Exhibit 10.18
SEPARATION AGREEMENT BETWEEN
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ INTERACTIVE SYSTEMS, INC.
This Agreement is entered into between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the
"Executive") and ▇▇▇▇▇▇ Interactive Systems, Inc. (the "Company") effective
February 15, 1999.
WITNESSETH
WHEREAS, the Executive and the Company have mutually agreed to terminate
the Executive's employment as Vice President of Finance and an Officer of the
Company, effective May 1, 1999;
WHEREAS, the Company believes that Executive has made significant
contributions to the Company and its success during her tenure as an employee;
WHEREAS, the Company wishes to express its appreciation to Executive for
the significant contributions she has made to the Company's success during the
three years she served with the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto:
1. SEPARATION. Executive's employment relationship with the Company will
terminate on May 1, 1999 ("Separation Date").
2. CONSULTING AGREEMENT. In order to facilitate the provision of future
services by Executive to the Company, the Executive and the Company agree to
enter into a Consulting Services Agreement (the "Consulting Agreement") in the
form attached as Exhibit I.
3. SALARY CONTINUATION. If Executive has not obtained new regular, full-time
employment as of the Separation Date, Executive will receive, on a month-to-
month basis, her regular base salary, paid on the Company's regular payroll
dates, subject to standard deductions and withholdings for taxes and social
security, for a period of time not to exceed eight (8) months, ending on
December 31, 1999. Executive shall certify in writing not less than two weeks
prior to the beginning of each month following the Separation Date that she has
not obtained regular full-time employment in order to trigger the salary
continuation payment. Salary continuation payments shall cease in the month
following the date Executive has obtained regular full-time employment.
4. EXERCISE OF OPTIONS.
4.1 The Company shall extend the ability of Executive to exercise the
30,000 options vested as of the Separation Date pursuant to Option Agreement No.
950088, dated April 1, 1996, and to exercise the 2,500 options vested as of the
Separation Date pursuant to Option Agreement No. 890814, dated November 13,
1997, (the "Option Agreements"), such that Executive shall have twelve (12)
months from the Separation Date to exercise these options and purchase these
shares. Thereafter, these options will no longer be exercisable with respect to
these 30,000 shares and 2,500 shares.
4.2 If a "change of control event" occurs during the period of time that
Executive is able to exercise her vested options, Executive will be covered
fully by provisions of Paragraph 11(b) of the ▇▇▇▇▇▇ Interactive Systems, Inc.,
1994 Equity Incentive Plan and Paragraph 10(b) of the ▇▇▇▇▇▇ Interactive
Systems, Inc., 1995 NonStatutory Stock Option Plan for Non-Officer Employees.
4.3 Except as expressly provided in this Agreement (including Exhibit 1,
attached) , vesting of all options will cease at the close of business on the
Separation Date.
5. CONTINUED HEALTH BENEFITS. The Company will continue to pay Executive's
monthly health insurance premiums for her current health insurance through the
end of the last month in which Executive receives salary continuation payments,
said Company paid health insurance premiums to cease effective December 31,
1999, at the latest. Effective January 1, 2000, to the extent permitted by the
federal COBRA law and by the Company's current group health insurance policies,
Executive shall be eligible to continue her health insurance benefits at her own
expense and, later, to convert to an individual policy if she wishes.
6. BONUSES. Executive shall be eligible to receive the following bonuses, if
such are paid to the executive management of ▇▇▇▇▇▇:
a) The Quarter 2, 1999, bonus, for the period of service from April 1,
1999, through May 1, 1999.
7. NO ADDITIONAL COMPENSATION. Executive acknowledges and agrees that after
the Separation Date she will not be entitled to or receive any compensation,
bonuses, stock, stock options or other benefits as a consequence of her
Employment, except as expressly set forth in this agreement and the Consulting
Agreement.
8. TAX CONSEQUENCES. Executive acknowledges that she has been advised by the
Company to consult with a tax advisor or attorney with respect to the tax
consequences, if any, of these amendments to her stock options grants.
