EXHIBIT 10.20
Xxxxxx Xxxxxxxx
Executive Vice President, Chief Financial Officer and Treasurer
Engage, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
May 10, 2002
RE: ENGAGE, INC. -- LETTER AGREEMENT WITH XXXXXX XXXXXXXX
-----------------------------------------------------
Dear Xxx:
This letter summarizes the terms under which you will work at Engage,
Inc. ("Engage" or the "Company") in connection with the transition of your
duties to a successor, your participation in the final wind-down of the media
unit of Engage, the payment of a bonus, and the provision of a severance payment
at the conclusion of your employment with the Company. This letter replaces and
supercedes any and all prior discussions and conversations, whether written or
oral, regarding the matters discussed herein. Provided that you are not
terminated for Cause (as such term is defined in Section 5(a) hereof), you
satisfy the duties described herein, and you sign the Company's severance
documentation that the form of which is provided in the appendix to this letter
agreement, the Company will pay you the sums as described below. By signing and
returning this letter, you will be entering into a binding agreement with the
Company and will be agreeing to the terms and conditions set forth herein.
1. ON-GOING CFO RESPONSIBILITIES. You agree that you will
continue to perform your tasks and responsibilities as Executive Vice President,
Chief Financial Officer ("CFO") and Treasurer of Engage, including without
limitation the supervision of and participation in forecasting, budgeting, final
wind-down of Engage's media unit and the work you regularly perform in your
capacity as CFO and Treasurer, as well as any task reasonably required of you in
connection with any transition of your duties and responsibilities to a
successor CFO and Treasurer. You shall continue to report to and take direction
and receive assignments from the Chief Executive Officer of Engage.
2. RETENTION BONUS. In the event that your employment with the
Company continues during the period beginning on the date hereof and ending at
the close of business on (i) October 31, 2002, or (ii) thirty (30) days
following the start date of a new CFO, whichever date occurs first (the
"Retention Period"), you shall receive a cash payment in the amount of $50,000,
less applicable taxes and withholding (the "Retention Bonus"). The Retention
Bonus will be paid to you after the expiration of the Retention Period and
within 30 days of your execution and non-revocation of the release, attached
hereto as APPENDIX A (the "Release"), of any and all claims you may have against
the Company and its officers, employees, directors, parents and affiliates.
You understand and agree that the payment of the Retention Bonus called for by
this Section 2 is contingent on your execution and non-revocation of the
Release.
In the event that your employment is terminated by the Company prior to
the expiration of the Retention Period for a reason other than Cause, the
Company shall pay to you the Retention Bonus after the Termination Date (as such
term is defined in Section 5(b) hereof) and within 30 days of your execution and
non-revocation of the Release. You understand and agree that the payment of the
Retention Bonus called for by this Section 2 is contingent on your execution and
non-revocation of the Release.
Notwithstanding anything to the contrary in this Section 2, you shall
be ineligible to receive the Retention Bonus if you are terminated for Cause
prior to the expiration of the Retention Period.
Your current 401(k) contributions will continue through the Termination
Date and the employer match portion of your 401(k) account will vest in
accordance with the Company's 401(k) Summary Plan Description.
3. SEVERANCE PAYMENT. In the event that your employment is
terminated by the Company for a reason other than for Cause, either prior to or
after the expiration of the Retention Period, you shall receive, as severance
pay, a cash payment in an amount equal to (i) 8 weeks of your then current base
wages, plus (ii) one (1) week of your then current base wages for every
completed six (6) months of continuous service to the Company, less, in each
case, applicable taxes and withholding (collectively, the "Severance Payment").
You acknowledge that your start date shall be deemed to be 6/21/99 (which was
your start date with an affiliated company of Engage). The Severance Payment
will be made to you within 30 days of your execution and non-revocation of the
Release, of any and all claims you may have against the Company and its
officers, employees, directors, parents and affiliates. You understand and agree
that the payment of the Severance Payment called for by this Section 3 is
contingent on your execution and non-revocation of the Release (the execution of
such Release shall not occur prior to the Termination Date). Notwithstanding
anything to the contrary in this letter agreement, you shall be ineligible to
receive the Severance Payment if you are terminated for Cause.
4. SOLE REMEDY. The payments to you of the amounts payable under
Sections 2, 3, and 4, together with payment of up to 80 hours of accrued but
unused vacation time, if any, and reimbursement of valid business expenses,
shall constitute the sole remedy by you in the event of a termination of your
employment by the Company for a reason other than Cause, during the Retention
Period.
