EXHIBIT 99
SEPARATION AGREEMENT
MediaLogic ADL, Inc.
1965 North 57th Court
Boulder, CO 80301
Mr. Lee H. Elizer
5551 Sunshine Canyon Drive
Boulder, Colorado 80302
Dear Lee:
This letter agreement (this "Agreement") is made and entered into as of
October 23, 1996 (the "Effective Date") by and between MediaLogic ADL, Inc. (the
"Company"), Media Logic, Inc. ("Media Logic," the Company's parent corporation)
and you and sets forth the terms applicable to the termination of your
employment by the Company.
1. You hereby acknowledge the termination of your employment as the
Chief Executive Officer and President of the Company and your resignation as a
Director of the Company, effective October 11, 1996 (the "Separation Date").
2. You acknowledge that the Company, Media Logic and you are parties to
the following agreements (collectively, the "Prior Agreements"):
(i) Employment Agreement between the Company and you, dated as of
July 21, 1994 (the "Employment Agreement");
(ii) Non-Statutory Stock Option Agreement, dated as of July 21,
1994, between the Company and you relating to the grant to you
of an option (the "Option") to purchase up to 1,000,000 shares
of the common stock of the Company, $.001 par value per share
(the "Company Option Agreement");
(iii) Incentive Stock Option Agreement, dated as of April 17, 1996,
between Media Logic and you relating to the grant to you of an
option to purchase up to 15,000 shares of the common stock of
Media Logic, $.01 par value per share (the "Media Logic Option
Agreement");
(iv) Shareholders Agreement, dated as of July 21, 1994, among the
Company and the Shareholders and Optionholders named therein
(the "Shareholders' Agreement"); and
(v) Technology Transfer Agreement, dated as of July 21, 1994,
between the Company and you and Chris Marlowe (the "Technology
Transfer Agreement").
3. In connection with the termination of your employment and in
consideration of the other provisions of this Agreement, including, without
limitation, those set forth in Paragraph 9 hereof, the Company hereby agrees to
pay and make available to you the amounts and benefits set forth in this
Paragraph 3.
(i) The Company will pay you an amount equal to the remainder of
your salary (excluding any bonuses) that would have been due
through July 21, 1997 under the Employment Agreement ("Salary
Continuation Payments"), plus an amount equal to what would
have been payable as accrued vacation pay under the Employment
Agreement ("Equivalent Vacation Payments"). Such amounts are
equal to the following:
(a) Salary Continuation Payments: $93,692.22 (equal to
$2,307.69 per week through July 21, 1997); and
(b) Equivalent Vacation Payments: $5,999.76 (equal to
$57.69 per hour for an aggregate of 104 hours through
July 21, 1997).
(c) Total (Salary Continuation Payments plus Equivalent
Vacation Payments): $99,691.98.
Said sum (less withholding) shall be paid by the Company
according to the following schedule: 50% ($49,846.00) to be
paid in one lump sum on the Effective Date of this Agreement
and the remaining 50% to be paid in 26 equal weekly
installments of $1,917.15 beginning on the first Friday
following the Effective Date of this Agreement.
(ii) You shall have the right to continue your medical insurance
coverage (solely at your expense) to the extent provided in
the Consolidated Omnibus Budget Reconciliation Act of 1985
(COBRA), as amended. The COBRA period shall be deemed to have
commenced as of the Separation Date.
(iii) The Company will not oppose any effort by you to collect
unemployment insurance and will provide such accurate
information to you and any unemployment agency as may be
requested in connection therewith.
(iv) The Company will pay you on the Effective Date of this
Agreement, the sum of $50,000 (less withholding) (the
"Separation Sum") in consideration of your obligations under
this Agreement. The payment of the Separation Sum shall be
reported by means of a Form W-2 and deemed to be a payment
under this Agreement and not wages.
(v) The Company shall provide you, or DataThinK, Inc.
