EXHIBIT 10.19
SEPARATION AGREEMENT
This Agreement is made as of January 17, 2002 (the "Effective
Date"), by and between Xxxxxx Xxxxxx (the "Executive") and Autobytel Inc. (the
"Company").
WHEREAS, the Executive has been employed by the Company or its
predecessor companies or its or their subsidiaries or affiliates as its
Executive Vice President, Corporate Development, pursuant to an employment
agreement by and between the Company and the Executive, dated as of May 3, 2000
(the "Employment Agreement");
WHEREAS, the Executive resigned from his position as Executive Vice
President, Corporate Development of the Company, and from all other positions
with the Company and its subsidiaries or affiliates effective December 31, 2001
(the "Resignation Date"); and
WHEREAS, the Executive and the Company desire to set forth the terms
of the Executive's separation from the Company.
NOW THEREFORE, the parties hereto, intending to be legally bound, do
hereby agree as follows:
1. Payments and Benefits to the Executive.
a) Cash Payments. Subject to and conditioned upon the performance by the
Executive of his obligations set forth in this Agreement, the Company
agrees to pay the Executive an amount equal to $440,529.40 which shall
be paid to the Executive on the Revocation Date (as defined in Section
14 hereof). In addition, the Company shall pay the Executive an amount
equal to $19,470.60 representing accrued and unpaid vacation.
b) Stock Options.
(i) The 150,000 options granted to the Executive pursuant to the
Employment Agreement (the "Regular Options") are vested and
exercisable and shall remain exercisable by the Executive until
the second anniversary of the Resignation Date, notwithstanding
anything to the contrary set forth in the agreements pursuant to
which such options were granted. Except as specifically set
forth in this Section 1(b)(i), the Regular Options shall
continue to be governed by and subject to the terms of the
applicable stock option plans and option agreements pursuant to
which such options were granted.
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(ii) The parties acknowledge and agree that the Regular Options
comprise all of the options to acquire shares of common stock of
the Company held by the Executive as of the date hereof.
c) Health and Welfare Benefits. The Company shall make monthly payments
to the Executive for health insurance through April 30, 2003, such
payments totaling in the aggregate $19,317.38.
d) Equipment. As soon as practicable following the Revocation Date, the
Executive shall return to the Company all computer and other
equipment, if any, belonging to the Company.
e) Other. In addition to the foregoing,
(i) the Executive acknowledges that he has received all salary
payments, as well as accrued but unused vacation and all other
amounts due him, through the Resignation Date and that no
further salary or other compensation for services rendered is
due to him; and
(ii) the Executive acknowledges that the Company shall deduct all
applicable withholding taxes from the amounts to be paid to the
Executive under this Agreement.
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2. Confidential Information. The Executive acknowledges that the Company's
and its subsidiaries' and affiliates' trade secrets, information
concerning products and services and their development, technical
information, marketing and sales activities and procedures, promotion and
pricing techniques and credit and financial data concerning the Company,
its subsidiaries and affiliates and their customers (the "Proprietary
Information") are valuable, special and unique assets of the Company and
its subsidiaries and affiliates, access to and knowledge of which have
been gained by virtue of the Executive's position and involvement with the
Company and its subsidiaries and affiliates. Proprietary Information shall
not include information which is or becomes generally available to the
public other than as a result of unauthorized disclosure by the Executive.
The Executive agrees that he will not disclose any of such Proprietary
Information to any person or other entity for any reason or purpose
whatsoever, and that the Executive will not make use of any Proprietary
Information for the benefit of any person or other entity other than the
Company and its subsidiaries and affiliates, except to the extent
disclosure is or may be required by a statute, by a court of law, by any
governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a
committee thereof) with jurisdiction to order him to divulge, disclose or
make accessible such information, provided, however, that the Executive
shall give
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the Company notice of any such request or demand for such information upon
his receipt of same and the Executive shall reasonably cooperate with the
Company in any application the Company may make seeking a protective order
barring disclosure by the Executive.