5. DEFINITIONS. For purposes of this letter agreement, the
following terms shall have the following meanings:
(a) "Cause" shall mean a good faith finding by the
Company of: (i) your commission of any act involving fraud,
embezzlement, theft, misrepresentation, dishonesty or moral
turpitude; (ii) your indictment for the commission of a
material
crime on the basis of alleged facts of such a serious nature
that the Company has reasonable cause to believe that you
cannot effectively discharge your duties and responsibilities,
or your indictment for the commission of a material business
related crime; (iii) any gross misconduct by you, including
material insubordination; (iv) failure by you to materially
perform the duties of your position; (v) any material breach
by you of this agreement, the Nondisclosure and Developments
Agreement between you and the Company dated September 29, 2000
and the Non-Competition Agreement between you and the Company
dated September 29, 2000; or (vi) disclosure by you to any
third party of any component of the terms of this confidential
letter agreement, except for disclosure made by you to your
legal, accounting, tax or financial advisors, to members of
your immediate family, or to any federal, state or local
governmental agency.
(b) "Termination Date" shall mean your last day on the
payroll of the Company.
6. NOT AN EMPLOYMENT CONTRACT. This letter agreement does not
constitute a guarantee of employment or contract of employment and your
employment may be terminated by you or the Company at any time and for any
reason.
7. CONFIDENTIALITY. You acknowledge that the existence and terms
of this letter agreement are confidential. You agree not to disclose the
existence or terms of this agreement to any other person, other than to your
immediate family members, legal counsel, accountants, tax return preparer,
financial planner, or to any federal, state, or local government agency, each of
which shall be informed of the confidentiality obligations imposed by this
agreement. Notwithstanding the foregoing, you may disclose the existence but not
the terms of this agreement to a prospective employer, provided that such
prospective employer shall be informed of the confidentiality obligations
imposed by this agreement.
8. AMENDMENT. This letter agreement may be amended or modified
only by a written instrument executed by both the Company and you.
9. GOVERNING LAW. This letter agreement shall be governed and
construed in accordance with the laws of the Commonwealth of Massachusetts. Any
action, suit or other legal matter arising under or relating to any provision of
this letter agreement shall be commenced only in a court of the Commonwealth of
Massachusetts (or, if appropriate, a federal court located within
Massachusetts), and the Company and the Employee each consents to the
jurisdiction of such a court. The Company and you each hereby irrevocably waive
any right to a trial by jury in any action, suit or other legal proceeding
arising under or relating to any provision of this letter agreement.
10. SUCCESSORS AND ASSIGNS. This letter agreement shall be binding
upon and inure to the benefit of both parties and their respective successors
and assigns, including any corporation with which or into which the Company may
be merged or which may succeed to its assets or business, provided, however,
that the obligations to you are personal and shall not be assigned by you.
11. WAIVERS. No delay or omission by the Company in exercising any
right under this letter agreement shall operate as a waiver of that or any other
right. A waiver or consent given by the Company on any one occasion shall be
effective only in that instance and shall not be construed as a bar or waiver of
any right on any other occasion.
12. CAPTIONS. The captions of the sections of this letter
agreement are for convenience of reference only and in no way define, limit or
affect the scope or substance of any section of this letter agreement.
13. SEVERABILITY. In case any provisions of this letter agreement
shall be invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
By signing below, you acknowledge that you have carefully read this letter
agreement and the document attached as APPENDIX A and understand and agree to
all of their terms. Please return one signed copy of this letter agreement to
me.
Sincerely,
/s/ Xxxxxxxxxxx Xxxxx
------------------------
Xxxxxxxxxxx Xxxxx
Chief Executive Officer
ACCEPTED:
/s/ Xxxxxx Xxxxxxxx May 10, 2002
-------------------------------- -----------------------
Xxxxxx Xxxxxxxx Date
Enclosures
cc: Xxxxxx Xxxxxxx, Esq. (w/ encl.)
Xxxxxx XxXxxxxx (w/ encl.)
Xxxxxx Xxxxxxx (w/ encl.)
APPENDIX A
______________, 2002
Xxxxxx Xxxxxxxx
Executive Vice President, Chief Financial Officer and Treasurer
Engage, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Dear Bob:
In connection with the termination of your employment with Engage, Inc.
