Separation Agreement & Mutual Release - Claudio Pinkus and Ask Jeeves Inc.
SEPARATION AGREEMENT & MUTUAL RELEASE
This Separation Agreement and Release of Claims (the "Agreement")
is entered into by and between Claudio Pinkus ("Pinkus") and Ask Jeeves, Inc.
(the "Company"), each a "Party" and collectively the "Parties."
RECITALS
WHEREAS, Pinkus has been employed by the Company commencing on
June 18, 1999, and currently is the Company's Chief Strategy Officer;
WHEREAS, Pinkus's employment with the Company shall terminate
effective August 28, 2003 (the "Termination Date");
WHEREAS, the Parties wish to enter into an agreement to clarify
and resolve any disputes that may exist between them arising out of the
employment relationship and its termination, and any continuing obligations of
the Parties to one another following the end of the employment relationship;
NOW, THEREFORE, for and in consideration of the promises and
undertakings described below, the Parties agree as follows:
AGREEMENT
1. PAYMENT OF SALARY THRU TERMINATION. Pinkus's base salary at
the time of termination is Two Hundred Twenty-Five Thousand Dollars ($225,000)
per year ("Base Salary"). The Company shall continue to provide Pinkus his Base
Salary and benefits through the Termination Date.
2. OTHER PAYMENTS. In consideration of the promises and covenants
contained herein, and provided Pinkus executes and does not revoke this
Agreement, the Company agrees to provide Pinkus the following compensation and
benefits:
a. His Base Salary for a period of nine (9) months
following his termination date, less applicable
withholdings and deductions. The payments following
the Termination Date will be paid by the Company to
Pinkus according to the Company's usual payroll
schedule and practices;
b. A lump sum payment of Sixty-Seven Thousand Five
Hundred Dollars ($67,500), less any applicable
withholdings and deductions, which is equivalent to
seventy-five percent (75%) of Pinkus's target bonus
for fiscal year 2003, payable within twenty (20)
days following execution of this Agreement;
c. If Pinkus elects to continue his health insurance
coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA")
following the termination of his employment, the
Company shall pay Pinkus's monthly premium under
COBRA until the earlier of:
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(i) nine (9) months following the Termination Date,
(ii) the first date that he is covered under
another employer's health benefit program without
exclusion for any pre-existing medical condition,
or (iii) the end of his statutory entitlement to
health care coverage pursuant to COBRA;
d. Reasonable customary executive outplacement
assistance for up to six (6) months after September
1, 2004;
e. The immediate vesting of Pinkus' Spring 2002 Focal
Review Option (the vested portion of such option
currently covers 50,000 shares of Company common
stock and the otherwise unvested portion of such
option currently covers 100,000 shares of Company
common stock, and the exercise price of such option
is currently $1.21 per share)(the "Focal Options");
provided that such Focal Option shall otherwise
continue in accordance with its terms and shall,
without limiting the generality of the foregoing,
be subject to termination (to the extent not
previously exercised) at the end of the limited
post-termination exercise period specified in the
applicable option agreement. Notwithstanding the
foregoing, Pinkus acknowledges and agrees that such
immediate vesting shall not occur in the event that
he revokes this Agreement prior to the Effective
Date and Pinkus further agrees that he will not
exercise such Focal Options or sell the underlying
shares until after the Effective Date of this
Agreement.
3. CONSULTING AND OTHER OBLIGATIONS FOLLOWING TERMINATION. From
August 29, 2003 through December 31, 2003, Pinkus agrees to provide consulting
services on behalf of the Company in accordance with the Ask Jeeves Consulting
Agreement between the Company and Pinkus dated August 29, 2003 (the "Consulting
Agreement").
In addition, aside from his consulting obligation to the Company, Pinkus
agrees to provide information for, and reasonably assist the Company in the
preparation of, Securities and Exchange Commission filings concerning the period
in which Pinkus was employed with the Company.
The Company also agrees that Pinkus may keep his Sony Vaio notebook
computer and his TREO cell phone.
4. STOCK AND DEFERRED COMPENSATION PLANS. Nothing in this
agreement is meant to, or does, supersede, alter or modify any rights or
benefits to which Pinkus may become entitled under the Ask Jeeves International
Deferred Compensation Agreement entered into in February 2002 by and among
Pinkus, the Company, and George Lichter (the "Deferred Compensation Plan").
Pinkus acknowledges and agrees that he has no right to any incentive payment,
bonus, security, derivative security, or other compensation or benefit pursuant
to that certain Incentive Agreement dated as of January 2, 2001 by and between
Pinkus and the Company, as subsequently amended.