("DataThinK", the company recently established by you to
operate as a value-added reseller of data storage
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libraries), within eighteen (18) months of the Effective Date
of this Agreement, twenty (20) newly manufactured base model
libraries at such times and in such quantities as you shall
request in writing. The libraries will be provided to you
pursuant to the following terms:
(a) The libraries provided will be from those base models
which are available from the Company at the time of
your request(s). You may, if you so choose, request
delivery at one time of more than one type of
library;
(b) The libraries, when delivered to you by the Company,
allow a ten (10) day acceptance period and carry a
standard new product warranty. Units not rejected
within the ten (10) day acceptance period will be
deemed to be accepted by you and will count toward
your 20-unit maximum allowance.
The Company does not intend to withhold employment taxes when
it delivers the data libraries to you. However, if it is
determined that the Company should have withheld such taxes,
you hereby agree to indemnify and hold the Company, Media
Logic and the other Releasees (as hereinafter defined) from
and against any costs, expenses (including, without
limitation, reasonable legal fees and expenses), judgments and
amounts paid in settlement that they may incur as to which
they may become subject on or after the Effective Date of this
Agreement by reason of any failure of the Company to withhold
properly any amounts specifically under this Paragraph 3(v).
(vi) If you so desire, the Company will enter into its standard
Value Added Resellers Agreement with you or with DataThinK on
the same terms, conditions and pricing policies as other
customers of the Company.
(vii) Should you desire to purchase products from the Company, the
Company will sell products to you pursuant to the following
terms:
(a) DataThinK will be allowed to purchase up to $50,000
worth of product on credit, to be paid within ninety
(90) days of your receipt of the products. You may
purchase products in an aggregate outstanding credit
amount not to exceed $50,000 (i.e., on a revolving
basis).
(b) Such terms shall remain in effect until the earlier
of (i) such time as you are no longer a majority
owner of DataThinK, or (ii) two (2) years from the
date of this Agreement. Upon any lapse of such terms,
the terms under which you purchase any further
products of the Company shall be the Company's
standard credit terms (currently thirty (30) days).
(c) Such terms are nontransferable and non-assignable.
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(d) Any products purchased that exceed the $50,000 credit
limit at any time shall be purchased under the
Company's standard credit terms, including but not
limited to, the Company's right at all times not to
sell product to customers which the Company deems
insolvent, bankrupt, or otherwise not credit-worthy.
(viii) The Company hereby assigns and transfers to you all of its
right, title and interest in and to the computer equipment
listed below (the "Equipment"), free and clear of all liens
and encumbrances. The Equipment is assigned and transferred to
you as of the date hereof and the Company makes no
representations or warranties whatsoever:
(a) Two (2) 486/66XM HP Vectra desktop computers with
CD-ROM, keyboard, floppy disk, sound card, 28.8 modem
and already installed software (with the exception of
Company data, which is on the server); and
(b) One (1) Gateway 2000 SOLO laptop computer, serial
number PB1F2512 with floppy disk, CD-ROM, 3com PCMCIA
28.8 modem card and carrying case with external power
supply, mouse and docking port.
(ix) Media Logic hereby grants to you, according to the following
schedule, an aggregate of 20,000 shares (the "Shares") of the
common stock, $.01 par value per share (the "Common Stock") of
Media Logic:
(a) 5,000 shares of Media Logic Common Stock as promptly
as practicable after the date of this Agreement, but
in no event later than thirty (30) days following
such date;
(b) 7,000 shares of Media Logic Common Stock one (1) year
from the date of this Agreement; and
(c) 8,000 shares of Media Logic Common Stock two (2)
years from the date of this Agreement.
If the Company or Media Logic is to be consolidated
with or acquired by another entity in a merger, sale of all or
substantially all of the Company's or Media Logic's assets or
otherwise, all Shares not yet issued shall be immediately
issued.
The Company will use all reasonable efforts to file a
registration statement on Form S-3 (the "Registration
Statement") with the Securities and Exchange Commission with
respect to the Shares within thirty (30) days following the
date of issuance of each group of Shares and agrees to keep
each respective
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Registration Statement effective until the earlier of (i) the
completion of the distribution pursuant to the respective
Registration Statement, or (ii) one hundred eighty (180) days
following the effective date of the respective Registration
Statement. The Company's obligations under this Paragraph
shall end following the filing of and termination of the
effectiveness-maintenance period of the third such
Registration Statement.
