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CONTOSO AI LABS, INC. SEPARATION AGREEMENT
This Separation Agreement ("Agreement") is made as of July xx, 20xx (the “Effective Date”) by and between Contoso AI Labs, Inc. (the "Company"), and Lynne Robbins (the "Employee").
WHEREAS, Employee and Company have mutually agreed that Employee’s employment with the Company shall terminate;
WHEREAS, the Company and Employee wish to specify the terms upon which Employee will receive compensation to which Employee is not otherwise entitled, and, in connection therewith, Employee will agree to release the Company from any claims arising from or related to the employment relationship by and between Company and Employee; and
WHEREAS, the Company and Employee wish to make certain other agreements in connection with the termination of Employee's employment with the Company.
NOW THEREFORE, in consideration of the mutual promises made herein, the Company and Employee (collectively referred to as "the Parties") hereby agree as follows:
1. Termination of Employment
Employee will remain employed as an at-will employee of the Company until the earliest of (a) the date Employee resigns; (b) the date the Company terminates Employee’s employment for any reason; or (c) July xx, 20xx (the “Termination Date”). Effective as of the Termination Date, Employee will cease to be employed and hereby resigns any and all positions with the Company or any of its subsidiaries.
1. Consideration; Expenses
a. Through the Termination Date, Employee will continue to be paid Employee’s current base salary, subject to standard payroll deductions and tax withholding, in accordance with the Company’s regular payroll or allowance payment schedule, as applicable, and be eligible to participate in the Company’s standard benefits plans to the extent currently enrolled in such plans. On the Termination Date, the Company shall pay Employee all unused vacation, all variable compensation earned through the Termination Date in accordance with Employee’s sales commission plan, and all wages accrued through the Termination Date, with such amounts subject to standard payroll deductions and tax withholding.
b. Although the Company is not otherwise obligated to do so, provided that (i) Employee signs this Agreement, returns it to the Company; (ii) Employee abides by the terms of this Agreement; (iii) Employee’s employment with the Company is not terminated for Cause (as defined below); and (iv) on or promptly following the Termination Date (and in no event more than 7 days following the Termination Date), Employee signs the Termination Date Release attached hereto as Exhibit A, returns it to the Company (collectively, the “Severance Conditions”), the Company will pay severance to Employee equal to the base salary payments which Employee would have been entitled (at Employee’s current base salary rate) had Employee’s employment continued from the Termination Date through December xx, 20xx (the “Severance Payments”). The Severance Payments shall be made in installments in accordance with the Company’s regular payroll dates commencing with the first payroll date following the Termination Date on which all the Severance Conditions are satisfied. Without limiting any other obligation of Employee hereunder, Employee’s right to receive any and all installments of the Severance Payments
shall be conditioned upon Employee’s continued compliance with the terms and conditions of this Agreement.
a. Employee’s group health insurance coverage terminates on the Termination Date (“Coverage Termination Date”). To the extent provided by the federal COBRA law or applicable state insurance laws, and by the Company’s current group health insurance policies, Employee shall be eligible to continue Employee’s group health insurance benefits at Employee’s own expense. Later, Employee may be able to convert to an individual policy through the provider of the Company’s health insurance. Employee has or will be provided with a separate notice more specifically describing Employee’s rights and obligations to continuing health insurance coverage under applicable state and/or federal insurance laws and the terms of the applicable health insurance plans after Employee no longer meets the eligibility requirements of the Company’s group health insurance plan. Although it is not otherwise obligated to do so, subject to the satisfaction of the Severance Conditions, the Company agrees to pay Employee Xxxxx Thousand Dollars ($xx,000), less applicable deductions and tax withholding, to offset the cost associated with health insurance premiums for Employee’s continued coverage under the Company’s group health insurance (the “Benefits Reimbursement”). The Benefits Reimbursement shall be paid in a lump sum on the first regular payroll date following the date on which all the Severance Conditions are satisfied. Employee agrees that the lump sum payment of the Benefits Reimbursement is Employee’s exclusive benefit with respect to Employee’s health insurance coverage and shall not be increased or otherwise modified if Employee’s costs with respect to continuing or obtaining health insurance coverage exceed the Benefits Reimbursement.
