▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
February 22, 1999
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇:
This letter is intended to set forth our agreement regarding the
termination of your employment with ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc (the "Company").
1. Your termination was effective on February 19, 1999. Our respective
obligations under this Agreement shall become effective on the date,
and only if, the Release (defined below) becomes irrevocable pursuant
to law (the "Effective Date").
2. You have concurrently executed and delivered to the Company the
attached General Release and Waiver (the "Release").
3. For the twelve-month period immediately following the Effective Date,
you shall continue to receive your $500,000 annual base salary (net of
all applicable withholding and other customary deductions) as and when
you would have received such payments if your employment with the
Company had continued. However, pursuant to your written request, the
Company shall make any or all remaining payments in a lump sum. The
Company shall also pay you for two weeks of accrued and unused
vacation time on or promptly following the Effective Date.
4. You shall be deemed fully vested with respect to 200,000 of your
600,000 options to purchase Membership Units in the Company (which are
ownership interests in the Company equivalent to shares in a
corporation). Such vested options (the "Options") shall continue to
have a per Unit exercise price of $12.00 per Unit based on 33,333,334
Units currently outstanding (a $400,000,000 valuation of the Company).
All other options shall be forfeited and of no further force or
effect.
In the event of an initial public offering with respect to the
business of the Company by an entity other than the Company, your
options will be
appropriately converted into options to acquire publicly traded stock
of the entity going public. In addition, if the currently outstanding
Units are split into an amount other than 33,333,334, the 200,000
options and the per Unit exercise price shall be similarly adjusted as
per all other Company employees.
If an initial public offering by the Company or another entity taking
the Company's business public (an "IPO") is not consummated by the
second anniversary of the Effective Date, the Options shall expire and
be of no further force or effect. If an IPO is consummated within one
year following the Effective Date, you shall have 12 months following
the consummation of the IPO to exercise your options. If an IPO is
consummated after the first anniversary of the Effective Date and
prior to the second anniversary of the Effective Date, you shall have
until the later of (i) 90 days after the consummation of the IPO, or
(ii) the second anniversary of the Effective Date.
You shall not be required to enter into any lock-up arrangement in
connection with an IPO. In all circumstances, however, if you are also
selling the securities received upon any exercise of your Options, you
shall not sell more than 20,000 shares in any one day. Immediately
following the consummation of an IPO, you will be able to use ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, the Company's agent for purposes of employee stock
option exercises, in connection with your exercise of the Options and
your sale of securities received pursuant thereto (subject to the
foregoing 20,000 share single-day sale limitation).
5. The Company shall continue to pay the employer's share of your Company
medical, insurance, disability and related benefits through the first
anniversary of the Effective Date.
6. For the six-month period immediately following the Effective Date, the
Company shall provide you with office space (including access to a
computer, a cellular and a noncellular phone, a fax machine, a copying
machine, administrative support, etc.) in a place to be determined by
the Company.
You acknowledge that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and other executive search firms
used by the Company would ordinarily be restricted from engaging in a
job search for you. However, the Company agrees to waive any and all
such restrictions, and you shall be free to utilize the services of
such firms at your own expense.
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7. For the 12-month period immediately following the Effective Date,
without the prior written permission of the Company, you shall not,
directly or indirectly, (i) enter into the employ of or render any
services to any person or entity engaged in any Competitive Business
(as defined below); (ii) engage in any Competitive Business for your
own account; (iii) become associated with or beneficially own an
interest in any Competitive Business as an individual, partner,
shareholder, creditor, director, officer, principal, agent, employee,
trustee, consultant, advisor or in any other relationship or capacity,
except that you may beneficially own up to 5% of the publicly traded
stock of a public company; or (iv) employ or retain, or have or cause
any other person or entity to employ or retain, any person who was
employed or retained by the Company while you were employed by the
Company, other than your assistant ▇▇▇▇ ▇▇▇▇▇▇.
"Competitive Business" shall mean any e-commerce business that derives
more than 50% of its revenues from bookselling, including without
limitation ▇▇▇▇▇▇.▇▇▇ and the e-commerce businesses of Borders Group
and Books-a-Million.
8. You shall maintain the confidentiality of all matters relating to the
Company, its business, operations, customers and suppliers, as set
forth in paragraph 10 of the Release.
9. You acknowledge that the Company will suffer substantial damage which
will be difficult to compute if you should violate any of the
provisions of paragraphs 7 or 8 above, and that such provisions are
reasonable and necessary for the protection of the business of the
Company.
If you commit a breach of any of the provisions of paragraphs 7 or 8
above, the Company shall have the right and remedy to have such
provisions specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed by you that your
obligations under paragraphs 7 and 8 above are of special, unique and
extraordinary character and that any such breach will cause
irreparable injury to the Company, and that money damages will not
provide an adequate remedy to the Company.