3. Restrictive Covenants. The Company is engaged in the business of
independent online automotive marketing services and information (the
"Business") throughout the world. The Executive represents, warrants,
acknowledges and agrees that (i) the market for the Business is extremely
competitive and extends throughout the world and the Executive, through
the Company, is among the limited number of people engaged in the
Business; (ii) the restrictive covenants and other agreements contained
herein are an essential part of this Agreement; (iii) the Executive has
been fully advised by, or has had the opportunity to be advised by, an
attorney in connection with the negotiation, preparation, execution and
delivery of this Agreement and the transactions contemplated by this
Agreement; and (iv) no reasonable person would engage in any of the
transactions contemplated by this Agreement without the benefit of the
restrictive covenants and the other agreements contained herein by the
Executive. Accordingly, the Executive agrees to be bound by the
restrictive covenants and the other agreements contained in this Agreement
to the maximum extent permitted by law, it being the intent and spirit of
the parties that the restrictive covenants and the
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other agreements contained herein shall be valid and enforceable in all
respects, and, subject to the terms and conditions of this Agreement,
mutually dependent upon the obligations of the Company to pay the
Executive the consideration due the Executive under this Agreement.
a) Noncompetition. During the period commencing with the Revocation Date
(as defined in Section 14 hereof) and extending for one year
thereafter (the "Restricted Period"), the Executive shall not in any
city, town, county, parish or other municipality in any state of the
United States where the Company or any of its subsidiaries, successors
or assigns engages in the Business, directly or indirectly, (i) engage
in the Business for the Executive's own account; (ii) enter the employ
of, or render any services to or for any entity that is engaged in the
Business; or (iii) become interested in any such entity in any
capacity, including as an individual, partner, shareholder, officer,
director, employee, principal, agent, trustee or consultant; provided,
however, the Executive may own, directly or indirectly, solely as a
passive investment, securities of any entity traded on any national
securities exchange or automated quotation system if the Executive,
individually or in the aggregate, is not a controlling Person of, or a
member of a group which controls, such entity and does not, directly
or indirectly, "beneficially own" (as defined in Rule 13d-3 of
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the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
without regard to the 60 day period referred to in Rule
13d-3(d)(1)(i)) 2% or more of any class of securities of such entity.
b) Noninterference. During the Restricted Period, the Executive shall
not, directly or indirectly, (i) hire, solicit, induce, or attempt to
solicit or induce any person known to the Executive to be an employee
of the Company or any of its subsidiaries, successors or assigns, that
is involved in the Business to terminate his or her employment or
other relationship with the Company, its subsidiaries, successors or
assigns for the purpose of associating with (A) any entity of which
the Executive is or becomes an officer, director, partner, executive,
employee, principal, agent, or consultant or (B) any competitor of the
Company or its subsidiaries, successors or assigns in the Business, or
(ii) otherwise encourage any person to terminate his or her employment
or other relationship with the Company or any of its subsidiaries,
successors or assigns for any other purpose or no purpose.
4. Standstill Agreement. The Executive, on behalf of himself and his
affiliates (as such term is defined in Rule 12b-2 under the Exchange Act),
agrees that, for a period of 2 years from the Effective Date, he and his
affiliates shall not, and shall cause any person or entity controlled by
him or them not to: (i) in
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any manner acquire, agree to acquire or make any proposal to acquire
ownership directly nor indirectly (including, but not limited to
beneficial ownership as defined in Rule 13d-3 under the Exchange Act) of
any voting securities or other equity interests in, debt securities, trade
payables, or property of the Company or any rights or options to acquire
such ownership except for the Regular Options; (ii) solicit proxies or
consents, directly or indirectly, or become a "participant" in any
"solicitation" (as such terms are defined in Regulation 14A under the
Exchange Act) of proxies or consents to vote, or seek to advise or
influence any person with respect to the voting of, any voting securities
of the Company; (iii) with respect to any voting securities of the
Company, (a) form, join or be part of any "group" (within the meaning of
Section 13(d)(3) of the Exchange Act); (iv) otherwise act, alone or in
concert with others, to seek to control or influence the management or
policies of the Company or the Board of Directors of the Company; or (v)
advise, assist or encourage any other person in connection with any of the
foregoing.
5. Rights and Remedies Upon Breach by the Executive. If the Executive
breaches, or threatens to commit a breach of, any of the provisions of
this Agreement, the Company, and its subsidiaries, successors or assigns
shall have the following rights and remedies, each of which shall be
independent of the others and severally enforceable, and each of which
shall be in addition
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to, and not in lieu of, any other rights or remedies available to the
Company, or its subsidiaries, successors or assigns at law or in equity
under this Agreement, or otherwise:
a) Specific Performance. The right and remedy to have each and every one
of the covenants in this Agreement specifically enforced and the right
and remedy to obtain injunctive relief, it being agreed that any
breach or threatened breach of any of the restrictive covenants in
this Agreement would cause irreparable injury to the Company and its
subsidiaries, successors or assigns and that money damages would not
provide an adequate remedy to the Company and its subsidiaries,
successors or assigns.
b) Accounting. The right to other appropriate equitable or monetary
relief.
c) Severability of Covenants. The Executive acknowledges and agrees that
the restrictive covenants in this Agreement are reasonable and valid
in geographic, temporal and subject matter scope and in all other
respects, and do not impose limitations greater than are necessary to
protect the goodwill, proprietary information, and other business
interests of the Company and its subsidiaries, successors or assigns.
