SEPARATION AGREEMENT AND MUTUAL RELEASE
*NOTE:
CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT CONFIDENTIAL
INFORMATION HAS BEEN OMITTED. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR
THIS
CONFIDENTIAL INFORMATION. THE CONFIDENTIAL PORTIONS HAVE BEEN PROVIDED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION.
This
six-page SEPARATION AGREEMENT AND MUTUAL RELEASE (hereinafter referred to
as the
“Agreement” and/or “Separation Agreement and Mutual Release”) is made and
entered into by and between Xxxxxxx Xxxxxxxxx (hereinafter referred to as
"Xx.
XXXXXXXXX") and Wherify Wireless, Inc. (hereinafter referred to as "WHERIFY").
(Xx. XXXXXXXXX and WHERIFY are hereinafter collectively referred to as the
“Parties.”)
RECITALS
A.
Xx.
XXXXXXXXX, who is employed by WHERIFY as its President of Government Services
and is also a member of WHERIFY’s Board of Directors, is resigning.
B.
In
order to smooth Xx. XXXXXXXXX’x transition and in order to provide closure for
the Parties, WHERIFY desires to provide Xx. XXXXXXXXX with certain benefits,
and
Xx. XXXXXXXXX desires to accept such benefits, all on the terms and conditions
set forth below.
NOW,
THEREFORE, in consideration of the premises and promises herein contained,
the
adequacy and receipt of which are hereby acknowledged by both Parties, the
Parties agree as follows:
AGREEMENTS
1.
Resignation.
Xx.
XXXXXXXXX hereby resigns his employment and his position on the Board of
Directors as of the “Effective Date”. Thus, at that time, he shall cease to hold
any office or title at WHERIFY.
2.
Monetary
Separation Benefits From WHERIFY:
In
consideration for Xx. XXXXXXXXX’x signing and complying with this Agreement,
WHERIFY shall:
(a)
Provide
to Xx. XXXXXXXXX, in a lump sum and within two (2) days of the “Effective Date”
of this Agreement, as such term is hereinafter defined in Section 15 below,
severance pay in the gross amount of One Hundred Thirty Thousand Dollars
($130,000), subject to regular payroll deductions and withholding.
(b)
Issue
to
Xx. XXXXXXXXX, within two (2) days of the Effective Date of this Agreement,
shares of WHERIFY’s S8 stock worth One Hundred Forty-Five Thousand Dollars
($145,000) as determined by the market price of the stock at the time of
Xx.
XXXXXXXXX’x execution of this Agreement, which shares shall, after the statutory
90-day restriction on trading such stock due to his insider status, be subject
to a three-month “lock-up,” pursuant to which lock-up Xx. XXXXXXXXX shall have
the right to sell up to one-third of the shares in each month of the three-month
lock-up; provided, however, that he shall sell only One Hundred Forty-Five
Thousand Dollars ($145,000) worth of these shares (as determined by the price
received for the shares upon their sale by Xx. XXXXXXXXX) during the lock-up
period and shall return any remaining shares to WHERIFY without charge; and
provided, however, that if Xx. XXXXXXXXX sells all of the aforementioned
shares
for less than One Hundred Forty-Five Thousand Dollars ($145,000) (as determined
by the price received for the shares upon their sale by Xx. XXXXXXXXX) during
the lock-up period, WHERIFY shall issue such additional shares of its S8
stock
as necessary to make up the difference between what Xx. XXXXXXXXX sold the
shares for and One Hundred Forty-Five Thousand Dollars ($145,000), the amount
of
any such additional shares to be determined by the market price of the stock
at
the time of the expiration of the three-month lock-up and not to be adjusted
due
to fluctuations in the market price of the stock at any time after the
expiration of the three-month lock up. The Parties agree that, except as
provided above in this Section 2(b), there shall be no obligation on the
part of
WHERIFY or Xx. XXXXXXXXX to make adjustments or provide accommodations in
regard
to the shares to be granted to him pursuant to this Section 2(b).