("Engage" or the "Company") on ___________, 2002, and pursuant to your letter
agreement of May 10, 2002 (the "May Letter Agreement") with Engage, you are
eligible to receive the retention and severance benefits described in the
"Description of Retention and Severance Benefits" attached to this letter as
ATTACHMENT A if you sign and return this letter agreement to Xxxx Xxxxxxx,
Director of Human Resources, in the enclosed envelope by _________, 2002 (the
"Return Date") By signing and returning this letter, you will be entering into a
binding agreement with the Company and will be agreeing to the terms and
conditions set forth in the numbered sections below, including the release of
claims set forth in Section 4. Therefore, you are advised to consult with your
attorney before signing this letter and you may take up to twenty-one (21) days
from the date of this letter to do so. If you sign this letter, you may change
your mind and revoke your agreement during the seven (7) day period after you
have signed it. If you do not so revoke, this letter will become a binding
agreement between you and the Company upon the expiration of the seven (7) day
revocation period.
If you choose not to sign and return this letter agreement by the
Return Date, you shall not receive any retention bonus or severance benefits
from the Company. You will, however, receive payment on your termination for up
to 80 hours of unused vacation time, if any, accrued through the Termination
Date (as such term is defined in Section 1 herein). Also, regardless of whether
you sign this letter, you may elect to continue receiving group health insurance
pursuant to the federal "COBRA" law, 29 U.S.C. ss. 1161 ET SEQ, providing you
fulfill all enrollment and participation requirements. If you elect COBRA and
choose to sign this letter and do not revoke it within the seven (7) day
revocation period, Engage will cover the cost of the medical portion for one
additional month after your Termination Date. All premium costs thereafter shall
be paid by you on a monthly basis for as long as, and to the extent that, you
remain eligible for COBRA continuation. You should consult the COBRA materials
to be provided by the Company for details regarding these benefits. All other
benefits, including life insurance and long term disability, will cease upon
your Termination Date. Further, pursuant to the Company's stock option plan(s),
you will have up to one month after your Termination Date to exercise any vested
options to purchase Engage stock that you may have, as provided for by the
plan(s). All unvested options will be cancelled on the Termination Date.
As part of the May Letter Agreement, you are eligible to receive the
Severance Benefits and Retention Bonus, as such terms are defined and described
below.
If, after reviewing this letter agreement with your attorney, you find
the terms and conditions are satisfactory to you, you should sign and return
this letter to Xxxx Xxxxxxx in the enclosed envelope by the Return Date.
The following numbered sections set forth the terms and conditions
which will apply if you timely sign and return this letter agreement and do not
revoke it within the seven (7) day period:
1. TERMINATION DATE -- Your effective date of termination from the Company
is __________, 2002 (the "Termination Date").
2. DESCRIPTION OF SEVERANCE BENEFITS -- The severance benefits (the
"Severance Benefits") to be paid to you if you timely sign and return
this letter are described in the "Description of Retention and
Severance Benefits" section attached as ATTACHMENT A.
3. DESCRIPTION OF RETENTION BONUS -- The retention bonus (the "Retention
Bonus")to be paid to you if you timely sign and return this letter is
described in the "Description of Retention and Severance Benefits"
section attached as ATTACHMENT A.
4. RELEASE -- In consideration of the payment of the severance benefits,
which you acknowledge you would not otherwise be entitled to receive,
you hereby fully, forever, irrevocably and unconditionally release,
remise and discharge the Company, its officers, directors,
stockholders, corporate affiliates, subsidiaries, parent companies,
agents and employees (each in their individual and corporate
capacities) (hereinafter, the "Released Parties") from any and all
claims, charges, complaints, demands, actions, causes of action, suits,
rights, debts, sums of money, costs, accounts, reckonings, covenants,
contracts, agreements, promises, doings, omissions, damages,
executions, obligations, liabilities, and expenses (including
attorneys' fees and costs), of every kind and nature which you ever had
or now have against the Released Parties arising out of your employment
with and/or separation from the Company, including, but not limited to,
all employment discrimination claims under Title VII of the Civil
Rights Act of 1964, 42 U.S.C. ss. 2000e ET SEQ., the Age Discrimination
in Employment Act, 29 U.S.C. ss. 621 ET SEQ., the Americans With
Disabilities Act of 1990, 42 U.S.C., ss. 12101 ET SEQ., the Family and
Medical Leave Act, 29 U.S.C. ss. 2601 ET SEQ., and the Massachusetts
Fair Employment Practices Act., M.G.L. c.151B, ss. 1 ET SEQ., all as
amended; all claims arising out of the Fair Credit Reporting Act, 15
U.S.C. ss. 1681 ET SEQ., the Employee Retirement Income Security Act of
1974 ("ERISA"), 29 U.S.C. ss. 1001 ET SEQ., the Worker Adjustment and
Retraining Notification Act,
29 U.S.C. ss. 2101 ET SEQ., the Massachusetts Civil Rights Act, M.G.L.
c.12 ss. ss. 11H and 11I, the Massachusetts Equal Rights Act, M.G.L.
