EXECUTIVE SEPARATION AND GENERAL RELEASE AGREEMENT
This Confidential Executive Separation and General Release Agreement ("Agreement
") is between Xxxx Xxxxxx ("Executive
") and Xxxxx & Xxxxxxxxxx Computer Corporation, a Utah corporation ("E&S
" or the "Company
"), as well as each and all of its parents, subsidiaries, and affiliates. Executive has been serving as Executive Vice President and Chief Financial Officer of the Company pursuant to an Employment Agreement
dated as of December 15, 2016, as amended (the "Employment Agreement
"). In consideration of the mutual promises recited in this Agreement, Executive and Company hereby agree:
1. General Terms of Termination. Executive's employment relationship with Company will terminate on [ ] (the "Separation Date"). Executive understands and acknowledges that through and including the Separation Date, that all of Company's human resources policies and practices remain in effect, and that Executive will continue to receive current base salary and will be entitled to participate in the same employee benefit and incentive compensation plans/programs as other similarly situated employees, subject to any restriction, limitation and discretionary authority specified in such plans and programs.
2. Other Compensation and Benefits. Executive understands that except as expressly provided for herein by this Agreement, all other compensation and benefit plans, policies and programs in which Executive participates in as a result of employment with Company, shall be administered pursuant to their terms, provisions and administrative practices and policies that are then in effect, as interpreted and applied by Company or the plan administrator(s) as applicable.
3. Separation Payment and Benefits. Company agrees to provide Executive with separation payment and benefits and described as follows:
(a) Separation Payment. Company will pay separation payments in the amount of [ ], which represents one hundred thirty-five percent (135%) of Executive's Base Salary as determined on the date of this Agreement. Payment of such amount shall commence immediately following the expiration of the revocation period set forth in Section 15 and shall be made [over a period of twelve (12) months][in a single lump sum].
(b) Vesting of Equity Compensation. Subject to the terms of the Company's 2014 Stock Incentive Plan (the "Equity Plan"), applicable awards and applicable law, Company will cause any outstanding, qualified option, non-qualified stock option, restricted stock unit and/or other equity awards provided pursuant to the Equity Plan to become vested to the extent not current vested. The shares associated with any vested awards (less any applicable tax withholding) will be issued or delivered to Executive in accordance with the terms of the applicable awards, the Equity Plan, and applicable law.
(c) COBRA Continuation. If Executive properly and timely elects to continue his medical, dental and vision insurance coverage (collectively, "health insurance coverage") under Company's group medical, dental and vision insurance plans (collectively, "Continuation Coverage") pursuant to the Consolidated Omnibus Budget Reconciliation Act ("COBRA"), Company shall reimburse Executive for payments made by him for such Continuation Coverage for him and his dependents who qualify for continuation coverage under COBRA for one (1) year following the Separation Date (the "COBRA Pay Period"). If Executive elects to continue COBRA coverage after the end of the COBRA Pay Period, such Continuation Coverage shall be entirely at his own expense. Notwithstanding the foregoing, if, during the COBRA Pay Period, Executive obtains insurance coverage through a new employer or Medicare, the Company shall have no further obligation to pay any portion of the premiums for Continuation Coverage under the Company's group health insurance plans.
4. General Release. In consideration of the promises, covenants and agreements contained herein, Executive, for himself and his heirs, successors, and assigns, hereby releases and forever discharges Company and its officers, shareholders, directors, employees, agents, representatives, attorneys, parent, subsidiary and affiliated companies, successors and assigns, and each of them, of and from any and all claims, losses, demands, actions, causes of action, obligations, debts and/or liabilities (the "Released Claims") relating to any matters of any kind, presently known or unknown, in law or in equity, arising out of any acts, omissions, events or facts which have occurred up to, and including the time of, the Effective Date. The Released Claims released pursuant to the foregoing paragraph include, without limitation, any claims, losses, demands, actions, causes of action, obligations, debts, and/or liabilities resulting from or arising out of Executive's employment by Company, the termination thereof, or any transaction, event, action, dispute and/or activity related thereto, as well as any claims arising under Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, the Fair Labor Standards Act, the Equal Pay Act of 1963, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employment Retirement Income Security Act, the Utah Anti-Discrimination Act, the Utah Payment of Wages Act, or any other federal, state or local statute prohibiting employment discrimination, harassment, or retaliation, or any claim for general, special, or other compensatory damages, consequential damages, punitive damages, back or front pay, fringe benefits, attorneys' fees, costs, or other damages or expenses, or any claim for injunctive relief or other equitable relief, or any claim for alleged wrongful discharge, breach of express or implied contract, breach of the covenant of good faith and fair dealing, termination in violation of public policy, negligence, negligent hiring, retention, or employment, invasion of privacy, defamation, intentional or negligent infliction of emotional distress, fraudulent representation, fraudulent omission, assault, battery, interference with contract or other economic opportunity, failure to pay wages due or other monies owed, failure to pay pension benefits, conversion, breach of duty, vicarious liability, any claim arising under any federal or state statute or local ordinance regulating the health and/or safety of the workplace, or any other tort, contract or statutory claim.
