EMPLOYMENT SEPARATION AND GENERAL RELEASE AGREEMENT
This
Employment Separation and General Release Agreement (this “Separation
Agreement”)
is
entered into this seventh day of December, 2007, by and between Nand Xxxxxxxx,
an individual (“Individual”),
and
Napster, Inc., a Delaware corporation (the “Company”).
WHEREAS,
Individual is employed as the Vice President and Chief Financial Officer of
the
Company; and
WHEREAS,
Individual and the Company have mutually agreed to terminate Individual’s
employment relationship with the Company effective as of December 31, 2007
(the
“Separation Date”) upon the terms set forth herein;
NOW,
THEREFORE,
in
consideration of the covenants undertaken and the releases contained in this
Separation Agreement, Individual and the Company agree as follows:
I.
Resignation.
Individual’s
employment by the Company will terminate on the Separation Date. Individual
hereby irrevocably resigns as an officer, director, employee, member, manager
and in any other capacity with the Company and each of its affiliates effective
as of the Separation Date and that, as of the Separation Date, he will hold
no
such position with the Company or any of its affiliates. The Company confirms
that it and each of its affiliates accepts such resignation effective as of
the
Separation Date. Individual
agrees that he has no consulting relationship with the Company or any of its
affiliates. Individual waives any right or claim to reinstatement as an employee
of the Company and any affiliate of the Company (if any) by which he is or
was
previously employed. Individual acknowledges and agrees that, as of the date
hereof, he has received all compensation to which he is entitled (including,
but
not limited to, any overtime, bonus, commissions, or other wages), reimbursement
of expenses, and usual benefits (other than his base wages for the current
pay
period and his accrued and heretofore unpaid vacation), that he will not be
entitled to any severance in connection with the termination of his employment
except as expressly set forth in this Separation Agreement, and that all
payments due to Individual from the Company and its affiliates after the
Separation Date shall be determined under this Separation Agreement.
Until
the Separation Date, the Company shall continue to pay Individual a base salary
at the rate currently in effect, but Individual shall not be entitled to any
other compensation. Individual will also be entitled to reimbursement by the
Company for his reasonable out-of-pocket expenses through the Separation Date,
subject to the Company’s current expense reimbursement policies.
II.
Termination
of Employment Agreement.
Effective as of the Separation Date, that certain employment agreement, dated
as
of January 29, 2004, by and between Individual and the Company, as amended
by
that certain agreement, dated as of November 8, 2006, by and between Individual
and the Company, is hereby terminated in its entirety.
III.
Severance.
The
Company has granted restricted stock awards to Individual, a portion of which
awards are outstanding and unvested as of the Separation Date (the “Restricted
Stock Awards”).
The
Restricted Stock Awards shall become fully vested as to 56,250 shares of Company
common stock subject to such awards (the portion otherwise scheduled to vest
on
June 1, 2008) as of the later of (1) the Separation Date, or (2) the date the
Release set forth in Section V hereof becomes irrevocable by Individual under
the Age Discrimination in Employment Act of 1967. Any portion of the Restricted
Stock Awards that do not so vest shall terminate on the Separation Date and
Individual shall have no further rights with respect thereto or in respect
thereof. On the Separation Date, the Company shall also pay Individual his
accrued and theretofore unpaid wages and vacation time.
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IV.
Stock
Options.
For
purposes of clarity, any stock options granted by the Company to Individual
that
are not vested on the Separation Date shall terminate on the Separation Date
and
any stock options granted by the Company to Individual that are vested on the
Separation Date shall continue to be exercisable by Individual in accordance
with the terms and conditions of the applicable awards only for the limited
post-termination of employment exercise period applicable to those awards as
determined under the applicable award agreement and plan under which the award
was granted.
V.
Release.