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(c)
Provide a bonus to Xx. XXXXXXXXX should he assist WHERIFY after the Effective
Date of this Agreement in connection with WHERIFY’s efforts to do business with
*[CONFIDENTIAL]*;
provided, however, that the bonus shall be provided only if any such assistance
is requested and approved by WHERIFY’s Chief Executive Officer and only if
*[CONFIDENTIAL]*
enter
into an announced business relationship with WHERIFY within six months of
the
Effective Date of this Agreement, and also provided that any such bonus shall
be
in the form of shares of WHERIFY S8 stock, without any lock-up, and in an
amount
to be determined in the sole discretion of WHERIFY but in no event in an
amount
worth more than Fifty Thousand Dollars ($50,000) as determined by the market
price of the stock at the time of any such bonus.
Xx.
XXXXXXXXX acknowledges that it is his intent and understanding that he is
entitled to no severance or separation benefits other than as expressly provided
for in this Agreement, and he acknowledges that he has received payment in
full
for all compensation earned by him during his employment with WHERIFY.
3.
Taxes:
Xx.
XXXXXXXXX acknowledges and agrees that WHERIFY has made no representations
to
him regarding the tax consequences of any amounts or benefits received by
him
pursuant to this Agreement. Xx. XXXXXXXXX also acknowledges that he is solely
responsible for payment of all taxes, state, federal and/or local, if any,
for
which he may be liable on the amounts or benefits he receives pursuant to
this
Agreement. He also agrees to indemnify and hold harmless WHERIFY, and all
of its
employees, principals and agents, from and against any and all loss, cost,
damage, or expense, including, but not limited to, attorney’s fees incurred by
any of them, arising out of his failure to pay the taxes, if any, for which
he
is liable.
4.
Mutual
Release Of Claims:
(a)
As a
material inducement to Xx. XXXXXXXXX to enter into this Agreement, WHERIFY
(on
behalf of itself, its successors, and assigns) hereby releases and forever
discharges Xx. XXXXXXXXX and his heirs, assigns, representatives, attorneys,
insurers, and all persons or entities acting by, through, under or in concert
with any of them, of and from any and all liabilities, claims, obligations,
promises, agreements, demands, damages, actions, charges, complaints, costs,
losses, debts and expenses (including attorney’s fees and costs actually
incurred), and causes of action of every kind, known or unknown, disclosed
or
undisclosed, matured or unmatured, which WHERIFY may have now or in the future
arising from any act or omission or condition arising prior to its signing
this
Agreement, including, but not limited to, all claims under state, federal,
or
common law, whether based in contract, tort, statute or otherwise, and
including, but not limited to, claims in any way related to Xx. XXXXXXXXX'x
employment by WHERIFY or the termination of such employment; provided, however,
that this Separation Agreement and Mutual Release does not release any claims
that cannot lawfully be released by this Agreement, and does not impact any
right that it may have pursuant to any WHERIFY benefit plan, including any
stock
option plan.
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(b)
As a
material inducement to WHERIFY to enter into this Agreement, Xx. XXXXXXXXX
(on
behalf of himself, his heirs, and assigns) hereby releases and forever
discharges WHERIFY and its former, current, and future owners, officers,
directors, trustees, employees, agents, assigns, representatives, attorneys,
insurers, and all persons or entities acting by, through, under or in concert
with any of them (collectively “Releasees”), of and from any and all
liabilities, claims, obligations, promises, agreements, demands, damages,
actions, charges, complaints, costs, losses, debts and expenses (including
attorney’s fees and costs actually incurred), and causes of action of every
kind, known or unknown, disclosed or undisclosed, matured or unmatured, which
Xx. XXXXXXXXX may have now or in the future arising from any act or omission
or
condition arising prior to him signing this Agreement, including, but not
limited to, all claims under state, federal, or common law, whether based
in
contract, tort, statute or otherwise, and including, but not limited to,
claims
of discrimination and claims in any way related to Xx. XXXXXXXXX'x employment
by
WHERIFY or the termination of such employment. Notwithstanding the foregoing,
this Separation Agreement and Mutual Release does not release any claims
that
cannot lawfully be released by this Agreement, and does not impact any vested
right that Xx. XXXXXXXXX may have pursuant to any WHERIFY benefit plan; this
Separation Agreement and mutual Release does not impact any future shareholder
rights that would be in force should Xx. XXXXXXXXX exercise his stock options,
for example, and this Separation Agreement and Mutual Release does not release
WHERIFY of its obligation to fully indemnify and defend Xx. XXXXXXXXX against
any future claims or lawsuits in which he is named as a result of his actions
on
behalf of WHERIFY in the course and scope of his responsibilities while employed
by WHERIFY or acting as a director of WHERIFY.
