Exhibit 10.1
TERMINATION AGREEMENT & MUTUAL RELEASES
This Termination Agreement & Mutual Releases (this "Agreement") is between
Spherix Incorporated, a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxx (the "Executive"), and is dated as of this 31st day of August, 2004.
RECITALS
The Executive hereby resigns as an employee and as a Director from the
Company. The Company and the Executive intend the terms and conditions of this
Agreement to govern all issues related to the Executive's employment and
resignation from the Company. The Executive acknowledges that he has been given
a reasonable period of time to consider the terms of this Agreement. The
Executive acknowledges that the consideration provided him under this Agreement
is sufficient to support the releases and other commitments provided by him
under this Agreement. The Executive represents that he has not filed any
charges, claims or lawsuits against the Company involving any aspect of his
employment. The Executive understands that the Company regards the
representations by him as material and that the Company is relying on these
representations in entering into this Agreement.
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Recitals. The foregoing Recitals are incorporated herein by reference.
2. Employment Status.
2.1. The Executive shall continue as an active employee of the
Company through August 30, 2004. Executive shall then be placed on
inactive status ("IS") commencing on August 31, 2004 and extending through
February 28, 2004. During the IS, the Executive will only be required to
assist with special projects as may be agreed upon by the Chairman of the
Board of the Company and the Executive.
2.2. The Executive hereby resigns as a member of the Board of
Directors of the Company (including as a member of all relevant committees
of the Board of Directors) as of August 31, 2004.
3. Salary. Executive shall continue at his current salary level during the
IS. Executive hereby acknowledges and agrees that he is not entitled to any
other compensation from the Company and that the Executive is not entitled to
any severance or similar benefits under any plan, program, policy or
arrangement, whether formal or informal, written or unwritten, of the Company.
4. Bonus. Executive shall not be entitled to any bonus for 2004 or any
portion of 2005.
5. Benefits. The Executive will be eligible to continue to participate in
the Company employee benefit plans and programs through February 28, 2005.
4
6. Stock Options. All of Executive's outstanding stock options have
vesting provisions; such options have vested in part in accordance with the
terms of the original stock option grants; none of such options shall further
vest after February 28, 2005. All of Executive's vested stock options must be
exercised no later than February 28, 2005 at which point all options (vested and
unvested) shall expire and be of no further force or effect.
7. Release of Claims by the Executive. The Executive and his heirs,
assigns and agents, release, waive and discharge the Company and its past and
present Directors, Officers, employees, subsidiaries, affiliates, and agents
from each and every claim, action or right of any sort, known or unknown,
arising on or before the date hereof.
7.1. The foregoing release includes, but is not limited to, any
claim of discrimination on the basis of race, sex, religion, marital
status, sexual orientation, national origin, handicap or disability, age,
veteran status, special disabled veteran status, or citizenship status;
any other claim based on a statutory prohibition; any claim arising out of
or related to an express or implied employment contract, any other
contract affecting terms and conditions of employment, any claim of
wrongful termination of employment or a covenant of good faith and fair
dealing.
7.2. The Executive represents that he understands the foregoing
release, which includes a release of the rights and claims under the Age
Discrimination in Employment Act of 1967, as amended.
7.3. The Executive further agrees never to xxx the Company or cause
the Company to be sued regarding any matter within the scope of the above
release. If the Executive violates this release by suing the Company or
causing the Company to be sued, the Company may recover all damages as
allowed by law, including costs and expenses of defending against the suit
incurred by the Company and its reasonable attorneys' fees.
8. Release of Claims by the Company. The Company releases, waives, and
discharges the Executive from each and every claim, action or right of any sort,
arising on or before the date hereof and based upon facts presently known to the
Chairman of the Board of the Company.
9. Confidential Information.
9.1. The Executive acknowledges that, in connection with his
employment at the Company, he obtained knowledge about confidential and
proprietary information and trade secrets of the Company, including but
not limited to lists of customers and vendors, technical information about
Company products and services, strategic plans of the Company relating to
its information services business and strategic plans of comparable
businesses and pricing information (hereinafter the "Information").
Executive agrees not to use, publish or otherwise disclose any Information
to others, including but not limited to a subsequent employer or
competitor of the Company. If the Executive has any question regarding
what data or information would be considered by the Company to be
5
Information subject to this provision, the Executive agrees to contact the
Chairman of the Board of the Company for written clarification.
9.2. Upon the execution and delivery of this Agreement, the
Executive shall return to the Company all property of the Company then in
his possession, including, without limitation, Company credit cards, and
all documents and records (including electronic records, computer and
other equipment, disks and files), drawings and manuals kept or made by
him in connection with his employment as a Director, Officer or employee
of the Company.
9.3. The Executive shall not discuss or otherwise enter into any
communications with Ticketmaster or any affiliate thereof in connection
with the business combination discussions between Ticketmaster and the
Company.
9.4. Executive and the Company, except for necessary personnel in
the filing and documentation hereof, shall keep the terms of this
Agreement and all communications with the Company regarding the Agreement
confidential.
