December 31, 2020 VIA EMAIL Jackie Barry Hamilton Dear Jackie:
Exhibit 10.1
December
31, 2020
VIA EMAIL
Xxxxxx
Xxxxx Xxxxxxxx
Dear
Xxxxxx:
The
purpose of this letter agreement is to set forth our mutual
understanding and agreement with respect to your transition and
ultimate separation from employment with Zoom Telephonics, Inc.
(the “Company”). In consideration of the mutual
covenants set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which you
acknowledge, we have agreed as follows:
1.
Transition and Separation from
Employment. Your separation from employment will occur on
December 31, 2020 (“Separation Date”). The period
between the date of this letter agreement and the Separation Date
is referred to in this letter agreement as your “Transition
Period.” On your Separation Date, you will relinquish any and
all positions that you have held with the Company and you will not
be considered a Company employee for any purpose after that
date.
2.
Transition Period. During the
Transition Period, your current terms and conditions of employment
(such as your job title, schedule, compensation, and benefits) will
remain the same or substantially the same in the aggregate. During
the Transition Period, you are required to train your replacement,
and you will also be required to support the integration of Minim
Inc. and the Company. You will also be required to continue to
comply with the Company’s policies and procedures. As of
December 4, 2020, you are no longer an officer of the Company, and
accordingly, have no liability as an officer of the Company for
events occurring after that date.
3.
Pay and Benefits. You agree
that you have received all compensation and benefits, including but
not limited to any non-monetary benefits such as leave time, to
which you are entitled in connection with your employment with the
Company. You further agree that the Company has satisfied in full
any contractual obligations it may have to you, including pursuant
to your Employment Agreement dated February 26, 2020 (the
“Employment Agreement”). You agree to make no claims
for further compensation from the Company of any type, including
bonus payments, commission payments, other than your earned an
unpaid vacation pay which will be paid to you on your Separation
Date. You acknowledge that, except to the extent provided in this
Agreement, the Company is under no obligation to provide you with
the benefits described below, including the health insurance
continuation payments, severance payments, and stock option
vesting. The Company and you agree that as of December 4, 2020, you
have 119 hours of accrued but unused Paid Time Off and 37 hours of
accrued and unused sick time. You will continue to accrue Paid
Time Off and sick time through the Separation Date in accordance
with the Company’s policies, and any such time you use before
the Separation Date will be deducted from your balances. The
Company will include in your final paycheck a payment for your
accrued but unused Paid Time Off.
4.
Health Insurance Continuation.
At your option, you may continue to be covered under the
Company’s group health insurance plan up to eighteen (18)
months after your Separation Date, subject to the terms and
conditions provided for in the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”)
provided you have timely and properly elected COBRA coverage in
accordance with the Company’s COBRA election procedures,
notice of which shall be sent to you under separate cover. Subject
to the Company’s receipt of this letter agreement timely
signed by you, the expiration of the seven (7) day revocation
period set forth below, and your compliance with the terms of this
letter agreement, the Company will pay the entire COBRA premiums
for your health insurance continuation coverage during the first
six (6) months of your COBRA continuation period, or until such
earlier time as you enroll in alternate health insurance coverage,
provided you have timely and properly elected COBRA coverage in
accordance with the Company’s COBRA election procedures,
notice of which shall be sent to you under separate cover. You
agree promptly to notify the Company if and when you become
eligible for alternate medical coverage during this six (6) month
period the Company is paying your COBRA premiums.
- 2 -
5.
Severance Package. If you
timely sign, do not revoke, and comply with this letter agreement,
the Company will:
●
Continue to pay
your current base salary (at the rate of $185,000 per year, less
all applicable federal, state or local tax withholding, F.I.C.A.,
and any other applicable payroll deductions) for the six (6) month
period following the Separation Date. Such payments shall be made
in installments corresponding to the regular pay periods of the
Company.
●
Pay you for your
accrued but unused sick time, which such amount (41.44 hours) will
be paid in installments along with the salary continuation
installment payments referenced in the first bullet point of this
Paragraph 5.
