse to Xxxxxxxx.Xxx. Xxxxxxxx.Xxx
will pay Employee a reasonable fee for any time and expense incurred to comply
with this provision.
CONFIDENTIALITY. Employee hereby represents, warrants and agrees that she will
hereinafter keep completely confidential any information concerning the terms,
amount and fact of this Agreement, and will not hereinafter disclose any such
information to anyone except her attorneys, immediate family, and tax
preparation advisors, and that she will cause each such person not to disclose
such information to any other person. Employee also agrees not to snake
disparaging, defamatory, or derogatory statements or allegations, whether verbal
or written (including, but not limited to, statements made anonymously or under
fictitious user names on Internet message boards), concerning Xxxxxxxx.Xxx.
CORPORATE CREDIT CARD. Employee agrees to return her corporate credit card to
Xx. Xxxx Xxxxxxxx on or before Friday, November 30, 2001. Employee acknowledges
and agrees that she remains liable for all charges placed on the corporate
credit card, prior to its return, and which are not reimbursable by Xxxxxxxx.Xxx
pursuant to its reimbursement policies. If, on the Effective
Date, Employee has any outstanding obligations to the credit card company or to
Xxxxxxxx.Xxx for charges incurred on the credit card, Employee acknowledges that
Xxxxxxxx.Xxx is authorized to deduct from the Severance Benefits due to Employee
under Paragraph 2 above (1) any amounts owed to the credit card company for
non-reimbursable charges, (2) any amounts owed to the credit card company for
authorized business charges for which Xxxxxxxx.Xxx has reimbursed Employee, and
(3) any amounts otherwise owed to Xxxxxxxx.Xxx.
TELEMATE. NET'S PROPERTY. Simultaneously with the execution of this Agreement,
Employee agrees to return all property in her possession, custody or control
belonging to Xxxxxxxx.Xxx, including, but not limited to, all documents, data,
records, notes, memoranda, drawings, manuals, computer programs, compilations
and all other tangible, information and material in whatever form, which belongs
to or pertains to Xxxxxxxx.Xxx, or which constitute or pertain to its trade
secrets, confidential information, product services, employees, distributors,
dealers, agents, contractors or customers.
GOVERNING LAW. This Agreement shall be deemed to have been executed in the State
of Georgia, and all matters pertaining to the validity, construction,
interpretation, and effect of this Agreement shall be governed by the laws of
the State of Georgia.
FINAL AGREEMENT -- NO ORAL MODIFICATION. This Agreement and the Employment
Agreement executed by Employee on March 19, 2001 (the "Prior Agreement'")
(collectively, the "Agreements") constitute the entire agreement between
Employee and Xxxxxxxx.Xxx. The Prior Agreement is incorporated by reference, and
any post-termination obligations contained in the Prior Agreement shall remain
in full force and effect, and shall survive cessation of Employee's employment.
Employee acknowledges that the post-termination obligations contained in the
Prior Agreement are valid, enforceable and reasonably necessary to protect the
interests of Xxxxxxxx.Xxx, and Employee agrees to abide by such obligations.
These Agreements supersede any prior communications, agreements or
understandings, whether oral or written, between Employee and Xxxxxxxx.Xxx
arising out of or relating to Employee's employment and the termination of that
employment. Other than this Agreement, no other representation, promise or
agreement has been made with Employee to cause her to sign this Agreement. This
Agreement shall not be amended, altered, revised, modified, terminated or
changed except by further written agreement signed by all Parties.
SUCCESSORS AND ASSIGNS. The terms and covenants set forth herein shall be
binding upon and inure to the benefit of the Parties subsidiaries, affiliates,
parent corporations, officers, directors, agents, servants, employees,
attorneys, successors, assigns, heirs, and representatives, as applicable.
ENFORCEABILITY OF AGREEMENT. This Agreement is intended to be performed in
accordance with and only to the extent permitted by all applicable laws,
ordinances, rules or regulations. If any provision of this Agreement or the
application thereof to any person, entity or circumstance shall, for any reason
and to any extent, be invalid or unenforceable, the remainder of this Agreement
and the application of such provision to other persons or circumstances should
not be effected thereby, but rather shall be enforced to the greatest extent
permitted by law.
HEADINGS. The headings that have been used to designate the various sections of
this Agreement are solely for the convenience in reading and ease of reference
and shall not be construed in any event or manner as interpretative of this
Agreement.
COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all of which when taken together shall
constitute one and the same Agreement.
NO ADMISSION OF LIABILITY. This Agreement is in compromise and settlement and is
not to be used or construed in any court or administrative proceeding of any
nature or in any subsequent actions by or between the parties hereto as an
admission, direct or indirect, of liability or wrongdoing whatsoever. The
Parties specifically deny any such liability or wrongdoing each to the other.
VALIDITY AND ENFORCEMENT. This Agreement is intended to be performed in
accordance with and only to the extent permitted by all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement or the
application thereof to any person, entity of- circumstance shall, for any
reason, to any extent, be invalid or unenforceable, the remainder of this
Agreement and the application of such provision to the other persons, entities
or circumstances shall not be effected thereby but rather should be enforced to
the greatest extent permitted by law.
AMBIGUITIES. This Agreement was drafted with the full participation of both
Parties. Accordingly, if there is an ambiguity in this agreement, it should not
be resolved against any particular party, but rather should be resolved by a
fair reading of what the Agreement was intended to provide.
VOLUNTARY ASSENT. In the negotiation, drafting, and execution of this Agreement,
the Parties have been represented by, and/or had the right and access to,
independent legal counsel of their choice, and each party does hereby affirm
that she has read and understands the terms of this Agreement, and executes the
same as her own free and voluntary act.
ACCESS TO INDEPENDENT COUNSEL. THE PARTIES ACKNOWLEDGE THAT THEY HAVE BEEN
REPRESENTED BY, OR HAD ACCESS TO, INDEPENDENT LEGAL COUNSEL OF HER OWN CHOOSING
IN CONNECTION
WITH ITS/HIS ENTERING INTO THIS AGREEMENT, AND EACH PARTY HEREBY ACKNOWLEDGES
THAT SHE OR IT FULLY UNDERSTANDS THE TERMS AND CONDITIONS OF THIS AGREEMENT AND
AGREES TO BE FULLY BOUND BY AND SUBJECT THERETO.
If the terms set forth in this Agreement are acceptable, please sign below and
deliver two (2) executed copies of this Agreement to me, and I will return to
you an executed version for your records.
Sincerely,
XXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx
Its: President & Chief Executive Officer
Read, acknowledged, agreed to and accepted by:
/s/ Xxxxx Xxx Xxxx
------------------------------------
Date: 11/16/01