b. As of the date of this Agreement, Employee has been granted (i) an incentive stock option to acquire up to 500,000 shares of the Company’s Common Stock (the “Common Stock”) at an exercise price of $x.xx per share (the “First Incentive Stock Option”); and (ii) an incentive stock option to acquire up to 250,000 shares of the Common Stock at an exercise price of
$x.xx per share (the “Second Incentive Stock Option” and together with the First Incentive Stock Option, the “Equity Awards”). As of July xx, 20xx, Employee is vested in (i) 341,000 shares of Common Stock subject to the First Incentive Option and (ii) 74,123 shares of Common Stock subject to the Second Incentive Option. Although the Company is not otherwise obligated to do so, subject to the satisfaction of the Severance Conditions, the Company shall accelerate the vesting of each of the Equity Awards such that the additional the shares of Common Stock which would have vested from the Termination Date through December xx, 20xx (the “Presumed Vesting Date”) had Employee remained an employee of the Company through such Presumed Vesting Date shall be deemed vested as of the effective date of the Termination Date Release (the “Acceleration Benefits”). Except as set forth in this Section 2(e) below, all other terms and conditions applicable to the Equity Awards, shall be as stated in the 20xx Stock Option and Grant Plan and the respective stock option agreements governing the Equity Awards. Employee acknowledges and agrees that all rights pursuant to the Equity Awards expire and are null and void as of the Termination Date except for the right to acquire shares of Common Stock deemed vested after giving effect to this Agreement pursuant to the exercise of the Equity Awards in compliance with the respective stock option agreements governing the Equity Awards. From and after the date of this Agreement, Employee agrees not to acquire any shares pursuant to the Equity Awards which are not vested on the date of exercise.
a. Although the Company is not otherwise obligated to do so, subject to the satisfaction of the Severance Conditions, the Company shall extend the period pursuant to which Employee may
exercise the Equity Awards to the date which is the earlier of: (i) December xx, 20xx or (ii) the date such Equity Awards terminate in connection with a Sale Event as provided for in Section 3 of the Plan (the “Extended Exercise Benefit”). Employee understands that pursuant to the Extended Exercise Benefit, each of the First Incentive Stock Option and the Second Incentive Stock Option will cease to be treated as an incentive stock option and will be treated for tax purposes as a non-qualified stock option. Employee also understands that the favorable tax treatment available to incentive stock options will no longer be available for the Incentive Stock Option. Employee has reviewed with the Employee’s own tax advisors the federal, state, local and foreign tax consequences of this Agreement. Employee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents.
a. For purposes of this Agreement, the term “Cause” shall mean, Employee’s (i) gross neglect of, or willful failure or refusal to timely perform, the material duties of Employee’s employment following written notice and a reasonable opportunity (not to exceed 15 days) to cure, if such neglect, failure or refusal is capable of being cured; (ii) material breach of this or any other agreements (including Employee’s Confidentiality Agreement (as defined below)) by and between Employee and the Company, or (iii) conviction of, or plea of guilty or nolo contendere to, a crime involving moral turpitude, dishonesty, fraud or unethical business conduct, or any felony.
b. Subject to the satisfaction of the Severance Conditions, Employee will be eligible for reasonable outplacement services (the “Outplacement Services”) at the expense of the Company. The Outplacement Services will be provided by an outplacement firm designated by the Company. The Outplacement Services will be provided for up to three (3) months from the Termination Date or until employment is obtained, whichever occurs first (such period, the “Outplacement Services Period”). Without limiting any other obligation of Employee hereunder, Employee’s right to receive the Outplacement Services for any portion of or the entire Outplacement Services Period shall be conditioned upon Employee’s continued compliance with the terms and conditions of this Agreement.
c. Employee shall submit for payment all expenses to be reimbursed by the Company in accordance with the Company’s expense reimbursement policies no later than ten (10) days following the Termination Date.
