EXHIBIT 10.40
[XXXXXXX LOGO]
XXXXXXX SERVICES, INC.
August 30, 2005
Xx. Xxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
Re: Separation Agreement and Mutual Release
Dear Xxxxx:
Together with Appendix A which is incorporated into this letter in
full, this letter shall be referred to as the "AGREEMENT" and contains the terms
of the separation agreement and mutual release between you, on the one hand ,
and Xxxxxxx Services, Inc., a Delaware corporation ("Xxxxxxx"), on the other
hand.
1. Your last day of active employment with the Company will be August
31, 2005. You will receive payment through that date consistent
with Company's regular payroll practices.
2. You will receive salary continuation for the period commencing on
September 1, 2005 through August 31, 2006. During that time
period, and contingent upon your compliance with the terms of
Paragraphs 9 - 12 of this Agreement and the Mutual Release
(defined below), you will receive in equal installments the
aggregate sum of One Hundred Sixty Eight Thousand Three Hundred
and Seventy Two Dollars ($168,372.00), less all applicable taxes
and withholdings, payable beginning with the start of the first
regularly scheduled pay period falling at least eight days after
you have returned a signed copy of this letter agreement. Based
upon your having executed the Agreement by August 31, 2005 and
provided you do not revoke your acceptance of the Agreement within
such eight day period, the first payroll date on which you will
receive payment will be September 9, 2005. You will be paid a
retention bonus in the amount of $108,333.36 not later than
September 9, 2005.
3. You will receive health insurance continuation for twelve (12)
months commencing on September 1, 2005 and terminating on August
31, 2006. Xxxxxxx will pay your health insurance premium payments
during that period in the same proportion as shared by Xxxxxxx and
yourself prior to your termination. To the extent that Xxxxxxx may
change its health insurance plans during this one year period you
will have the right to receive continuation in the "best and
highest" plan offered by Xxxxxxx to its employees, or you may
elect to have Xxxxxxx pay you the premium payments that Xxxxxxx is
currently paying on your behalf as of the date of this Agreement
and you may elect your own coverage with a carrier independent of
Xxxxxxx. To the extent you are eligible, elect to, and in fact
receive continued health insurance coverage under COBRA, coverage
pursuant to which commences on September 1, 2006, the cost of any
premium will be paid by you and Xxxxxxx will have no COBRA premium
obligation whatsoever. It is expressly understood and agreed that
nothing in this Agreement is designed to guarantee, promise,
convey, or covenant coverage or continuation coverage under any
insurance or benefit plan except as expressly set forth herein.
4. You will receive payment for accrued but unused vacation pay, less
applicable taxes.
5. Simultaneously with the execution of this Agreement, and as
consideration for the undertakings set forth herein, you and an
officer of Xxxxxxx will execute the Mutual Release attached hereto
as APPENDIX A (the "Mutual Release"). Your agreement to, and
non-revocation of, the Mutual Release is a material term of this
Agreement and failure to agree to the same will nullify any and
all obligations of Xxxxxxx and any all of your rights under this
Agreement;
6. All amounts payable to you pursuant to this Agreement shall be
subject to applicable taxes and withholding;
7. You agree to return to Xxxxxxx, no later than the close of
business on August 31, 2005, all property of Xxxxxxx in your
possession, including by way of example and not by way of
limitation, any and all files, documents, books, records, reports,
credit cards, cell phones, computers, computer equipment,
networking equipment hardware, software, source code, object code,
customer lists, customer information, pricing lists, marketing
materials and other proprietary information.,
8. The parties agree to keep the existence and terms of this
Agreement completely confidential other than (i) as may be
necessary for each party to enforce its rights against the other
under the terms of the this Agreement or the Mutual Release, or
(ii) to the extent necessary to comply with any applicable legal
process. In any case, you may disclose the terms of this Agreement
and the Mutual Release to your immediate family, and each of the
parties may disclose the terms of this Agreement to its legal
counsel and tax and accounting advisors. Furthermore, you agree
not to disparage Xxxxxxx or any of their respective subsidiaries,
affiliates, officers, directors, shareholders, agents or employees
to any third party; and Xxxxxxx agrees not to disparage you to any
third party.