9. LIMITATION ON ACTIVITIES (NON-COMPETE). In consideration for the benefits
provided in Paragraphs 2 and 3, above, Executive agrees that, for the twelve
month period beginning May 1, 1999, and ending April 30, 2000, she will not
directly or indirectly (whether for compensation or without compensation), as an
individual proprietor, partner, stockholder, officer, employee, consultant,
director, joint venturer, investor, lender, or in any other capacity whatsoever
(other than as the holder of not more than one percent (1%) of the total
outstanding stock of a publicly held company), engage in any business activity
that is directly competitive with the business of the Company, ("Competitive
Activity"). For purposes of the Agreement, "Competitive Activity" shall be
defined as obtaining employment, performing work or providing services directly
and specifically to SAP, PeopleSoft, Oracle, Hyperion, QSP, BAAN, ▇▇▇▇▇▇, CODA
(or any related corporation or partnership). These Competitive Activities are in
addition to the limitations on Executive's activities set forth in her
Proprietary Information Agreement (Exhibit A hereto), and they are considered by
the parties to constitute a reasonable restriction for the purpose of protecting
the business of the Company. However, if any such limitation is found by a
court of competent jurisdiction to be unenforceable because it extends for too
long a period of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
10. RELEASE. In exchange for the consideration under this Agreement to which
she would not otherwise be entitled:
10.1 Executive hereby forever releases and discharges the Company, its
parent corporation, subsidiaries and affiliates, and its and their officers,
directors, employees and agents, and all others, of and from any and all claims
and demands of every kind and nature, known and unknown, suspected and
unsuspected, disclosed and undisclosed, for damages actual and consequential,
past, present and future, arising out of or in any way connected with the
termination of her Employment, including (without limitation) all claims and
demands under the Age Discrimination in Employment Act of 1967, as amended
("ADEA"), and other federal and state employment laws, or for breach of
contract; provided however, that Executive is not releasing any claims against
the Company that may arise from events that occur after she signs this
Agreement.
10.2 Executive acknowledges that she is knowingly and voluntarily waiving
and releasing any rights she may have under the ADEA. She also acknowledges that
the consideration given for the waiver in this Paragraph is in addition to
anything of value to which she was already entitled. She further acknowledges
that she has been advised by this writing that: (i) her waiver and release do
not apply to any claims that may arise after she signs this Agreement; (ii) she
has the right to consult with an attorney prior to executing this Agreement;
(iii) she has twenty-one (21) days within which to consider this Agreement
(although she may choose to voluntarily execute this Agreement earlier); (iv)
she has seven (7) days following the execution of this Agreement to revoke the
Agreement; and (v) this Agreement shall not be effective until the date upon
which the revocation period has expired, which shall be the eighth day after
this Agreement is executed by her ("Effective Date").
11. PROPRIETARY INFORMATION OBLIGATIONS. Executive acknowledges her
continuing, post-Employment obligations under that certain Proprietary
Information and Confidentiality Agreement dated April 5, 1996, between Executive
and the Company ("Proprietary Information Agreement"), a copy of which is
attached hereto as Exhibit A.
12. MISCELLANEOUS.
12.1 Confidentiality. Executive shall hold the provisions of this
Agreement in strictest confidence and not publicize or disclose them in any
manner whatsoever; provided, however, that Executive may disclose this Agreement
to her immediate family, attorneys, accountants, tax preparers and financial
advisers, provided the person to whom she intends to make such disclosure first
agrees to be bound by this provision, and she may also disclose this Agreement
insofar as such disclosure is required by law.
12.2 Binding Effect; Non-Assignability. The rights and obligations of the
parties hereto shall bind and inure to the benefit of their respective
successors, assigns, heirs, executors and administrators, as the case may be.
12.3 Complete Understanding; Modification. This Agreement, including
Exhibit A, constitutes the complete, final and exclusive embodiment of the
entire agreement between the parties hereto with respect to the subject matter
hereof. This Agreement is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein,
and it supersedes any other such promises and representations. Any modification
or amendment of this Agreement shall be effective only if in writing and signed
by Executive and an authorized officer of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERACTIVE SYSTEMS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Date Signed: February 4, 1999 Date Signed: February 4, 1999
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EXHIBIT I
CONSULTING SERVICES AGREEMENT BETWEEN
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇ INTERACTIVE SYSTEMS, INC.
This Consulting Services Agreement is entered into between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
(the "Executive") and ▇▇▇▇▇▇ Interactive Systems, Inc. (the "Company") effective
February 15, 1999.
WITNESSETH
WHEREAS, Executive and the Company have mutually agreed that Executive's
employment as Vice President of Finance and Officer of the Company will
terminate effective May 1, 1999 ("Separation Date");
WHEREAS, the Company believes Executive possesses significant skills and
knowledge which can assist the Company in its ongoing business endeavors;
WHEREAS, the Company wishes to provide Executive with several benefits in
return for Executive's assisting the Company in various business development and
customer relationship situations;
WHEREAS, Executive wishes to provide Company with such assistance;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, the parties agree as follows:
1. CONSULTING ENGAGEMENT.
1.1 Engagement of Services. Executive is hereby engaged by the Company in
the capacity of Consultant to the Chief Executive Officer of the Company for a
period of six months commencing on the Separation Date ("Consulting
Engagement"), unless terminated sooner pursuant to Section 4, below. During
the Consulting Engagement, Executive shall render such services in connection
with the business of the Company as may reasonably be requested from time to
time by the Chief Executive Officer of the Company or his designee and Executive
shall utilize her best efforts, skills and talents in the performance of those
services; provided, however, that Executive shall have the right reasonably to
decline any particular request. Executive shall be available to devote a
minimum equivalent of one day per month to performing such services, at such
times and locations as shall be mutually convenient to Executive and the
Company.