If, however, any court of competent jurisdiction subsequently
determines that any of the restrictive covenants, or any part thereof,
is
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invalidor unenforceable, the remainder of the restrictive covenants
shall not thereby be affected and shall be given full effect without
regard to the invalid portions.
d) Blue-Penciling. If any court of competent jurisdiction determines that
any of the restrictive covenants, or any part thereof, is
unenforceable because of the duration or scope of such provision, such
court shall have the power to reduce the duration or scope of such
provision, as the case may be, and, in its reduced form, such
provision shall then be enforceable to the maximum extent permitted by
applicable law.
e) Enforceability in All Jurisdictions. The Executive intends to and
hereby confers jurisdiction to enforce each and every one of the
covenants in this Agreement upon the courts of any jurisdiction within
the geographic scope of such restrictive covenants. If the courts of
any one or more of such jurisdictions hold the restrictive covenants
unenforceable by reason of the breadth of such scope or otherwise, it
is the intention of the Executive that such determination shall not
bar or in any way affect the Company's, or any of its subsidiaries',
successors' or assigns' right to the relief provided above in the
courts of any other jurisdiction within the geographic scope of such
restrictive covenants, as to breaches of such restrictive covenants in
such other respective jurisdictions, such restrictive covenants as
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they relate to each jurisdiction being, for this purpose, severable
into diverse and independent covenants.
6. Cooperation. The Executive agrees to cooperate in the Company's handling
or resolution of any matter in which the Executive was involved in the
course of his employment, provided that such requests shall not be unduly
burdensome. By way of example only, such obligation of cooperation may
include furnishing information and assisting the Company in legal
proceedings. Promptly following submission of a written statement by the
Executive, the Company shall reimburse the Executive his reasonable
out-of-pocket costs and other reasonable expenses incurred in connection
with his cooperation pursuant to this Section 6, including but not limited
to reasonable attorney's fees.
7. Releases
a) Release by the Executive.
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(i) The Executive on behalf of himself and his agents, assignees,
attorneys, heirs and executors (the "Executive Releasors")
agrees to and does hereby forever release the Company, any
affiliated companies, and their past and present parents,
subsidiaries, and present and former employees, officers,
directors, shareholders, agents, successors and assigns of any
of them (but, as to any such individuals, only in connection
with or in relationship to their capacity as an employee,
officer, director, shareholder, agent, successor or assignee of
the Company, any affiliated companies, and their past and
present parents and subsidiaries, successors and assignees and
not in connection with or in relationship to their personal
capacity unrelated to a referenced corporate entity; such
individuals as described and such corporate entities
collectively, the "Company Releasees") from all claims, demands,
causes of action, controversies, agreements, promises and
remedies, of any type which the Executive may have as of the
date hereof, whether known or unknown, in connection with or in
relationship to the Executive's capacity as an employee, officer
or director of any of the Company Releasees, and the termination
of any such capacity, other than
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with respect to the rights expressly preserved herein (such
released claims are collectively referred to herein as the
"Released Executive Claims"). Without any limitation on the
foregoing, the Released Executive Claims shall include any
claims arising under the Age Discrimination in Employment Act
("ADEA"), Title VII of the Civil Rights Act, the Americans with
Disabilities Act, the California Fair Employment and Housing
Act, as amended, the California Labor Code and all other
federal, state and local laws.
(ii) In addition, the Executive, on behalf of himself and the
Executive Releasors expressly waives all rights afforded by
Section 1542 of the Civil Code of the State of California
("Section 1542") with respect to the Company Releasees. Section
1542 states 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
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MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
Notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release, the
Executive understands and agrees that this Release is intended
to include and does include all claims, if any, which the
Executive may have and which the Executive does not now know or
suspect to exist in his favor against the Company Releasees, and
this Release extinguishes those claims.
