EXHIBIT 10.4
THIS SEVERANCE AGREEMENT (hereinafter the "Severance Agreement") made
this 23rd day of December, 2004, by and between XXXXXX XXXXXX, an individual
with an address of 000 Xxxxxxxxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx 00000
(hereinafter "Xxxxxx") and EASYLINK SERVICES CORPORATION, a Delaware corporation
with its principal place of business at 00 Xxxxxxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx
Xxxxxx 00000 (hereinafter the "Corporation"). Xxxxxx and the Corporation are
each a "Party" and together the "Parties."
WHEREAS, Xxxxxx is Chairman of the Board of Directors of the
Corporation; and
WHEREAS, Xxxxxx has resigned as Chairman and Director of the
Corporation this even date herewith; and
WHEREAS, the Parties wish to ensure that Xxxxxx'x resignation does not
disrupt the operations of the Corporation;
NOW THEREFORE, the Parties agree as follows:
1. Severance Payments
Provided that Xxxxxx has not revoked his acceptance of this Agreement
in accordance with Paragraph 16 hereof, the Corporation will pay severance to
Xxxxxx in the amount of two hundred fifty thousand dollars ($250,000.00) payable
over a period of two (2) years (the "Severance Period") in accordance with the
Corporation's standard payroll procedures. Severance payments will be subject to
normal payroll taxes and deductions and will commence within two (2) weeks of
the expiration of the revocation period set forth in Paragraph 16.
2. Health Insurance
x. Xxxxxx shall continue to participate in the Corporation's group health
plan for a period of six (6) months. During such period, each of the
Corporation and Xxxxxx shall continue to pay its or his monthly
premium for Xxxxxx'x continued participation in the group health plan
in accordance with the usual policy of the Corporation. During the
initial six (6) month period, any increase to the Corporation's
premium shall be borne by the Corporation and any increase to Xxxxxx'x
premium shall be borne by Xxxxxx.
b. Following the initial six (6) months, Xxxxxx shall elect continuation
coverage under the Consolidated Omnibus Budget Reconciliation Act of
1985 ("COBRA") for the standard COBRA period of eighteen (18) months.
The Corporation shall pay Xxxxxx'x monthly COBRA premiums during such
period up to the dollar amount paid by the Corporation at the
conclusion of the initial six (6) month period and Xxxxxx shall pay
all amounts in excess thereof.
c. If, at any time during the Severance Period, Xxxxxx would prefer to
obtain private health insurance in lieu of participation in the
Corporation's group health plan, the Corporation shall pay for the
premiums for such private health insurance during the balance of the
Severance Period, provided however that the Corporation shall not pay,
in monthly premiums to the private insurer, an amount in excess of the
monthly premium which the Corporation would otherwise be paying under
subparagraph a. or b., above.
3. Options
The vesting of options shall terminate upon the execution of this
Severance Agreement.
4. Life Insurance
During the Severance Period, the Corporation shall continue to provide
Xxxxxx with life insurance as provided immediately prior to the execution of the
Severance Agreement, provided however that the Corporation shall not pay any
premium for such insurance in excess of the premiums paid immediately prior to
the execution of this Severance Agreement.
5. 401(k) Plan
Xxxxxx'x participation in the Corporation's 401(k) plan shall terminate
upon execution of this Severance Agreement and the Corporation shall provide
Xxxxxx with information regarding roll-over rights.
6. Unused Vacation
In accordance with the Corporation's usual practice, Xxxxxx shall be
entitled to a lump sum payment, subject to normal payrolls taxes and deductions,
as payment for all vacation which Xxxxxx has accrued, but not used, as of the
date hereof. Said payment shall be made within two (2) weeks of the expiration
of the revocation period set forth in Paragraph 16.
7. Office
Xxxxxx shall be entitled to use his office at the Corporation for a
period of four (4) months following the date of this Severance Agreement, during
which time the secretarial support services of the Corporation will continue to
be available to him.
