EXHIBIT 10.4
June 20, 2001
Xx. Xxxxx X. Xxxxxx
00 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xxxxx:
This letter agreement (the "Agreement") confirms the agreement that we
have reached regarding your resignation from your employment and all offices you
hold with FairMarket Inc. (the "Company") and its related and affiliated
entities.
This Agreement details the offer and, if signed, will confirm the
agreement that we have reached regarding your separation from employment with
the Company. The purpose of this Agreement is to establish an amicable
arrangement for ending your employment relationship, to release the Company from
any claims that you may have against it or any related individuals, and to
permit you to receive your separation pay and related benefits.
If you agree to this Agreement, you acknowledge that you are entering
into the Agreement voluntarily. It is customary in employment separation
agreements that provide for severance pay for the departing employee to release
the employer from any possible claim, even if the employer believes, as is the
case here, that no such claims exist. You understand that you are giving up your
right to bring any and all possible legal claims against the Company. Neither
the Company nor you want your employment relationship to end with a legal
dispute. By entering into this Agreement, you understand that the Company is not
admitting in any way that it violated any legal obligation that it owed to you.
To the contrary, the Company's willingness to enter into this Agreement
demonstrates that it is continuing to deal with you fairly and in good faith.
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 2
With those understandings and in exchange for the promises set forth
below, you and the Company agree as follows:
1. SEPARATION.
You hereby confirm your resignation from your office of Vice
President of Corporate Development of the Company as of Friday, June 22, 2001
(the "Separation Date"). You also hereby confirm your separation from the
Company as an employee effective as of the Separation Date and your resignation
from any and all other employment and offices that you may hold with the Company
as of the Separation Date. Said resignations are hereby accepted by the Company
(your separation as an employee and your resignation from your offices shall be
referred to hereinafter as the "Separation"). The Company will pay you all base
salary and all accrued but unused vacation time through your Separation Date.
This Agreement will automatically terminate and be of no further force or effect
should you not resign from your offices of the Company on the Separation Date.
You acknowledge your ineligibility for rehire. You agree that
you will not knowingly apply for or otherwise seek or accept employment or serve
or seek to serve as a consultant or independent contractor at any time with the
Company or any of the Company's affiliated or related entities. You acknowledge
and agree that your forbearance to seek future employment as just stated is
purely contractual and in no way involuntary, discriminatory or retaliatory.
2. SEVERANCE AND BENEFITS.
x. XXXXXXXXX PAYMENTS. Beginning on the first pay period
following the execution of this Agreement, the Company shall pay your base
salary to you as severance payments for six months thereafter.
b. BONUS PAYMENT. The Company shall pay you a second
quarter bonus payment as approved by the Company's Board of Directors.
c. OUTPLACEMENT SERVICE BENEFIT The Company shall engage
Drake Beam Xxxxx, Inc. for the purpose of providing outplacement services to you
to commence no later than thirty days after the Separation Date and ending six
months thereafter.
d. STOCK OPTIONS. The vesting of your existing stock
options to purchase the Company's common stock shall accelerate and become
exercisable upon the Separation Date as follows: (a) 40,625 shares of the 50,000
shares granted on March 19, 1999; (b) 75,000 shares of
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 3
the 100,000 shares granted on June 2, 1999 and (c) 15,000 shares of the 15,000
shares granted on October 18, 2000. You shall have until June 22, 2002 to
exercise these stock options.
e. BENEFITS CONTINUATION. For six (6) months from the
Separation Date, you may continue to participate in the group health and dental
insurance plans of the Company in which, and to the same extent as, you are
currently participating, with the full cost of the regular premium for such
benefit paid by the Company; PROVIDED, that nothing in this Paragraph shall be
construed to affect you or your beneficiaries' rights thereafter to receive
continuation coverage for an additional twelve-month period thereafter to the
extent authorized by and consistent with 29 U.S.C. ss.1161, ET SEQ. (commonly
known as "COBRA") and applicable group health and dental plan terms, entirely at
your own cost after your right to benefit continuation ends under this
Paragraph. Notwithstanding the foregoing, your right to such participation shall
cease if you become ineligible for continuation coverage under COBRA. You shall
promptly notify the Company if you become eligible for coverage under other
group health or dental insurance plans during the six (6) month period following
the Separation Date.
