October 17, 2005 Ms. Lynn Reedy Dear Lynn:
Exhibit 10.1
October 17, 2005
Xx. Xxxx Xxxxx
Dear Xxxx:
This letter sets forth the substance of the separation agreement (the “Separation Agreement”)
that eBay (the “Company”) is offering to aid you with your employment transition.
1. SEPARATION. Your last day of active employment with the Company is anticipated to be May 31,
2006 (the “Separation Date”). You will continue to perform your current duties through October 31,
2005. On that date you will resign as an executive officer of the Company and will no longer be
considered to be an “executive officer” of the Company under applicable SEC regulations. You will
then take your sabbatical through the month of November. From December 1, 2005 through the
Separation Date (the “Transition Period”), Xxxxxxx Xxxx (or, if he is no longer employed by the
Company, Xxxxxxx Xxxxxxxx) will assign you duties to perform, which may include, but not be limited
to, transitioning your current job responsibilities. The Company will pay you all accrued salary,
subject to standard payroll deductions and withholdings, earned through the Separation Date. You
will also be paid all accrued and unused vacation time earned through the Separation Date, subject
to standard payroll deductions and withholdings.
2. SEVERANCE. Although the Company has no policy or procedure requiring payment of any severance
benefits, the Company will make a severance payment to you in the form of a lump sum payment in the
amount of $95,000, which is equivalent to three months of base pay, subject to standard deductions
and withholdings and less any sums owing the Company. You will receive this payment after the
Separation Date and after the eighth day following the re-execution of this Agreement.
3. ADDITIONAL COMPENSATION. So long as you remain actively employed during the applicable
quarter(s) and are otherwise eligible under the program, you will receive the quarterly eBay
Incentive Plan (eIP) bonus for Q4 2005 and X0 0000, if any, calculated for you at an individual
rating of 100. Payment of such compensation will be paid out in accordance with the standard plan
schedule and will be subject to standard payroll deductions and withholdings.
4. STOCK OPTIONS. Subject to your re-execution of this agreement as of the Separation Date and the
passage of the period of time that you may revoke this contract thereafter (as referenced in
Section 18 below) without any such revocation, and the terms of your stock option grant(s), on the
Separation Date you will receive additional (accelerated) vesting of your stock options for three
(3) months. Except for this acceleration and that described in Section 7 below, your vesting will
cease on the Separation Date and you will have ninety (90) days or three (3) months (depending on
your option agreement) from that date to exercise any vested options.
5. HEALTH INSURANCE. As provided by the federal COBRA law and by the Company’s current group
health insurance policies, you will be eligible to continue your health insurance following the
Separation Date and, later, to convert to an individual policy. You will be provided with a
separate notice of your COBRA rights. You are entitled to COBRA insurance whether or not you sign
this Agreement. If you elect continued coverage under COBRA, the Company will pay your COBRA
premiums for three (3) months after the Separation Date as part of this Agreement. The Company’s
obligation to make these payments will cease immediately if you become eligible for other health
insurance benefits at the expense of another employer. You agree to immediately provide the
Company written notice of the availability of health insurance within that time period. Although
you are entitled to COBRA insurance whether or not you sign this Agreement, if
you want the Company to pay your COBRA premium(s) for the above-referenced time period, you must
sign this Agreement.
6. NON-COMPETITION. (a) During the period beginning on the Separation Date and ending on the
second anniversary of the Separation Date (the “Restricted Period”), you will not, directly or
indirectly, without the prior written consent of the Company, own, manage, operate, join, control,
finance or participate in the ownership, management, operation, control or financing of, or be
connected as an officer, director, employee, stockholder, Affiliate, promoter, manager, partner,
principal, agent, representative, advisor (whether paid or not) or consultant of, for or to, any of
the businesses on our previously agreed list (and any of their subsidiaries or divisions; each, a
“Restricted
Business”).
(b) Notwithstanding the provisions of Section 6(a), you will not be deemed to be in contravention
of the provisions of Section 6(a): if you own shares as a passive investor in a Restricted
Business, provided that: (A) such shares are actively traded on an established national securities
market in the United States; and (B) the number of shares of such entity’s capital stock that are
owned beneficially (directly or indirectly) by you collectively represent less than one percent
(1%) of the total number of shares of such entity’s capital stock outstanding.
7. ADDITIONAL CONSIDERATION. As consideration for the non-compete agreement contained in Section 6
above, subject to the terms of your options, you will receive as an additional benefit an
additional two (2) months acceleration of vesting of your options as of the Separation Date and an
additional $63,333, which is the equivalent of two months base salary.
8. OTHER COMPENSATION OR BENEFITS. You acknowledge that, except as expressly provided in this
Separation Agreement, you will not receive nor are you entitled to receive any additional
compensation, severance or benefits after the Separation Date. You recognize and agree that your
employment relationship with the Company is permanently and irrevocably severed and the Company has
no obligation, contractual or otherwise, to hire, re-hire or re-employ you in the future.