Individual, on behalf of himself, his descendants, dependents, heirs, executors,
administrators, assigns, and successors, and each of them, hereby covenants
not
to xxx and fully releases and discharges the Company and each of its parents,
subsidiaries and affiliates, past and present, as well as its and their
trustees, directors, officers, members, managers, partners, agents, attorneys,
insurers, employees, stockholders, representatives, assigns, and successors,
past and present, and each of them, hereinafter together and collectively
referred to as the “Releasees,”
with
respect to and from any and all claims, wages, demands, rights, liens,
agreements or contracts (written or oral), covenants, actions, suits, causes
of
action, obligations, debts, costs, expenses, attorneys’ fees, damages,
judgments, orders and liabilities of whatever kind or nature in law, equity
or
otherwise, whether now known or unknown, suspected or unsuspected, and whether
or not concealed or hidden (each, a “Claim”),
which
he now owns or holds or he has at any time heretofore owned or held or may
in
the future hold as against any of said Releasees (including, without limitation,
any Claim arising out of or in any way connected with Individual’s service as an
officer, director, employee, member or manager of any Releasee, Individual’s
separation from his position as an officer, director, employee, manager and/or
member, as applicable, of any Releasee, or any other transactions, occurrences,
acts or omissions or any loss, damage or injury whatever), whether known or
unknown, suspected or unsuspected, resulting from any act or omission by or
on
the part of said Releasees, or any of them, committed or omitted prior to the
date of this Release Agreement including, without limiting the generality of
the
foregoing, any Claim under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act,
the Family and Medical Leave Act of 1993, the California Fair Employment and
Housing Act, the California Family Rights Act, or any other federal, state
or
local law, regulation, or ordinance, or any Claim for severance pay, bonus,
sick
leave, holiday pay, vacation pay, life insurance, health or medical insurance
or
any other fringe benefit, workers’ compensation or disability (the “Release”);
provided, however, that the foregoing release does not apply to any obligation
of the Company to Individual pursuant to any of the following: (1) any right
to
indemnification that Individual may have pursuant to the Bylaws of the Company,
its Certificate of Incorporation or under any written indemnification agreement
with the Company (or any corresponding provision of any subsidiary or affiliate
of the Company) or applicable state law with respect to any loss, damages or
expenses (including but not limited to attorneys’ fees to the extent otherwise
provided) that Individual may in the future incur with respect to his service
as
an employee, officer or director of the Company or any of its subsidiaries
or
affiliates; (2) with respect to any rights that Individual may have to insurance
coverage for such losses, damages or expenses under any Company (or subsidiary
or affiliate) directors and officers liability insurance policy; (3) any rights
to continued medical or dental coverage that Individual may have under COBRA;
or
(4) any rights to payment of benefits that Individual may have under a
retirement plan sponsored or maintained by the Company that is intended to
qualify under Section 401(a) of the Internal Revenue Code of 1986, as amended.
In addition, this Release does not cover any Claim that cannot be so released
as
a matter of applicable law. Individual acknowledges and agrees that he has
received any and all leave and other benefits that he has been and is entitled
to pursuant to the Family and Medical Leave Act of 1993.
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VI.
1542
Waiver. It
is the
intention of Individual in executing this Separation Agreement that the same
shall be effective as a bar to each and every Claim hereinabove specified.
In
furtherance
of this
intention, Individual hereby expressly waives any and all rights and benefits
conferred upon his by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL
CODE and expressly consents that this Separation Agreement (including, without
limitation, the Release set forth above) shall be given full force and effect
according to each and all of its express terms and provisions, including those
related to unknown and unsuspected Claims, if any, as well as those relating
to
any other Claims hereinabove specified. SECTION 1542 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 HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH
THE DEBTOR.”
Individual
acknowledges that he may hereafter discover Claims or facts in addition to
or
different from those which Individual now knows or believes to exist with
respect to the subject matter of this Separation Agreement and which, if known
or suspected at the time of executing this Separation Agreement, may have
materially affected this settlement. Nevertheless, Individual hereby waives
any
right, Claim or cause of action that might arise as a result of such different
or additional Claims or facts. Individual acknowledges that he understands
the
significance and consequences of the foregoing Release and such specific waiver
of SECTION 1542.
VII.
ADEA
Waiver.
Individual expressly acknowledges and agrees that by entering into this
Separation Agreement, he is waiving any and all rights or claims that he may
have arising under the Age Discrimination in Employment Act of 1967, as amended
(“ADEA”),
which
have arisen on or before the date of execution of this Separation Agreement.
