Exhibit 10.7
TERMINATION AGREEMENT
---------------------
This Agreement is entered into this 30th day of December, 1999, by and
between xxxxxxxxxxx.xxx inc., a Michigan corporation (hereinafter referred to as
"Employer"), and Xxxxxx Xxxxx, an individual ("hereinafter referred to as
"Employee").
W I T N E S S E T H:
WHEREAS, according to the terms of Employee's employment, such employment
is terminable at will by either party; and
WHEREAS, Employee voluntarily terminated his employment with Employer
effective as of December 31, 1999;
NOW, THEREFORE, in consideration of the representations, promises, and
agreements set forth herein, the adequacy, sufficiency and receipt of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Termination of Employment. Employer and Employee hereby acknowledge and
-------------------------
confirm that: (i) Employee delivered his resignation, effective as of December
31, 1999, to the Company on or about September 10, 1999; and (ii) Employer
accepted Employee's resignation, effective as of December 31, 1999, on or about
September 10, 1999. Accordingly, Employee's employment with Employer shall
terminate at the close of business on December 31, 1999. Until such time,
Employer shall continue to pay Employee, when due (in accordance with Employer's
practices in effect for all employees), his salary compensation currently in
effect, less all applicable state and federal taxes. Further, in the event
Employee properly performs his duties from and after the date of this Agreement
through the close of business on December 31, 1999, then Employer shall pay
Employee, no later than January 15, 2000, a bonus for the services performed by
Employee during 1999 in the amount of Twenty Thousand and 00/100 ($20,000)
Dollars.
2. Severance Compensation. Employee hereby acknowledges that in accordance
----------------------
with Employer's usual and customary termination practices, Employee is not
entitled to receive any severance pay or other compensation.
3. Additional Consideration. In consideration of the covenants and
-------------------------
agreements set forth in this Agreement (including but not limited to the Release
contained in Section 5 herein and the covenants and restrictions contained in
Sections 6 and Section 7 herein), Employer hereby agrees to pay and/or allow
Employee the following additional benefits, all of which are beyond the scope of
Employer's usual and customary termination practices (the "Additional
Consideration"). Employer shall simultaneously with the execution of this
Agreement, enter into the following agreements with Employee:
(i) A First Amendment to each of the three (3) Non-Qualified Stock
Option Agreements currently in effect between Employee and Employer,
in form and
1
substance as attached hereto, which Amendments Employee hereby agrees
materially amend, for Employee's benefit, Employee's rights under all
of said Non-Qualified Stock Option Agreements currently in effect with
Employer; and
(ii). A Consulting Agreement.
Employee acknowledges and agrees that the benefits granted by Employer
pursuant to this Section 3 are not, and shall not be construed as, compensation
to Employee, but rather as consideration for the covenants and agreements
contained herein (including but not limited to the Release contained in Section
5 herein and the covenants and restrictions contained in Sections 6 and Section
7 herein). Further, Employee acknowledges, understands and agrees that he is
solely responsible for the payment of any and all taxes incurred as a result of
all such benefits.
4. Representations and Warranties of Employee. Employee hereby represents
------------------------------------------
and warrants to Employer, as follows:
a. That on January 1, 2000 he will not be in possession of any work
product, trade secret, and/or other confidential written information of
Employer or any copies thereof, except such work product, trade secrets,
and/or other confidential written information of Employer that Employee
shall be entitled to possess under the terms of the Consulting Agreement.
b. That from and after January 1, 2000 he will not disclose any of
Employer's work product, trade secrets, the terms of this Agreement
(including, but not limited to, the type or nature of Additional
Consideration received hereunder), and/or other confidential information,
written or oral, to any third party, except as specifically permitted under
the terms of the Consulting Agreement; provided however that nothing
contained herein shall be construed to limit Employee's right to use
information which is common knowledge within the online and/or internet
industry or within the general public at large. Further, any and all skills
of Employee acquired during his employment with Employer may be used in
subsequent employment, subject to the terms of paragraph 6 herein, provided
same do not include the use of trade secrets acquired by reason of
Employee's confidential relationship with Employer.
c. That the signing of this Agreement by Employee evidences: (i)
Employee's understanding of the terms hereof, including but not limited to,
Sections 5, 6, 7, and 8; (ii) an acknowledgement by Employee that prior to
Employee signing this Agreement, Employee was advised by Employer in
writing to consult with an attorney; and (iii) a representation by Employee
to Employer that he did consult with an attorney and/or with others whom
Employee deemed it necessary or advisable to consult, prior to signing this
Agreement; and (iv) that Employee has taken a period of at least 21 days to
read, review, and consider the terms of this Agreement.