4. You expressly acknowledge and agree that all amounts and benefits
which the Company has agreed to pay or make available to you under this
Agreement are not otherwise due or owing to you under any employment agreement
(oral or written). You further acknowledge that you have been paid and provided
all wages, commissions, bonuses, vacation pay, holiday pay and any other form of
compensation or benefit that either is due now or otherwise would become due in
the future in connection with your employment or separation of employment with
the Company.
5. (i) You expressly acknowledge that as of the date of this Agreement,
under the Company Option Agreement, options to purchase 223,000 shares of the
Company's common stock have vested and options to purchase 777,000 shares of the
Company's common stock remain unvested. You expressly agree that you are waiving
your right under the Company Option Agreement to exercise the vested portion of
your options and that the unvested stock options to purchase 777,000 shares of
common stock of the Company shall immediately lapse.
(ii) You expressly acknowledge and agree that as of the date
of this Agreement, under the Media Logic Option Agreement, you hold 15,000
unvested options to purchase common stock of Media Logic, such options which
will not vest under the terms of the Media Logic Option Agreement.
(iii) You acknowledge that the foregoing vested and unvested
options, respectively, are all of the vested options and unvested options,
respectively, which you own in either the Company or Media Logic as to which you
are entitled.
(iv) The parties acknowledge and agree that you do not have,
and shall not in the future have, (a) rights to vest in any stock options under
any stock or stock option plan of the Company or of Media Logic (of whatever
name or kind) in which you participated or were eligible to participate during
your employment, or (b) rights to any other securities of the Company or of
Media Logic.
6. (i) The Employment Agreement is hereby terminated. However, you
hereby reaffirm your obligations and agree to remain bound, to the same extent
as you were bound during the period that you were employed by the Company, by
the following provisions as set forth in the Employment Agreement: (a) the
prohibition as set forth in Section 8 of the Employment Agreement after
termination of your employment on your soliciting any employees of the Company
or of Media Logic, (b) the requirement as set forth in Section 10 of the
Employment Agreement that you not reveal any Confidential Information (as
therein defined)
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of the Company, (c) the requirement as set forth in Section 11 of the Employment
Agreement that you deliver to the Company following the termination of your
employment all Company property and documents which are in your possession or
control, and (d) the provisions of Section 12 of the Employment Agreement with
regard to specific enforcement.
(ii) You hereby reaffirm your obligations and agree to remain
bound, to the same extent as is fully contemplated by the Technology Transfer
Agreement, by the provisions of Section 5 of the Technology Transfer Agreement
with respect to the confidentiality and use of the Transferred Technology (as
defined therein).
(iii) Breach of any of the foregoing provisions of the
Employment Agreement or the Technology Transfer Agreement shall constitute a
material breach of this Agreement and, in addition to the Company's other
remedies, shall relieve the Company of any further obligations hereunder.
7. (i) You further agree that you will not make any statements that are
disparaging about or adverse to the Company's business interests (including its
officers, directors and employees) or which are intended to harm the Company's
reputation, including, but not limited to, any statements that disparage any
operations, product, service, finances, capability or any other aspect of
Company's business. The breach of this paragraph by you shall constitute a
material breach of this Agreement and shall relieve the Company of any further
obligations hereunder, without limiting other rights and remedies available to
the Company in any such circumstances.
(ii) The Company further agrees that, with respect to the
period of time you were employed by the Company, it will not make any statements
that are disparaging about your business performance or adverse to your
professional reputation or which are intended to harm your professional
reputation. In particular, if contacted by a prospective employer for a
reference, the Company, its officers and directors shall limit their response to
such prospective employer to providing your job duties and length of employment.
The Company shall instruct its employees to also abide by the previous sentence
and you agree to direct all such inquiries to William E. Davis, Jr.
