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Sample Business Contracts

Separation Agreement - Phoenix Technologies Ltd. and Robert J. Riopel

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                              SEPARATION AGREEMENT
                              --------------------

        This Severance Agreement (the "Agreement") is made and entered into
effective as of December 18, 1998, by and between Robert J. Riopel (the
"Executive") and Phoenix Technologies Ltd., a Delaware corporation (the
"Company").

                                 R E C I T A L S

        A. Executive, based on his own considerations, including the terms
set forth in this Agreement, has decided to voluntarily enter into this
Agreement providing for the separation of his employment, certain amounts of
pay in lieu of notice, certain other rights and obligations, and the release
of all pending legal claims.

        B. To accomplish the foregoing objectives, the Board has directed the
Company, upon execution of this Agreement by the Executive, to agree to the
terms provided herein.

       C. Certain capitalized terms used in the Agreement are defined in
Section 7 below.

                                A G R E E M E N T

        In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Executive by the Company, the
parties agree as follows:

1. DEFINITION OF TERMS. The following terms referred to in this Agreement
shall have the following meanings for the purposes of this Agreement only:

         a. CAUSE. "Cause" shall mean (i) any act of personal dishonesty
taken by the Executive in connection with his responsibilities as an
Executive and intended to result in substantial personal enrichment of the
Executive, (ii) conviction of a felony that is injurious to the Company,
(iii) a willful act by the Executive which constitutes gross misconduct and
which is injurious to the Company, and (iv) continued violations by the
Executive of the Executive's obligations under Section 1 of this Agreement
that are demonstrably willful and deliberate on the Executive's part after
there has been delivered to the Executive a written demand for performance
from the Company which describes the basis for the Company's belief that the
Executive has not substantially performed his duties.

         b. DISABILITY. "Disability" shall mean that the Executive has been
unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least
ninety (90) days after its commencement, is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative (such
Agreement as to acceptability not to be unreasonably withheld). Termination
resulting from Disability may only be effected after at least 30 days'
written notice by the Company of its intention to terminate the Executive's
employment. In the event that the Executive resumes the performance of
substantially all of his duties hereunder before the

<PAGE>

termination of his employment becomes effective, the notice of intent to
terminate shall automatically be deemed to have been revoked.

         c. RE-EMPLOYMENT. "Re-employment shall mean that the Executive has
obtained work for compensation from any single employer or client, or any
group of employers or clients in a cumulative amount greater than twenty-four
hours per week, or one hundred hours per month.

         d. SEPARATION DATE. "Separation Date" shall mean the earlier of: (1)
January 31, 1999, (2) Executive's resignation from the Company upon twenty
(20) days written notice, (3) Company's involuntary termination of Executive
for any reason other than Cause.

2.    RIGHTS AND OBLIGATIONS UNTIL SEPARATION.

         a. SCOPE OF EMPLOYMENT. The Company currently employs Executive as
Chief Financial Officer, as such position has been defined in terms of
responsibilities and compensation as of the Effective Date of this Agreement.
Executive shall comply with and be bound by the Company's operating policies,
procedures and practices from time to time in effect until the Separation
Date. Until the Separation Date, Executive shall continue to devote his full
time, skill and attention to his duties and responsibilities, and shall
perform them faithfully, diligently and competently, and Executive shall use
his best efforts to further the business of the Company and its affiliated
entities.

         b. BASE COMPENSATION. The Company pays the Executive as compensation
for his services a base salary at the annualized rate of $180,000. Such
salary shall be paid periodically in accordance with normal Company payroll
practices. The annual compensation specified in this Section 2, together with
any increases in such compensation as the Board may direct from time to time,
is referred to in this Agreement as "Base Compensation."

         c. EXECUTIVE BENEFITS. The Executive shall be eligible to
participate in the employee benefit plans and executive compensation programs
maintained by the Company applicable to other key executives of the Company,
including (without limitation) retirement plans, savings or profit-sharing
plans, stock option, incentive or other bonus plans, life, disability,
health, accident and other insurance programs, paid vacations, and similar
plans or programs, subject in each case to the generally applicable terms and
conditions of the applicable plan or program in question and to the sole
determination of the Board or any committee administering such plan or
program.

         d. TERMINATION FOR CAUSE. Until the Separation Date, if the Company
terminates Executive's employment for Cause, Executive shall not be entitled
to receive severance or other benefits pursuant to this Agreement.

         e. DISABILITY; DEATH. If the Company terminates Executive's
employment before the Separation Date as a result of the Executive's
Disability or if the Executive's employment terminates due to the death of
the Executive, then the Executive shall not be entitled to receive severance
or other benefits pursuant to this Agreement. However, Executive shall remain
eligible for those

<PAGE>

severance and other benefits (if any) as may then be available under the
Company's then existing severance and benefits plans and policies at the time
of Executive's termination or death.