(c)
All
items hereby released are hereinafter collectively referred to as the
“Claims.”
5.
Express
Release Of Claims For Age Discrimination:
Without
limiting the scope of Section 4, Xx. XXXXXXXXX specifically acknowledges
that
this Separation Agreement and Mutual Release includes, without limitation,
any
and all Claims he may have under the federal Age Discrimination in Employment
Act, which prohibits discrimination against employees because of their
age.
6.
Covenant
Not To Pursue Complaints:
Xx.
XXXXXXXXX represents that he has not filed any complaints, charges, claims,
or
actions against any Releasees with any state, federal, or local agency or
court
or any other forum.
7.
Waiver
Of Unknown Claims:
The
Parties understand and agree that the released Claims include not only Claims
presently known to the Parties but also include all unknown or unanticipated
Claims. The Parties knowingly and voluntarily waive any and all rights or
benefits that they may now have, or in the future may have, under the terms
of
Section 1542 of the California Civil Code, which provides as
follows:
A
general release does not extend to claims which the
creditor
does not know or suspect to exist in his or her favor
at
the time of executing the release, which if known by him
or
her
must have materially affected his or her settlement with
the
debtor.
8.
Confidential/Proprietary
Information:
As
of the
Effective Date, Xx. XXXXXXXXX shall have returned to WHERIFY all keys,
computers, and credit cards belonging to WHERIFY and any other property
belonging to WHERIFY, including
intellectual property and other proprietary information.
Such
property includes, but is not limited to, all
computer files,
documents, letters, notes, programs, software, media, photographs, lists,
manuals, records, notebooks, and similar repositories containing “Confidential
Information,” including all copies thereof, whether prepared by Xx. XXXXXXXXX or
others. Xx. XXXXXXXXX agrees not, directly or indirectly, to use, disseminate,
disclose, lecture upon, or publish articles concerning any Confidential
Information, unless specifically authorized in writing by the Board of Directors
of WHERIFY. The term “Confidential Information” means all of the valuable,
confidential, and proprietary financial, technical, economic, and/or other
types
of proprietary information relating to WHERIFY in whatever form, whether
oral,
written, or electronic, to which Xx. XXXXXXXXX has, or is given (or has had
or
been given), access as a result of his work for WHERIFY. Such Confidential
Information includes, without limitation, non-public information regarding
WHERIFY's plans, programs, systems, software, accounting, financial affairs,
personnel, and operations, and specifically includes WHERIFY’s customers’
contact and financial information. This restriction shall not apply to any
Confidential Information that (a) becomes known generally to the public through
no fault of Xx. XXXXXXXXX;
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(b)
is
required by applicable law, legal process, or any order or mandate of a court
or
other governmental authority to be disclosed; or (c) is reasonably believed
by
Xx. XXXXXXXXX, based upon the advice of legal counsel, to be required to
be
disclosed in defense of a lawsuit or other legal or administrative action
brought against Xx. XXXXXXXXX; provided, that in the case of clauses (b)
or (c)
above, Xx. XXXXXXXXX shall give the Board of Directors of WHERIFY reasonable
advance written notice of the Confidential Information intended to be disclosed
and the reasons and circumstances surrounding such disclosure, in order to
permit WHERIFY to seek a protective order or other appropriate request for
confidential treatment of the applicable Confidential Information. Xx. XXXXXXXXX
acknowledges that he remains bound by any proprietary and/or confidential
information agreement signed by him in conjunction with his employment by
WHERIFY except to the extent, if any, that such agreement conflicts herewith,
in
which case this Agreement shall control.
9.
Non-Disparagement:
Xx.
XXXXXXXXX agrees that he will not disparage WHERIFY or any of the other
Releasees; WHERIFY agrees that its executive officers and members of its
Board
of Directors will not disparage Xx. XXXXXXXXX.
10.
No
Future Employment:
Xx.
XXXXXXXXX hereby waives any right he may have to reinstatement or future
employment by WHERIFY, and Xx. XXXXXXXXX agrees not to seek such employment
and
not to perform any work for WHERIFY unless such restrictions are cancelled
or
modified by mutual consent.