c.93, ss. 102 and M.G.L. c.214, ss. 1C, the Massachusetts Labor and
Industries Act, M.G.L. c.149, ss. 1 ET SEQ., the Massachusetts Privacy
Act, M.G.L. c. 214, ss. 1B, and the Massachusetts Maternity Leave Act,
M.G.L. c. 149, ss. 105(d), all as amended; all common law claims
including, but not limited to, actions in tort, defamation and breach
of contract; all claims to any non-vested ownership interest in the
Company, contractual or otherwise, including but not limited to claims
to stock or stock options; and any claim or damage arising out of your
employment with or separation from the Company (including a claim for
retaliation) under any common law theory or any federal, state or local
statute or ordinance not expressly referenced above; provided, however,
that nothing in this Agreement prevents you from filing, cooperating
with, or participating in any proceeding before the EEOC or a state
Fair Employment Practices Agency (except that you acknowledge that you
may not be able to recover any monetary benefits in connection with any
such claim, charge or proceeding).
5. NON-DISCLOSURE AND NON-COMPETITION AND NON-SOLICITATION -- You
acknowledge and reaffirm your obligation to keep confidential all
non-public information concerning the Company which you acquired during
the course of your employment with the Company, as stated more fully in
the Nondisclosure and Developments Agreement between you and the
Company dated September 29, 2000 you executed at the inception of your
employment which remains in full force and effect. You further
acknowledge and reaffirm your obligations under the Non-Competition
Agreement between you and the Company dated September 29, 2000 you
previously executed for the benefit of the Company at the inception of
your employment which also remains in full force and effect.
6. RETURN OF COMPANY PROPERTY -- You confirm that you have returned to the
Company all keys, files, records (and copies thereof), equipment
(including, but not limited to, computer hardware, software and
printers, wireless handheld devices, cellular phones, pagers, etc.),
Company identification, Company vehicles and any other Company-owned
property in your possession or control and have left intact all
electronic Company documents, including but not limited to those which
you developed or help develop during your employment. You further
confirm that you have cancelled all accounts for your benefit, if any,
in the Company's name, including but not limited to, credit cards,
telephone charge cards, cellular phone and/or pager accounts and
computer accounts.
7. NON-DISPARAGEMENT -- You understand and agree that as a condition for
payment to you of the consideration herein described, you shall not
make any false, disparaging or derogatory statements to any media
outlet, industry group, financial institution or current or former
employee, consultant, client or customer of the Company regarding the
Company or any of its directors, officers, employees, agents or
representatives or about the Company's business affairs and
financial condition. The Company agrees that it shall use reasonable
efforts to preclude those of its officers and employees privy to the
terms of this agreement from making any false, disparaging or
derogatory statements about you as an officer and employee of the
Company to any third party. The Company further agrees that pursuant to
its current policy, responses to direct inquiries regarding your
employment with the Company or separation from employment shall be
limited to confirmation of your name, position(s), and dates of
employment.
8. AMENDMENT -- This letter agreement shall be binding upon the parties
and may not be modified in any manner, except by an instrument in
writing of concurrent or subsequent date signed by duly authorized
representatives of the parties hereto. This letter agreement is binding
upon and shall inure to the benefit of the parties and their respective
agents, assigns, heirs, executors, successors and administrators.
9. WAIVER OF RIGHTS -- No delay or omission by the Company in exercising
any right under this letter agreement shall operate as a waiver of that
or any other right. A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
10. VALIDITY -- Should any provision of this letter agreement be declared
or be determined by any court of competent jurisdiction to be illegal
or invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby and said illegal or invalid part, term or
provision shall be deemed not to be a part of this letter agreement.
11. CONFIDENTIALITY -- You understand and agree that as a condition for
payment to you of the severance benefits herein described, the terms
and contents of this letter agreement, and the contents of the
negotiations and discussions resulting in this letter agreement, shall
be maintained as confidential by you and your agents and
representatives and shall not be disclosed except to the extent
required by federal or state law or as otherwise agreed to in writing
by the Company.