3.      RIGHTS AND OBLIGATIONS AFTER SEPARATION DATE.

         a. GUARANTEED SEVERANCE PAYMENTS. Executive shall receive severance
payments for twelve (12) months after the Separation Date at Executive's Base
Compensation to be paid to Executive in accordance with the Company's
standard payroll practices. Executive will continue to receive severance
payments for up to an additional six months in the event that Executive has
not obtained Re-employment during the twelve month period following the
Separation Date. During the period beginning twelve months from the
Separation Date and ending six months thereafter, Severance payments shall
discontinue in the event Executive obtains Re-employment.

         b. MEDICAL BENEFITS. The Company, at the Company's sole expense,
shall provide Executive (and, if applicable, his eligible dependents) with
the same level of health coverage and benefits as in effect for Executive
(and, if applicable, his eligible dependents) on the day immediately
preceding the day of the Executive's termination of employment (the
"Company-Paid Coverage"); provided, however, that (i) Executive and each
eligible dependent constitutes a qualified beneficiary, as defined in Section
498OB(g)(1) of the Internal Revenue Code of 1986, as amended (collectively,
"Qualified Beneficiaries"); (ii) each Qualified Beneficiary elects
continuation coverage under the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended ("COBRA"), within the time period prescribed pursuant
to COBRA. Such Company-Paid Coverage shall continue in effect for each
Qualified Beneficiary until the earlier of (i) the Qualified Beneficiary is
no longer eligible to receive continuation coverage under COBRA, or (ii)
eighteen (18) months following termination of employment pursuant to Section
5(a).

         c. COVENANTS NOT TO COMPETE AND NOT TO SOLICIT.

                  (i) Upon the termination of the Executive's employment with
         the Company pursuant to Section 5(a) and for a period of eighteen (18)
         months thereafter, Executive agrees that he shall not, on his own
         behalf, or as owner, manager, advisor, principal, agent, partner,
         consultant, director, officer, stockholder or employee of any business
         entity, or otherwise in any territory in which the Company is actively
         engaged in business (i) open or operate any business which is in
         competition with any business of the Company, (ii) act as an employee,
         agent, advisor or consultant of any competitor of the Company, (iii)
         solicit or accept business from any of the Company's competitors, (iv)
         take any action to or do anything reasonably intended to divert
         business from the Company or influence or attempt to influence any
         existing customers of the Company to cease doing business with the
         Company or to alter its business relationship with the Company, or (v)
         take any action or do anything reasonably intended to influence any
         suppliers of the Company to cease doing business with the Company or to
         alter its business relationship with the Company. Executive further
         covenants and agrees that he will not for himself or on behalf of any
         other person, partnership, firm, association or corporation in any
         territory served by the Company, directly or indirectly solicit or
         accept business from any of the Company's existing customers for the
         purchase or sale of products or services of a like kind to those sold
         or provided the Company. The

<PAGE>

         foregoing covenant shall not be deemed to prohibit Executive from
         acquiring an investment not more than one percent (1%) of the
         capital stock of a competing business, whose stock is traded on a
         national securities exchange or through the automated quotation
         system of a registered securities association.

                  (ii) Upon the termination of the Executive's employment with
         the Company pursuant to Section 5 (a) and for a period of eighteen (18)
         months thereafter, Executive agrees that he shall not either directly
         or indirectly solicit, induce, attempt to hire, recruit, encourage,
         take away, hire any employee of the Company or cause any employee of
         the Company to leave his or her employment either for Executive or for
         any other entity or person.