●
Pay you an extra
$16,000, which such amount will be paid in installments along with
the salary continuation payments and sick time payments, referenced
in the first and second bullet points, respectively, of this
Paragraph 5.
●
Vest all of your
sixty-seven thousand five hundred (67,500) unvested Company stock
options.
6.
Equity. You acknowledge and
agree that, with the vesting of the sixty-seven thousand five
hundred (67,500) Company stock options pursuant to Paragraph 5
above, you will have seventy-one thousand seven hundred twenty-one
(71,721) vested but unexercised Company stock options. All of your
vested stock options with the Company, including the 67,500 stated
above, are governed by the applicable Company equity plans and
grant agreements. You further acknowledge and agree that you will
not vest in or receive any additional stock options, other than
what is stated in this Agreement, or Company stock in connection
with your employment (or the termination of that employment) with
the Company.
7.
Unemployment Compensation. The
Company agrees that it shall not contest any good faith claim you
make for unemployment benefits. Of course, the Company may respond
truthfully and provide accurate information if it receives a
request for information from the agency with which you file such a
claim.
8.
Transfer of Responsibilities.
You shall, through the month of June 2021, cooperate fully and
timely with the Company and its personnel with all of its
reasonable requests, including after the Separation Date, to
provide an orderly transfer of your duties and responsibilities.
After the Separation Date, the Company will compensate you for your
time pursuant to this Paragraph 8 at the hourly rate of $150 an
hour for anything over 3 hours a week.
9.
Confidentiality of This Letter
Agreement. You agree to keep confidential and not to
disclose the existence or terms of this letter agreement or sums
paid under this letter agreement to anyone or to any organization,
except you may disclose such information to your spouse and
children, attorney, and financial advisor, provided you have
received in advance their promises to maintain this information in
strict confidence. You understand that the confidentiality
restrictions of this paragraph extend to and expressly prohibit
disclosure through social media. Notwithstanding the above, nothing
herein prevents you sharing information regarding this Agreement
with taxing authorities or the Department of Unemployment
Compensation if requested to do so. Further, nothing herein
prevents you from complying with a valid court order or
subpoena.
10.
Confidential Information.
During your employment with the Company, you had access to trade
secrets and confidential and proprietary business and technical
information of the Company, including data and information which
would not otherwise have been available to you except by reason of
your employment or position with the Company, and including, but
not limited to, customer files and records, plans, developments,
product information, pricing lists and information, customer lists
and other customer information, marketing plans, methods and other
marketing information, research methods and data, personnel
information, computer discs and files, maps, sketches and other
confidential, proprietary or secret information, and to documents
and information from third parties which the Company is required to
maintain in confidence (collectively “Confidential
Information”). You agree that you will not, without the
Company’s prior written consent, directly or indirectly
disclose to any person, not an employee of the Company, any
Confidential Information obtained in the course of your employment
with the Company, nor will you use any Confidential Information for
your own benefit to the detriment or intended or probable detriment
of the Company.
- 3 -
11.
Intellectual Property. You
agree you have disclosed promptly, completely, and in writing, and
will in the future disclose promptly, completely and in writing to
the Company any original works of authorship (including all
copyrights with respect thereto), any discovery, process, design,
improvement, innovation, development, improvement or invention,
whether or not patentable and whether reduced to writing or
practice or not, which you discovered, conceived and/or developed,
in whole or in part, either individually or jointly with others
(whether on or off the Company’s premises or during or after
working hours) during the period you were employed with the
Company, and which was or is directly or indirectly related to the
business or proposed business of the Company, or which resulted or
results from or was suggested by any work performed by any employee
or agent of the Company during your period of employment or for one
year thereafter ("Inventions").