5. Exclusions from General Release. This Agreement's general release provisions exclude: claims arising after Executive signs this Agreement; claims for breach of this Agreement; any claim for coverage under E&S's Directors and Officers insurance policy or any applicable indemnification agreement or policy; and claims that cannot be waived, such as for unemployment or worker's compensation.
6. Protected Rights. Employee understands that nothing contained in this Agreement limits Employee's ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission ("Government Agencies"). Employee further understands that this Agreement does not limit Employee's ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit Employee's right to receive an award for information provided to any Government Agencies.
7. Cooperation and Assistance. Executive agrees to cooperate and assist in the investigation, prosecution or defense of any potential claims or concerns regarding Company's or any affiliates' business about which he has relevant knowledge, including: (i) by providing truthful information and testimony as reasonably requested by Company; and (ii) by providing truthful information and testimony with Government Agencies on matters pertaining to any investigation, litigation or administrative proceeding concerning Company or its affiliates. Company will reimburse Executive for reasonable time, travel and out‑of‑pocket expenses incurred in providing such cooperation and assistance after the Separation Date.
Except as provided for in Section 18 with regard to governmental reporting, Executive further agrees to inform Company of all subpoenas, correspondence, telephone calls, and requests for information, inquiries or other contacts he may receive from third parties, concerning any fact or circumstances known to him during his employment. Executive agrees to inform E&S within three (3) business days of each such contact. All notices and other communications Executive may provide Company as required to accomplish this obligation shall be in writing and shall be given by Executive in hand or by overnight delivery, with a signed receipt, shall be deemed effective as of the date delivered.
8. Indemnification. Company shall defend and indemnify Executive with respect to Executive's actions in the performance of Executive's duties arising from his employment and performance as an officer and employee through the Separation Date to the fullest extent permitted by the Company's Bylaws as in effect from time to time.
9. Non-Disparagement. Executive agrees not to criticize, make any negative comment about or otherwise disparage Company and its current officers and directors in any manner, whether orally or in writing and directly or indirectly, that when viewed objectively, appears calculated to disrupt or impair their normal, ongoing business operations, or to harm their reputation with employees, suppliers, customers, agents, shareholders or the public. Company agrees that it will instruct its executive officers and Directors, not to criticize, make any negative comment about or otherwise disparage Executive in any manner, whether orally or in writing and directly or indirectly, that when viewed objectively, appears calculated to disrupt or impair or to harm his reputation with prospective employers, employees, suppliers, customers, agents, shareholders or the public.
Executive further agrees not to provide testimony as an expert or paid witness on behalf of a party adverse to Company or its affiliates. This paragraph does not prohibit Executive from testifying pursuant to a subpoena or from accepting witness fees accompanying a subpoena, and this paragraph in no way limits Executive's right to report possible violations of law or regulation to Government Agencies; to file a charge with any governmental administrative agency or participate in any such agency investigation; nor from making other disclosures that are protected under whistleblower provisions of state or federal law or regulation.
10. Reference. Executive agrees to direct all inquiries regarding employment, including those from prospective employers to [ ].
11. Obligations Regarding Trade Secret and Company Confidential Information. Executive acknowledges that during his employment, he developed and has been exposed to trade secrets or Confidential Information (as defined in the Employment Agreement) regarding Company and its affiliates. Company considers such Confidential Information to be valuable and proprietary. Except as provided for in Section 18 with regard to governmental reporting, Executive acknowledges that he is under a continuing obligation to keep confidential, not disclose and not use any Confidential Information, except as specifically authorized by Company, pursuant to Section 8 of the Employment Agreement, which continues to be enforceable by Company according to its terms.
12. Obligations Regarding Non-Solicitation and Non-Competition. Executive acknowledges that he is obligated, during the Restricted Period (as defined in the Employment Agreement), not to directly or indirectly solicit, contact, attempt to contact or meet with the Company's current, former or prospective customers as more fully described in Section 10 of the Employment Agreement, which continues to be enforceable by Company according to its terms. Executive further acknowledges that he is obligated, during the Restricted Period not to engage in any Restricted Business (as defined in the Employment Agreement) in the Restricted Territory (as defined in the Employment Agreement) as more fully described in Section 10 of the Employment Agreement, which continues to be enforceable by Company according to its terms.