1. Confidentiality
a. The Parties agree that the existence of, reasons for, and terms of the Agreement shall be held by them in strictest confidence and, except as required by law or applicable regulation, will not be disclosed by them, directly or indirectly, to any person or entity, other than their respective employees, attorneys, accountants, governmental entities, and insurers who have a reasonable need to know of such information.
b. Except for such items as Employee is authorized in writing by the Company's Chief Executive Officer to retain, Employee shall return to the Company all of the Company's property, equipment and all materials (including all copies thereof, whether or not in tangible form) and confidential and proprietary information of the Company in Employee’s possession on or prior to the Termination Date (or such earlier date as requested by the Company). If Employee has used any personally owned computer, server, or e-mail system to receive, store, review, prepare or transmit any Company confidential or proprietary information, Employee shall provide the Company with a computer-useable copy of all such information and then permanently delete and expunge such information from those systems on or prior to the Termination Date (or
such earlier date requested by the Company).
1. Settlement and Release of Claims
a. Employee agrees that this Agreement and the payments hereunder represent settlement in full of all outstanding obligations owed to Employee by the Company as a result of Employee’s employment by the Company. Employee also agrees and understands that notwithstanding the receipt of the Severance Payments, Benefits Reimbursement, Extended Exercise Benefit, Outplacement Services, and Acceleration Benefits, Employee’s participation in all benefits and incidents of employment shall cease on the Termination Date. Employee acknowledges, that except as expressly provided in this Agreement, Employee will not have earned and will not receive from the Company any additional compensation (including housing allowances, base salary, bonus, incentive or other variable compensation, equity, or vacation/PTO accrual), severance, or benefits on or after the Termination Date.
b. Employee, on behalf of Employee and Employee’s descendants, dependents, heirs, executors, agents, principals, partners, representatives, attorneys, administrators, assigns and transferees, as applicable Parties, does hereby fully and forever release, discharge and free the Company, its officers, directors, employees, investors, shareholders, predecessors, successors, subsidiaries, parent company and their respective successors and assigns (the “Released Parties”) of and from any claim, duty, demand, liability, obligation or cause of action (collectively, "Claims") and agrees not to sue any of the Released Parties concerning any matters of any kind, character or nature whatsoever, whether at law or in equity, now existing or heretofore ever having existed, whether currently known or unknown, suspected or unsuspected, that Employee may possess arising from any acts, omissions or facts that have occurred up until and including the Effective Date of this Agreement, including, without limitation, any and all Claims relating to or arising from Employee's involvement or employment relationship with the Company, the termination of that relationship and status, federal, state or local laws prohibiting discrimination in employment, or Employee's ownership of securities of the Company.
c. Employee acknowledges that they may have Claims against the Released Parties relating to the foregoing subject matter of which, at the time of execution of this Agreement, Employee has no knowledge, and Employee acknowledges and expressly agrees that this Agreement is specifically intended to and does extend to any and all such Claims, whether or not known, claimed or suspected. Accordingly, Employee hereby waives as to the Released Parties the benefits of Section 1542 of the California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN THEIR FAVOR AT THE TIME OF EXECUTING A RELEASE, WHICH IF KNOWN BY THEM MUST HAVE MATERIALLY AFFECTED THEIR SETTLEMENT WITH THE DEBTOR.
a. Employee expressly acknowledges and agrees that this waiver and release includes any and all rights or claims Employee may have or claim to have arising under Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment and Housing Act, the Worker Adjustment and Retraining Notification Act, the California Constitution, the California Worker's Compensation Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, and/or any other statute or provision. Employee expressly acknowledges and agrees that the Claims released pursuant to this Agreement include all claims against individual directors, officers, shareholders and employees of the Company and its affiliated companies, and that any and all such claims are hereby settled, compromised, released and
discharged by this Agreement.