9. “AT-WILL” EMPLOYMENT. Your employment at all times, including during the Transition Period,
remains “at-will” and nothing in this Agreement shall be construed as altering the at-will
relationship. Either you or the Company may terminate your employment at any time, with or without
cause or advanced notice. If, however, the Company terminates your employment prior to the
Separation Date for reasons other than Cause (as defined herein), the Company will pay you the
balance of your salary through the Separation Date at your then-current rate and make the
additional payments called for by Sections 2-4 above, and will provide COBRA sponsorship pursuant
to Section 5 above, unless you are or become eligible for other health insurance benefits at the
expense of another employer. For purposes hereof, termination for “Cause” shall mean termination
upon the occurrence of any one of the following: (i) your willful failure to substantially perform
your assigned duties, which failure continues after written notice to you, other than failure
resulting from your death or incapacity due to physical or mental illness or impairment; (ii) a
willful act by you that constitutes misconduct and that is injurious to eBay or any of its
affiliates or subsidiaries (collectively, the “Companies”); (iii) a breach by you of a material
provision of this Agreement; (iv) a material violation by you of any law or regulation relating to
the business of any of the Companies; or (v) a breach by you of your fiduciary duty, if any, to any
of the Companies. In the event of early termination (by either you or the Company for any reason),
your stock options will cease vesting as of the date thereof, and you will have 90 days or three
months from that date (depending on your option agreement) to exercise any vested options.
10. EXPENSE REIMBURSEMENTS. Within ten (10) days of the Separation Date, you will submit your
final documented expense reimbursement statement reflecting any and all authorized business
expenses you incurred through the Separation Date for which you seek reimbursement. The Company
will reimburse you for such expenses pursuant to its regular business practice.
11. RETURN OF COMPANY PROPERTY. By the Separation Date, you will return to the Company all Company
documents (and all copies thereof) and other Company property and materials in your
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possession, or your control, including, but not limited to, Company files, notes, memoranda,
correspondence, lists, drawings, records, plans and forecasts, financial information, personnel
information, customer and customer prospect information, sales and marketing information, product
development and pricing information, specifications, computer-recorded information, tangible
property, credit cards, entry cards, identification badges and keys; and any materials of any kind
which contain or embody any proprietary or confidential material of the Company (and all
reproductions thereof).
12. PROPRIETARY INFORMATION OBLIGATIONS. You acknowledge your continuing obligations under your
Employee Information and Inventions Agreement (a copy of which is attached hereto as Exhibit A),
which include but are not limited to the obligation to refrain from any unauthorized use or
disclosure of any confidential or proprietary information of the Company.
13. CONFIDENTIALITY. To the extent not publicly disclosed pursuant to SEC regulations, the
provisions of this Separation Agreement will be held in strictest confidence by you and by us and
will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you may
disclose this Agreement to your immediate family; (b) you and we may disclose this Agreement in
confidence to your or our attorneys, accountants, auditors, tax preparers, financial advisors and
other agents; and (c) you or we may disclose this Separation Agreement insofar as such disclosure
may be necessary to enforce its terms or as otherwise required by law.
14. NONDISPARAGEMENT. You agree not to disparage the Company, the Company’s officers, directors,
employees, shareholders and agents, affiliates and subsidiaries in any manner likely to be harmful
to them or their business, business reputation or personal reputation; provided that you will
respond accurately and fully to any question, inquiry or request for information when required by
legal process. We will similarly not disparage you in any manner likely to be harmful to you or
your reputation.
15. RELEASE OF CLAIMS. In consideration for the payments and other promises and undertakings
contained in this Separation Agreement to which you would not otherwise be entitled, and except as
otherwise set forth in this Separation Agreement, and your rights under your indemnification
agreement with the Company and the Company’s Directors’ and Officers’ Insurance policies, all of
which rights shall continue following the Separation Date, you release, acquit and forever
discharge the Company, its parents and subsidiaries, and its and their respective officers,
directors, agents, servants, employees, attorneys, shareholders, successors, assigns and
affiliates, of and from any and all claims, liabilities, demands, charges, causes of action, costs,
expenses, attorneys fees, damages, indemnities and obligations of every kind and nature, in law,
equity, or otherwise, which you assert or could assert against the Company at common law or under
any statute, rule, regulation, order or law, whether federal, state or local, on any ground
whatsoever, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of
or in any way related to agreements, events, acts or conduct at any time prior to and including the
date you sign this Agreement, including but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with your employment with the Company or the
termination of that employment; claims or demands related to salary, bonuses, commissions, stock,
stock options, or any other ownership interests in the Company, vacation or other time off pay,
fringe benefits, expense reimbursements, severance pay, or any other form of compensation; any and
all causes of action, including but not limited to actions for breach of contract, express or
implied, breach of the covenant of good faith and fair dealing, express or implied, wrongful
termination in violation of public policy, all other claims for wrongful termination and
constructive discharge, and all other tort claims, including, but not limited to, intentional or
negligent infliction of emotional distress, invasion of privacy, negligence, negligent
investigation, negligent hiring, supervision or retention, assault and battery, false imprisonment,
defamation, intentional or negligent misrepresentation, fraud, and any and all claims arising under
any federal, state or local law or statute, including, but not limited to, the California Fair
Employment and Housing Act; Title VII of the Civil Rights Act of 1964; the Civil Rights Act of
1991; the Fair Labor Standards Act; the Employee Retirement and Income Security Act; the Americans
with Disabilities Act, 42 U.S.C. § 1981; the Age Discrimination in Employment Act of 1967, as
amended (“ADEA”); the Family and Medical Leave Act; the California Family Rights Act; the
California Labor Code; the California Civil Code; the California Constitution; and any and all
other laws and regulations relating to employment termination, employment discrimination,
harassment or retaliation, claims for wages,
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hours, benefits, compensation, and any and all claims for attorneys’ fees and costs, inasmuch as is
permissible by law and by the respective governmental enforcement agencies for the above-listed
laws.