13. Breach by Executive. In the event of a breach by Executive of any of the provisions of this Agreement, including without limitation the duty to cooperate, confidentiality, non-solicitation, non-competition or non-disparagement provisions of this Agreement, Company's obligation to make any payment under this Agreement will immediately cease. Executive acknowledges that irreparable harm would result from any breach by Executive of the provisions of this Agreement, and that monetary damages alone would not provide adequate relief for any such breach. Accordingly, if Executive breaches or threatens to breach this Agreement, Executive consents to injunctive relief in favor of Company without the necessity of Company posting a bond.
14. Advice to Consult Legal Counsel. Since this Agreement includes a waiver of rights, including those rights falling under the Age Discrimination in Employment Act, Executive has been advised to consult an attorney before signing this Agreement.
15. Period to Consider Agreement. Executive agrees that he has at least twenty‑one (21) days from the day that he has been given this Agreement, not counting the day upon which he received it, to consider whether to sign the Agreement. If he signs the Agreement before the end of the 21‑day period, he agrees that he will have done so knowingly and voluntarily, without undue influence, duress or any type of pressure by Company.
16. Right to Revoke Agreement. Executive may rescind this Agreement at any time within seven (7) days after signing it, not counting the day upon which he signs it. This Agreement will not become effective or enforceable unless and until the 7‑day rescission period has expired without Executive rescinding it.
17. Procedure for Accepting or Rescinding the Agreement. To accept the terms of this Agreement, Executive agrees that he must deliver the Agreement, after having signed and dated it, to Company by hand or mail. If he decides to rescind the acceptance, the Executive must deliver to Company by hand or by mail a written, signed statement to announce that acceptance of this Agreement is rescinded. This statement must be delivered to Company within the 7‑day rescission period. Executive understands that all deliveries of acceptance or rescission to Company must be made to [ ].
18. Executive Acknowledgments. By signing this Separation Agreement, Executive agrees that: he has been advised to consult with legal counsel concerning the terms of this Agreement prior to signing it; that he is entering into this Separation Agreement knowingly and voluntarily; that he has been paid for all time worked; and that he has paid for all unused accrued paid vacation leave in accordance with Company's vacation leave policy. Executive also acknowledges and agrees to cooperate in the return of all property belonging to Company, including but not limited to identification badge, keys, key cards, files (in whatever form – including electronic files), records, computer access codes, computer passwords, computer hardware, computer programs, instruction manuals, business plans, as well as other documents prepared or received and other property used in connection with his employment.
19. Confidentiality. The parties mutually agree to keep the existence and terms of this Agreement, and the discussions between them regarding this Agreement, confidential and agree that neither the existence, the terms, nor the discussions with regarding this Agreement shall be disclosed or communicated in any manner except (i) as required by legal proceedings to secure compliance with or enforcement of the terms of this Agreement; (ii) in response to any proper subpoena, court order, or lawful discovery request in litigation; (iii) to Employee's spouse, domestic partner, or financial/legal advisors, all of whom shall agree to keep such information confidential; or (iv) as required by law. This provision also does not prohibit or restrict Executive (or his attorney) from responding to any inquiry about this Agreement or its underlying facts and circumstances by the Securities and Exchange Commission ("SEC") or any other Government Agencies, nor does this confidentiality obligation require Executive to notify Company regarding any such reporting, disclosure or cooperation with SEC or any other entity or agency of the government.
20. Non-Admissions. The fact and terms of this Separation Agreement are not an admission by Company or by the Executive of liability or other wrongdoing under any law.
21. Internal Revenue Code Section 409A. The Parties agree that the separation payment made pursuant to this Agreement does not constitute deferred compensation for purposes of Section 409A of the Internal Revenue Code of 1986 and its accompanying regulations ("Section 409A"). Specifically, the separation payment described in this Agreement will be made in a manner that will cause it to be a short-term deferral as described in Treas. Reg. § 1.409A-1(b)(4). This Agreement shall be implemented and construed in a manner to give effect to the foregoing. In no event whatsoever shall Company or any of its affiliates be liable for any tax, interest or penalties that may be imposed on Executive pursuant to Section 409A. Neither Company nor any of its affiliates have any obligation to indemnify or otherwise hold Executive harmless from any such taxes, interest or penalties, or liability for any damages related thereto.
22. Entire Agreement and Enforceability. The Parties agree that this Agreement is the entire Agreement between them regarding the termination of their employment relationship, and that if any part of this Agreement is found to be invalid, the rest of the Agreement will be enforceable between them. Any changes to this Agreement after it was first presented to Executive, whether material or immaterial, do not restart the decision period described in the Section entitled "Period to Consider Agreement." Further, both parties agree that this Agreement shall be interpreted and enforced in accordance with the laws of the State of Utah. Notwithstanding any other provision of this Separation Agreement, it is expressly understood and agreed by the parties that Section 16 of the Employment Agreement shall remain in full force and effect.
XXXXX & XXXXXXXXXX COMPUTER CORPORATION