1. Remaining Obligations
Notwithstanding the foregoing, the provisions of Section 4 above shall not restrict or limit in any way the liability or obligations of Employee from Employee’s continuing obligations under Section 3 or Section 9 hereof or any other obligation not to use or disclose confidential, trade secret, or proprietary information of the Company.
1. Injunctive Relief
In view of the nature of the right and goodwill, business reputation and prospects of the Company to be protected under Sections 3, 4, 7, 8 and 9 of this Agreement, the Employee understands and agrees that the Company could not be reasonably or adequately compensated in damages in an action at law for the Employee's breach of their obligations thereunder. Accordingly, the Employee specifically agrees that the Company shall be entitled to temporary and permanent injunctive relief to enforce the provisions of Sections 3, 4, 7, 8 and 9 of this Agreement, and that such relief may be granted without the necessity of proving actual damages. This provision with respect to injunctive relief shall not, however, diminish the right of the Company to claim and recover damages in addition to injunctive relief.
1. Non-Disparagement
Employee agrees not to criticize, denigrate, or otherwise disparage the Company or any other Released Party. However, nothing in this paragraph shall prohibit Employee from complying with and giving truthful testimony in response to any lawful subpoena or court order or taking any other actions affirmatively authorized by law.
1. Non-Solicitation
Employee agrees that for a period of one year from the execution of this Agreement, Employee shall not solicit, encourage or entice for employment on behalf of any other entity any employee who is employed by the Company at the time of execution of this Agreement or thereafter.
1. Confidentiality Agreement
A copy of Employee’s Confidentiality and Assignment Agreement (“Confidentiality Agreement”) is attached, and, notwithstanding any other provision of this Agreement (including without limitation Section 10(a)) or the termination of Employee’s employment with the Company, its terms shall remain in full force and effect. Employee understands and agrees that the Company’s proprietary information as defined in Section 1 of the Confidentiality Agreement belongs exclusively to the Company, and that the confidential information of the Company’s customers or of other organizations with which the Company does business remains their exclusive property. Employee agrees that Employee will not use or disclose any such information, whether for Employee’s benefit or for the benefit of another, and that Employee will hold and treat such information as confidential, unless Employee has specific prior written authorization from the Company to disclose it.
1. General
a. Entire Agreement
This Agreement represents the entire agreement and understanding between the Company and Employee concerning the termination of Employee's employment relationship with the Company, and, except as specifically provided herein, supersedes and replaces any and all prior agreements and understandings, written and oral, concerning Employee's relationship with the Company and Employee’s compensation by the Company. Neither party has relied upon any representations or statements made by the other party hereto which are not specifically set forth in this Agreement.
a. Waivers and Amendments
This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by both Parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any Party of any such right, power, or privilege, nor any single or partial exercise of any such right, power, or privilege, preclude any other or further exercise thereof or the exercise of any other such right, power, or privilege.
a. Governing Law
This Agreement shall be governed by and construed in accordance with the internal substantive laws, but not the choice-of-law rules, of the State of California applicable to agreements made and to be performed entirely within such state.
a. Assignment
This Agreement, and Employee's rights and obligations hereunder, are personal in nature and accordingly may not be assigned by Employee. The Company may assign this Agreement and its rights, together with its obligations hereunder, in connection with any sale, transfer or other disposition of all or substantially all of its assets or business, whether by merger, consolidation or otherwise. In such event, the term "Company," as used in this Agreement, shall mean the Company as defined above and any successor or assignee to the business or assets which by reason hereof becomes bound by the terms and provisions of this Agreement.
a. Counterparts; Electronic Delivery
This Agreement may be executed in counterparts, and each counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the Parties. In the event that any signature is delivered by facsimile or by electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or electronic delivered signature page were an original thereof.
a. Severability
If any provision of this Agreement is determined to be invalid or unenforceable, the provision shall be deemed to be severable from the remainder of this Agreement and shall not cause the invalidity or unenforceability of the remainder of this Agreement, which thereafter shall be construed so as to continue to effect the purposes hereof, provided, however, that in such event the Parties agree to negotiate substitute valid and enforceable provisions which carry out, so far as reasonably possible, the Parties' original intent in entering into this Agreement.