5. Release.
-------
a. In exchange for the Additional Consideration, Employee does hereby
agree not to xxx Employer for, and does further remise, release and forever
discharge Employer from, any
2
and all Claims (as defined in subsection c. below), known or unknown,
against Employer which Employee ever had, now has, or may or could have,
for or by reasons of any matter, cause or thing whatsoever, occurring at
any time prior to and including the date of this Agreement. HOWEVER, THIS
RELEASE DOES NOT CAUSE EMPLOYEE TO WAIVE ANY RIGHTS OR CLAIMS THAT MAY
---
ARISE AGAINST EMPLOYER AFTER THE DATE THIS AGREEMENT IS SIGNED BY EMPLOYEE.
-----
b. This Release includes, but is not limited to, all Claims arising out
-----------
of, in any way connected with or relating to Employee's employment, or the
--------------------------------------------------------------------------
termination of Employee's employment, with Employer. Such Claims include
------------------------------------
but are not limited to: breach of contract; impairment of economic
opportunity; intentional or negligent infliction of emotional harm or
distress or any other tort whatsoever; age discrimination (including but
not limited to, under the Age Discrimination in Employment Act of 1967, 42
U.S.C. Section 1985 and The Older Workers Benefit Protection Act); sex,
race, or religious discrimination; sexual harassment; all Claims under all
federal, state and municipal statutes and ordinances relating to
discrimination of any type whatsoever in employment or otherwise; and all
Claims Employee has asserted or may assert or could assert in any state or
federal forum (including but not limited to all courts and administrative
agencies) as a result of Employee's employment, or the termination of
Employee's employment, with Employer or otherwise. HOWEVER, THIS RELEASE
DOES NOT APPLY TO: EMPLOYEE'S RIGHTS UNDER EMPLOYER'S PENSION OR BENEFIT
PLANS; ANY PENDING OR POTENTIAL WORKERS COMPENSATION CLAIMS OF EMPLOYEE; OR
EMPLOYEE'S RIGHT TO INSTITUTE LEGAL ACTION FOR THE PURPOSE OF ENFORCING THE
PROVISIONS OF THIS AGREEMENT.
c. Notwithstanding anything contained in this Agreement to the contrary,
the following terms, as used in this Section 5, shall have the following
meanings:
(i) "Claims" shall mean any and all manners of actions, causes
of action, charges, obligations, suits, proceedings,
debts, dues, contracts, judgments, damages, attorney fees,
claims, and demands whatsoever, in law or equity.
(ii) "Employee" shall mean "Employee" as defined on page 1 of
this Agreement and his heirs, executors, administrators,
successors and assigns.
---
(iii) "Employer" shall mean "Employer" as defined on page 1 of
this Agreement and all of its officers, directors,
---
shareholders, agents and employees and any and all
affiliates and related entities, and their respective
heirs, executors, administrators, successors and assigns .
6. Confidentiality and Preservation of Corporate Opportunity.
----------------------------------------------------------
a. Employee agrees at all times during the term hereof and thereafter, to
hold in strictest confidence, and not to use, except for the benefit of
Employer, or to disclose to any person, firm or corporation without written
authorization of Employer, the Proprietary Information of Employer.
Employee understands that "Proprietary Information" means any Employer
proprietary information, technical data, trade secrets
3
or know-how, including, but not limited to, research, product plans,
marketing plans, products, services, customer lists and customers
(including, but not limited to, customers of Employer on whom Employee may
call or with whom Employee becomes more acquainted during the term of this
Agreement or has become acquainted during any prior period in which he
performed services for Employer), software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing, financial or other business
information disclosed to Employee by Employer either directly or indirectly
in writing, electronically, orally or by drawings or observation of parts
or equipment prior to or after the commencement of this Agreement.