9. You shall not use or disclose Confidential Information, as defined
in this Paragraph 9, to any person or entity for any for any
reason or purpose whatsoever. You acknowledge that (i) Xxxxxxx has
expended time, effort and money to obtain and develop Confidential
Information, (ii) the Confidential Information constitutes
special, valuable and unique assets of Xxxxxxx, whether or not any
of the Confidential Information is embodied in tangible or
intangible form; and (iii) all materials containing Confidential
Information are the property of Xxxxxxx or its affiliates, as the
case may be. You agree and acknowledge that for purposes of this
Agreement, "CONFIDENTIAL INFORMATION" means information and data
not generally known outside of Xxxxxxx that you prepared,
acquired, learned, or had reasonable access to during your
employment with Xxxxxxx or any of its respective predecessors,
subsidiaries or affiliates, including, but not limited to,
research, design, development, strategies, production,
presentation, methodologies, margins, and budgets, and costs
related thereto; information and materials used in marketing or
presenting the business, products or services of Xxxxxxx or any of
its respective affiliates including without limitation, style,
format and content; customer lists and potential customer lists
and information pertaining to customer goals and strategies;
prices and terms offered or paid for products and services by
customers; information and materials related to determining
whether products and services should be offered or sold to a
customer; supplier, vendor and contractor lists, contacts, prices,
specifications and other information; techniques, source code,
object code, software documentation, software
diagrams, software flow charts, procedures, processes, formulas,
equipment, methods, technical data and compilations; business
proposals and plans and financial and operational information and
strategies; the financial and capital structure of Xxxxxxx and its
affiliates; creditors, debtors and financial data; any other
material or information of whatever nature which provides any of
the Xxxxxxx or any of its affiliates, an opportunity to gain an
advantage over competitors; and any and all trade secrets or
proprietary and confidential information or materials of Xxxxxxx
and its affiliates, or any customer or any potential customers of
which you had knowledge or reasonable access to; PROVIDED,
HOWEVER, that: (1) the foregoing confidentiality obligation shall
not apply to any information or material to the extent it is or
becomes publicly known (other than as a result of any act by you
in violation of this Agreement or others in violation of an
obligation of confidentiality); and (2) the foregoing
confidentiality obligation shall not prevent you from disclosing
information pursuant to court order, or order agency of competent
jurisdiction, or to a government or law enforcement agency if you
have reasonable cause to believe that the information discloses a
violation of a State or federal law, rule, or regulation; PROVIDED
FURTHER, HOWEVER, to the extent permitted by law, that you notify
Xxxxxxx in writing no less than five (5) business days in advance
of any such disclosure under this Paragraph 9 and that you further
notify Xxxxxxx within five (5) business days of your receipt of
any subpoena, court order, administrative order, or other legal
process requiring disclosure of information subject to this
confidentiality provision. Notwithstanding anything herein to the
contrary, Xxxxxxx agrees that it will provide you with copies of
Confidential Information required for you to comply with a
regulatory investigation upon presentation of a subpoena, court
order, administrative order or other legal process requiring
disclosure of information subject to this confidentiality
provision.
10. You hereby disclaim, forego, revise, and acquit any and all
rights, titles and interests possessed by you, directly or
indirectly, in law or in equity, in any and all Inventions (as
defined below) capable of being used by Xxxxxxx or any of its
respective subsidiaries or affiliates to its advantage, as
determined by Xxxxxxx in its sole and absolute discretion,
including but not limited to, any and all interest in proprietary
software applications (and improvements, modifications and
derivatives thereof) commonly referred to as Deal Management
System (DMS), Xxxxxxx Loan Analysis System (CLAS), and High-Cost
Analyzer (HCA), Conduit and CU, and you hereby transfer and assign
to Xxxxxxx , for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, any and all such
rights, titles and interests in all such Inventions. For the
purposes of this Agreement, "INVENTIONS" includes, but is not
limited to, machinery, apparatus, products, processes, computer
hardware, information systems, software (including, without
limitation, source code, object code, documentation, diagrams, and
flow charts) and any other discoveries, concepts, ideas, and
inventions, whether patentable or not (including, without
limitation, processes, methods, formulas, and techniques, as well
as improvements thereof or know-how related thereto), concerning
any present or prospective activities of Xxxxxxx.
11. You shall not, for a period of twelve (12) months after the date
of this Agreement, for any reason whatsoever, directly or
indirectly, as an owner, employee, agent, salesperson or member of
any person, corporation, firm, agency or otherwise that is engaged
in a business directly competitive with any business currently
conducted by Xxxxxxx or any of its respective subsidiaries or
affiliates, solicit such business from or engage in such business
with a client or potential client of Xxxxxxx (a) with which you
had direct or indirect contact as an employee of Xxxxxxx, or (b)
regarding which client or potential client you had learned , or
become aware of, or (c) with which client or potential client of
Xxxxxxx has solicited new business, or has conducted new business,
within the twelve (12) month period immediately preceding the date
of this Agreement. You shall not, for a period of twelve (12)
months after the date of this Agreement, for any reason
whatsoever, individually or on behalf of, directly or indirectly,
as an owner, employee, agent, salesperson or member of any person,
corporation, firm, agency or otherwise (a) employ or retain, or
solicit, entice, encourage or persuade or attempt to solicit,
entice, encourage or persuade any person who is, at the time, an
employee of Xxxxxxx or who was an employee of Xxxxxxx less than
three (3) months before such an attempt to employ, retain,
solicit, entice or encourage any such person; or (b) encourage,
persuade or entice any employee or Client of Xxxxxxx to terminate
his, her or its employment or business relationship with Xxxxxxx.
12. If you breach any of the foregoing covenants or obligations
contained in Paragraphs 9-11 of this Agreement, the parties agree
that Xxxxxxx'x obligation to make any remaining scheduled payments
under Paragraph 2 or 3 of this Agreement shall terminate, Xxxxxxx
may retain such amounts by way of liquidated damages (without in
any way restricting its right to seek injunctive and other relief
against you in any such event, which right to seek injunctive
relief is expressly granted herein), and Xxxxxxx shall be entitled
to repayment of the sums previously paid to you under Paragraph 2
and 3 of this Agreement.
13. This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns,
heirs, and legal representatives by operation of law or otherwise,
including any entity with which Xxxxxxx may merge or consolidate
or to which all or substantially all of its assets may be
transferred. The duties and covenants of you under this Agreement,
being personal, may not be delegated or assigned.
14. You understand that this Agreement is final and binding. By
signing this Agreement, you acknowledge that you have read and
understand this Agreement; that you have not relied upon any
representation or statement, written, or oral, not set forth in
this Agreement; that you have been advised to consult with an
attorney; that your signature on this Agreement is voluntary; and
that you have entered into this Agreement knowingly and willfully.
You acknowledge and agree that: (a) the restrictions placed upon
you by this Agreement are reasonable and necessary; (b) you will
be able to earn a livelihood without violating such
restrictions; and (c) you understand that your ability to earn a
livelihood without violating such restrictions is a material
condition to this Agreement.
15. This Agreement may be executed in counterparts and by facsimile,
each of which shall be deemed an original and all of which, taken
together, shall constitute one agreement.
16. This Agreement shall be interpreted, construed and enforced under
the laws of the State of Connecticut.
17. This Agreement constitutes the entire agreement, and supersedes
all other prior agreements and understandings, both written and
oral, among parties with respect to the subject matter hereof.
18. You are advised to consult with an attorney prior to signing this
Agreement and the Mutual Release attached hereto as Exhibit A. You
have a period of twenty-one (21) days from the date of delivery of
this Agreement to accept the Agreement by executing it and
returning it to Xxxxxx Xxxxxx, SVP Human Resources of Xxxxxxx,
prior to the expiration of the twenty-one (21) day period. If you
execute this Agreement prior to the expiration of the twenty-one
(21) day signing period, such execution shall constitute a waiver
by you of the remainder of the twenty-one (21) day signing period.
You also have seven (7) days following your execution of this
Agreement during which you may revoke the Agreement by delivering
written notice to the offices of Xxxxxx Xxxxxx, SVP Human
Resources at 0 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx
00000 by hand or by mail, prior to the expiration of the seven (7)
day period. If this Agreement is not revoked by you during said
seven (7) day period, it shall be deemed accepted. The Agreement
shall not be effective or enforceable until the revocation period
has expired.
If these terms are acceptable to you, please countersign the enclosed copy of
this letter and the fully incorporated Appendix A and return them to me within
the time parameter above. Thank you very much.