11.
Indemnification
And Forfeiture In The Event Of Breach:
Each
of
the Parties hereto agrees to indemnify and hold the other harmless from and
against any and all loss, cost, damage or expense, including but not limited
to
attorney’s fees incurred by the other, arising out of any breach of this
Agreement or false representation herein by the indemnifying Party.
12.
No
Admission Of Liability:
Xx.
XXXXXXXXX acknowledges and agrees in good faith that this Agreement shall
never
at any time or for any purpose be considered as an admission of liability
or
responsibility on the part of the Releasees.
13.
No
Reliance On Other Representations:
Xx.
XXXXXXXXX represents and acknowledges that in executing this Agreement, he
does
not rely and has not relied upon any representation or statements made by
any of
the Releasees with regard to the subject matter, basis, or effect of this
Agreement or otherwise beyond those expressly contained herein. Xx. XXXXXXXXX
represents that he has carefully read and fully understands all provisions
of
this Agreement, and that he is voluntarily entering into this Agreement after
adequate time to consider its terms.
14.
Consideration
Period:
Having
been presented to Xx. XXXXXXXXX on or before June 20, 2007, this Agreement
must
be signed and dated by him and returned in its entirety to, and actually
received by, Xxxxxx XxXxxxxx of WHERIFY’s Board of Directors on or before July
11, 2007, if it is to have any effect. Xx. XXXXXXXXX acknowledges that he
has
been afforded at least twenty-one (21) days to consider this Separation
Agreement and Mutual Release, its benefits, and its consequences. He understands
that he has the option of signing this Agreement at any time before the end
of
the consideration period, but that any election to do so is completely within
his discretion. Xx. XXXXXXXXX further acknowledges that he has been advised
that
he may seek the advice of an attorney before signing this Separation Agreement
and Mutual Release, and that he has had a full and adequate opportunity to
do
so.
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15.
Revocation
Period:
It
is
understood and agreed by Xx. XXXXXXXXX that he will have seven (7) days after
signing this Separation Agreement and Mutual Release to revoke it by written
notice delivered to Xxxxxx XxXxxxxx of WHERIFY’s Board of Directors. Thus, the
Agreement will not become effective and enforceable unless and until this
revocation period has expired without revocation occurring. The "Effective
Date"
of this Agreement, as that term is used in this Agreement, shall be the date
on
which this revocation period expires but only if written notice of revocation
is
not delivered on or before that date.
16.
Miscellaneous:
In
further consideration of this Agreement, Xx. XXXXXXXXX and WHERIFY agree
as
follows:
(a)
The
terms
mentioned in the preceding paragraphs of this Agreement are the entire and
only
consideration for it, and each of the Parties shall be responsible for payment
of his or its own attorney’s fees, costs, and legal expenses, if
any;
(b)
The
language of all parts of this Agreement shall in all cases be construed as
a
whole, according to its fair meaning, and not strictly for or against any
of the
Parties;
(c)
This
Agreement is entered into in the State of California and shall be construed
and
interpreted in accordance with its law;
(d)
The
various provisions of this Agreement are severable and if any is unenforceable,
at law or in equity, that provision may be severed, leaving the others remaining
in full force and effect;
(e)
Headings
contained in this Agreement are for convenience only and shall not be considered
for any purpose in construing the Agreement;
(f)
This
Agreement may only be modified by a written agreement identified as an
amendment/modification to this Agreement and signed by the Parties hereto;
and
(g)
This
Agreement contains the entire agreement between the Parties to it with regard
to
the matters set forth in it and shall be binding upon and inure to the benefit
of the executors, administrators, personal representatives, heirs, successors
and assigns of each. This Agreement fully supersedes any and all negotiations,
and all prior written, oral, or implied agreements or understandings between
the
Parties pertaining to the subject matters hereof.
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of page intentionally left blank.]
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PLEASE
READ CAREFULLY. THIS SEPARATION
AGREEMENT
AND MUTUAL RELEASE INCLUDES
A
RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.
DATED:
___________________
|
_________________________________
|
Xxxxxxx
Xxxxxxxxx
|
|
DATED:
___________________
|
WHERIFY
WIRELESS, INC.
|
By:
______________________________
|
|
Name:
|
|
Title:
|
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