(iii) Notwithstanding the foregoing, the Executive does not waive, and
"Released Executive Claims" shall not include, any rights to
which he may be entitled (A) to seek to enforce this Agreement
or (B) to obtain contribution as permitted by law in the event
of the entry of judgment against him as a result of any act or
failure to act for which both the Executive and the Company are
held to be jointly liable. The Executive shall have the right to
indemnification, to the fullest extent permitted under
applicable law, to the same extent as other senior executive
officers and directors of the Company or its subsidiaries or
affiliates are so entitled, in accordance with the
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provisions of the Company's by-laws, certificate of
incorporation or as otherwise provided under the laws of the
state of Delaware, whichever provides the Executive with the
broadest protections, and directors' and officers' liability
insurance policies to the same extent as other senior executive
officers and directors of the Company, and in the event such
indemnification or liability insurance policy rights are
subsequently enhanced, and relate to the period of time prior to
the Resignation Date the Executive shall be entitled to the
protection of such enhanced rights.
(iv) The Executive, on behalf of himself and the Executive Releasors,
promises never to file a lawsuit or arbitration asserting any
Released Executive Claims against the Company Releasees. If the
Executive files a lawsuit or arbitration against the Company
Releasees based on the Released Executive Claims, he agrees to
pay for all costs incurred by the Company Releasees, including
reasonable attorney's fees, in defending against such claim.
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b) Release by the Company.
(i) The Company, on behalf of itself and any affiliated
companies and their past and present parents and
subsidiaries (the "Company Releasors"), agree to forever
release the Executive and his family, estate, agents,
attorneys, heirs, executors, successors and assigns (the
"Executive Releasees") from any and all claims, demands,
causes of action, controversies, agreements, promises and
remedies, in connection with or in relationship to the
Executive's capacity as an employee, officer or director
of any of the Company Releasors which they may have as of
the date hereof, whether known or unknown, including,
without limitation, any rights to pursue such dispute(s)
against the Executive Releasees (the "Released Company
Claims") except for any claims, demands, causes of action,
controversies, agreements, promises and remedies arising
out of the Executive's intentional disclosure of, or
direction to disclose, material non-public information to
any person.
(ii) The Company, on behalf of itself and the Company
Releasors, promises never to file a lawsuit or arbitration
against the Executive Releasees asserting any Released
Company Claims.
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If the Company files a lawsuit or arbitration against the
Executive Releasees based on Released Company Claims, it
will pay for all costs incurred by the Executive
Releasees, including reasonable attorney's fees, in
defending against such claims. Notwithstanding the
foregoing, the Company does not waive, and "Released
Company Claims" shall not include, any rights to which the
Company may be entitled to seek to enforce this Agreement.
8. Miscellaneous.
a) Mutual Nondisparagement. The Executive shall not make any public
statements, encourage others to make statements or release information
intended to disparage or defame the Company, its subsidiaries or
affiliates or their products or services or their officers, directors
or managers. The Company, on behalf of itself and its subsidiaries and
affiliates, shall not make any public statements, encourage others to
make statements or release information intended to disparage or defame
the Executive's reputation. Notwithstanding the foregoing, nothing in
this Section 8(a) shall prohibit any person from making truthful
statements when required by order of a court or other body having
jurisdiction.
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b) Resolution of Disputes. Any disputes or claims arising under or in
connection with this Agreement, including, without limitation, any
disputes arising under Sections 3 or 4 hereof, shall be resolved by
binding arbitration, to be held in Orange County, California, in
accordance with the Commercial Rules of the American Arbitration
Association before a panel of three (3) arbitrators, one appointed by
the Executive, one appointed by the Company, and the third appointed
by mutual agreement of the arbitrators selected by the Executive and
the Company. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof. Each party shall
bear its own counsels' fees in arbitration or litigation, and shall
share equally the costs of arbitration; provided however the Company
shall pay and be solely responsible for any attorneys' fees and
expenses and court or arbitration costs incurred by the Executive as a
result of a claim that the Company has breached or otherwise failed to
perform this Agreement or any provision thereof to be performed by the
Company if the Executive prevails in the contest in whole or in
substantial part. Nothing herein shall prevent the Company from
seeking equitable relief in court as provided for in Section 5 hereof.
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c) General. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and the Company. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver
of any similar or dissimilar provisions or conditions at the same or
any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter
hereof have been made by either party that are not set forth expressly
in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the
State of Delaware without regard to its conflicts of law principles.