In light of the highly competitive nature of the industry in which
Employer conducts its business, Employee agrees that all Proprietary
Information heretofore or in the future obtained by the Employee as a
result of the Employee's association with Employer shall be considered
confidential. In recognition of this fact, the Employee agrees that he
will not, except in the performance of his duties under the Consulting
Agreement, or, except as otherwise provided herein, during and after the
execution of this Agreement, disclose any of such Proprietary Information
to any person or entity for any reason or purpose whatsoever and he will
not make use of any Proprietary Information for his own purposes or for the
benefit of any person or entity (except Employer) under any circumstances.
The provisions contained in this Section 6 shall also apply to information
obtained by Employee with respect to any subsidiary of or company otherwise
affiliated with Employer.
In the event that Employee is requested or required (by oral
questions, interrogatories, requests for information or documents,
subpoena, civil investigative demand, any informal or formal investigation
by any government or governmental agency or authority or otherwise) to
disclose any of the Proprietary Information, Employee will notify Employer
promptly in writing so that Employer may seek a protective order or other
appropriate remedy or, in Employer's sole discretion, waive compliance with
the terms of this Agreement. Employee agrees not to oppose any action by
Employer to obtain a protective order or other appropriate remedy. In the
event that no such protective order or other remedy is obtained, or that
Employer waives compliance with the terms of this agreement, Employee will
furnish only that portion of the Proprietary Information which Employee is
advised in writing by counsel that he is legally required to furnish and
will exercise his reasonable best efforts, at Employer's expense, to obtain
reliable assurance that confidential treatment will be accorded to the
Proprietary Information.
b. In order to further protect the confidentiality of the Proprietary
Information and in recognition of the highly competitive nature of the
industries in which Employer conducts its business, and for the Additional
Consideration set forth in Section 3 herein, Employee further agrees as
follows:
(i) for the period commencing on the date hereof and ending on the
second anniversary of the effective date of Termination of the
Consulting Agreement (as hereinafter defined) (the "Preservation
Period"), Employee will not, directly or
4
indirectly engage in any Business Activities (as hereinafter defined),
other than on behalf of Employer, whether such engagement is as an
officer, director, proprietor, employee, partner, investor (other than
as a holder of less than 3% of the outstanding capital stock of a
publicly traded corporation), consultant, advisor, agent or otherwise,
in any geographic area in which the products or services of Employer
have been distributed or provided by Employer during the period
commencing two years prior to the date hereof and ending on the
effective date of Termination of the Consulting Agreement.
As used in this Agreement: "Business Activities" shall mean the
providing of marketing services directly to consumers over the
Internet, including but not limited to, the distribution of coupons,
saving notices, gift certificates and other promotional incentives;
and "Termination of the Consulting Agreement" shall mean: (x) the
expiration of the Consulting Agreement or (y) any termination of the
Consulting Agreement in accordance with the terms of the Consulting
Agreement, prior to the expiration of the term then in effect under
the Consulting Agreement, by either Employee or Employer; whichever
occurs first.
(ii) Employee will not, during the Preservation Period, directly or
indirectly engage in any activities, provide any services or supply
any products (other than on behalf of Employer) which would constitute
Business Activities to any company or customer with whom Employer has
done any business during the period commencing two years prior to the
date hereof and ending on the effective date of Termination of the
Consulting Agreement, whether as an officer, director, proprietor,
employee, partner, investor (other than as a holder of less than 3% of
the outstanding capital stock of a publicly traded corporation),
consultant, advisor, agent or otherwise.
(iii) Employee will not, during the Preservation Period, directly or
indirectly assist others in engaging in any of the Business Activities
in the manner prohibited to Employee.
(iv) Employee will not, during the Preservation Period, directly or
indirectly induce employees of Employer or any of its subsidiaries to
engage in any activities hereby prohibited to Employee or to terminate
their employment.
It is expressly understood and agreed that although Employee and Employer
consider the restrictions contained in each of clauses (i) through (iv)
above to be reasonable for the purpose of preserving the goodwill,
proprietary rights and going concern value of Employer, if a final
judicial determination is made by a court having jurisdiction that the time
or territory or any other restriction contained in this Section 6 is an
unenforceable restriction on the activities of Employee, the provisions of
this Section 6 shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such other extent as
such court may judicially determine or indicate to be reasonable.
