EXHIBIT 99.1
ADDENDUM TO SEVERANCE AGREEMENT AND RELEASE
This agreement is an Addendum ("Addendum") to the Severance Agreement and
Mutual Release ("Severance Agreement") entered into on April 10, 2001 between
eMachines, Inc. (the "Company") and Xxxx Xxxxxxxxx ("Employee") (Company and
Employee are collectively referred to herein as the "Parties").
WHEREAS, Section 1 of the Severance Agreement presumed Employee's continued
full-time active employment status up to and including his Resignation Date (as
defined by the Severance Agreement);
WHEREAS, Section 2(b) of the Severance Agreement conditioned certain of
Employee's payments in the amount of $50,000, less applicable withholdings, upon
Employee's substantial compliance in restructuring the Internet business unit of
the Company, including the tasks set forth in Sections 2(b)(1-7) of the
Severance Agreement (the "Tasks"), prior to his Resignation Date;
WHEREAS, the Company has concluded that it is necessary to place Employee
on a temporary leave of absence as of May 7, 2001, which will prevent Employee
from maintaining his active status as an Employee of the Company and completing
the Tasks prior to his Resignation Date;
WHEREAS, the Parties mutually agree that it is necessary in this Addendum
to modify the terms of the Severance Agreement to reflect the changed
circumstances of Employee's status with the Company and the Company's
obligations to make payments pursuant to the terms of the Severance Agreement;
NOW THEREFORE, in consideration of the mutual promises made herein, the
Company and Employee hereby agree as follows:
1. Modification #1. Section 1 of the Severance Agreement shall be
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stricken and replaced as follows:
"1. Resignation. Employee shall resign from his position at the
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Company effective July 1, 2001 ("Resignation Date"). From May 7, 2001 through
the Resignation Date, Employee shall be on paid leave status with the Company.
Employee shall return all Company-owned property in Employee's possession to the
Company on or prior to May 14, 2001."
2. Modification #2. Section 2(b) of the Severance Agreement shall be
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stricken and replaced as follows:
"(b) Salary Through the Resignation Date; Bonus. From the date that
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this Agreement is signed by both Parties through the Resignation Date, the
Company will pay Employee a base salary at the annualized rate of $275,000 (the
"Base Salary"). The
Base Salary will be paid periodically in accordance with the Company's normal
payroll practices and be subject to the usual, required withholding. Up through
the Resignation Date, the Company shall continue to provide Employee, Medical,
Dental and Life Insurance (if applicable). Employee shall have the right to
convert his health insurance benefits to individual coverage pursuant to COBRA
(at the employee's expense) until the earlier of (a) 18 months following the
Resignation Date or (b) Employee obtaining other employment providing comparable
medical and dental insurance to that of the Company. The Company shall have no
obligation to pay employee's COBRA benefits. In addition, within eight (8) days
after the Resignation Date, the Company agrees to pay to employee a lump sum in
the amount of ($50,000), less applicable withholding, provided that Employee has
executed the General Release (as defined below) on the Resignation Date and not
revoked it. In the event that Company requests the assistance of Employee in any
pending or future claims or disputes, the Employee shall provide such assistance
to the Company upon reasonable advance notice, and the Company shall pay any
reasonable out-of-pocket expenses incurred by Employee in providing such
assistance."
3. Entire Agreement. To the extent this Addendum modifies the terms of
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the Severance Agreement, it supersedes and replaces such terms. Aside from
Sections 1 and 2(b) of the Severance Agreement, as modified herein, all other
original terms of the Severance Agreement shall remain in full force and effect.
4. Voluntary Execution of Agreement. This Addendum is executed
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voluntarily and without any duress or undue influence on the part or behalf of
the Parties hereto, with the full intent of releasing all claims. The Parties
acknowledge that:
(a) They have read this Addendum;
(b) They have been represented in the preparation, negotiation, and
execution of this Addendum by legal counsel of their own choice or that they
have voluntarily declined to seek such counsel;
(c) They understand the terms and consequences of this Addendum and
of the releases it contains;
(d) They are fully aware of the legal and binding effect of this
Addendum.
[Signatures appear on the next page]
IN WITNESS WHEREOF, the Parties have executed this Addendum on the
respective dates set forth below.
eMachines, Inc.
Dated: 5/9/01 By /s/ Xxxx Xxxxxxxx
___________________ ______________________________
Name: Xxxx Xxxxxxxx
Title: SVP/COO
Xxxx Xxxxxxxxx, an individual
Dated: May 9, 2001 /s/ Xxxx Xxxxxxxxx
___________________ ______________________________
Xxxx Xxxxxxxxx
