Separation Agreement - Internet Pictures Corp. and Jeffrey D. Peters
SEPARATION AGREEMENT
AGREEMENT dated as of September 14, 2000 between Internet Pictures
Corporation, a Delaware corporation with its principal offices at 1009 Commerce
Park Drive, Oak Ridge, Tennessee, 37830 (the "COMPANY") and Jeffrey D. Peters
("EMPLOYEE").
WHEREAS, Interactive Pictures Corporation, a Tennessee corporation and
successor to the Company, and Employee entered into an employment and non
competition agreement dated as of August 17, 1998, as amended by the Amendment
to the Employment and Non Competition Agreement, dated as of September 14, 2000,
between the Company and Employee (the "EMPLOYMENT AGREEMENT");
WHEREAS, the Company and Employee desire to terminate the Employment
Agreement; and
WHEREAS, the Company and Employee desire to enter into this Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein and for other good and valuable consideration, the parties agree as
follows:
Section 1. Termination of Employment Agreement. The Company and
Employee mutually agree to terminate the Employment Agreement, and all rights
and duties arising from it or under it, effective as of December 31, 2000 (the
"TERMINATION DATE"), except as specifically provided herein.
Section 2. Severance Payments to Employee.
(a) Within ten (10) days of the Termination Date, the Company
shall pay to Employee a lump sum severance payment in cash (the "SEVERANCE
PAYMENT") equal to the sum of:
(i) the Employee's annual base salary as in effect on the
date hereof; and
(ii) Any portion of Employee's Base Salary, vacation time
and travel, entertainment or other business expenses incurred or
accrued but not paid, as of the Termination Date.
(b) The Company may withhold from any amounts payable under this
Agreement any U.S. federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation. The Company's obligations
to make any payments pursuant to this Section 2 are expressly conditioned on
Employee's continued compliance with the provisions of this Agreement. Employee
will provide to the Company within ten (10) days of the Termination Date
documentation reasonably required to substantiate the business-related expenses
described in Section 2(a)(ii) of this Agreement.
<PAGE> 2
Section 3. Conditional Nature of the Severance Payment;
Non-Competition Agreement.
(a) Conditional Nature of the Severance Payment; Non-Competition.
Notwithstanding anything in this Agreement, Employee acknowledges that the
provisions of Section 7 of the Employment Agreement and the Confidentiality and
Invention Assignment Agreement dated as of _______, 1998 (the "Confidentiality
Agreement") shall remain in full force and effect for the time periods specified
therein. Employee agrees and acknowledges that the Employee's right to receive
and keep the severance payments and other benefits set forth in Section 2 is
conditioned upon Employee continuing to observe, and not be in breach of, the
provisions of Section 7 of the Employment Agreement and all provisions of the
Confidentiality Agreement. Upon any breach of Section 7 of the Employment
Agreement or the Confidentiality Agreement, all severance payments pursuant to
Section 2 of this Agreement shall immediately cease, or if already paid, shall
be recoverable in full by the Company.
(b) Exclusions. No provision of this Agreement shall be construed
to preclude Employee from performing the same services which the Company hereby
retains Employee to perform for any person or entity which is not a Competitor
of the Company upon the expiration or termination of Employee's employment (or
any post-employment consultation) so long as Employee does not thereby violate
any term of the Employment Agreement or the Confidentiality Agreement.
Section 4. Remedies. Employee's obligations under Section 3 of
this Agreement shall survive the Termination Date. Employee acknowledges that a
remedy at law for any breach or threatened breach by Employee of Section 3 of
this Agreement would be inadequate and Employee therefore agrees that the
Company shall be entitled to injunctive relief in any court of competent
jurisdiction in the case of any such breach or threatened breach. Employee
acknowledges that this Section 4 does not limit the Company's right to seek
monetary damages for breach of this Agreement.
Section 5. Golden Parachute Excise Tax.
(a) Reimbursement. In the event that it shall be determined that
any payment or other benefit by the Company to or for the benefit of Employee
under this Agreement or otherwise, whether paid or payable, but determined
without regard to any additional payments required under this Section (the
"PAYMENTS"), would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code (the "EXCISE TAX"), then Employee shall be entitled to
receive (i) an additional payment from the Company (the "REIMBURSEMENT PAYMENT")
sufficient to pay the Excise Tax, and (ii) an additional payment from the
Company sufficient to pay the Excise Tax and federal and state income taxes
arising from the payments made by the Company to Employee pursuant to this
sentence.