8. Return of Property
Xxxxxx agrees to immediately return to the Corporation all company
property, records, and files belonging to the Corporation which he has in his
possession including, but not limited to, all memoranda, notes, records,
reports, plans, forecasts, spreadsheets, and other documents in any form
whatsoever (including information contained in computer memory or any computer
disks, tapes, and other media) relating to the Corporation's business, which
Xxxxxx obtained while employed by or otherwise servicing or acting on behalf of
the Corporation. Xxxxxx further agrees to take all necessary actions, if
required by and at the cost of the Corporation, to vest such property rights in
the Corporation. Xxxxxx may retain the Corporation's laptop computer once all
Corporation information has been removed.
9. Confidentiality
Xxxxxx agrees to maintain the confidentiality of all information
relating to the Corporation, including, but not limited to, the business,
finances, customers, trade practices, trade secrets, developments, methods and
know-how of the Corporation and agree not to disclose any such confidential
information to anyone, or to make any use of any such confidential information,
on his own behalf or on behalf of any third party, without the Corporation's
prior written consent.
10. Nondisparagement
The Corporation and Xxxxxx each agree that neither will make, nor cause
to be made, any statements, observations or opinions, or communicate any
information (whether oral or written) that disparages or is likely in any way to
harm the reputation of the other.
11. Remedies
a. In the event the Corporation breaches this Severance Agreement,
Xxxxxx may only institute an action for specific enforcement of the
terms of this Agreement and seek damages resulting from that breach.
Xxxxxx may not institute before any local or state administrative
agency, or before any court, any proceeding based on any claims related
to his employment with the Corporation or the termination of his
employment with the Corporation as released herein. The prevailing
party in any action to enforce this Severance Agreement will be
entitled to an award of attorneys' fees and costs in addition to any
other legal or equitable relief.
x. Xxxxxx agrees that any unauthorized disclosure to third parties of
any such confidential information would cause irreparable damage to the
trade secret status of such information, if applicable, and to the
Corporation, and that, since the Corporation would have no adequate
remedy at law, in the event such a disclosure or threatened disclosure
is proven, the Corporation will be entitled to an injunction,
prohibiting Xxxxxx from any such disclosure or attempted disclosure.
12. Release
In consideration of the terms and conditions of this letter, which
constitute good and valuable consideration, Gorman
a. Agrees that he is hereby acting of his own free will, voluntarily
and on behalf of himself, his heirs, administrators, executors,
successors and assigns, and
b. Understands and agrees that this Severance Agreement is legally
binding and that by signing it, he is giving up certain rights; and
c. Releases the Corporation and its subsidiaries, parent, and
affiliates, together with each of those entities' directors, officers,
employees, shareholders, fiduciaries, administrators, and agents, and
each of them (collectively the "Released Parties"), from any and all
debts, obligations, claims, demands, judgments, or causes of action of
any kind whatsoever, in tort, contract, by statute, or on any other
basis, for compensatory, punitive, or other damages, expenses,
reimbursements, or costs of any kind, including but not limited to any
and all claims, demands, rights, and/or causes of action arising out of
his employment, or the termination of his employment, with the
Corporation or relating to purported employment discrimination or
violations of civil rights, such as, but not limited to, those arising
under Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Civil Rights Acts of 1866 and/or 1871, the Age
Discrimination in Employment Act of 1967, the Older Workers Benefit
Protection Act of 1990, the Americans with Disabilities Act of 1990,
the Family and Medical Leave Act of 1993, the Fair Labor Standards Act,
the National Labor Relations Act, the Worker Adjustment and Retraining
Notification Act, Executive Order 11246, the Equal Pay Act of 1963, the
Rehabilitation Act of 1973 (including Section 504 thereof), the
Employee Retirement Income Security Act of 1974, the New Jersey Law
Against Discrimination, N.J.S.A. 10:5-1 et. seq., (all as they may have
been amended) or any other applicable federal, state, or local
employment discrimination statute or ordinance or any other claim,
whether statutory or based on common law, arising by reason of Xxxxxx'x
employment, or the termination of his employment, with the Corporation,
or relating in any way to his employment relationship with the
Corporation or any of the other Released Parties, or by reason of any
other matter, cause, or thing whatsoever, from the first date of
Xxxxxx'x employment to the date of this Severance Agreement. This
release specifically includes, but is not limited to, any claims based
upon the right to the payment of wages, bonuses, vacation, pension
benefits, stock benefits or any other employee benefits, or any other
rights arising under federal, state or local laws prohibiting
discrimination and/or harassment on the basis of age, race, color,
religion, creed, sex, affectional or sexual orientation, national
origin, ancestry, nationality, mental or physical disability, alienage
or citizenship status, marital status, familial status, liability for
service in the Armed Forces of the United States, atypical hereditary
cellular or blood trait or any other genetic information, AIDS and HIV
infection, harassment or any other basis prohibited by law, and
d. Represents that he has not filed against the Corporation or any of
the other Released Parties, any complaints, charges or lawsuits with
any governmental agency or any court prior to the date hereof.
