Exhibit 10.7
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SEPARATION AGREEMENT
This Separation Agreement ("Agreement"), dated this 16th day of October
2001, is entered into by and between Xxxxx X. Perl ("Perl") and
XxxxxxxXxxxxxxx.xxx ("Company").
WHEREAS: Perl has an employment agreement with the Company with an effective
date of February 1, 2000.
WHEREAS: The Company and Perl wish to terminate that employment agreement in
order to allow the Company to reduce expenses effective October 31, 2001. The
reason for the separation is not for "cause" as defined in the employment
agreement.
WHEREAS: As part of the employment agreement Perl has he is entitled to thirty
days notice of termination and a cash settlement.
WHEREAS: Perl is entitled upon termination of his status of employment to
immediate vesting of all unvested options to purchase common stock of the
Company.
WHEREAS: Perl is entitled to other remedies under the employment contract.
WHEREAS: The parties wish to enter into an agreement to alter and modify the
remedies and compensation due to Perl on termination of the employment agreement
and to create new rights and remedies including a Consultant Agreement
WHEREAS: The parties wish to memorialize the agreed terms and obligations on
Separation.
NOW THEREFORE, in consideration of the payments set forth below and the
mutual promises contained herein, the parties agree as follows:
1. Payment of Salary and Vacation. The Company agrees to pay to Perl
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all wages due through the last day of employment, including
accrued and unused vacation time.
2. Payment of Settlement. In addition, and in consideration for this
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Agreement, the Company agrees to pay Perl separation benefits
consisting of cash compensation of $173,500, payable 50% on
January 2, 2002, 35% on February 1, 2002, and 15% on May 1, 2001.
The Company will also pay additional compensation consisting of
Common Stock of XxxxxxxXxxxxxxx.xxx (NASDAQ, POSO) equaling
$100,000 worth of stock issued on the date this agreement is
executed. The Company agrees to pay all taxes resulting from the
issuance of the securities. The issuance of the Stock is subject
to a resolution from the Board of Directors of the Company
authorizing the issuance of shares of stock as part of this
settlement.
3. Registration of Stock Securities. The Company shall prepare and
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file a registration statement covering the Stock Securities issued
to Perl as set forth in section 2 above, and shall use its best
efforts to cause each such registration statement to become and
remain effective prior to January 11, 2002, and in any event the
Company agrees to register such shares in the next registration
statement issued by the Company.
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4. Lock up of stock, and terms under which Stock Options may be
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exercised. Perl agrees that he shall limit his sale of any of the
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common stock issued as set forth in section 2 above so as to sell
no more than 20% of the total amount of stock granted in any one
calendar month. Perl shall have an affirmative obligation to
notify the Company within ten (10) days of having sold any stock.
Perl agrees that he shall not exercise and sell more than 10% of
the total vested options as set forth in section 7 below in any
one calendar month during the first twelve months following the
effective date of this Agreement, and no more than 20% of the
total vested options in any one calendar month during the
thirteenth through eighteenth months following the effective date
of this Agreement. This provision shall be of no further effect
after the eighteenth month following the effective date of this
Agreement or if there has been a change of control of the Company
as defined in the Consultant Agreement. In addition if the Company
terminates the Consultant Agreement referenced herein this
provision shall be of no further effect, nothing herein however
shall be construed to release Perl from these restrictions on the
sale of stock and the exercise of options if he terminates the
Consultant Agreement. Vested options which expire during the term
of this Agreement shall be exempt from the provisions of the
lock-up in this section 4 beginning thirty (30) days prior to
scheduled expiration of said options.
5. Unpaid Expenses. The Company agrees to pay Perl all business
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expenses incurred by Perl during his employment for which he is
entitled.
6. Consultant Agreement. As further consideration, the Company agrees
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to enter into a consulting agreement with Perl for two years,
commencing November 1, 2001, in a form substantially similar to
the draft agreement attached hereto as Exhibit "A".
7. Vesting of Rights to Purchase Common Stock of the Company. The
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Company agrees that Perl has either previously vested, or vested
as a consequence of the termination of the employment agreement
the following options: 110,000 options (which is the net of the
original grants less options exercised) granted on October 23,
1998 at a strike price of $1.15, 75,000 options granted on July 2,
1999 at a strike price of $2.25, and 200,000 options granted on
June 15, 2001 at a strike price of $1.25. Perl as part of this
settlement agrees to waive and disclaim any interest whatsoever to
the following options, which are also vested: 36,000 options
granted on April 17, 2000 at a strike price of $11.00 and 164,000
options granted on November 28, 2000 at a strike price of $8.81.