1. Voluntary Execution of Agreement
This Agreement is executed voluntarily and without any duress or undue influence on the part or on behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that:
a. They have carefully read this Agreement;
b. They have been advised and represented in the preparation, negotiation, review and execution of this Agreement by legal counsel of their own choice;
c. They understand the scope, terms, consequences and effects of this Agreement and of the releases it contains; and
d. They are fully aware of the legal and binding effect of this Agreement.
1. Acceptance of Offer
Employee understands and agrees that the offer provided in this Agreement expires at 5:00 p.m. on July xx, 20xx and may not executed or otherwise accepted by Employee following such expiration. Once executed, this Agreement may not be revoked by Employee.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth below.
Lynne Robbins (Employee) Date
Contoso AI Labs, Inc. (Company) Date
Exhibit A Termination Date Release
In exchange for the Severance Payments, Benefits Reimbursement Payments, Acceleration Benefits, Extended Exercise Benefit, Outplacement Services, and other consideration provided to me by Contoso AI Labs, Inc. (the “Company”) and as required by the Separation Agreement by and between the Company and me dated July xx, 20xx (the “Separation Agreement”), I hereby provide the following Termination Date Release (the “Release”). Capitalized Terms included herein and not otherwise defined shall have the meaning set forth in the Separation Agreement.
On behalf of myself and my descendants, dependents, heirs, executors, agents, principals, partners, representatives, attorneys, administrators, assigns and transferees, as applicable Parties, I hereby fully and forever release, discharge and free the Company, its officers, directors, employees, investors, shareholders, predecessors, successors, subsidiaries, parent company and their respective successors and assigns (the “Released Parties”) of and from any claim, duty, demand, liability, obligation or cause of action (collectively, "Claims") and agrees not to sue concerning any matters of any kind, character or nature whatsoever, whether at law or in equity, now existing or heretofore ever having existed, whether currently known or unknown, suspected or unsuspected, that I may possess arising from any acts, omissions or facts that have occurred up until and including the date of this Release, including, without limitation, any and all Claims relating to or arising from my involvement or employment relationship with the Company, the termination of that relationship and status, federal, state or local laws prohibiting discrimination in employment, or my ownership of securities of the Company.
I acknowledge that I may have Claims against the Released Parties relating to the foregoing subject matter of which, at the time of execution of this Release, I have no knowledge, and I acknowledge and expressly agrees that this Release is specifically intended to and does extend to any and all such Claims, whether or not known, claimed or suspected. Accordingly, I hereby waive as to the Released Parties the benefits of Section 1542 of the California Civil Code, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN THEIR FAVOR AT THE TIME OF EXECUTING A RELEASE, WHICH IF KNOWN BY THEM MUST HAVE MATERIALLY AFFECTED THEIR SETTLEMENT WITH THE DEBTOR.
I expressly acknowledge and agree that this Release includes any and all rights or claims I may have or claim to have arising under Title VII of the Civil Rights Act of 1964, as amended, the California Fair Employment and Housing Act, the Worker Adjustment and Retraining Notification Act, the California Constitution, the California Worker's Compensation Act, the Employee Retirement Income Security Act of 1974, the Americans with Disabilities Act, and/or any other statute or provision. I expressly acknowledge and agree that the Claims released pursuant to this Release include all claims against individual directors, officers, shareholders and employees of the Company and its affiliated companies, and that any and all such claims are hereby settled, compromised, released and discharged by this Agreement.
I understand and agree that (i) I have received consideration pursuant to the Separation Agreement to which this Release is related beyond that to which I was entitled; and (ii) I have been advised to consult with an attorney before signing this Release.
By: Lynne Robbins
Date: