Exhibit 10.2
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SEVERANCE AGREEMENT AND GENERAL RELEASE
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This Severance Agreement and General Release (hereinafter "Agreement")
is entered into this day 20th day of June, 2002, by and between Xxxxxxxx Xxxxxxx
("Xxxxxxx") and C5 Technologies, Inc., a Nevada corporation ("C5"), who shall
collectively be referred to as the "Parties", or individually as a "Party".
RECITALS
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WHEREAS, effective June 1, 2001, Network Investor Communications, Inc.
(which later had its name changed to C5) and Xxxxxxx entered in an employment
agreement, as amended, (the "Employment Agreement");
WHEREAS, the Parties mutually agree that it is in their respective best
interests to bring the employment relationship between Xxxxxxx and C5 to a
conclusion, and
WHEREAS, the Parties desire to settle and compromise any and all claims
between the Parties.
COVENANTS
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NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto covenant and
agree as follows:
1. Termination of Employment. Effective June 20, 2002, the parties
mutually agree that Xxxxxxx' employment with C5 ceased. Furthermore, on or
before June 20, 2002, Xxxxxxx shall deliver to Xxxxx & Xxxxxx, LLP, counsel for
the C5, a written resignation from his positions as President of C5 and as an
officer or director of C5 and any of C5's subsidiaries, in the form attached
hereto as Exhibit A, with such resignation to be immediately effective. Xxxxxxx
shall be entitled to receive his regular pay check payable on June 20, 2002.
2. Two Year Prohibition on Future Employment. For a period of two (2)
years from the date hereof, Xxxxxxx shall not apply for or accept employment
with either C5 and its affiliated or successor entities or MindArrow Systems,
Inc. ("MindArrow"), nor shall he accept any consulting agreement with either C5
and its affiliated or successor entities or MindArrow, except as expressly
provided for herein. C5 agrees that for a period of two (2) years, neither it
nor its affiliated or successor entities shall, except as expressly set forth
herein, offer employment or enter into any consulting agreement with Xxxxxxx.
3. Severance Compensation. Provided that Xxxxxxx has complied with the
terms of this Agreement, C5 shall provide the following to Xxxxxxx as severance
compensation:
(a) pay Xxxxxxx his normal paycheck on June 20, 2002. This shall
be Xxxxxxx last regular paycheck.
(b) pay Xxxxxxx the sum of $125,000 in six equal monthly payments
in the amount of $20,833.33, with the first payment being paid on July
20, 2002 and on the 20th of each month thereafter until paid in full.
These monthly payments shall be paid, less applicable tax withholdings,
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as severance pay and as consideration for the release of any and all
alleged claims, including mental and emotional distress, which Xxxxxxx
may have against C5.
4. Health Insurance. C5 agrees to provide through December 31, 2002, a
continuation of Xxxxxxx' health insurance, as currently in place, and provide to
him thereafter the availability of COBRA continuation coverage at his expense.
5. Vesting of Options.
a. C5 and Xxxxxxx agree that as of the date hereof, options to
purchase 133,333 shares of Xxxxxxx initial 200,000 share option grant
have vested, and that options to purchase 166,667 shares of Xxxxxxx'
500,000 share option have vested. The purchase price for both of these
options is $0.25 per share. As of the date hereof, no other options
which have been granted to Xxxxxxx have vested.
x. Xxxxxxx shall remain a consultant to C5 through the earlier of
August 6, 2002 or the closing of the currently contemplated merger
transaction with MindArrow (the "Vesting Date"). On the Vesting Date,
C5 and Xxxxxxx agree that a certain number of options to purchase
additional shares of C5's common stock shall vest according to the
terms of Section 5 (c) below.. Except for those additional options
which shall vest on the Vesting Date as set forth below in Section 5
(c), Xxxxxxx and C5 agree that all other options which have been
granted to Xxxxxxx by C5 shall terminate and be null and void.
c. The number of shares which shall vest on the Vesting Date shall
be calculated by multiplying 450,000 by a fraction, the numerator of
which is the annualized revenue of C5, including the MindArrow revenue
(calculated by adding the actual six month's revenue of both C5 and its
subsidiaries and the six month's revenue of MindArrow, all as of June
30, 2002, and multiplying this amount by 2), and the denominator of
which is $50,000,000. Thus, by way of illustration, if C5's
consolidated six month revenue as of June 30, 2002, is $12 million and
MindArrow's revenue for the same six month period of time is $3
million, Xxxxxxx would be entitled to receive vesting on 3/5 of 450,000
shares, or 270,000 shares.
x. Xxxxxxx and C5 agree that other than as set forth in Section 5
(c) above, Xxxxxxx shall not be entitled to vesting any additional
options, not be entitled to any additional shares, and all such other
options held by Xxxxxxx shall, on the Vesting Date, terminate and
become null and void. All options which vest on the Vesting Date, as
well as all previously vested options owned by Xxxxxxx shall be
exercisable in accordance with the terms set forth in the relevant
option agreement(s) and grant(s).
6. No Solicitation by Xxxxxxx. For a period of two (2) years from the
date hereof, Xxxxxxx agrees to not solicit or entice in any manner any employee,
consultant or director to leave or modify his/her employment with C5, MindArrow
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or any of their affiliated or successor entities. Xxxxxxx further agrees that he
will not contact any customer or known prospective customer of either C5 and its
affiliated entities or MindArrow, nor will he entice or solicit any customer or
prospective customer of either C5 and its affiliated entities or MindArrow to
change or modify in any manner its relationship with C5 or MindArrow, or their
affiliated and successor entities, except as specifically requested by the Chief
Executive Officer of C5 or its successor entity.
7. Scope of Consulting Services to be Provided by Xxxxxxx. Xxxxxxx
agrees that he will only provide those consulting services which shall be
expressly requested by the Chief Executive Officer of C5 and that he shall
refrain from taking any action for or on behalf of C5 and any of its affiliated
entities without first receiving the prior express instruction and consent of
C5's Chief Executive Officer. Further, in the event investors, customers,
lenders, prospective customers, employees or others specifically ask for Xxxxxxx
input or opinion regarding C5 and its affiliated or successor entities, Xxxxxxx
agrees to provide positive communications regarding C5, its affiliated or
successor entities, its officers, directors, employees and products.
8. Crescent Advisors Shares. Xxxxxxx agrees to the repurchase of the
900,000 shares of Company stock that had been granted to Crescent Advisors
pursuant to two letter agreements dated February 22, 2001 and May 29, 2001, at a
price of $0.01 per share, and, upon such repurchase, Xxxxxxx agrees to waive any
claim or interest that Xxxxxxx may have had in said shares.
9. Release by Xxxxxxx.
(a) Excluding claims for breach of enforcement of this Agreement,
Xxxxxxx does hereby irrevocably and unconditionally release and forever
discharge, for himself and for his heirs, executors, administrators and
assigns, any and all claims of any nature whatsoever against C5, its
subsidiaries, committees, groups, and their present, former and future
employees, agents, trustees, officers, directors, attorneys,
successors, predecessors, and assigns, which Xxxxxxx has or had against
them or any of them arising out of or by reason of any cause, matter or
thing whatsoever existing as of the date of execution of this
Agreement, whether known to the parties at the time of execution of
this Agreement or not, including without limitation, any claims arising
out of, or relating in any manner whatsoever to, the employment of
Xxxxxxx by C5 and his separation from C5. This FULL WAIVER OF ALL
CLAIMS includes, without limitation, any claims, demands, or causes of
action arising out of, or relating in any manner whatsoever to Title
VII of the Civil Rights Act of 1964 and 1991, as amended, the Labor
Management Relations Act, the Employee Retirement Income Security Act
of 1974 (ERISA), the Consolidated Omnibus Budget Reconciliation Act
(COBRA), the Fair Labor Standards Act (FLSA), the Utah
Anti-Discrimination Act of 1965, as amended, the Older Worker's Benefit
Protection Act, Worker's Compensation claims, the Americans with
Disabilities Act (ADA), as amended, or any other applicable federal,
state, or local statute or regulation, or any common law cause of
action, including without limitation, claims for breach of any express
or implied contract, the covenant of good faith and fair dealing, tort,
wrongful discharge, constructive discharge, personal injury, emotional
distress, defamation, fraud, or any claims for attorneys' fees or other
costs.
Xxxxxxx acknowledges that he has no claim under any federal, state
or local age discrimination in employment law including, but not
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necessary limited to, the Age Discrimination in Employment Act (ADEA),
the Utah Anti-Discrimination Act (UADA), and WAIVES any claim under the
ADEA or UADA for any alleged event or incident occurring up to the time
of the execution of this Agreement.
Xxxxxxx further covenants and agrees that, except for those items
expressly set forth herein, upon being paid the amounts provided for in
Section 3, above, and upon being paid his regular salary paycheck on
June 20, 2002, C5 is not further indebted to him in any amount for any
reason, including any fringe benefits or other forms of compensation.
(b) Xxxxxxx represents and warrants that he has not assigned or
subrogated any of his rights, claims and causes of action, including
any claims referenced in this Agreement or authorized any other person
or entity to assert such claim or claims on his behalf and he agrees to
indemnify and hold harmless C5 against any assignment of said right,
claims and/or causes of action.
(c) Xxxxxxx acknowledges that he has been given at least
twenty-one (21) days within which to consider this Agreement before
execution (which twenty-one day period he hereby waives) and seven (7)
days following the execution of the Agreement to revoke it. This
Agreement shall not become effective or enforceable until the foregoing
revocation period has elapsed. Xxxxxxx' decision not to revoke this
Agreement shall be reflected by signature(s) on Exhibit B, which is
incorporated herein and made part hereof.
10. Release by C5. Excluding claims for breach or for enforcement of
this Agreement or claims arising hereafter with respect to those provisions of
this Agreement that survive from the date hereof, C5 does hereby irrevocably and
unconditionally release and forever discharge, for itself and for its
subsidiaries, committees, groups, and their present, former and future
employees, agents, trustees, officers, directors, attorneys, successors,
predecessors, and assigns, any and all claims of any nature whatsoever against
Xxxxxxx, his heirs, executors, administrators, and assigns, which C5 has or had
against them or any of them arising out of or by reason of any cause, matter or
thing whatsoever existing as of the date of execution of this Agreement, whether
known to the parties at the time of execution of this Agreement or not,
including without limitation, any claims arising out of, or relating in any
manner whatsoever to, the employment of Xxxxxxx by C5; his role, activities or
decisions as a Director of C5; and, his separation from C5. This FULL WAIVER OF
ALL CLAIMS includes, without limitation, any claims, demands, or causes of
action arising out of, or relating in any manner whatsoever to Title VII of the
Civil Rights Act of 1964 and 1991, as amended, the Labor Management Relations
Act, the Employee Retirement Income Security Act of 1974 (ERISA), the
Consolidated Omnibus Budget Reconciliation Act (COBRA), the Fair Labor Standards
Act (FLSA), the Utah Anti-Discrimination Act of 1965, as amended, the Older
Worker's Benefit Protection Act, Worker's Compensation claims, the Americans
with Disabilities Act (ADA), as amended, or any other applicable federal, state,
or local statute or regulation, or any common law cause of action, including
without limitation, claims for breach of any express or implied contract, the
covenant of good faith and fair dealing, tort, wrongful discharge, constructive
discharge, personal injury, emotional distress, defamation, fraud, or any claims
for attorneys' fees or other costs.
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11. Representations. Xxxxxxx specifically represents that he has not
filed any complaints or charges against C5 with any local, state or federal
court or agency, including without limitation, any claims arising out of, or
relating in any manner whatsoever to, the employment of Xxxxxxx by C5 and his
separation from C5.
12. Mutual Nondisclosure and Confidentiality. The Parties each agree
that unless compelled or allowed otherwise by court order or subpoena, the terms
and conditions of this Agreement, including but not limited to the severance
payments referenced in Section 3 above, shall remain confidential and will not
be disclosed or released to any other person(s) or third parties except for
Xxxxxxx' immediate family members and the Parties' attorney(s), advisors and
accountant(s) provided that they agree to the same nondisclosure terms and
conditions.
13. Mutual Non-Disparagement. Xxxxxxx shall at all times hereafter
refrain from any activity harmful to or making any disparaging or negative
statements concerning C5, its affiliates, subsidiaries, officers, boards of
directors, attorneys, agents, employees, successors or assigns, either publicly
or privately. C5, its officers and Directors shall at all times hereafter
refrain from any activity harmful to or making any disparaging or negative
statements concerning Xxxxxxx, either publicly or privately. In the event either
Xxxxxxx or C5 is asked to respond to the severance between C5 and Xxxxxxx, both
parties shall only (a) state that "Xx. Xxxxxxx departed to pursue another
opportunity" and (b) confirm that Xx. Xxxxxxx was hired by C5 as President and
Chief Financial Officer on June 1, 2001, and resigned from employment on June
20, 2002, holding the same offices.
14. Non-Disclosure of Proprietary Information; Assignment of
Inventions; Shop Rights; Non-Compete and other Surviving Provisions of Xxxxxxx'
Employment Agreement. Xxxxxxx acknowledges that Sections 15, 16, 17, 18, 19 and
20 of his Employment Agreement dated June 1, 2001 survive and remain in full
force and effect. These provisions relate to Non-Disclosure of Proprietary
Information; Assignment of Inventions; Shop Rights; Non-Compete; Remedies and
Jurisdiction; and Attorney's Fees. Xxxxxxx specifically ratifies and agrees to
abide by the terms of these provisions and acknowledges their enforceability.
15. Termination of Xxxxxxx' Employment Agreement. Except as set forth
in Section 14 hereof, effective upon the execution of this Agreement, Xxxxxxx'
Employment Agreement with C5 (previously Network Investor Communications, Inc.)
shall terminate and be of no further force or effect.
16. Voluntary Agreement. This Agreement is freely entered into by the
undersigned.
17. Agreement Not an Admission. The parties hereby acknowledge that
neither this Agreement nor the settlement payment made hereunder nor the
acceptance of the same, may be treated as an admission of any legal
responsibility, liability, wrongdoing or fault of any kind whatsoever. Such
responsibility, liability, wrongdoing and fault being expressly denied.
18. Entire Agreement. Except for certain Sections of the Employment
Agreement which survive this Agreement, which Sections are identified in Section
14 hereof, this Agreement constitutes the sole and entire agreement between the
parties hereto, and supersedes any and all understandings and agreements made
prior hereto. There are no collateral understandings, representations, or
agreements other than those contained herein. It is understood and agreed that
the execution of this Agreement by either Xxxxxxx or C5 is not an admission of
liability, but is a severance agreement to put to rest any claim of any kind
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whatsoever between the parties, which either party may have against the other up
to the date of execution of this Agreement.
19. Jurisdiction. This Agreement shall be governed in all respects,
whether as to validity, construction, capacity, performance, or otherwise, by
the laws of the State of Utah, and no action involving this Agreement may be
brought except in the Courts of the State of Utah or the Federal District Court
for the District of Utah. If any provision of this Agreement is held to be
invalid, void or unenforceable for whatever reason, the remaining provisions not
so declared shall nevertheless continue in full force and effect without being
impaired in any manner whatsoever.
20. Breach. In addition to other remedies that may be available to
either Party, each Party shall be entitled to specific performance and
injunctive relief as remedies for any breach or threatened breach of this
Agreement by the other Party. Each Party agrees that in the event of any breach
of any provision of this Agreement, the Party who is found to have breached this
Agreement will indemnify and hold harmless the other Party from and against any
and all claims, demands, causes of action, obligations, damages or liabilities
including costs and attorneys fees arising from or in connection with that
breach.
21. Waiver. No waiver by any party of any breach of any term or
provision of this Agreement shall be construed to be a waiver of any proceeding,
concurrent or succeeding breach of the same or any other term or provision
hereof. No waiver shall be binding on the part of or on behalf of any party
entering into this Agreement.
22. Understanding. The parties represent and agree that they have
carefully read and fully understand all the provisions of this Agreement.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all such
counterparts together shall constitute but one agreement.
24. Amendments and Modifications. Any amendment or modification of this
Agreement must be in writing and signed by each party.
THE SIGNATORIES HAVE CAREFULLY READ THIS ENTIRE AGREEMENT. THE
SIGNATORIES FULLY UNDERSTAND THE FINAL AND BINDING EFFECT OF THIS
AGREEMENT. THE ONLY PROMISES MADE TO ANY SIGNATORY TO SIGN THIS
AGREEMENT ARE CONTAINED IN THIS AGREEMENT. THE SIGNATORIES ARE
SIGNING THIS AGREEMENT VOLUNTARILY. PLEASE READ CAREFULLY: THIS
SEVERANCE AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.
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IN WITNESS WHEREOF, this Severance Agreement and General Release is
executed as of the date first above written.
CATEGORY 5 TECHNOLOGY, INC. XXXXXXXX XXXXXXX
By __________________________ __________________________
Its __________________________ Xxxxxxxx Xxxxxxx
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EXHIBIT A
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RESIGNATION OF XXXXXXXX XXXXXXX
I, Xxxxxxxx Xxxxxxx, hereby resign my employment with Category 5
Technologies, Inc. ("C5"), including, without limitation, my position as
Director, President and Chief Financial Officer as of June 20, 2002.
I also hereby confirm my Resignation from (a) any other capacity that I
held, including any committee, as of the same date and (b) any subsidiary of C5
as a director, officer, and from any other capacity that I held as of the same
date. A copy of this Resignation shall be deemed an original.
__________________________ Date: June 20, 2002
Xxxxxxxx Xxxxxxx
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EXHIBIT B
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NON-REVOCATION
AS OF THE DATE SHOWN ON THIS FORM
By signing below, I hereby verify that I have chosen not to revoke my
agreement to and execution of the Severance Agreement and General Release. My
signature confirms my renewed agreement to the terms of that Agreement,
including the release and waiver of any and all claims relating to my employment
with C5 and its successors, assigns, and affiliated entities, and/or the
termination of that employment.
______________________________ _______________________________
Xxxxxxxx Xxxxxxx (Social Security Number)
______________________________ ________________________________
Signature* Date*
*Do not sign, date, or return this document until eight (8) days after
you sign the Severance Agreement and General Release
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