Notwithstanding any other provisions of this paragraph, the provisions of this
paragraph shall not require the Company to make any false or misleading
statements to any governmental entity or as otherwise required by law or legal
process.
8. (i) You agree to cooperate with and be available to assist the
Company and Media Logic (including, without limitation, meeting with attorneys
of the Company and/or Media Logic) in any legal proceedings that either entity
is or may become involved with against a third party, including, but not limited
to, the Company's and Media Logic's current legal proceedings brought against
and by Christian P. Marlowe and Marlowe Engineering Company. When you are
requested to become involved by the Company or by Media Logic, you will be
reimbursed for reasonable out-of-pocket expenses, excluding attorneys fees,
arising out of such cooperation and assistance.
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(ii) The Company and Media Logic further agree that if
requested by you, such entities will cooperate with and be available to assist
you in legal proceedings that you may become involved with against a third party
for claims that arose during the term of your employment. You agree that, when
you request either the Company and/or Media Logic to become so involved, you
will reimburse such entit(ies) for reasonable out-of-pocket expenses, excluding
attorneys fees, arising out of such cooperation and assistance.
9. You agree and acknowledge that by signing this Agreement and
accepting the benefits to be provided to you, and other good and valuable
consideration provided for in this Agreement, you are waiving and releasing your
right to assert any form of legal claim against the Company, Media Logic, and
the Company's and Media Logic's affiliates, directors, officers, agents,
employees, successors and assigns of any kind whatsoever (hereinafter the
"Releasees") from the beginning of time through the date of this Agreement. Your
waiver and release herein is intended to bar any form of legal claim, charge,
complaint or any other form of action (jointly referred to as "Claims") against
such Releasees or recovery of any damages or other relief whatsoever (including,
without limitation, back pay, compensatory damages, punitive damages, attorneys
fees and any other costs) against such Releases, up through the date of this
Agreement.
Without limiting the foregoing general waiver and release, you
specifically waive and release the aforesaid Releasees from any Claim arising
from or related to your employment relationship with the Company or the
termination thereof, including, without limitation:
(i) Claims under the Prior Agreements.
(ii) Claims under any state discrimination, fair employment
practices, civil rights or other employment related statute,
regulation or executive order (as they may have been amended
through the date of this Agreement) prohibiting discrimination
or harassment based upon any protected status including,
without limitation, race, color, national origin, age, gender,
marital status, disability, veteran status or sexual
orientation.
(iii) Claims under any federal discrimination, fair employment
practices or other employment related statute, regulation or
executive order (as they may have been amended through the
date of this Agreement) prohibiting discrimination or
harassment based upon any protected status including, without
limitation, race, color, national origin, age, gender, marital
status, disability, veteran status or sexual orientation.
Without limitation, specifically included in this paragraph
are any Claims arising under the Age Discrimination in
Employment Act, the Older Workers Benefit Protection Act, the
Civil Rights Acts of 1866 or 1871, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991 and the
Americans With Disabilities Act.
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(iv) Claims under any other state or federal employment related
statute, regulation or executive order (as they may have been
amended through the date of this Agreement) relating to wages,
payment of wages hours or any other terms and conditions of
employment. Without limitation, specifically included in this
paragraph are any Claims arising under the Fair Labor
Standards Act, the Family Medical Leave Act of 1993, and the
National Labor Relations Act, the Employee Retirement Income
Security Act.
(v) Claims under any state or federal common law theory including,
without limitation, wrongful discharge, breach of express or
implied contract, promissory estoppel, unjust enrichment,
breach of a covenant of good faith and fair dealing, violation
of public policy, defamation, interference with contractual
relations, intentional or negligent infliction of emotional
distress, invasion of privacy, misrepresentation, deceit,
fraud or negligence.
(vi) Any other Claim arising under state or federal law.