5. CONFIDENTIAL INFORMATION. Pinkus hereby acknowledges and
agrees that he has agreed to and is bound by the terms and obligations under the
Confidentiality of Information and
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Inventions Agreement, attached hereto as Exhibit A, and that he agrees to
continue to be bound by those terms and obligations.
6. CESSATION OF BENEFITS. Pinkus's participation in all of the
Company's benefits and incidents of employment shall cease on the Termination
Date, except as noted in Section 2 herein.
7. RELEASE BY PINKUS. In consideration of the benefits provided
to Pinkus under Section 2 herein, Pinkus fully and forever releases, waives,
discharges (and promises not to sue or otherwise institute or cause to be
instituted) any legal or administrative proceedings against the Company, and any
of its officers, directors, attorneys, insurers, shareholders, predecessors,
successors, affiliated or related companies, agents, current and former
employees, representatives, attorneys and other agents, and assignees thereof
("Releasees"), with respect to any and all liabilities, claims, demands,
contracts, debts, obligations and causes of action of any nature, kind, and
description, whether in law, equity or otherwise, whether or not now known or
ascertained, which currently do or may exist, including without limitation any
matter, cause or claim arising out of or related to or connected with Pinkus's
hire, employment with the Company or its predecessor, or the termination
therefrom, as well as any act or omission by the Company, and any of its
officers, directors, attorneys, insurers, shareholders, predecessors,
successors, affiliated or related companies, agents, employees, and assignees
thereof, occurring on or before the date of this Agreement. Such liabilities,
claims, demands, contracts, debts, obligations and causes of action, include but
are not limited to any claims for unpaid or late wages, severance, stock
options, retirement, pension benefits, or other benefits, penalties, breach of
contract, breach of the covenant of good faith and fair dealing, infliction of
emotional distress, misrepresentation, fraud, claims under Title VII of the
Civil Rights Act, under the California Fair Employment and Housing Act, under
the Employment Retirement Income and Security Act, under the California Labor
Code, and under any other statutory or common law claim relating to employment,
and any act or omission by the Company occurring on or before the date of this
Agreement except any claims for: (1) rights under California Labor Code section
2802, (2) workers' compensation insurance benefits, and (3) indemnification (if
available) pursuant to the Company's certificate or incorporation or bylaws, the
Company's indemnification agreement with Pinkus, or any insurance policy
maintained by the Company with respect to, and for the benefit of, Pinkus as an
officer or employee (or former officer or employee) of the Company or any of its
subsidiaries (including directors' and officers' liability insurance, errors and
omissions insurance and other similar insurance, if any), it being understood
and agreed that nothing herein shall require the Company to purchase or maintain
any such insurance or limit the Company's rights to amend its certificate of
incorporation and bylaws in accordance with, and subject to the limitations of,
applicable law. Notwithstanding the foregoing, the release in this Section 7
shall not apply to the continuing liabilities and obligations created by or
referred to in this Agreement, including the payment obligations in Section 1
and 2 and the liabilities and obligations under the Focal Options, Deferred
Compensation Plan, and Consulting Agreement.
8. RELEASE BY THE COMPANY. The Company fully and forever
releases, waives, discharges (and promises not to sue or otherwise institute or
cause to be instituted) any legal or administrative proceedings against either
Pinkus or any of his heirs, executors, administrators, representatives,
attorneys and other agents, with respect to any and all liabilities, claims,
demands, contracts, debts, obligations and causes of action of any nature, kind,
and description, whether in law, equity or otherwise, whether or not now known
or ascertained, which currently do or may exist, including without limitation
any matter, cause or claim arising out of or related to or connected to
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his employment with the Company and with any predecessor thereof, and any act or
omission by Pinkus occurring on or before the date of this Agreement except for
any claim against Pinkus for fraud, misappropriation of the Company's property
or assets; willful misconduct in connection with a communication to any
government agency or entity; any breach by Pinkus of his fiduciary duties, or a
breach of the Confidential Information and Invention Assignment Agreement.
Notwithstanding the foregoing, the release in this Section 8 shall not apply to
the continuing liabilities and obligations created by or referred to in this
Agreement, including the liabilities and obligations under Consulting Agreement.
9. WAIVER: CIVIL CODE SECTION 1542. The Parties represent that
they are not aware of any claim other than the claims that are released by this
Agreement. The Parties acknowledge that they have been advised by legal counsel
and are familiar with the provisions of California Civil Code Section 1542,
which provides 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.
The Parties agree to expressly waive any rights they may have
under California Civil Code Section 1542, as well as under any other federal or
state statute or common law principles of similar effect.
10. ADEA RELEASE AND WAIVER. Pinkus acknowledges that he is
waiving and releasing any rights he may have under Age Discrimination in
Employment Act (ADEA), as amended, and that the waiver and release of these
rights is knowing and voluntary. Pinkus and the Company agree that this waiver
and release do not apply to any rights or claims that may arise under ADEA after
the date this Agreement is signed.