f. OTHER BENEFITS OR COMPENSATION. Except as expressly
provided above, your eligibility to participate in any of the Company's
respective employee benefit plans and programs ceases on or after the Separation
Date in accordance with the terms and conditions of each of those benefit plans
and programs, and your rights to accrued benefits, if any, under any such
employee benefit plans and programs as of the Separation Date are governed by
the terms and conditions of each of those employee benefit plans and programs
which are incorporated herein by reference. You acknowledge that you received
your base salary and all other compensation due to you through the Separation
Date.
3. GENERAL RELEASE OF CLAIMS.
(a) GENERAL RELEASE OF CLAIMS BY YOU. In consideration of
the compensation and benefits provided in Paragraph 2 above, you voluntarily and
irrevocably release and discharge the Company, its related or affiliated
entities, and its respective predecessors, successors, and assigns, and the
current and former officers, directors, shareholders, employees, and agents of
each of the foregoing (any and all of which are referred to as "Releasees")
generally from all charges, complaints, claims, promises, agreements, causes of
action, damages, and debts, known or unknown ("Claims") of any name and nature,
including, without limitation, those that relate in any manner to your
employment with or termination of employment from the Company, which you have,
claim to have, ever had, or ever claimed to have had against any of the
Releasees through the date on which you execute this Agreement. This general
release of Claims includes, without implication of limitation, a release of all
Claims for or related to: your employment, the compensation provided to you by
the Company; your resignations as described in Paragraph 1; wrongful or
constructive discharge; breach of contract; breach of any implied covenant of
good faith and fair dealing; tortious interference with advantageous relations;
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 4
intentional or negligent misrepresentation, fraud or deceit; infliction of
emotional distress, and unlawful discrimination under the common law or any
statute (including, without implication of limitation, the Employee Retirement
Income Security Act, Title VII of the Civil Rights Act of 1964, the Americans
with Disabilities Act, the Age Discrimination in Employment Act or Mass. G.L.
c.151B). You also waive any Claim for reinstatement, severance (except as
expressly provided in this Agreement), incentive or retention pay, attorney's
fees, or costs, relating to the above waived Claims; PROVIDED, however, that
nothing in this general release shall be construed to bar or limit your on-going
rights, if any, to indemnification subject to and in accordance with the terms
of the Amended and Restated By-Laws of the Company or as otherwise might exist
under applicable law, or to enforce your rights under this Agreement.
(b) GENERAL RELEASE OF CLAIMS BY THE COMPANY. The Company
hereby irrevocably and unconditionally releases, acquits and forever discharges
you from any and all Claims of any name and nature that the Company now has,
owns, or holds or claims to have, own, or hold or that the Company at any time
had, owned, or held, or claimed to have had, owned, or held against you. This
general release of Claims includes, without implication of limitation, a release
of all Claims related to your performance of your responsibilities as an
employee of the Company. Notwithstanding the foregoing, the Company does not
release you from any civil Claims based on conduct that would constitute a
criminal offense; PROVIDED, however, that I represent that I have no knowledge
of any basis for the Company to assert any such Claim against you. This general
release of Claims shall not be construed to affect the Company's right to
enforce this Agreement.
4. RETURN OF PROPERTY.
All documents, records, material and all copies of any of the
foregoing pertaining to Confidential Information, and all software, equipment,
and other supplies, whether or not pertaining to confidential information, that
have come into your possession or been produced by you in connection with your
employment ("Property") have been and remain the sole property of the Company.
You hereby confirm that you have returned all Property to the Company.
5. NONDISPARAGEMENT.
You agree not to take any action or make any statement,
written or oral, which disparages the Company, its respective officers, or
management and business practices, or which disrupts or impairs the Company's
normal operations. The Company shall instruct its respective directors and
officers who receive a copy of this Agreement not to take any action or make any
statement, written or oral, which disparages or criticizes you or your
management and business practices. The provisions of this Paragraph 5 shall not
apply to any truthful statement required to be made by you or the Company, as
the case may be, in any legal proceeding, required filing under the securities
laws, or pursuant to any governmental or regulatory investigation.