1.2 Limitations On Other Activities. During the Consulting Engagement,
Executive agrees to abide fully by the provisions of Paragraph 7, "Limitations
on On Other Activities (Non-Compete)," of the Separation Agreement between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ Interactive Systems, Inc., dated February 15, 1999.
2. Compensation.
2.1 As compensation for Executive's services as a consultant hereunder for
services rendered between May 2, 1999 and October 31, 1999, the Company shall
pay Executive a reasonable and mutually agreeable fee for services rendered in
excess of one day per month. Executive will provide Company with an invoice for
services rendered on a monthly basis.
2.2 In addition to such compensation, the Company will reimburse Executive
for travel and other out-of-pocket costs reasonably incurred by her in the
course of performing services under this Agreement; provided, however, that the
Company shall not be obligated hereunder unless (i) the Company has agreed in
advance to reimburse such costs, and (ii) Executive provides the Company with
appropriate receipts or other relevant documentation for all such costs as part
of any submission by her for reimbursement.
2.3 Executive acknowledges and agrees that she is not entitled to and will
not receive any fees or other items of value in connection with either his
Consulting Engagement or any of her other obligations under Section 1 of this
Agreement, except as expressly set forth above.
3. BENEFITS. Provided this Agreement is not terminated by Company pursuant to
Paragraph 4 below prior to October 31, 1999, Executive's option to purchase
2,500 shares of Company stock pursuant to Option Agreement No. 950449, October
23, 1998, will vest and become exercisable. Executive shall have a period of
six (6) months
after the vesting of such option, through April 30, 1999, to exercise and
purchase these 2,500 shares. Thereafter, such option will no longer be
exercisable.
4. RIGHT TO TERMINATE. In the event that (a) Executive breaches any of her
continuing obligations under the Proprietary Agreement she signed on April 5,
1996, or (b) Executive commences a Competitive Activity in violation of this
Agreement, the Company may terminate this Agreement upon written notice to the
Consultant.
5. INDEPENDENT CONTRACTOR STATUS.
5.1 It is understood and agreed that Executive is an independent contractor
and not an employee, agent, joint venturer or partner of the Company, and
Executive agrees not to hold herself out as, or give any person reason to
believe that she is, an employee, agent, joint venturer or partner of the
Company;
5.2 As an independent contractor, Executive is responsible for paying all
required state and federal taxes and insurance. In particular, the Company will
not withhold FICA (Medicare and Social Security) from Executive's payments, make
state or federal unemployment insurance contributions on behalf of Executive,
withhold state and federal income tax from Executive's payments, make disability
insurance contributions on behalf of Executive, or obtain workers' compensation
insurance on behalf of Executive. Executive will indemnify the Company against
any liability for any of the payments or withholdings described in this
Paragraph.
5.3 Prohibition Against Use Or Disclosure Of Proprietary And Confidential
Information. Executive's Proprietary Information Agreement with the Company
(Exhibit A hereto) is hereby incorporated into this Agreement and made a part
hereof, and it shall impose the same obligations on Executive, and have the same
force and effect, during the Consulting Engagement and thereafter as was the
case as a consequence of Executive's Employment with the Company.
5.4 Office Space; Support Services. The Company shall provide Executive
with office space and secretarial support if and when Executive is performing
services under this Agreement on the Company's premises, should she desire to
utilize them.
5.5 Term. Unless previously terminated as set forth above, the
Consulting Engagement shall terminate six months from the Separation Date. The
Consulting Engagement shall terminate automatically in the event of (i)
Executive's death, (ii) a disability that prevents Executive from performing her
obligations hereunder, or (iii) Executive's revocation of this Agreement prior
to the Effective Date.
6. MISCELLANEOUS.
6.1 Confidentiality. Executive shall hold the provisions of this Agreement
in strictest confidence and not publicize or disclose them in any manner
whatsoever; provided, however, that Executive may disclose this Agreement to her
immediate family, attorneys, accountants, tax preparers and financial advisers,
provided the person to whom she intends to make such disclosure first agrees to
be bound by this provision, and she may also disclose this Agreement insofar as
such disclosure is required by law.
6.2 Binding Effect; Non-Assignability. The rights and obligations of the
parties hereto shall bind and inure to the benefit of their respective
successors, assigns, heirs, executors and administrators, as the case may be;
provided that, as the Company has specifically contracted for Executive's
services, Executive may not assign or delegate his consulting obligations under
this Agreement either in whole or in part without the prior express written
consent of an authorized officer of the Company.
6.3 Complete Understanding; Modification. This Agreement, including
Exhibit A, constitutes the complete, final and exclusive embodiment of the
entire agreement between the parties hereto with respect to the subject matter
hereof. This Agreement is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained herein,
and it supersedes any other such promises and representations. Any modification
or amendment of this Agreement shall be effective only if in writing and signed
by Executive and an authorized officer of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INTERACTIVE SYSTEMS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Date Signed: February 4, 1999 Date Signed: February 4, 1999
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