11. TIME TO CONSIDER; REVOCATION PERIOD; EFFECTIVE DATE. In
accordance with the federal Older Workers Benefit Protection Act of 1990 and the
ADEA, and any amendments thereto, Pinkus represents and acknowledges that he has
been made aware of the following:
(a) he has the right to consult with an attorney before signing this
Agreement and agreeing to the release set forth herein;
(b) he is not otherwise entitled to the consideration provided in this
Agreement;
(c) he has seven (7) days after signing this Agreement to revoke it; and
(d) he has twenty-one (21) days from delivery of this Agreement to him
to consider this release. Pinkus agrees and acknowledges that if he chooses to
sign this Agreement before 21 days after he received it, that he has done so
voluntarily, and in that event, Pinkus agrees to sign and deliver to Company
Exhibit C to this Agreement.
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Pinkus further understands that the Effective Date of this Agreement
shall be the eighth (8th) day after he has signed the Agreement, provided that
he has delivered his signature on this Agreement to the Company and he has not
revoked it during the seven (7) days after he signed it. The Company and Pinkus
agree to use reasonable commercial efforts to effectuate this Agreement in a
timely manner and to deal with any administrative matters as expeditiously as
possible.
12. CONFIDENTIALITY. Except as may otherwise be required by
applicable law, rule, regulation or order, or as required by any governmental
agency or tribunal, Pinkus agrees to maintain in complete confidence the
contents and terms of this Agreement and to disclose the contents and terms of
this Agreement only to members of Pinkus's immediate family and those attorneys,
accountants, tribunals and governmental entities who have a reasonable need to
know the contents and terms of this Agreement. The Company agrees, that except
as required law, rule, regulation, order, or as required by any governmental
agency or tribunal, or in the Company's good faith, the Company agrees to
maintain in complete confidence the contents and terms of this Agreement, and to
disclose the contents and terms of this Agreement only to those employees of the
Company, who have a reasonable need to know the contents and terms of this
Agreement, or to third parties considering a potential transaction with the
Company in connection with their "due diligence" pursuant to a customary
confidentiality agreement.
13. NO PENDING OR FUTURE LAWSUITS. The Parties represent to each
other that they have no lawsuits, claims, or actions pending in their name, or
on behalf of any other person or entity, against each other or any other person
or entity referred to herein. The Parties also represent to each other that as
of the date of this Agreement, they do not have any basis for and do not intend
to bring any claims on their behalf or on behalf of any other person or entity
against each other or any other person or entity referred to herein.
14. NO PRIOR ASSIGNMENTS. Pinkus hereby represents and warrants
that he has not assigned or transferred, or purported to assign or transfer, to
any third person or entity any claim, right, liability, demand, obligation,
expense, action or causes of action being waived or released pursuant to this
Agreement.
15. NON-DISPARAGEMENT. Pinkus agrees not to make any derogatory
statements about the Company or any of its current or former agents, attorneys,
representatives, employees, officers, directors, successors, predecessors,
assigns, parent corporations, subsidiaries, or affiliated companies.
16. RESTRICTIVE COVENANTS. Pinkus acknowledges that the Company
has invested substantial time, money and resources in the development and
retention of its inventions, confidential information (including trade secrets),
customers, accounts and business partners, and further acknowledges that during
the course of his employment with the Company, he has had and will continue to
have access to the Company's inventions and confidential information (including
trade secrets), and has been introduced to existing and prospective customers,
accounts and business partners of the Company. Pinkus acknowledges and agrees
that any and all "goodwill" associated with any existing or prospective
customer, account or business partner belongs exclusively to the Company,
including, but not limited to, any goodwill created as a result of direct or
indirect contacts or relationships between Pinkus and any existing or
prospective customers, accounts or business partners. Pinkus further
acknowledges that the Company has operations and conducts business on a global
scale.
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In recognition of this, Pinkus covenants and agrees that during
his employment and consulting arrangement with the Company and for a period of
either (i) one (1) year following the Termination Date or (ii) six months
following the termination of his Consulting Agreement, whichever is longer, he
will not (without the prior written consent of the Board of Directors of the
Company): (i) participate in any capacity (whether as an employee, agent,
servant, owner, partner, consultant, independent contractor, representative,
stockholder or in any other capacity whatsoever) with any of the six companies
listed on Exhibit B hereto; (ii) entice, solicit or encourage any Company
employee to leave the employ of the Company or any independent contractor to
sever its engagement with the Company; or (iii) directly or indirectly, entice,
solicit or encourage any client, customer, prospective client or customer,
vendor, strategic partner or business associate of the Company to cease doing
business with the Company, reduce its relationship with the Company or refrain
from establishing or expanding a relationship with the Company. Pinkus agrees
that the Company may suffer irreparable harm should he breach this Section 16,
and therefore agrees that the Company may seek and obtain injunctive relief as a
remedy for any such breach by him.