10. (i) In consideration of the promises contained herein, and other
good and valuable consideration, the Company and Media Logic hereby release and
forever discharge you from any and all Claims (as defined in Paragraph 9 of this
Agreement), which the Company and/or Media Logic had, now have, or may have in
the future, relating in any manner to the performance by you of your duties as
an officer or employee of the Company, so long as you were duly authorized by
the Company and/or Media Logic and in fact were acting within the scope of such
authority in the performance of such duties.
(ii) Notwithstanding the foregoing, this paragraph shall not
release you from any obligation set forth in this Agreement.
(iii) Additionally, notwithstanding the foregoing, if any
Claim (as defined in Paragraph 9 of this Agreement) is brought against the
Company or Media Logic by a third party, not at the invitation or initiation of
the Company or Media Logic, which is based on any alleged act(s) or omission(s)
by you during the course of your employment with the Company, the Company and
Media Logic retain the right, subject to the same rights of indemnification to
which you were entitled during the course of your employment with the Company
and to the fullest extent available under any applicable law, to bring a
third-party Claim against you. If in the course of such a proceeding it is
determined that the Company or Media Logic is liable as a result of such act(s)
or omission(s) by you, you shall not be released from liability to the Company
and/or Media Logic under this Paragraph 10 and, in addition to the Company's
other remedies, the Company shall be relieved from any further obligations under
this Agreement.
11. The parties expressly acknowledge that because you are older than
40 years of age, you are granted specific rights under the Older Worker Benefits
Protection Act ("OWBPA") which prohibits discrimination on the basis of age, and
that the release set forth in the prior paragraph is intended to release any
right you may have to file a claim against the Company or
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Media Logic alleging discrimination on the basis of age. Consistent with the
provisions of OWBPA, you shall have twenty-one (21) days after your receipt of
this Agreement to consider and accept the terms of this Agreement by signing
below. In addition, you may rescind your assent to this Agreement if, within
seven (7) days after the date you sign this Agreement, you deliver to Media
Logic, Inc., 310 South Street, Plainville, MA 02762, Attn: William E. Davis,
Jr., President and CEO, a written notice of rescission. To be effective, such
notice of rescission must be postmarked within the seven (7) day period and sent
by certified mail, return receipt requested, to William E. Davis, Jr. at the
above address.
12. Except as expressly provided for herein, this Agreement supersedes
any and all prior oral and/or written agreements, including, without limitation,
the Prior Agreements and sets forth the entire agreement between the Company,
Media Logic and you. No variations or modifications hereof shall be deemed valid
unless reduced to writing and signed by the parties hereto. This Agreement shall
take effect as an instrument under seal and shall be governed, construed and
enforced in accordance with the laws of the Commonwealth of Massachusetts,
without giving effect to the conflict of law principles thereof. The terms of
this Agreement are severable, and if for any reason any part hereof shall be
found to be unenforceable, the remaining terms and conditions shall be enforced
in full.
13. Any legal action or proceeding with respect to this Agreement shall
be brought in the courts of the Commonwealth of Massachusetts or of the United
States of America for the District of Massachusetts. By execution and delivery
of this Agreement, each of the parties hereto accepts for itself and in respect
of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts.
14. The rights and obligations under this Agreement may not be assigned
by any party hereto without the prior written consent of the other parties. All
statements, representations, warranties, covenants and agreement in this
Agreement shall be binding on the parties hereto and shall inure to the benefit
of the respective successors, heirs and permitted assigns of each party hereto.
15. You hereby acknowledge that you have read this Agreement carefully,
that you have been afforded sufficient time to understand the terms and effects
of this Agreement, that you are hereby advised to consult with legal counsel
before signing the Agreement, that you are voluntarily entering into and
executing this Agreement and that neither the Company, Media Logic, nor their
agents or representatives has made any representations inconsistent with the
terms and effects of this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
MEDIALOGIC ADL, INC. LEE H. ELIZER
By: /s/ William Davis /s/ Lee H. Elizer
-------------------------- -------------------------
Name: William Davis Lee H. Elizer
Title: President
MEDIA LOGIC, INC.
By: /s/ William Davis
--------------------------
Name: William Davis
Title: President
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