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 5
6. LITIGATION AND REGULATORY COOPERATION.
During and after your employment, you shall cooperate fully
with the Company and its affiliates in the defense or prosecution of any claims
or actions now in existence or which may be brought in the future against or on
behalf of the Company or any of its affiliates which relate to events or
occurrences that transpired while you were employed by the Company. Your full
cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for discovery or
trial, to act as a witness on behalf of the Company, and if called to testify,
to testify truthfully and in good faith about events that happened during your
employment. During and after your employment, you also shall cooperate fully
with the Company in connection with any investigation or review of any federal,
state or local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while you were employed by the Company.
The Company shall make reasonable efforts to schedule any cooperation required
pursuant to this Paragraph 6 at such times that will not unreasonably interfere
with your search for other employment or performance of other employment
services. The Company shall (a) reimburse you for reasonable expenses incurred
by you in connection with your performance of obligations pursuant to this
Paragraph 6 based on the standards and procedures applicable to expense
reimbursement for the Company's employees and (b) compensate you for any
required cooperation pursuant to this Paragraph 6 by paying you for your time at
an hourly rate of 125% of your final annual base salary rate when last employed
by the Company divided by 2,080, provided that the Company shall not be
obligated to pay for any of your time spent testifying or that otherwise could
have been required to be expended pursuant to a subpoena.
7. ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS.
As a material inducement to the Company to enter into this
Agreement, you represent, warrant and covenant that: (a) you have not assigned
to any third party any claim released by this Agreement; and (b) you have not
heretofore filed with any agency or court any claim released by this Agreement.
8. FURTHER ASSURANCES.
Upon the terms and subject to the conditions herein provided,
each of the signatories hereto agrees to use its reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
9. EXCLUSIVITY.
This Agreement sets forth all the consideration to which you
are entitled by reason of the Separation, and you shall not be entitled to or
eligible for any payments or benefits under
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 6
any other severance, equity, bonus, retention or incentive policy, arrangement
or plan of the Company.
10. TAX MATTERS.
The Company shall undertake to make deductions, withholdings
and tax reports with respect to payments and benefits under this Agreement to
the extent that it reasonably and in good faith believes that it is required to
make such deductions, withholdings and tax reports. Payments under this
Agreement shall be in amounts net of any such deductions or withholdings.
Nothing in this Agreement shall be construed to require the Company to make any
payments to compensate you for any adverse tax effect associated with any
payments or benefits or for any deduction or withholding from any payment or
benefit.
11. CONSENT TO JURISDICTION.
To the extent that any court action is permitted consistent
with or to enforce this Agreement, the signatories hereby consent to the
jurisdiction of the state and federal courts in Massachusetts. Accordingly, with
respect to any such court action, the parties hereto (a) submit to the personal
jurisdiction of such courts; (b) consent to service of process; and (c) waive
any other requirement (whether imposed by statute, rule of court, or otherwise)
with respect to personal jurisdiction or service of process.
12. NOTICES, ACKNOWLEDGMENTS AND OTHER TERMS.
a. This Agreement is a legally binding document. Provided that
you do not revoke this Agreement in accordance with this Paragraph 12, your
signature will commit you to the terms of this Agreement. You acknowledge that
you have been advised to discuss all aspects of this Agreement with your
attorney, that you have carefully read and fully understand all of the
provisions of this Agreement and that you are voluntarily entering into this
Agreement.
b. You acknowledge and agree that the Company's promises in
this Agreement constitute consideration in addition to anything of value to
which you are otherwise entitled by reason of your separation from employment.
c. You acknowledge that you have been given the opportunity,
if you so desire, to consider this Agreement for fourteen (14) days before
executing it. If not signed by you and returned to the Chief Financial Officer
of the Company so that it is received by close of business on the fifteenth
(15th) day after your receipt of the Agreement, this Agreement will not be
valid. In addition, if you breach any of the conditions of the Agreement within
the fourteen (14) day period prior to execution of this Agreement, the offer of
this Agreement will be withdrawn and your execution of the Agreement will not be
valid. In the event that you execute and return this Agreement within fourteen
(14) days or less of the date of its delivery to you, you
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 7
acknowledge that such decision was entirely voluntary and that you had the
opportunity to consider this letter agreement for the entire fourteen (14) day
period.
d. By signing this Agreement, you acknowledge that you are
doing so voluntarily and knowingly, fully intending to be bound by this
Agreement. You also acknowledge that you are not relying on any representations
by the Company or any other representative of the Company concerning the meaning
of any aspect of this Agreement. You understand that this Agreement shall not in
any way be construed as an admission by the Company of any liability or any act
of wrongdoing whatsoever by the Company against you and that the Company
specifically disclaims any liability or wrongdoing whatsoever against you on the
part of itself and its respective officers, directors, shareholders, employees
and agents. You understand that if you do not enter into this Agreement and
bring any claims against the Company, the Company will dispute the merits of
those claims and contend that it acted lawfully and for good business reasons
with respect to you.
e. In the event of any dispute, this Agreement will be
construed as a whole, will be interpreted in accordance with its fair meaning,
and will not be construed strictly for or against either you or the Company.
f. The laws of the Commonwealth of Massachusetts will govern
any dispute about this Agreement, including any interpretation or enforcement of
this Agreement, without regard to its conflicts of laws principles.
g. In the event that any provision or portion of a provision
of this Agreement shall be determined to be illegal, invalid or unenforceable,
the remainder of this Agreement shall be enforced to the fullest extent possible
and the illegal, invalid or unenforceable provision or portion of a provision
will be amended by a court of competent jurisdiction to reflect the signatories'
intent if possible. If such amendment is not possible, the illegal, invalid or
unenforceable provision or portion of a provision will be severed from the
remainder of this Agreement and the remainder of this Agreement shall be
enforced to the fullest extent possible as if such illegal, invalid or
unenforceable provision or portion of a provision was not included.
h. This Agreement may be modified only by a written
agreement signed by an authorized representative of the Company and all of the
other parties hereto.
i. This Agreement constitutes the entire agreement between the
signatories hereof and supersedes all prior agreements between the parties.
Notwithstanding the foregoing, the parties intend that all provisions of the
Agreement Regarding Inventions, Confidentiality and Non-Competition, dated March
22, 1999, remain in full force and effect and that the parties shall retain
their rights and obligations under the FairMarket, Inc. 2000 Stock Option and
Incentive Plan and the Stock Option Certificates as modified in Paragraph 2 of
this Agreement.
j. This Agreement shall be binding upon each of the
signatories and upon their respective heirs, administrators, representatives,
executors, successors and assigns, and shall
Xx. Xxxxx X. Xxxxxx
June 20, 2001
Page 8
inure to the benefit of each party and to their heirs, administrators,
representatives, executors, successors, and assigns.
k. You will not disclose the fact or terms of this Agreement
to anyone except to your counsel, your financial advisors, and members of your
immediate family until the Company makes public disclosure of the fact and terms
of this Agreement.
l. From and after the Separation Date, the Company
acknowledges that you will no longer be subject to the Company's xxxxxxx xxxxxxx
policy. However, you will continue to be subject to xxxxxxx xxxxxxx liability if
you trade in the Company's stock while you are in the possession of material
nonpublic information concerning the Company, regardless of when the trade
occurs. Therefore, you should not trade in the Company's stock at any time that
you are in possession of material nonpublic information regarding the Company.
m. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
one and the same instrument.
[SIGNATURE PAGES FOLLOW]
If you agree to these terms, please sign and date below and return this
Agreement to the Chief Financial Officer of the Company. You are advised to
consult with an attorney before signing this Agreement.
Sincerely,
FAIRMARKET, INC.
By: /s/ Xxxxx Xxxxx
--------------------------------
Name: Xxxxx Xxxxx
Title: CFO
Accepted and agreed to:
/s/ Xxxxx X. Xxxxxx 6/22/01
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Xxxxx X. Xxxxxx Date