16. RELEASE OF UNKNOWN CLAIMS. You acknowledge that you have read and understand Section 1542 of
the California Civil Code, which reads as follows: “A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his settlement with the debtor.” You
hereby knowingly, intentionally, and expressly waive and relinquish all rights and benefits under
that section and any law of any jurisdiction of similar effect with respect to your release of any
unknown or unsuspected claims you may have against the Company.
17. MISCELLANEOUS. This Separation Agreement, including all exhibits, constitutes the complete,
final and exclusive embodiment of the entire agreement between you and the Company with regard to
this subject matter. It is entered into without reliance on any promise or representation, written
or oral, other than those expressly contained herein, and it supersedes any other such promises,
warranties or representations, prior agreements and communications, whether oral or written, as to
the specific subjects of this letter by and between you and the Company. This Separation Agreement
may not be modified or amended except in writing signed by both you and a duly authorized officer
of the Company. This Separation Agreement will bind the heirs, personal representatives,
successors and assigns of both you and the Company, and inure to the benefit of both you and the
Company, their heirs, successors and assigns. If any provision of this Separation Agreement is
determined to be invalid or unenforceable, in whole or in part, this determination will not affect
any other provision of this Separation Agreement and the provision in question will be modified by
the court so as to be rendered enforceable. No waiver by the Company of any right under this
Separation Agreement shall be construed as a waiver of any other right, nor shall any waiver by the
Company of any breach of this Separation Agreement be a waiver of any preceding or succeeding
breach. This Separation Agreement will be deemed to have been entered into and will be construed
and enforced in accordance with the laws of the State of California as applied to contracts made
and to be performed entirely within California.
18. I ACKNOWLEDGE THAT I HAVE BEEN ADVISED BY THIS WRITING, AS REQUIRED BY THE AGE DISCRIMINATION
IN EMPLOYMENT ACT (ADEA) AND THE OLDER WORKERS’ BENEFIT PROTECTION ACT (OWBPA), THAT: (a) MY
WAIVER AND RELEASE DO NOT APPLY TO ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE EXECUTION DATES OF
THIS AGREEMENT; (b) I HAVE BEEN ADVISED HEREBY THAT I HAVE THE RIGHT TO CONSULT WITH AN ATTORNEY
PRIOR TO EXECUTING THIS AGREEMENT; (c) I HAVE TWENTY-ONE (21) DAYS TO CONSIDER THIS AGREEMENT
(ALTHOUGH I MAY CHOOSE TO VOLUNTARILY EXECUTE THIS AGREEMENT EARLIER); (d) I HAVE SEVEN (7) DAYS
FOLLOWING THE EXECUTION OF THIS AGREEMENT TO REVOKE THE AGREEMENT; AND (e) THIS AGREEMENT WILL NOT
BE EFECTIVE UNTIL THE DATE UPON WHICH THE RESPECTIVE REVOCATION PERIOD HAS EXPIRED, WHICH WILL BE
THE EIGHTH DAY AFTER THIS AGREEMENT IS EXECUTED AND, WITH RESPECT TO SECTIONS 2,4,8, AND 11-19
SUBSEQUENTLY RE-EXECUTED BY ME, PROVIDED THAT THE COMPANY HAS ALSO EXECUTED THIS AGREEMENT BY THAT
DATE.
Upon acceptance of this Separation Agreement, please sign below within the timeframe specified
above and return the executed original to me. Upon your signature below, this will become our
binding agreement with respect to your separation from the Company and its terms merging and
superceding in their entirety all other or prior agreements and communications, whether written or
oral, by you and eBay as to the specific subjects of this Agreement.
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| eBay Inc. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
I UNDERSTAND AND AGREE TO THE TERMS CONTAINED IN THIS AGREEMENT AND INTEND, BY MY SIGNATURE BELOW,
TO BE LEGALLY BOUND BY THOSE TERMS. I AM SIGNING THIS RELEASE KNOWINGLY, WILLINGLY AND VOLUNTARILY
IN EXCHANGE FOR THE SEVERANCE BENEFITS DESCRIBED ABOVE:
/s/ Xxxx X. Xxxxx
|
Date: | 10/18/05 | ||
EMPLOYEE NAME |
Please re-execute below on your Separation Date.
I HAVE READ AND AGREE TO THE FOREGOING RELEASE OF CLAIMS AS OF THE DATE SET FORTH BELOW:
| Date: | ||||
EMPLOYEE NAME |
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