Alternatively, if the court referred to above finds that any restriction
contained in this Section 6 or any remedy provided in Section 8 of this
Agreement is
5
unenforceable, and such restriction or remedy cannot be amended so as to
make it enforceable, such finding shall not affect the enforceability of
any of the other restrictions contained therein or the availability of any
other remedy. The provisions of this Section 6 shall in no respect limit or
otherwise affect the obligations of Employee under other agreements with
Employer, including but not limited to, the Consulting Agreement.
7. Designs, Inventions, Patents and Copyrights. Employee shall promptly
-------------------------------------------
disclose, grant and assign to Employer for its sole use and benefit any and all
designs, inventions, improvements, technical information, know-how and
technology and suggestions relating in any way to the products or services of
Employer or capable of beneficial use by customers to whom products or services
of Employer are sold or provided, which the Employee in his past association
with Employer, conceived, developed or acquired, during the Employee's
employment with Employer (whether or not during usual working hours), together
with all applications for copyrights, trademarks, design patents, patents,
divisions of pending patent applications, applications for reissue of patents
and specific assignments of such applications (and any copyrights, trademarks,
patents or design patents) (the "Intellectual Property") that may at any time be
granted for or upon any such designs, inventions, improvements, technical
information, know-how or technology. In connection therewith at all times after
the execution of this Agreement:
(i) Employee shall promptly execute and deliver such applications,
assignments, descriptions and other instruments as may be necessary or
proper in the opinion of Employer to vest in Employer title to the
Intellectual Property and to enable it to obtain and maintain the entire
right and title thereto throughout the world; and
(ii) Employee shall render to Employer at its expense all such assistance
as it may require in the prosecution of applications for said patents or
reissues thereof, in the prosecution or defense of interferences which may
be declared involving any of said applications or patents, and in any
litigation in which Employer and affiliates may be involved relating to the
Intellectual Property.
(iii) Employee agrees to, and hereby grants to Employer, title to all
copyrightable material first designed, produced or composed in the course
of or pursuant to Employee's employment with Employer, which material shall
be deemed "works made for hire" under Xxxxx 00, Xxxxxx Xxxxxx Code, Section
1.01 of the Copyright Act of 1976.
(iv) Employee agrees to and does hereby grant to Employer a royalty-free,
non-exclusive, and irrevocable license to reproduce, translate, publish,
use and dispose of, and to authorize others so to do, any and all
copyrighted or copyrightable material furnished as a result of Employee's
employment with Employer but not first produced or composed by Employee in
the performance of his employment with Employer, provided that the license
granted by this Section shall be only to the extent the Employee now has,
or under any later agreements with Employer relating to similar work may
acquire, the right to grant such licenses without Employer becoming liable
to pay compensation to others solely because of such grant.
6
(v) This Section 7 does not apply to Intellectual Property for which no
equipment, supplies, facility or trade secret of Employer was used and
which was developed entirely on Employee's own time, and (1) which does
not relate (a) to the business of Employer, or (b) to Employer's actual or
demonstrably anticipated research or development, or (2) which does not
result from any work performed by Employee for Employer.
8. Remedies. Employee acknowledges and agrees that Employer's remedy at law
--------
for a breach or threatened breach of any of the provisions of Sections 6 or 7 of
this Agreement would be inadequate and that in the event of such breach or
threatened breach relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available would be appropriate. It is understood and
agreed that the existence of such breach or threatened breach shall be
determined by a court of competent jurisdiction and nothing contained herein
shall be deemed an admission by Employee that such breach or threatened breach
has occurred. Nothing herein contained shall be construed as prohibiting
Employer from pursuing, in addition, any other remedies available to it for any
such breach or threatened breach. The waiver by Employer of a breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of a breach of any other provision of this Agreement or of any subsequent
breach by Employee.