                  (iii) Executive represents that he (i) is familiar with the
         foregoing covenants not to compete and not to solicit, and (ii) is
         fully aware of his obligations hereunder, including, without
         limitation, the reasonableness of the length of time, scope and
         geographic coverage of these covenants.

         d. TRANSITION ASSISTANCE. Executive will make himself available to
respond to inquiries regarding Company matters.

         e. OTHER BENEFIT PLANS. Executive's stock options will vest and be
exercisable according to the terms of the options after the Separation Date.
Employee will be able to continue to participate in neither the Phoenix's 401(k)
plan nor the Employee Stock Purchase Plan (ESPP) after the Separation Date.
Employee will not continue to accrue vacation and sick leave after the
Separation Date.

4.      RELEASE.

        Executive hereby forever waives for himself, his attorneys, heirs,
executors, administrators, successors and assigns any claim against Phoenix,
including its subsidiaries, affiliates, insurers, shareholders, officers,
directors and employees (the "Parties Released"), for any action, loss, expense
or any damages arising from any occurrence from the beginning of time until the
date of the signing of this Agreement and arising or in any way resulting from
Executive's employment with Phoenix or his resignation thereof. The only
exceptions to the above waiver are claims by Executive under any worker's
compensation or unemployment statutes and any right arising under this
Agreement. Executive represents that he has no current intention to assert any
claim on any basis against the Parties Released.

5.       SUCCESSORS.

         a. COMPANY'S SUCCESSORS. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and assets
shall assume the obligations under this Agreement and agree expressly to perform
the obligations under this Agreement in the same manner and to the same extent
as the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall
include any

<PAGE>

successor to the Company's business and assets which executes and delivers
the assumption agreement described in this Section or which becomes bound by
the terms of this Agreement by operation of law.

         b. EXECUTIVE'S SUCCESSORS. The terms of this Agreement and all
rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, devices and legatees.

6.       NOTICE.

         a. GENERAL. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of
the Executive, mailed notices shall be addressed to him at the home address,
which he most recently communicated to the Company in writing. In the case of
the Company, mailed notices shall be addressed to its corporate headquarters,
and all notices shall be directed to the attention of its Secretary.

         b. NOTICE OF TERMINATION. Any termination by the Company for Cause
shall be communicated by a notice of termination to the Executive given in
accordance with Section 9(a) of this Agreement. Such notice shall indicate
the specific termination provision in this Agreement relied upon, shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall specify the
termination date (which shall be not more than 15 days after the giving of
such notice).

7.      ARBITRATION.

         a. The Company and Executive agree that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, the
interpretation, validity, construction, performance, breach, or termination
hereof, or any of the matters herein released shall be settled by binding
arbitration to be held in Santa Clara County, California in accordance with
the National Rules for the Resolution of Employment Disputes then in effect
of the American Arbitration Association (the "Rules"). The arbitrator may
grant injunctions or other relief in such dispute or controversy. The
decision of the arbitrator shall be final, conclusive and binding on the
parties to the arbitration. Judgment may be entered on the arbitrator's
decision in any court having jurisdiction.

         b. The arbitrator(s) shall apply California law to the merits of any
dispute or claim, without reference to conflicts of law rules. Executive
hereby consents to the personal jurisdiction of the state and federal courts
located in California for any action or proceeding arising from or relating
to this Agreement or relating to any arbitration in which the Parties are
participants.

         c. EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF,

<PAGE>

RELATING TO, OR IN CONNECTION WITH THIS AGREEMENT, THE INTERPRETATION,
VALIDITY, CONSTRUCTION, PERFORMANCE, BREACH OR TERMINATION THEREOF, OR ANY OF
THE MATTERS HEREIN TO BINDING ARBITRATION, AND THAT THIS ARBITRATION CLAUSE
CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO THE
RESOLUTION OF ALL DISPUTES RELATING TO ALL ASPECTS OF THIS SEVERANCE
AGREEMENT AND RELEASE OF ALL CLAIMS.

8.       MISCELLANEOUS PROVISIONS.

         a. WAIVER. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the
Company (other than the Executive). No waiver by either party of any breach
of, or of compliance with, any condition or provision of this Agreement by
the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time.

         b. WHOLE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof and supersedes in
its entirety any and all prior undertakings and agreements of the Company and
Executive with respect to the subject matter hereof.

         c. CHOICE OF LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal substantive
laws but not the choice of law rules of the State of California.

         d. SEVERABILITY. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full
force and effect.

         e. NO ASSIGNMENT OF BENEFITS. The rights of any person to payments
or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or
other creditor's process, and any action in violation of this Section 11(e)
shall be void.