(b) Determination. Unless the Company and Employee otherwise agree
in writing, any determination required under this Section 5 shall be made in
writing by the Company's primary independent public accounting firm (the
"ACCOUNTANTS"), whose determination shall be conclusive and binding upon
Employee and the Company for all purposes. For purposes of making the
calculations required by this Section 5, the Accountants may make reasonable
2
<PAGE> 3
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Internal Revenue Code. The Company and Employee shall
furnish to the Accountants such information and documents as the Accountants may
reasonably request in order to make their determination under this Section. The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section.
Section 6. Release. For and in consideration of the payment to
be made and for other valuable consideration to be provided to Employee pursuant
to this Agreement, Employee, for himself, his heirs, executors, administrators,
trustees, legal representatives, successors and assigns (hereinafter,
collectively referred to as "Releasors"), hereby forever releases and discharges
the Company and any of its past, present or future parent entities, and all of
the partners, subsidiaries, affiliates, divisions, employee benefit and/or
pension plans or funds, successors and assigns of each and any of its or their
past, present or future directors, officers, attorneys, agents, trustees,
administrators, employees, or assigns (whether acting as agents for the Company
or in their individual capacities) (hereinafter collectively referred to as
"Releasees") from any and all claims, demands, causes of action, and liabilities
of any kind whatsoever (upon any legal or equitable theory, whether contractual,
common-law, statutory, federal, state, local, or otherwise), whether known or
unknown, by reason of any act, omission, transaction or occurrence which
Releasors ever had, now have or hereafter can, shall or may have against
Releasees up to and including the Termination Date. Without limiting the
generality of the foregoing, Releasors hereby release and discharge Releasees
from:
(a) any and all claims relating to Employee's employment
("employment" in this Agreement refers to any remunerative relationship,
including without limitation, any form of independent contractor or consultant
relationship);
(b) any and all claims of employment discrimination, harassment
and/or retaliation under any federal, state or local statute or ordinance,
including without limitation, any and all claims under Title VII of the Civil
Rights Act, the Age Discrimination in Employment Act, the Fair Labor Standards
Act, the Family and Medical Leave Act, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the New York State Executive Law, the
New York City Administrative Code;
(c) any and all claims for tortious conduct, wrongful discharge
and/or breach of employment contract or commission agreement; and
(d) any all claims for attorney's fees, costs, disbursements and
the like which Employee ever had, now has or hereafter can, shall or may have
against Releasees for, upon or by reason of any act, omission, transaction or
occurrence up to and including the Termination Date.
Section 7. Miscellaneous.
(a) Governing Law/Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the state of Tennessee, without
reference to principles of conflict of laws.
3
<PAGE> 4
(b) Entire Agreement/Amendments. This Agreement shall supersede
the Employment Agreement in its entirety and contains the entire understanding
of the parties with respect to the termination of the Employment Agreement and
any rights and duties arising under or from it. There are no restrictions,
agreements, promises, warranties, covenants or undertakings between the parties
with respect to the subject matter herein other than those expressly set forth
herein or therein. This Agreement may not be altered, modified, or amended
except by written instrument signed by the parties hereto.
(c) No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party's rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
(d) Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
(e) Assignment. This Agreement shall not be assignable by Employee
and may be assigned by the Company without the consent of Employee; provided,
however, that the Company shall require any successor to substantially all of
the stock, assets or business of the Company to assume this Agreement.
(f) Successors; Binding Agreement. This Agreement shall inure to
the benefit of and be binding upon the personal or legal representatives,
executors, administrators, successors, including successors to all or
substantially all of the stock, business and/or assets of the Company, heirs,
distributees, devisees and legatees of the parties.
(g) Notice. For the purpose of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the execution page of this Agreement, provided
that all notices to the Company shall be directed to the attention of the
General Counsel of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
(h) Counterparts. This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
4
<PAGE> 5
By:
-------------------------------------------
Internet Pictures Corporation
Title: Chairman and Chief Executive
Officer
Address: 1009 Commerce Park Dr.
Oak Ridge, Tennessee 37830
-----------------------------------------
JEFFREY D. PETERS
Address:
5