9. Severability. It is further understood and agreed by the parties hereto
------------
that if any of the provisions of this Agreement shall contravene, or be invalid
under, the laws of the particular state, county, or jurisdiction where used,
such contravention or invalidity shall not invalidate the whole Agreement;
rather the Agreement shall be construed as if not containing the particular
provision or provisions held to be invalid, and the rights and obligations of
the parties shall be construed and enforced accordingly.
10. Notices. Except as may otherwise be provided in this Agreement, any
-------
notices required by or submitted in connection with the terms and conditions of
this Agreement shall be in writing and be deemed effective upon the first to
occur of: actual receipt; confirmation of facsimile transmission; or three (3)
days after deposit in the U.S. mail, certified mail, return receipt requested,
and addressed as follows:
CSI: Employee:
0000 Xxxx Xxxxxxx Xxxx Xxxxxx Xxxxx
Xxxxx 000 000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxx Xxxxxx, Xxxxxxxx 00000
Any party hereto may change its address for the purposes of this paragraph by
tendering notice of such change of address to the other party in the manner
herein provided for giving notice.
11. Governing Law. This Agreement shall be governed by and interpreted under
-------------
the laws, statutes and case decisions of the State of Illinois.
7
12. Amendment/Waiver. No provision of this Agreement may be altered, amended
----------------
and/or waived, except by a written document signed by both parties hereto
setting forth such alteration, amendment, and/or waiver. The parties hereto
agree that the failure to enforce any provision or obligation under this
Agreement shall not constitute a waiver thereof or serve as a bar to the
subsequent enforcement of such provision or obligation or any other provisions
or obligations under this Agreement.
13. Successors and Assigns. This Agreement shall be binding upon and the
----------------------
benefits thereof, shall inure to the parties hereto and their respective legal
representatives, heirs, successors, and assigns.
14. Entire Agreement. Subject to Section 5 above, this Agreement resolves any
----------------
and all claims, disputes or causes of action which Employee may have against
Employer, its officers, directors, employees, partners, and any and all related
entities. Further, this Agreement constitutes the entire agreement between the
parties hereto and contains all of the agreements between said parties with
respect to the subject matter hereof. There is no statement, promise,
agreement, or obligation in existence which may conflict with the terms of this
Agreement or may modify, enlarge, or invalidate this Agreement or any provision
hereof. None of the prior and/or contemporaneous negotiations, preliminary
drafts, or prior versions of this Agreement leading up to its execution and not
set forth herein shall be used by any of the parties to construe or affect the
validity of this Agreement. Each party acknowledges that no representation,
inducement or condition not set forth herein has been made or relied upon by
either party. Further, this Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto.
15. Draftsmanship. Each of the parties hereto has been represented by counsel
-------------
in negotiating this Agreement and the parties agree that there shall be no
presumption favoring or burdening any one or more parties hereto based upon
draftsmanship. Whenever necessary in this agreement the context would permit,
the singular term and the related pronoun shall include the plural, the
masculine and the feminine terms.
16. Employee's Right to Revoke. NOTWITHSTANDING ANYTHING CONTAINED IN THIS
--------------------------
AGREEMENT WHICH CAN BE CONSTRUED TO THE CONTRARY, THIS AGREEMENT MAY BE REVOKED
BY EMPLOYEE AT ANY TIME WITHIN SEVEN (7) DAYS OF THE DATE EMPLOYEE SIGNS THIS
AGREEMENT. FURTHER, THIS AGREEMENT SHALL NOT BE EFFECTIVE UNTIL SAID SEVEN (7)
DAY PERIOD HAS EXPIRED. IN THE EVENT EMPLOYEE ELECTS TO REVOKE THIS AGREEMENT
WITHIN SAID TIME PERIOD, EMPLOYEE SHALL NOTIFY EMPLOYER OF SUCH REVOCATION IN
WRITING.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year hereinbelow written.
Witnesses: EMPLOYER:
xxxxxxxxxxx.xxx inc.
By: /s/ Xxxxxx X. Xxxxxx
______________________ _____________________________
Its: CEO
______________________ ____________________________
Dated: December 30, 1999
__________________________
EMPLOYEE:
/s/ Xxxxxx Xxxxx
______________________ _________________________________
Xxxxxx Xxxxx
______________________ December 30, 1999
Dated:___________________________
9