Except as otherwise expressly provided in this Agreement, including
without limitation the provisions of Section 2 hereof, and except for
disclosure by the Company to its legal, accounting and other advisors,
and/or in due diligence to potential investors, it is the express
intention of the parties hereto that this Agreement and the provisions
hereof be treated as confidential and not disclosed in any public
manner other than disclosure (i) that is or may be required by a
statute, by a court of law, by any governmental agency having
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supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof)
with jurisdiction to order that such information be divulged,
disclosed or made accessible; provided, however, that the Executive
shall give the Company notice of any such request or demand for such
information upon his receipt of same and the Executive shall
reasonably cooperate with the Company in any application the Company
may make seeking a protective order barring disclosure by the
Executive; (ii) that is made to the Executive's legal counsel or
personal financial advisor and is reasonably necessary in connection
with the Executive's consideration of the terms of this Agreement or
the Executive's personal financial dealings, or (iii) that is made to
a member of the Executive's immediate family; provided, however, that
with respect to subsections (ii) and (iii) of this Section 8(c), any
person to whom the Executive discloses such information has agreed in
advance to maintain the confidentiality of such information consistent
with the terms of this Agreement.
d) Beneficiaries. This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If the Executive shall die while any amount would still
be
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payable to the Executive hereunder (other than amounts which, by their
terms, terminate upon the death of the Executive) if the Executive had
continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
executors, personal representatives or administrators of the
Executive's estate.
9. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
10. Notices. Notices, demands and all other communications provided for in
this Agreement shall be in writing and shall be sent by messenger,
overnight courier, certified or registered mail, postage prepaid and
return receipt requested or by facsimile transmission to the parties at
their respective addresses and fax numbers set forth below or to such
other address or fax number as to which notice is given.
If to the Executive:
Xxxxxx Xxxxxx
00000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
If to the Company:
Autobytel Inc.
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
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Attention: General Counsel
Fax: (000) 000-0000
Notices, demands and other communications shall be deemed given on
delivery thereof or, in the case of facsimile transmission, upon receipt
of successful transmission from the transmitting facsimile machine.
11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together
will constitute one and the same instrument.
12. Entire Agreement; Effect on Employment Agreement. This Agreement sets
forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersedes all prior agreements, including,
without limitation, the Employment Agreement, promises, covenants,
arrangements, communications, representations or warranties, whether oral
or written, by either party or by any officer, employee or representative
of either party hereto.
13. Legal Fees. Each party shall bear its own legal fees and expenses in
connection with the preparation and negotiation of this Agreement.
14. Review and Revocation. The Executive acknowledges that the Company has
advised him to consult with an attorney of his choosing prior to signing
this Agreement. The Executive understands and agrees that he has the right
and
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has been given the opportunity to review this Agreement and, specifically,
the release in Section 7 hereof, with an attorney of his choice. The
Executive also understands and agrees that he has entered into this
Agreement freely and voluntarily. The Executive has twenty-one (21) days
to consider the release of his rights under ADEA, although he may sign
this Agreement sooner if he so desires. Furthermore, once the Executive
has signed this Agreement, he has seven (7) additional days from the date
he signs it to revoke his consent to the release of his rights under ADEA.
The Executive's release of his rights under ADEA will not become effective
until seven (7) days after the date he has signed this Agreement (the day
immediately following the expiration of such 7-day period being referred
to herein as the "Revocation Date") and the payments and obligations of
the Company set forth in this Agreement shall not become due unless and
until the period for such revocation has expired with no such revocation
by the Executive having occurred.
15. No Admission of Wrongdoing. The Company's offer to the Executive of this
Agreement and the payments and benefits set forth herein is not intended
to, and shall not be construed as, an admission of liability by the
Company or of any improper conduct on the Company's part, all of which the
Company specifically denies.
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16. Representations of the Company. The Company represents and warrants to the
Executive that the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been
duly and validly authorized on behalf of the Company and that all
corporate action required to be taken by the Company for the execution,
delivery and performance of this Agreement including, without limitation,
the performance of Section 1(b) hereof, has been or promptly will be duly
and effectively taken. The Company acknowledges that the Executive has
relied upon such representations and warranties in entering into this
Agreement.
17. No Mitigation or Offsets. The Executive shall not be required to seek
other employment or to reduce or otherwise mitigate any severance amount
or benefit payable to him under this Agreement and no severance amount or
benefit shall be reduced on account of any compensation received by the
Executive from other employment. The Company's obligation to pay severance
amounts and benefits under this Agreement shall not be reduced by any
amount owed by the Executive to the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date set forth above.
Autobytel Inc.
/s/ Xxxxxx Xxxxxx By: /s/ Xxxxx Xxxx
--------------------------- ---------------------------
Xxxxxx Xxxxxx Executive Vice President and General Counsel
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