12. NATURE OF AGREEMENT -- You and the Company understand and agree that
this letter agreement is a severance agreement and does not constitute
an admission of liability or wrongdoing on the part of you, the
Company, or any other person.
13. ACKNOWLEDGMENTS -- You acknowledge that you have been paid all wages
and other compensation due and owing through the Termination Date and
that you have been paid for any and all unused vacation that has been
accrued through the Termination Date. You acknowledge and understand
that you shall not be entitled to any payments or benefits from the
Company other than those expressly set forth in this letter agreement
and its attachment.
You further acknowledge that you have been given at least twenty-one
(21) days to consider this letter agreement, including ATTACHMENT A,
and that the Company advised you to consult with an attorney of your
own choosing prior to signing this letter agreement. You understand
that you may revoke this letter agreement for a period of seven (7)
days after you sign this letter agreement, and the letter agreement
shall not be effective or enforceable until the expiration of this
seven (7) day revocation period. You understand and agree that by
entering into this letter agreement you are waiving any and all rights
or claims you might have under The Age Discrimination in Employment
Act, as amended by The Older Workers Benefit Protection Act, and that
you have received consideration beyond that to which you were
previously entitled.
15. VOLUNTARY ASSENT -- You affirm that no other promises or agreements of
any kind have been made to or with you by any person or entity
whatsoever to cause you to sign this letter agreement, and that you
fully understand the meaning and intent of this letter agreement. You
state and represent that you have had an opportunity to fully discuss
and review the terms of this letter agreement with an attorney. You
further state and represent that you have carefully read this letter
agreement, including ATTACHMENT A, understand the contents herein,
freely and voluntarily assent to all of the terms and conditions
hereof, and sign your name of your own free act.
16. APPLICABLE LAW -- This letter agreement shall be interpreted and
construed by the laws of the Commonwealth of Massachusetts, without
regard to conflict of laws provisions. You hereby irrevocably submit to
and acknowledge and recognize the jurisdiction of the courts of the
Commonwealth of Massachusetts, or if appropriate, a federal court
located in Massachusetts (which courts, for purposes of this letter
agreement, are the only courts of competent jurisdiction), over any
suit, action or other proceeding arising out of, under or in connection
with this letter agreement or the subject matter hereof.
17. ENTIRE AGREEMENT -- This letter agreement, including ATTACHMENT A, and
the May Letter Agreement and its appendix contain and constitute the
entire understanding and agreement between the parties hereto with
respect to your severance benefits and the settlement of claims against
the Company and cancels all previous oral and written negotiations,
agreements, commitments, writings in connection therewith. Nothing in
this section, however, shall modify, cancel or supersede your
obligations set forth in Section 5 herein.
If you have any questions about the matters covered in this letter,
please call your Human Resources department.
Very truly yours,
ENGAGE, INC.
By: ________________________________
Xxxx Xxxxxxx
Director, Human Resources
I hereby agree to the terms and conditions set forth above and in the
Description of Retention and Severance Benefits, attached hereto as ATTACHMENT
A. I have been given at least twenty-one (21) days to consider this agreement
and I have chosen to execute this on the date below. I intend that his letter
agreement, including ATTACHMENT A, become a binding agreement between me and the
Company if I do not revoke my acceptance in seven (7) days.
-------------------------------- ------------------------------
Xxxxxx Xxxxxxxx Date
To be returned in the enclosed envelope by the Return Date
ATTACHMENT A
DESCRIPTION OF RETENTION AND SEVERANCE BENEFITS
Provided that you return an executed copy of this letter agreement to the
Company by the Return Date and do not revoke the agreement within the seven (7)
day revocation period, you will receive the severance benefits described below:
1. SEVERANCE PAY. Engage will pay you eight (8) weeks base wages
plus one week's base wages for every completed six month
period of continuous service to Engage (equivalent to $
53,846.24), less all applicable taxes and withholdings (the
"Severance Pay"). Your start date shall be deemed to be
6/21/99, which was your start date with an affiliated company
of Engage.
2. COBRA. Engage will cover the cost of your medical insurance
for one month beyond your Termination Date, provided that you
elect insurance continuation under the terms of COBRA. You
should consult the COBRA materials to be provided by the
Company for details regarding these benefits.
3. RETENTION BONUS. The Retention Bonus to be paid to you is the
amount of $50,000, less applicable taxes and withholding.
The Severance Pay and Retention Bonus shall be paid to you within 30
days of your execution and non-revocation of this letter agreement.