You hereby assign, and agree to assign to the Company, without any
separate or additional remuneration, your entire right, title and
interest in all such Inventions, together with any and all United
States and foreign rights thereto. You also agree that all
Inventions and all works of authorship, literary works (including
computer programs), audiovisual works, translations, compilations,
and any other written materials, including but not limited to,
copyrightable works (the “Works”)
which were originated or produced by you (solely or jointly with
others), in whole or in part, within the scope of, or in connection
with, your employment will be considered "works made for hire" as
defined by the U.S. Copyright Act (17 USC §101, as amended)
and further acknowledge that you are an employee as defined under
that Act. All such works made for hire are and will be the
exclusive property of the Company, and you agree to treat any such
works as Proprietary Information. In the event that any Works are
not deemed to be “works made for hire,” you hereby
assign all of your right, title, and interest in and to such Works,
including but not limited to, the copyrights therein, to the
Company. You also agree to cooperate with the Company to execute
all instruments including patent and copyright applications and
assignments therefor, and to do all other things reasonably
necessary to fully vest, and perfect, in the Company the ownership
rights contemplated herein. In the event the Company is unable,
after reasonable effort, to secure your signature on any document
or instrument necessary to secure trademarks, letters patent,
copyrights or other analogous protection relating to any Works,
whether because of your physical or mental capacity or for any
other reason whatsoever, you hereby irrevocably designate and
appoint the Company and its duly authorized officers and agents as
your agent and attorney-in-fact, to act for and in his behalf and
stead to execute and file any such application or applications and
to do all other lawfully permitted acts.
12.
Non-Disparagement. Unless as
required by law or valid subpoena, you further agree, that you will
not, at any time after the date hereof, make any remarks or
comments, orally, in writing, or via social media, which remarks or
comments reasonably could be construed to be derogatory or
disparaging to the Company or any of its shareholders, officers,
directors, employees, attorneys or agents, or which reasonably
could be anticipated to be damaging or injurious to the Company's
reputation or good will or to the reputation or good will of any
person associated with the Company.
13.
Return of Property. You
acknowledge that you will return to the Company immediately after
your Separation Date all property of the Company that is in your
possession or under your control, including, without limitation,
any and all files, documents and other information with respect to
the Company’s management, business operations or customers,
including all files, documents, or other information containing
Confidential Information. If any Company property is on your
personal electronics, you agree to delete the same and such action
will satisfy this request.
- 4 -
14.
Non-Solicitation: During the
Transition Period and for six (6) months thereafter, you shall not,
directly or indirectly, as an individual proprietor, partner,
stockholder, officer, employee, director, joint venturer, investor,
lender, consultant, independent contractor, or in any other
capacity whatsoever: (i) recruit, solicit, or hire any
employee, consultant, agent, director or officer of the Company or
contact, recruit, solicit or induce, or attempt to contact,
recruit, solicit or induce, any employee, consultant, agent,
director or officer of the Company to terminate his/her employment
with, or otherwise adversely change, reduce, or cease any
relationship with, the Company; or (ii) contact, solicit,
divert, take away, or attempt to contact, solicit, divert or take
away, any clients, customers or accounts, or prospective clients,
customers or accounts, of the Company, or any of the
Company’s business with such clients, customers or accounts,
except as agreed upon in writing signed by a duly authorized
officer of the Company. If any restriction set forth in this
paragraph is found by any court to be unenforceable because it is
overbroad in any manner, such restriction shall be interpreted to
extend only over the maximum period of time, range of activities,
or geographic area which the court finds to be enforceable. You
acknowledge that the restrictions contained in this paragraph are
necessary for the protection of the business and goodwill of the
Company and are considered by you to be reasonable for such
purpose. You acknowledge that the restrictions contained in this
paragraph extend to and expressly prohibit conduct via social media
that would violate this paragraph. You further acknowledge that the
restrictions set forth in this paragraph do not prevent you from
earning a livelihood nor unreasonably impose limitations on your
ability to earn a living. As used in this agreement the term
“client,” “customer,” or
“accounts” shall include: (i) any person or entity that
is a client, customer or account of the Company on the date hereof
or becomes a client, customer or account of the Company during the
covered period; (ii) any person or entity that was a client,
customer or account of the Company at any time during the two-year
period preceding the date of your termination; and (iii) any
prospective client, customer or account to whom the Company has
made a presentation (or similar offering of services) within a
period of 180 days preceding the date of the termination of your
employment.