Individual further expressly acknowledges and agrees that:
(a)
In
return
for this Separation Agreement, he will receive consideration beyond that which
he was already entitled to receive before entering into this Separation
Agreement;
(b)
He
is
hereby advised in writing by this Separation Agreement to consult with an
attorney before signing this Separation Agreement;
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(c)
He
was
given a copy of this Separation Agreement on December 7, 2007 and informed
that
he had twenty-one (21) days within which to consider the Separation Agreement
and that if he wished to execute this Separation Agreement prior to expiration
of such 21-day period, he should execute the Acknowledgement and Waiver attached
hereto as Exhibit
A;
(d)
Nothing
in this Separation Agreement prevents or precludes Individual 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 from
doing so, unless specifically authorized by federal law; and
(e)
He
was
informed that he has seven (7) days following the date of execution of this
Separation Agreement in which to revoke this Separation Agreement, and this
Separation Agreement will become null and void if Individual elects revocation
during that time. Any revocation must be in writing and must be received by
the
Company during the seven-day revocation period. In the event that Individual
exercises his right of revocation, neither the Company nor Individual will
have
any obligations under this Separation Agreement.
VIII.
No
Transferred Claims.
Individual warrants and represents that Individual has not heretofore assigned
or transferred to any person not a party to this Separation Agreement any
released matter or any part or portion thereof and he shall defend, indemnify
and hold the Company and each of its affiliates harmless from and against any
claim (including the payment of attorneys’ fees and costs actually incurred
whether or not litigation is commenced) based on or in connection with or
arising out of any such assignment or transfer made, purported or
claimed.
IX.
Restrictive
Covenants.
A.
Anti-Solicitation.
Individual promises and agrees that, for a period of one (1) year following
the
Separation Date, he will not influence or attempt to influence customers,
vendors, or business partners of the Company or any of its subsidiaries, either
directly or indirectly, to divert their business from the Company or any of
its
subsidiaries to any individual, partnership, firm, corporation or other entity
then in competition with the business of the Company or any
subsidiary.
B.Solicitation
of Employees.
Individual promises and agrees that, for a period of one (1) year following
the
Separation Date, he will not directly or indirectly solicit any employee of
the
Company or any of its subsidiaries to work for any business, individual,
partnership, firm, corporation, or other entity then in competition with the
business of the Company or any subsidiary.
C.
Confidentiality.
Individual promises and agrees that he will not at any time after the Separation
Date, unless compelled by lawful process, disclose or use for his own benefit
or
purposes or the benefit or purposes of any other person, firm, partnership,
joint venture, association, corporation or other business organization, entity
or enterprise (other than the Company and any of its subsidiaries or
affiliates), any trade secrets, or other confidential data or information
relating to customers, design programs, costs, marketing, sales activities,
promotion, credit and financial data, financing methods, or plans of the Company
or any subsidiary or affiliate of the Company; provided
that the
foregoing shall not apply to information which is not unique to the Company
(or
subsidiary or affiliate, as applicable) or which is generally known to the
industry or the public other than as a result of Individual’s breach of this
covenant. Individual agrees that, to the extent he has not already done so,
he
will return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in
any
way relating to the business of the Company or any subsidiary or affiliate
of
the Company. Individual further agrees that he has not retained and will not
retain or use for his account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business
of the Company or any subsidiary or affiliate of the Company.
4
D.
Non-Disparagement.
Individual agrees that he will not at any time after the date hereof (i)
directly or indirectly, make or ratify any statement, public or private, oral
or
written, to any person that disparages, either professionally or personally,
the
Company, any of its subsidiaries or any of their respective directors, officers,
employees, stockholders, attorneys, accountants, insurers, agents,
representatives, assigns, successors, or products, past and present, and each
of
them, or (ii) make any statement or engage in any conduct that has the purpose
or effect of disrupting the business of the Company or any of its subsidiaries.
The Company agrees that it will not at any time after the date hereof, directly
or indirectly, make or ratify any statement, public or private, oral or written,
to any person that disparages, either professionally or personally, Individual.
Nothing herein shall in any way prohibit either party from disclosing such
information in a truthful manner as may be required by law, or by judicial
or
administrative process or order or the rules of any securities exchange or
similar self-regulatory organization applicable to such party; provided,
however, upon receiving any subpoena or order from a court or arbitrator
requiring such party to testify regarding Individual’s employment with the
Company or any of its subsidiaries, such party shall provide a copy of such
subpoena or order to the other party within 72 hours.
E.
