EXHIBIT 10.11
SETTLEMENT AGREEMENT
Agreement, made this 24th day of August, 2000, between SPATIALIGHT,
INC., a New York Corporation (the "Company") and XXXXXXX X. XXXXXX ("Xxxxxx")
PREAMBLE
WHEREAS, Xxxxxx'x employment as Chief Executive Officer ("CEO"),
Secretary and Treasurer (collectively, the "Corporate Offices") of the Company
ended in June 2000;
WHEREAS, Xxxxxx desires to continue to serve as a member of the Board
of Directors (the "Board") of the Company until the date hereinafter set forth;
WHEREAS, Xxxxxx and the Company desire to reach agreement and effect a
complete and binding settlement of all outstanding rights and obligations of the
parties with respect to each other;
NOW, THEREFORE, in consideration of the foregoing, and for all good and
valuable considerations hereinafter set forth, the parties hereto agree as
follows:
1. End of Employment Term. Xxxxxx and the Company hereby confirm that
Xxxxxx'x employment as CEO, Secretary and Treasurer of the Company ended
effective as of June 21, 2000 (the "End of Employment Date"). The end of
Xxxxxx'x employment shall be equally effective and binding with respect to any
corporate offices of the Company's subsidiary, SpatiaLight of California, Inc.
("SpatiaLight California") and/or any other subsidiaries of the Company occupied
by Burney as of the End of Employment Date.
2. Resignation from Board. Xxxxxx will remain a member of the Board
through the close of business on December 31, 2000, it being understood that
Xxxxxx may tender his resignation as a member of the Board upon any such earlier
date as he, in his discretion, deems appropriate. In furtherance of the
foregoing, upon the execution of this Agreement, Xxxxxx shall deliver to the
Board his resignation as a member of the Board, effective December 31, 2000.
3. Employment Agreement Superseded. In order to effect the full
settlement of the mutual obligations and rights of the parties which are the
subject of this Agreement, the parties hereby agree that, except with respect to
specific provisions of the Employment Agreement between Xxxxxx and the Company,
dated as of December 31, 1999 (the "Employment Agreement") referred to herein,
all of the provisions of the Employment Agreement are hereby canceled in their
entirety and superseded by the provisions of this Agreement and shall be of no
further force or effect. The compensation, benefits and agreements to or with
respect to Xxxxxx set forth in the following provisions of this Agreement, shall
be in lieu of, and in full substitution for, those provided in the Employment
Agreement.
4. Compensation and Benefits to Xxxxxx. Xxxxxx shall be entitled to
receive the following compensation and benefits from the Company:
(a) Xxxxxx shall receive and shall be paid nine months' salary by the
Company, commencing on the End of Employment Date through March
21, 2001 (the "Severance Pay Period") at the current annual rate
received by Xxxxxx, which shall be paid in such periodic
installments as the Company has heretofore paid to Xxxxxx. The
Company shall deduct from such salary installment payments all
required federal, state and local withholding and other charges.
(b) Xxxxxx shall be paid for eighteen (18) days of previously unpaid
but accrued vacation pay.
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(c) Xxxxxx shall be reimbursed for outstanding out-of-pocket
expenses, if any, incurred by Xxxxxx on behalf of the Company,
subject to the submission by Xxxxxx of reasonably itemized
statements therefor.
(d) Life Insurance. The Company will pay 75% of the first annual
premium on an insurance policy on the life of Xxxxxx in the
amount of $660,000.00 due and payable during the Severance Pay
Period, subject to Xxxxxx assuming the obligations to continue to
pay premiums accruing on such life insurance after the expiration
of the Severance Pay Period, and provided that the Company shall
be relieved of and released from any further liability or
obligations under that policy as of the end of the Severance Pay
Period. A check for 75% of the applicable premium will be
delivered to Xxxxxx with the execution of this Agreement.
(e) Other Benefits. The Company agrees to continue and provide and
pay for applicable premiums for medical, dental and vision
insurance for Xxxxxx for the Severance Pay Period. Upon the
expiration of the Severance Pay Period, Xxxxxx may elect to
continue to participate in the Company's medical, dental, and
vision plan (or any successor plans thereto), at Xxxxxx'x
expense, for the additional period required under Federal law.
(f) The Company will continue to defend and indemnify Xxxxxx in the
Xxxxxx matter, subject to the condition that Xxxxxx continues to
cooperate with the Company and its counsel in the defense or
other legal actions pertaining to the Xxxxxx matter.
5. Stock Options.
(a) Options Granted Under 1993 Stock Option Plan. The Company
confirms and agrees that Xxxxxx is fully vested in the right to
purchase a total of 507,500 shares of the Common Stock of
SpatiaLight; 500,000 of which have an exercise price of $0.75 per
share, and 7, 500 which have an exercise price of $0.25 per
share. Xxxxxx shall have the right to a "cashless exercise"
(simultaneous exercise and sale of the option and stock) for all
of these options through March 21, 2001.