15.
Cooperation in Litigation. At
the Company’s reasonable request, you agree to assist,
consult with, and cooperate with the Company in any litigation or
administrative procedure or inquiry that involves the Company,
subject to reimbursement for your reasonable out of pocket
expenses, such as travel, meals, or lodging.
16.
Breach of Agreement. You
understand and agree that any material breach of your obligations
under this letter agreement will immediately render the
Company’s obligations and agreements hereunder null and void,
all payments pursuant to this letter agreement shall immediately
cease, you shall repay to the Company all sums you have been paid
or sums paid on your behalf pursuant to this letter agreement, and
you shall indemnify the Company Released Parties (as defined below)
for the full and complete costs of enforcing this letter agreement,
including reasonable attorneys’ fees, court costs, and other
related expenses.
- 5 -
17.
General Release of Company.
You, for yourself and your heirs, legal representatives,
beneficiaries, assigns and successors in interest, hereby knowingly
and voluntarily release the Company, its affiliates, and its
and their successors, assigns, former or current shareholders,
officers, directors, employees, agents, insurers, attorneys and
representatives (“Company Released Parties”) from any
and all causes of action, in law or equity, you now have, may have
or ever had, whether known or unknown, from the beginning of the
world to this date, including, without limitation, any claims under
the Age Discrimination in Employment Act, 29 U.S.C. §621
et seq.; claims for breach
of contract or based on tort; claims for employment discrimination
and wrongful termination; statutory wage and hour claims under
Massachusetts law, including but not limited to, claims for
violation of the Massachusetts Wage Act, and any other statutory,
regulatory or common law causes of action (“the Released
Claims”). You understand that you are releasing claims
pursuant to M.G.L., Chapter 149 including, but not limited to,
claims for untimely, underpayment, or non-payment of wages,
discrimination and/or retaliation for seeking to enforce your wage
and hour rights, misclassification as an independent contractor,
improper withholdings or deductions, tip or service charge related
claims, and claims pursuant to M.G.L., Chapter 151 relating to
minimum wage, discrimination and/or retaliation for seeking to
enforce your rights under Chapter 151, and/or overtime pay.
You hereby
acknowledge and understand that this is a General Release, and that
this means you are giving up your right to xxx the Company Released
Parties for any and all claims, including but not limited to the
specific claims mentioned in this paragraph. Notwithstanding the
following, under no circumstances are you releasing any rights or
claims to vested 401K benefits, any rights or claims you may have
to indemnification and defense, including, but not limited to, any
rights you may have under the Company D&O insurance and the
Company’s D&O Side A DIC insurance, and your rights to
vested equity.
18.
ADEA Disclosures/Revocation.
You are advised that you have at least forty-five (45) days to
consider this letter agreement and to consult with an attorney
prior to executing it. You and the Company agree that any changes
to this document, whether material or immaterial, do not restart
the running of the forty-five (45) day period and that such period
shall be calculated from the date that you first received this
letter agreement. For a period of seven (7) business days after
executing this letter agreement, you may revoke this letter
agreement by providing written notice of such revocation to Xxxx
Xxxxxxxxx at xxxx@xxxxx.xx, and this letter agreement shall not
become effective or enforceable until said seven (7) business day
period has expired.
In
connection with your consideration of this letter agreement, the
Company has furnished you with certain information regarding the
individuals who were selected and not selected to participate in
this layoff, which information is attached hereto as Exhibit A. The
class, unit or group of employees from which the Company selected
individuals to participate in the layoff is all members of the
Company’s senior leadership team (the “Decisional
Unit”). The factors the Company used to select individuals
from within the “Decisional Unit” to participate in the
layoff are skill set and position need in light of the
Company’s current and anticipated business needs. The time
limits applicable to the employees in the Decisional Unit who are
40 years of age and older and who are being asked to waive claims
under the Age Discrimination in Employment Act are as
follows:
●
Such employees have
been given forty-five (45) days after receiving their letters
agreements containing a General Release of claims to sign and
return their letter agreements to the Company.