Injunctive
Relief.
Individual expressly agrees that the Company will or would suffer irreparable
injury if he were to breach any of the provisions of this Section IX and that
the Company would by reason of such conduct be entitled, in addition to any
other remedies, to injunctive relief. Individual consents and stipulates to
the
entry of such injunctive relief prohibiting his from engaging in conduct which
violates any of the provisions of this Section IX.
X.
Miscellaneous
A.
Successors.
(i) This
Separation Agreement is personal to Individual and shall not, without the prior
written consent of the Company, be assignable by Individual.
(ii) This
Separation Agreement shall inure to the benefit of and be binding upon the
Company and its respective successors and assigns and any such successor or
assignee shall be deemed substituted for the Company under the terms of this
Separation Agreement for all purposes. As used herein, “successor” and
“assignee” shall include any person, firm, corporation or other business entity
which at any time, whether by purchase, merger, acquisition of assets, or
otherwise, directly or indirectly acquires the ownership of the Company,
acquires all or substantially all of the Company’s assets, or to which the
Company assigns this Separation Agreement by operation of law or
otherwise.
5
B.
Waiver.
No
waiver
of any breach of any term or provision of this Separation Agreement shall be
construed to be, nor shall be, a waiver of any other breach of this Separation
Agreement. No waiver shall be binding unless in writing and signed by the party
waiving the breach.
C.
Modification.
This
Separation Agreement shall not be modified by any oral agreement, either express
or implied, and all modifications hereof shall be in writing and signed by
the
parties hereto.
D.
Complete
Agreement.
This
Separation Agreement embodies the entire agreement of the parties hereto
respecting the matters within its scope. This Separation Agreement supersedes
all prior agreements of the parties hereto on the subject matter hereof. Any
prior negotiations, correspondence, agreements, proposals, or understandings
relating to the subject matter hereof shall be deemed to be merged into this
Separation Agreement and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to
be
of no force or effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the subject
matter hereof, except as set forth herein. Notwithstanding the foregoing, the
Company’s rights under any confidentiality, trade secret, proprietary
information, inventions or similar agreement to which Individual was a party
or
otherwise bound are not integrated into this Agreement and such rights of the
Company shall continue in effect.
E.
Severability.
In
the
event that a court of competent jurisdiction determines that any portion of
this
Separation Agreement is in violation of any statute or public policy, then
only
the portions of this Separation Agreement which violate such statute or public
policy shall be stricken, and all portions of this Separation Agreement which
do
not violate any statute or public policy shall continue in full force and
effect. Furthermore, any court order striking any portion of this Separation
Agreement shall modify the stricken terms as narrowly as possible to give as
much effect as possible to the intentions of the parties under this Separation
Agreement.
F.
Governing
Law.
This
Separation Agreement and the legal relations hereby created between the parties
hereto shall be governed by and construed under and in accordance with the
internal laws of the State of California, without regard to conflicts of laws
principles thereof.
G.
Legal
Counsel; Mutual Drafting.
Each
party recognizes that this is a legally binding contract and acknowledges and
agrees that they have had the opportunity to consult with legal counsel of
their
choice. Each party has cooperated in the drafting, negotiation and preparation
of this Separation Agreement. Hence, in any construction to be made of this
Separation Agreement, the same shall not be construed against either party
on
the basis of that party being the drafter of such language. Individual agrees
and acknowledges that he has read and understands this Separation Agreement,
is
entering into it freely and voluntarily, and has been advised to seek counsel
prior to entering into this Separation Agreement, has had ample opportunity
to
do so.
6
H.
Notices.
All
notices under this Separation Agreement shall be in writing and shall be either
personally delivered or mailed postage prepaid, by certified mail, return
receipt requested:
(a) if
to the
Company:
Napster,
Inc.
Attention:
Chief Executive Officer
0000
Xxxxxxx Xxx.
Xxx
Xxxxxxx, XX 00000
with
a
copy to:
Napster,
Inc.
Attention:
General Counsel
0000
Xxxxxxx Xxx.
Xxx
Xxxxxxx, XX 00000
(b) if
to
Individual:
At
the
address on file with the Company
Notice
shall be effective when personally delivered, or five (5) business days after
being so mailed. Any party may change its address for purposes of giving future
notices pursuant to this Agreement by notifying the other party in writing
of
such change in address, such notice to be delivered or mailed in accordance
with
the foregoing.