         f. EMPLOYMENT TAXES. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

         g. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

9.       REPRESENTATIONS BY EXECUTIVE.

EXECUTIVE STATES THAT HE HAS CAREFULLY READ THIS SEPARATION AGREEMENT, THAT
HE KNOWS, UNDERSTANDS AND ACCEPTS THE TERMS AND CONDITIONS OF THIS DOCUMENT,
AND THAT HE EXECUTED THIS DOCUMENT OF HIS OWN FREE WILL. EXECUTIVE FURTHER
REPRESENTS AND AGREES THAT HE HAS

<PAGE>

BEEN ADVISED BY PHOENIX TO CONSULT AN ATTORNEY PRIOR TO EXECUTING THIS
SEPARATION AGREEMENT. EXECUTIVE UNDERSTANDS AND ACCEPTS THAT THE TERMS
CONTAINED IN THIS AGREEMENT ARE TO BE A FULL AND FINAL RELEASE OF ALL CLAIMS
WITH FINAL AND BINDING EFFECT.

10.      CONDITIONS PRECEDENT AND REVOCATION.

EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN GIVEN A PERIOD OF AT LEAST TWENTY-ONE
(21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT BEFORE SIGNING IT. THE
PARTIES AGREE THAT EXECUTIVE SHALL HAVE THE RIGHT TO REVOKE THIS AGREEMENT BY
WRITTEN NOTICE TO PHOENIX WITHIN THE SEVENDAY PERIOD FOLLOWING ITS EXECUTION,
AND THAT THIS AGREEMENT SHALL NOT BECOME EFFECTIVE AND BINDING UNTIL SUCH
PERIOD HAS EXPIRED. IN THE EVENT THIS AGREEMENT IS REVOKED BY EXECUTIVE,
EXECUTIVE SHALL RETURN ALL CONSIDERATION AND BENEFITS PROVIDED TO EXECUTIVE
PURSUANT TO THIS AGREEMENT.

         IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.



COMPANY:                                              PHOENIX TECHNOLOGIES LTD.

                                                      /s/ Jack Kay
                                                      -------------------------
                                                      By:    Jack Kay
                                                      Chief Executive Officer


EXECUTIVE:                                            Robert J. Riopel

                                                      /s/ Robert J. Riopel
                                                      -------------------------
                                                      Signature

<PAGE>


                                    EXHIBIT A

In consideration for Executive accepting the benefits under his Severance
Agreement dated December 18, 1998, Executive agrees to release Company of all
claims arising from his employment as set forth below.

Executive hereby forever waives for himself, his attorneys, heirs, executors,
administrators, successors and assigns any claim against Phoenix, including
its subsidiaries, affiliates, insurers, shareholders, officers, directors and
employees (the "Parties Released"), for any action, loss, expense or any
damages arising from any occurrence from the beginning of time until the date
of the signing of this Agreement and arising or in any way resulting from
Executive's employment with Phoenix or the termination thereof. The only
exceptions to the above waiver are claims by Executive under any worker's
compensation or unemployment statutes and any right arising under this
Agreement. Executive represents that he has no current intention to assert
any claim on any basis against the Parties Released. Phoenix releases its
claims on intellectual property created by Employee after the date of
execution of this Agreement.

EXECUTIVE ACKNOWLEDGES THAT HE HAS BEEN GIVEN AT LEAST TWENTY-ONE (21) DAYS
WITHIN WHICH TO CONSIDER SIGNING THIS RELEASE. EXECUTIVE MAY REVOKE THIS
AGREEMENT BY WRITTEN NOTICE TO PHOENIX WITHIN SEVEN DAYS FOLLOWING ITS
EXECUTION. THIS RELEASE SHALL NOT BECOME EFFECTIVE AND BINDING UNTIL SUCH
PERIOD HAS EXPIRED. EXECUTIVE WILL RETURN ALL CONSIDERATION AND BENEFITS
PROVIDED IN CONNECTION WITH THE GRANTING OF THIS RELEASE IF HE REVOKES THE
RELEASE.

In the event of breach of this Agreement by Phoenix, Executive's exclusive
remedy for such breach shall be limited to the enforcement of the terms of
this Agreement.

COMPANY:                                              PHOENIX TECHNOLOGIES LTD.


                                                      -------------------------
                                                      By

                                                      -------------------------
                                                      Title


EXECUTIVE:                                            Robert J. Riopel


                                                      -------------------------
                                                      Signature