●
Once such an
employee signs the letter agreement containing the General Release
of claims and returns it to the Company, the employee has seven
days after signing the letter agreement to revoke it.
- 6 -
19.
Participation in Agency
Proceeding. You understand that nothing contained in this
letter agreement limits your ability to file a charge or complaint
with the Equal Employment Opportunity Commission, the National
Labor Relations Board, the Occupational Safety and Health
Administration, the Securities and Exchange Commission or any other
federal, state or local governmental agency or commission (each a
“Government Agency”). You further understand that this
letter agreement does not limit your ability to communicate with
any Government Agency or otherwise participate in any investigation
or proceeding that may be conducted by any Government Agency,
including providing documents or other information, without notice
to the Company. However, you understand and agree that that
although you may engage in such activities, you will not be
entitled to receive any award or damages, to the extent consistent
with applicable law.
20.
Acknowledgment. By signing this
letter agreement, you acknowledge and agree that you understand the
meaning of this letter agreement and that you freely and
voluntarily enter into it and the General Release contained herein.
You agree that no fact, evidence, event, or transaction, whether
known or unknown, shall affect in any manner the final and
unconditional nature of the agreements and release set forth
herein.
21.
Miscellaneous. This letter
agreement shall be construed in accordance with the laws of the
Commonwealth of Massachusetts without regard to choice or conflict
of law principles. In the event that any provision contained in
this letter agreement is declared invalid, illegal or unenforceable
for any reason by any court of competent jurisdiction, and cannot
be modified to be enforceable, excluding the general release
language, such provision shall immediately become null and void,
leaving the remainder of this letter agreement in full force and
effect. However, if any portion of the general release language is
ruled to be unenforceable for any reason, this entire letter
agreement shall be deemed null and void. To avoid any possible
misunderstanding, the Company and you intend this letter agreement
to be a comprehensive statement of the terms of your separation and
supersede: (i) all prior understandings or statements made to you
by the Company regarding your arrangements with the Company after
your Separation Date; and (ii) all agreements you previously
executed with the Company, including your Employment Agreement. It
does not, however, supersede your equity agreements with the
Company. Any modifications or waiver of the terms set forth in this
letter agreement must be in writing and signed by you and by me on
behalf of the Company. This letter agreement is binding on the
company’s successors and assigns.
Please
indicate your agreement to the terms of this letter agreement by
signing and dating the last page of the enclosed copy of this
letter agreement, and return it to me no earlier than December 31,
2020 and no later than the close of business on February 15, 2021,
which you acknowledge to be more than forty-five (45) days from the
date of your receipt of this letter agreement.
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Sincerely, |
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/s/ Xxxx
Xxxxxxxxx
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Xxxx
Xxxxxxxxx
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Chief Executive
Officer
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By
signing this letter agreement, I acknowledge and agree that I
understand the meaning of this letter agreement and that I freely
and voluntarily enter into it and the General Release contained
herein. I agree that no fact, evidence, event, or transaction,
whether known or unknown, shall affect in any manner the final and
unconditional nature of the agreements and releases set forth
herein.
AGREED
TO AND EXECUTED UNDER SEAL THIS 31st day of December, 2020.
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/s/ Xxxxxxxxx Xxxxx
Xxxxxxxx
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Xxxxxxxxx Xxxxx
Xxxxxxxx
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- 7 -
EXHIBIT A
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Job Title
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Age
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Selected for Layoff
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Not Selected for Layoff
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Interim
Chief Marketing Officer
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31
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X
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Chief
Operations Officer
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54
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X
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Chief
Technology Officer
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56
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X
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Chief
Financial Officer
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59
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X
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