Perl further disclaims and releases any rights he may have to any
additional options awarded to him by the Compensation Committee on
June 15, 2001. The Company agrees that it will treat the vested
options, which Perl has with the most favorable treatment it gives
to current employees or Directors, provided however this shall
only apply if such treatment shall have a non-material impact on
the Profit and Loss for the Company.
8. Insurance Benefits. The Company agrees to continue to provide to
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Perl the same PPO (Health) and DMO (Dental) insurance, which is
provided to current employees for a period not to exceed two
years. Perl will pay the then current standard employee
contribution for said insurance. The Company shall not be
obligated to provide insurance once Perl has accepted full time
employment and is eligible for coverage under a policy that is
substantially similar under that employer's policy.
9. Computer Equipment. Company is to transfer title to the Laptop
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Computer and associated equipment and software, which Perl is
currently using as an employee of the Company.
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10. Outplacement Assistance. Company agrees to pay Outplacement
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Assistance, which Perl may request in an amount not to exceed
$2,000.00. Such fee(s) shall be paid directly to the provider(s).
11. General Release. In consideration of the above payments by Company
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and other valuable consideration, Perl for himself and his heirs,
assigns, and personal representatives agree upon payment of all
consideration required herein to forever waive and release any and
all claims, demands, rights, causes of action, or grievances of
any kind or character which he may have accrued pursuant to common
law, federal law, state laws including without limitation any and
all anti-discrimination statutes, laws and ordinances, and local
laws and regulations. Perl realizes there are many laws and
regulations prohibiting employment discrimination pursuant to
which he may have rights or claims. These include Title VII of the
Civil Rights Act of 1964, as amended; the Age Discrimination in
Employment Act of 1967, as amended; The Americans with
Disabilities Act, as amended; the National Labor Relations Act, as
amended; 42 U.S. C. 1981; and the state human rights laws. Perl
also understands that there are other statutes and laws of
contract and tort otherwise related to his employment. Perl
intends to waive and release any rights he may have under these
other laws. Said release shall run to and be in favor of, and
shall forever protect Company, and its parent and subsidiaries, as
well as all officers, directors, and agents of Company and its
parent and subsidiaries. Said release shall be a general full and
complete waiver and shall be applicable to any and all such
claims, demands, rights, wages, benefits, employment, causes of
action, or grievances, whether claims for psychic injuries or any
other injuries, which may be brought before an administrative
agency, a court, a tribunal, an arbitrator, or otherwise, whether
in law or equity, contract, or tort, and which are related,
directly or indirectly, to Perl's employment or the termination of
employment with Company. In turn, Company hereby releases Perl, as
well as his heirs, assigns, and personal representatives, from any
and all claims, which are related, directly or indirectly, to
Perl's employment. A copy of the Mutual General Release is
attached hereto as Exhibit "B". The Release shall not be deemed to
be effective against Perl if the Company fails to make the
payments due hereunder.
12. Disparagement. Each party agrees not to defame or in any way
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disparage the other. Perl agrees not to engage in any activities
which may be detrimental, directly or indirectly, to the interests
of Company, whether such interests be property, reputation, or
otherwise.
13. Confidential Information. Perl acknowledges that during the term
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of his employment with Company, Company disclosed confidential
information to Perl, which Company deems to be valuable and
proprietary. "Confidential information" as used herein shall mean
any information of or about Company (or Company's clients or
customers, or the customers' or any vendors), which has been
disclosed to Perl or made available to him, which is not publicly
available and which is maintained by Company in confidence.
Confidential Information shall include information of or about
Company in both oral and written form, which is maintained by
Company in confidence including, but not limited to, information
about Company's finances, personnel, products, clients, or
strategic plans. Perl agrees not to make public or disclose any
Confidential Information, except as expressly permitted in writing
by Company. Perl agrees that in the event of any violation or
threatened violation of this Agreement, monetary damages would
provide an inadequate remedy so that Perl agrees, in addition to
all other rights provided by law, that Company shall have the
right to seek an injunction or equivalent remedy issued against
the Perl to prevent violations or further violations of this
provision. This provision shall not be binding on Perl in the
event the Company publicly discloses, or this information becomes
public other than by disclosure by Perl.
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14. Non-Competition Covenant Not to Compete. In consideration for the
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payments to be made under this Agreement, and for the
consideration contained in the Consultant Agreement, Perl shall,
for the lesser of (a) two years from the effective date of this
Agreement, or (b) for 60 days after the termination of the
Consultant Agreement by the Company without cause, either alone or
in conjunction with any other person, refrain from directly or
indirectly through its present or future affiliates:
(i) Employing, engaging or seeking to
employ or engage any person who within the prior twenty-four
(24) months had been an officer or employee of the Company,
unless said employee was involuntarily separated from the
Company.