(b) Options under 1999 Stock Option Plan. In addition, on December
31, 1999, Xxxxxx was granted additional options to purchase
500,000 shares of Common Stock of the Company (the "1999
Options"). By executing this Agreement, Xxxxxx hereby
relinquishes and surrenders to the Company all the 1999 Options
and any and all exercise and other rights arising under the 1999
Options in return for the Company's agreement to make a cash
payment to Xxxxxx in an amount equal to the difference between
the 1999 Options' exercise price of $5.75 per share and the price
at which an "Ownership Change Event" (as defined in the
Employment Agreement) occurs, such cash payment, if required to
be made by the Company to Xxxxxx simultaneously upon the
effective date of the Ownership Change Event as long as the
Ownership Change Event is consummated within the nine (9) month
period ending March 21, 2001.
6. Confidential and Proprietary Information. Xxxxxx shall continue to
comply in all respects with the Company's "Proprietary Information and
Assignment of Inventions Agreement" and shall also retain in confidence all
proprietary information and data concerning the Company's sources of supply,
customers, secret processes and inventions, with respect to which Xxxxxx has
become apprised in his capacity as an officer and director of the Company
throughout the period called for by the Company's Proprietary Information and
Assignment Agreement.
7. Reciprocal General Releases. In consideration of the agreements of
the parties herein and of the mutual general releases set forth below, and for
other good and valuable consideration, the receipt of which is hereby
acknowledged by each party hereto, the parties covenant, agree and generally
release as follows:
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(a) Except with respect to the continuing rights or obligations that
the Company has to Xxxxxx and Xxxxxx has to the Company under
this Agreement, each party hereto releases and forever discharges
each other party hereto from any and all claims, demands or
causes of action heretofore or hereafter arising out of,
connected with or incidental to the relationships between the
parties prior to the date hereof, including, without limitation
on the generality of the foregoing, any and all claims, demands
and causes of action which either party might otherwise have the
right to assert against the other.
(b) Each party to this Agreement hereby unconditionally, irrevocably
and specifically waives the benefit of the provisions of Section
1542 of the Civil Code of the State of California, which provides
as follows:
"A general release does not extend to claims which the
creditor does no know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
(c) The general release herein extended by Burney to and in favor of
the Company shall include, and be deemed to include the Company,
SpatiaLight California, any other subsidiaries and affiliates of
the Company, and any an all of the Company's officers, directors,
employees, agents and representatives and their respective
affiliates.
8. Representations and Warranties. To induce Xxxxxx and the Company,
respectively, to execute and deliver this Agreement, Xxxxxx and the Company each
represents and warrants to and agrees that:
(a) The Company and Xxxxxx have each received independent legal
counsel from their respective attorneys with respect to the
advisability of making the settlement provided for herein, with
respect to the advisability of executing this Agreement, and with
respect to the meaning of California Civil Code Section 1542.
(b) The Company and Burney acknowledge that each is not relying, and
has not relied, on any promise, representation or statement made
by or on behalf of the other that is not set forth in this
Agreement.
(c) Each party has not heretofore assigned, transferred or granted,
or purported to assign, transfer or granted, any of the claims,
demands, and causes of action disposed of by this Agreement.
(d) This Agreement is, and is to be, final and binding between the
parties hereto and it is the intention of each of the parties to
fully, finally and forever settle and release all such matters,
and all claims, relative thereto, which do now exist, may exist,
or hereto have existed between them. In furtherance of such
intention, and subject to the performance of their respective
obligations under this Agreement, the releases given herein shall
be and remain in effect as full and complete mutual releases of
all such matters, notwithstanding the discovery or existence of
any additional or different claims or facts relative thereto.
(e) The parties shall execute all such further and additional
documents as shall be reasonable, convenient, necessary or
desirable to implement the provisions of this Agreement.
9. Governing Documents. In the event of any inconsistencies between the
provisions of this Settlement Agreement and the provisions of the Employment
Agreement or any other prior oral or written agreement or understanding between
Xxxxxx and the Company and/or any of its subsidiaries or affiliates, the
provisions of this Agreement shall govern and be deemed controlling.
10. Non-Disclosure. The Company and Xxxxxx both agree not to directly
or indirectly disclose the terms of this agreement to anyone other than
immediate family, counsel, employees and anyone else on
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a "need to know basis," except as such disclosure may be required for accounting
or tax reporting purposes or otherwise may be required by law, including Federal
and state securities laws and regulations.
11. Modification.
(a) This Agreement may only be rescinded, modified or amended by a
supplemental written instrument executed by Xxxxxx and by the
Company.
(b) This Agreement has been executed and delivered in, shall be
construed and interpreted in accordance with, and shall be
governed by the laws of the State of California applicable to
agreements to be performed within the State of California.
(c) This Agreement shall be binding upon Burney and his heirs,
executors, administrators, personal representatives, successors
and assigns and the Company and its successors and assigns.
(d) This Agreement may be executed in one or more counterparts, all
of which taken together shall constitute one and the same
Agreement, provided that neither party hereto shall be bound by
this Agreement unless each of the parties hereto has executed and
delivered the original or a counterpart thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first written above.
SPATIALIGHT, INC.
\s\ XXXXXXX X. XXXXXX By: \s\XXXXXX X. XXXXX
---------------------------------- ----------------------------
Xxxxxxx X. Xxxxxx Xxxxxx X. Xxxxx
By: \s\ XXXXXXXX X. XXXXXXXX
----------------------------
Xxxxxxxx X. Xxxxxxxx
By: \s\ XXXXXX X. XXXXX
----------------------------
Xxxxxx X. Xxxxx
(Members of the Board of
Directors of SpatiaLight,
Inc.)
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