10. Non-Competition and Non-Solicitation.
10.1. The Executive agrees that prior to December 31, 2006 he will
not, directly or indirectly, on behalf of anyone other than the Company,
solicit or accept sales or employment from (i) any current information
services customer of the Company, (ii) any entity which was an information
services customer of the Company at any time within two (2) years prior to
the date of this Agreement, (iii) any entity for which the Company has an
outstanding proposal for information services business or is in the
process of preparing such a proposal as of February 28, 2005 or (iv)
Ticketmaster or any of its affiliates.
10.2. The Executive agrees that prior to December 31, 2006, he will
not, directly or indirectly, solicit any person who is an employee of the
Company to terminate his or her relationship with the Company.
10.3. The Executive agrees that prior to December 31, 2006, he will
not, directly or indirectly, acquire any debt, equity, or other ownership
interest in any person or entity engaged in a business competitive to the
Company's information services business except that the Executive may own
in the aggregate not more than one percent (1%) of the outstanding equity
of any publicly-traded entity engaged in such a competitive business.
10.4. The Executive acknowledges that monetary damages may not be
sufficient to compensate the Company for any economic loss which may be
incurred by reason of his breach of the foregoing
none-compete/non-solicitation agreements. Accordingly, in the event of any
such breach, the Company shall, in addition to any remedies available to
the Company at law, be entitled to obtain equitable relief in the form of
an injunction precluding the Executive from continuing such breach. The
existence of this right shall
6
not preclude any other rights and remedies at law or in equity which the
Company may have. The parties agree that the restrictions and agreements
contained herein are reasonable, are the product of arm's length
negotiation, and are necessary for the Company to protect its business;
however, in the event that any part of this Paragraph 10 shall be found to
be unenforceable, but would be valid and enforceable if any part thereof
were deleted or otherwise modified, then such restrictions in this
Paragraph 10 shall apply with such modifications, but only to the extent
as shall be necessary to make them valid and enforceable.
11. Breach by the Executive. The Company's obligations to the Executive
under this Agreement are contingent on the Executive's performance of his
agreements and obligations under this Agreement. Any material breach by
Executive of his obligations under this Agreement will result in the immediate
cancellation of all Executive stock options, the immediate termination of
Executive's employment, as well as entitle the Company to all its other remedies
in law or equity, including but not limited to a claim for reimbursement of all
amounts paid to the Executive hereunder.
12. Executive Availability. The Executive agrees to promptly supply a
brief summary of open projects/items he was working on together with a list of
action items related to such matters and to make himself reasonably available to
the Company to respond to requests by the Company for information pertaining to
or relating to the Company and/or the Company's affiliates, agents, Officers,
Directors or employees which may be within the knowledge of the Executive. The
Executive will cooperate fully with the Company in connection with any and all
existing or future litigation or investigations brought by or against the
Company or any of its past or present affiliates, agents, Officers, Directors or
employees whether administrative, civil or criminal in nature in which and to
the extent the Company deems the Executive's cooperation necessary. The Company
will reimburse the Executive for reasonable out-of-pocket expenses incurred as a
result of such cooperation. If more than 8 hours of his time is required after
February 28, 2005, Executive will be compensated at his currently hourly rate.
13. Non Disparagement. The Executive agrees that he will not make or cause
to be made any statements that disparage, are inimical to, or damage the
reputation of the Company or any of its past or present affiliates,
subsidiaries, agents, Officers, Directors or employees. In the event such
communication is made to anyone, it will be considered a material breach of the
terms of this Agreement. The Company agrees it will not make or cause to be made
any statements that disparage, are inimical to, or damage the reputation of the
Executive.
14. Severability of Provisions. In the event that any provision of this
Agreement is determined to be legally invalid or unenforceable by any court of
competent jurisdiction and cannot be modified to be enforceable, the affected
provision shall be stricken from the Agreement, and the remaining terms of the
Agreement and its enforceability shall remain unaffected.
15. Right to Revoke this Agreement. The Executive may revoke this
Agreement in writing within seven (7) days of signing it . If the Executive
timely revokes this Agreement in a
7
signed writing delivered to the Chairman of the Board of the Company, all of its
provisions shall be void and unenforceable.
16. Entire Agreement.
16.1. This Agreement constitutes the entire understanding between
the parties. The parties have not relied on any oral statements that are
not included in the Agreement. Any modifications to this Agreement must be
in writing and signed by the Executive and the Chairman of the Board of
the Company.
16.2. The Executive acknowledges and reaffirms the provisions of the
Employee Confidentiality Agreement he executed as an employee of the
Company. Any conflict between the provisions of the Employee
Confidentiality Agreement and this Agreement shall be resolved in favor of
the provisions of this Agreement.
17. Governing Law. This Agreement shall be construed, interpreted and
applied in accordance with the laws of the State of Maryland, without giving
effect to the choice of law provisions thereof.
SPHERIX INCORPORATED
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx,
Chairman of the Board
/s/ Xxxxxx X. Xxxxx
---------------------
Xxxxxx X. Xxxxx
8