Very truly yours,
XXXXXXX SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------
Xxxxxxx X. Xxxxxxx
President and CEO
AGREED TO AND ACCEPTED:
this 31st day of August, 2005
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Xxxxx X. Xxxxxx
APPENDIX A
MUTUAL RELEASE
WHEREAS, Xxxxx X. Xxxxxx, an individual ("XXXXXX"), and Xxxxxxx Services,
Inc., a Delaware corporation ("XXXXXXX"), are parties to the attached Letter
Agreement (the "LETTER AGREEMENT"); and
WHEREAS, this Mutual Release is incorporated into, and is a material term
of, the Letter Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
set forth in the Letter Agreement, Xxxxxx, on the one hand, and Xxxxxxx, on the
other hand, agree as follows:
1. Xxxxxx, on behalf of himself and on behalf of his heirs, executors,
administrators, successors and assigns, hereby REMISES, RELEASES,
ACQUITS, SATISFIES and FOREVER DISCHARGES Xxxxxxx as well as its
respective present and former subsidiaries, parent companies,
divisions, affiliates, and respective insurers, representatives,
officers, directors, shareholders, partners, joint ventures,
independent contractors, members, agents, employees, attorneys,
retirement benefit plans, welfare benefit plans and their heirs
executors, administrators, successors and assigns (all hereinafter
referred to collectively as "the "RELEASED PARTIES"), with respect
to any and all claims, obligations, demands, liabilities, promises,
costs, expenses (including attorneys' fees, costs and expenses)
and/or causes of action of whatever nature, whether known or
unknown, that Xxxxxx has or may have against Xxxxxxx from the
beginning of time through the date of the Agreement. Without
restricting the generality of the foregoing, the Released Parties
agrees to and does hereby remise, release, acquit, satisfy, and
forever discharge Xxxxxxx of and from any and all claims,
obligations, demands, liabilities, costs, expenses, and/or causes of
action, known or unknown, arising out of or in any way connected
with or relating to his employment and the termination of his
employment up to and including the date he signs this Mutual Release
and the Letter Agreement, including, but not limited to, claims,
obligations, demands, liabilities, costs, expenses, and/or causes of
action based in whole or in part on (i) any alleged (oral or
written) agreement to provide compensation, equity, stock, profit
sharing, bonus, phantom stock, phantom equity, revenue sharing,
incentive compensation or similar type of compensation, benefits,
vesting, or payment; (ii) breach of contract and/or promissory
estoppel; (iii) tort, retaliatory discharge; (iv) federal, state or
local law, regulation or ordinance, including, but not limited to,
claims under the Family Medical Leave Act (29 U.S.C. Sections 2601
ET SEQ.), the Americans With Disabilities Act (42 U.S.C. Sections
12101 ET SEQ.), the Age Discrimination in Employment Act (29 U.S.C.
Sections 621 ET SEQ.), the Older Workers Benefit Protection Act,
Title VII of the Civil Rights Act (42 U.S.C. Sections 2000e ET
SEQ.), the Civil Rights Act of 1991, the Employee Retirement Income
Security Act (29 U.S.C. Sections 1001 ET SEQ.), the Fair Labor
Standards Act (29 U.S.C. Sections 201 ET SEQ.), all applicable
Connecticut laws, regulations, ordinances and rules, or any other
federal, state or municipal statute
or ordinance relating to discrimination in employment or
compensation from employment; (v) federal or state public policy;
and/or (vi) any other legal restrictions prohibiting, in whole or in
part, the actual or constructive discharge of employees. This
release does not impact or affect claims that cannot be released as
a matter of law or that are related to Xxxxxxx'x obligations under
the Letter Agreement between Xxxxxxx and Xxxxxx.
2. In the event any administrative agency or other person or entity
pursues any claim, charge, lawsuit, demand, or class or group action
against any of the Xxxxxxx Entities relating to Xxxxxx'x employment,
termination, compensation, or severance, Xxxxxx agrees that he will
not be entitled to any monetary relief from such pursuit.
3. Xxxxxx agrees not to commence or bring any action at law,
proceeding, in equity, or any other judicial or non-judicial
proceeding against any Released Party relating, in whole or in part,
to his employment. This covenant not to xxx does not extend to
claims that Xxxxxx may not release at this time as a matter of law.
4. Xxxxxx certifies that he has not filed any claims, complaints, or
other actions against any of the Released Parties and hereby waives
any right to recover from any party released pursuant to Paragraph 1
under any lawsuit charged or filed by him or any federal, state, or
local agency on his behalf based upon any event occurring up to and
including the date on which he signs this Agreement.
5. Xxxxxxx agrees and does hereby release, acquit and forever discharge
Xxxxxx of and from any and all claims, demands and causes of action
now existing and known, as of the date hereof, to Xxxxxxx, which
arose by any act or omission on the part of Xxxxxx committed in his
capacity as an officer and/or employee of Xxxxxxx that occurred at
any time during his tenure, up to an including the date hereof. This
release does not extend to any claims, demands or causes of action
which arose as a result of any fraudulent conduct or willful
misconduct on the part of Xxxxxx during his tenure with Xxxxxxx.
6. This Mutual Release may be executed in counterparts and by
facsimile, each of which shall be deemed an original and all of
which, taken together, shall constitute one agreement which is
incorporated in full into the Letter Agreement.
AGREED: AGREED:
XXXXXXX SERVICES, INC.
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------------ -----------------------------
Xxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxx
President and CEO
August 31, 2005 August 31, 2005