13. Review Period
Xxxxxx shall have twenty-one (21) days from the date this Severance
Agreement is delivered to him to consider the terms detailed herein. By
executing this Severance Agreement, Xxxxxx acknowledges that he has been given
this twenty-one (21) day period within which to consider this Severance
Agreement.
14. Consideration
Xxxxxx hereby acknowledges that the consideration he is receiving
hereunder and under that certain Domain Portfolio Purchase Agreement executed
this even date herewith is greater than he would otherwise have received had he
not signed this Severance Agreement and that the consideration thus received is
given in exchange for all of the provisions hereof.
15. Attorney Consultation
Xxxxxx has been advised by the Corporation to consult with an attorney
before signing this letter, and this Paragraph 15 constitutes such advice in
writing. By executing this Severance Agreement, Xxxxxx acknowledges that he has
been advised by an attorney or has knowingly waived his right to be so advised.
16. Revocation Period
For a period of seven (7) days following his execution of this
Severance Agreement, Xxxxxx may revoke this letter by written notification to
the Corporation. The terms of this Severance Agreement shall not become
effective or enforceable until the seven (7) day revocation period has expired.
17. No Admission of Liability
Xxxxxx acknowledges that payment by the Corporation of the severance
payments described herein is not an admission of any liability whatsoever on the
part of Corporation in connection with Xxxxxx'x employment by the Corporation
and/or the termination of said employment.
18. Cooperation During Transition Period
Xxxxxx will fully cooperate with the Corporation following the date of
this Severance Agreement in order to assist the Corporation with the transition
of his duties from time to time. Such cooperation shall include, but not be
limited to, answering questions regarding the Corporation's business, customer
relationships, and items of a similar nature.
19. Non-Disclosure
Xxxxxx agrees that the amounts paid to him, as well as the terms and
conditions set forth in this Severance Agreement, will be kept confidential by
him, and that he will not reveal the terms and conditions set forth in Severance
Agreement except in response to a valid subpoena or other legal process, or to
his professional advisors and immediate family members, provided that they are
made aware of this Non-Disclosure provision and agree to abide by it. Xxxxxx
acknowledges that the terms and conditions of this Severance Agreement may be
disclosed by the Corporation in accordance with the requirements of applicable
law.
20. Entire Agreement
This Severance Agreement constitutes the entire agreement between
Xxxxxx and the Corporation concerning the subject matter herein and may not be
altered or modified except in writing signed by both parties. In the event of
any conflict between the terms of this Severance Agreement and the terms of
Xxxxxx'x employment agreement, the Corporation's stock option plan[s], or any of
Xxxxxx'x stock option grant agreements, the terms of this Severance Agreement
will govern. This Severance Agreement will be governed by the laws of the state
of New Jersey without reference to its choice of law rules.
IN WITNESS WHEREOF, Xxxxxx and the Corporation have hereunto set their
hands and seals on the date first written above.
ATTEST EASYLINK SERVICES CORPORATION
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxx
----------------------------- -----------------------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxxxx Xxxxxxxx
Title: EVP, GC and Secretary Title: President & Chief Executive Officer
WITNESS ACCEPTED AND AGREED
/s/ Xxxxxxxx Xxxx /s/ Xxxxxx Xxxxxx
----------------------------- -----------------------------------------
Name: Xxxxxxxx Xxxx Xxxxxx Xxxxxx
Date: December 23, 2004 Date: December 23, 2004