I.
Counterparts.
This
Separation Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which together shall constitute
one
and the same instrument.
J.
Arbitration.
Any
controversy arising out of or relating to this Separation Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, or any other
controversy arising out of Individual’s employment or the termination thereof,
including, but not limited to, any state or federal statutory claims, shall
be
submitted to arbitration in Los Angeles County, California, before a sole
arbitrator selected from Judicial Arbitration and Mediation Services, Inc.,
Los
Angeles County, California, or its successor (“JAMS”),
or if
JAMS is no longer able to supply the arbitrator, such arbitrator shall be
selected from the American Arbitration Association, and shall be conducted
in
accordance with the provisions of California Code of Civil Procedure §§ 1280 et
seq. as the exclusive forum for the resolution of such dispute. Pursuant to
California Code of Civil Procedure § 1281.8, provisional injunctive relief may,
but need not, be sought by either party to this Separation Agreement in a court
of law while arbitration proceedings are pending, and any provisional injunctive
relief granted by such court shall remain effective until the matter is finally
determined by the Arbitrator. Final resolution of any dispute through
arbitration may include any remedy or relief which the Arbitrator deems just
and
equitable, including any and all remedies provided by applicable state or
federal statutes. At the conclusion of the arbitration, the Arbitrator shall
issue a written decision that sets forth the essential findings and conclusions
upon which the Arbitrator’s award or decision is based. Any award or relief
granted by the Arbitrator hereunder shall be final and binding on the parties
hereto and may be enforced by any court of competent jurisdiction. The parties
acknowledge and agree that they are hereby waiving any rights to trial by jury
in any action, proceeding or counterclaim brought by either of the parties
against the other in connection with any matter whatsoever arising out of or
in
any way connected with this Separation Agreement or Individual’s employment. The
parties agree that (i) the Company shall be responsible for payment of the
forum
costs of any arbitration hereunder, including the Arbitrator’s fee, in
connection with any proceeding to enforce the terms of this Separation
Agreement, and (ii) the Arbitrator shall have discretion, if the Arbitrator
determines it to be appropriate, to award reasonable attorneys’ fees and costs
to the party prevailing in any such proceeding.
7
K.
Number
and Gender.
Where
the context requires, the singular shall include the plural, the plural shall
include the singular, and any gender shall include all other
genders.
L.
Headings.
The
section headings in this Separation Agreement are for the purpose of convenience
only and shall not limit or otherwise affect any of the terms
hereof.
M.
Taxes.
The
Company has the right to withhold from any payment hereunder or under any other
agreement between the Company and Individual the amount required by law to
be
withheld with respect to such payment or other benefits provided to Individual.
Other than as to such withholding right, Individual shall be solely responsible
for any taxes due as a result of the payments and benefits received by
Individual contemplated by this Separation Agreement.
[Remainder
of page intentionally left blank.]
8
I
have
read the foregoing Separation Agreement and I accept and agree to the provisions
it contains and hereby execute it voluntarily with full understanding of its
consequences.
EXECUTED
this 7th day of December, 2007, at Los Angeles County, California.
|
“Individual”
|
|
|
/s/
Nand Gangwaini
|
|
|
Nand
Xxxxxxxx
|
EXECUTED
this Seventh day of December, 2007, at Los Angeles County,
California.
| “Company” | |
|
Napster,
Inc.,
a
Delaware corporation
|
|
|
/s/
Wm.
Xxxxxxxxxxx Xxxxx
|
|
|
By: Xxxxx
Xxxxx
|
|
| Its: Chairman and CEO |
9
EXHIBIT
A
ACKNOWLEDGEMENT
AND WAIVER
I,
Nand
Xxxxxxxx, hereby acknowledge that I was given 21 days to consider the foregoing
Employment Separation and General Release Agreement and voluntarily chose to
sign the Employment Separation and General Release Agreement prior to the
expiration of the 21-day period.
I
declare
under penalty of perjury under the laws of the state of California, that the
foregoing is true and correct.
EXECUTED
this Seventh day of December, 2007, at Los Angeles County,
California.
|
/s/
Nand Gangwaini
|
|
|
Nand
Xxxxxxxx
|
A-1