17. NO ADMISSION. Nothing contained in this Agreement shall
constitute, be construed or be treated as an admission of liability or
wrongdoing by the Company or any of its current or former agents, attorneys,
representatives, employees, officers, directors, successors, predecessors,
assigns, parent corporations, subsidiaries, or affiliated companies.
18. RESULTS OF NEGOTIATION; KNOWING AND VOLUNTARY EXECUTION. The
Parties hereby acknowledge that this Agreement is the results of negotiation
between them, and that each has read and understands the foregoing Agreement and
that each affixes their respective signature to this Agreement knowingly,
voluntarily and without coercion.
19. ENTIRE AGREEMENT. The Parties hereby acknowledge and agree
that except as provided herein, the Agreement contains the entire agreement
between Pinkus and the Company, and that neither is relying on any
representation or promise that does not appear in this Agreement.
20. MODIFICATIONS AND WAIVERS. 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 Pinkus and by an authorized
officer of the Company.
21. GOVERNING LAW. The construction, interpretation and
enforcement of this Agreement shall be governed by the internal laws of the
State of California applicable to contracts made and to be performed wholly
within such state, without regard to the conflict of laws rules of any
jurisdiction.
22. SEVERABILITY. The Parties hereby agree that if any provision,
or portion thereof, of this Agreement shall for any reason be held to be invalid
or unenforceable or to be contrary to public policy or any law, then the
remainder of the Agreement shall not be affected thereby.
23. ARBITRATION. Each Party agrees that any and all disputes
which arise out of or relate to this Agreement or any of the subjects hereof
shall be resolved through final and binding arbitration. Such arbitration shall
be in lieu of any trial before a judge and/or jury, and the Parties expressly
waive all rights to have such disputes resolved via trial before a judge and/or
jury. Such
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disputes shall include, without limitation, claims for breach of contract or of
the covenant of good faith and fair dealing, claims of discrimination, claims
under any federal, state or local law or regulation now in existence or
hereinafter enacted and as amended from time to time concerning in any way the
subject of Pinkus's employment with the Company or its termination. The only
claims not covered by this Agreement to arbitrate disputes are: (i) claims for
benefits under the unemployment insurance benefits; (ii) claims for workers'
compensation benefits under any of the Company's workers' compensation insurance
policy or fund; (iii) claims the Company may have against Pinkus for fraud,
misappropriation of the Company's property or assets; willful misconduct in
connection with a communication to any government agency or entity; any breach
by Pinkus of her fiduciary duties, or a breach of the Confidentiality of
Information and Inventions Agreement. With respect to such disputes, they shall
not be subject to arbitration; rather, they will be resolved pursuant to
applicable law.
Binding arbitration will be conducted in Emeryville, CA in
accordance with California Code of Civil Procedure section 1282, et seq., and
the rules and regulations of the American Arbitration Association then in effect
for resolution of commercial disputes. Each of the Parties will bear its or his
own respective attorneys' fees, although the arbitrator may award the prevailing
party his/its reasonable attorneys' fees and costs of arbitration except that
such fees and costs may not be recovered by the Company that result from the
Company's defense against any claim by Pinkus challenging the waiver, release
and discharge of rights under the Age Discrimination in Employment Act.
24. ATTORNEYS FEES AND EXPENSES. If an action is brought by
either Party for breach of any provision of this Agreement, the non-breaching
Party shall be entitled to recover all reasonable attorneys' fees and costs in
defending or bringing such an action.
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25. COUNTERPARTS. This Agreement may be signed in counterpart
originals with the same force and effect as though a single original were
executed.
Date: August 28, 2003 /s/ Claudio Pinkus
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Claudio Pinkus
Ask Jeeves, Inc.:
Date: August 28, 2003 By: /s/ Brett Robertson
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Name: Brett Robertson
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Title: General Counsel
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EXHIBIT A
CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT
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EXHIBIT B
COMPETITIVE COMPANIES
1) Google
2) Overture
3) AOL
4) Yahoo
5) MSN
6) Looksmart
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EXHIBIT C
I, Claudio Pinkus, hereby acknowledge that I was given 21 days to
consider the foregoing Agreement and voluntarily chose to sign the Agreement
prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the State of
California that the foregoing is true and correct.
EXECUTED this 28th day of August, at Los Angeles County,
California.
/s/ Claudio Pinkus
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Claudio Pinkus