(ii) Causing or attempting to cause (A) any
client, customer or supplier of the Company to terminate or
materially reduce its business with the Company, or (B) any
officer, employee or consultant of the Company to resign or
sever a relationship with the Company;
(iii) Disclosing (unless compelled by
judicial or administrative process) or using any confidential
or secret information relating to the Company or any of their
respective clients, customers or suppliers;
(iv) Participating or engaging in (other
than through the ownership of five percent (5%) or less of any
class of securities registered under the Securities Exchange
Act of 1934, as amended), or otherwise lending assistance
(financial or otherwise) to any person participating or
engaged in, any of the lines of business in which the Company
is participating or engaged on the date of termination in any
jurisdiction in which the Company participates or engages in
such line of business on the date of termination.
The parties hereto recognize that the laws and public policies of
the various states of the United States may differ as to the
validity and enforceability of covenants similar to those set
forth in this Section. It is the intention of the parties that the
provisions of this Section be enforced to the fullest extent
permissible under the laws and policies of each jurisdiction in
which enforcement may be sought, and that the unenforceability (or
the modification to conform to such laws or policies) of any
provisions of this Section shall not render unenforceable, or
impair, the remainder of the provisions of this Section.
Accordingly, if any provision of this Section shall be determined
to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the
operation of such provision in the particular jurisdiction in
which such determination is made and not with respect to any other
provision or jurisdiction.
The parties hereto acknowledge and agree that any remedy at law
for any breach of the provisions of this Section would be
inadequate, and Employee hereby consents to the granting by any
court of an injunction or other equitable relief, without the
necessity of actual monetary loss being proved, in order that the
breach or threatened breach of such provisions may be effectively
restrained.
The Company and the Employee acknowledge that the foregoing
restrictive covenants in this Section 14 are essential elements of
this Agreement and that, but for the agreement of the Employee to
comply with those covenants, the Company would not have agreed to
enter into this Agreement. The covenants by the Employee shall be
construed as agreements independent of any other provision in this
Agreement.
15. Confidentiality. Perl represents and agrees that he will keep the
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terms, amount and facts of this Agreement completely confidential,
and that he will not hereinafter disclose any information relating
to this Separation Agreement to anyone, including but not limited
to, any past, present or prospective
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employee of the Company, the media, or anyone else, unless such
information has previously been made public by the Company.
16. Agreement to Provide Litigation Assistance. Perl agrees that he
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shall on reasonable notice provide information and assistance
necessary regarding any litigation the Company may be or is
potentially involved with; this obligation shall survive both the
term of this agreement and the Consultant Agreement.
17. Miscellaneous.
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a. Perl is advised to consult with an attorney prior to
executing this Agreement, and Perl acknowledges that he has
had an opportunity to do so.
b. Perl may revoke this Agreement at any time within seven (7)
days following his execution of this Agreement. This
Agreement shall not become effective or enforceable until
that revocation period has expired; In order to cancel or
revoke this Agreement, Perl must deliver to the Director of
Human Resources at XxxxxxxXxxxxxxx.xxx a signed letter or
other written notice stating that he/she is canceling or
revoking this Agreement.
c. This Agreement constitutes the sole agreement between the
parties and supersedes any and all understandings and
agreements made prior hereto. There are no other
understandings, representations or agreements between the
parties other than those as contained or referenced herein.
d. It is understood and agreed that the execution of this
Agreement is not to be construed as an admission of any
liability on the part of Company; the Company specifically
disclaims any wrongdoing of any part or any nature with
respect to Perl.
e. This Agreement and each of its provisions are binding upon,
and inure to the benefit of the parties as well as their
respective heirs, executors, administrators, successors
and/or assigns.
f. All agreements and covenants contained herein are severable.
In the event that any of them are held to be invalid by any
competent court, this Agreement shall be interpreted as if
such invalid agreement or covenants were not contained
herein.
g. In the event that any action is filed in relation to this
Agreement or to the employment relationship between the
parties, the prevailing party is entitled to recover all
costs and expenses, including reasonable attorneys' fees and
expert witness fees, from the other party.
h. This Agreement shall be construed under and governed by the
state law in which Perl resides, Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
Xxxxx X. Perl
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__________________________________________________
Date: ___________________________________________
"Company"
XxxxxxxXxxxxxxx.xxx
By: ___________________________________________
Printed or Typed Name:____________________________
Date: ___________________________________________
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