You further acknowledge that: (i) the rights and remedies enumerated
in this paragraph 9 shall be in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or
equity; and (ii) If any provision of paragraphs 7 or 8 above is held
to be unenforceable because of the scope, duration or area of
applicability, the tribunal making such determination shall modify
such scope, duration and/or area to give them
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the maximum effect permissible by law, and such provision or
provisions shall then be applicable in such modified form.
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10. We shall mutually agree on the form and substance of internal (within
the Company) and external (outside the Company) communications
regarding the termination of your employment.
11. In the event of your death, the benefits of this Agreement shall inure
to the benefit of your legal representatives, heirs and distributees.
If you are in agreement with the foregoing, please so indicate by signing
the enclosed copy of this letter in the appropriate space below and returning it
to the undersigned.
Very truly yours,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ LLC
By:______________________
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, CEO
Agreed to:
----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Dated: March 10, 1999
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GENERAL RELEASE AND WAIVER
THIS DOCUMENT WILL AFFECT YOUR LEGAL RIGHTS, AND THE
LEGAL RIGHTS OF OTHER PERSONS AND ENTITIES INCLUDED
WITHIN THE DESCRIPTION OF "RELEASEE" IN PARAGRAPH 3
BELOW.
IF YOU DECIDE TO SIGN THIS DOCUMENT, YOU MUST READ IT
CAREFULLY AND COMPLETELY, AND UNDERSTAND IT FULLY,
BEFORE YOU SIGN.
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("Employee"), on his behalf and on behalf of his heirs,
executors, administrators, successors and assigns (collectively, "Releasor"),
hereby acknowledges and agrees that Employee's employment with
▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc ("Company") terminated effective February 19, 1999.
2. (a) Employee hereby agrees that in accordance with the terms and
conditions of this Release, and after the delivery to the Company of a signed
and notarized original of this Release, the expiration of seven (7) days from
the signing of this Release and Employee's compliance with paragraph 7 of this
Release, the Company, on behalf of itself and each Releasee, shall make the
payments and provide Employee with the benefits set forth in the letter
agreement to which this Release is an exhibit (the "Letter Agreement"). Such
consideration shall be referred to collectively as the "Termination
Consideration."
(b) Employee acknowledges and agrees that: (i) the Termination
Consideration includes benefits, monetary or otherwise, which were not earned or
accrued or to which Releasor was already entitled; and (ii) any monetary or
other benefits which, prior to the execution of this Release, Employee may have
earned or accrued or to which Employee may have been entitled, have been paid,
or such payments have been released, waived or settled by Releasor pursuant to
this Release.
(c) Employee also acknowledges that prior to or contemporaneous with
his execution of this Release he received all wages and other payments,
including accrued vacation pay, sick pay and bonuses if any, that may be due to
him from the Company through the date of his execution of this Release.
3. THIS PARAGRAPH PROVIDES A COMPLETE RELEASE AND WAIVER OF ALL EXISTING
AND POTENTIAL CLAIMS YOU MAY HAVE AGAINST EVERY PERSON AND ENTITY INCLUDED
WITHIN THE DESCRIPTION BELOW OF "RELEASEE." BEFORE YOU SIGN THIS RELEASE, YOU
MUST READ THIS PARAGRAPH CAREFULLY, AND MAKE SURE THAT YOU UNDERSTAND IT FULLY.
(a) In consideration of Releasor's receipt and acceptance of the
Termination Consideration from and/or on behalf of the Company, Releasor hereby
irrevocably, unconditionally and generally releases the Company, its current and
former officers, directors,
managers, shareholders, members, parents, affiliates, subsidiaries, divisions,
agents, attorneys and employees, in their respective capacities as such, and the
current and former officers, directors, managers, shareholders, members, agents,
attorneys and employees of any such parent, affiliate, subsidiary or division of
the Company, in their respective capacities as such, and the heirs, executors,
administrators, receivers, successors and assigns of all of the foregoing
(collectively, "Releasee"), from or in connection with, and hereby waives and/or
settles, with prejudice, any and all actions, causes of action, suits, debts,
dues, sums of money, accounts, controversies, agreements, promises, damages,
judgments, executions, or any liability, claims or demands, known or unknown and
of any nature whatsoever and which Releasor ever had, now has or hereafter can,
shall or may have as of the date of this Release, including, without limitation,
arising directly or indirectly pursuant to or out of any aspect of Employee's
employment with the Company, the payment or nonpayment of any wages or
compensation, the performance of services for the Company or any Releasee or the
termination of such employment or services.
(b) Specifically, without limitation, this Release shall include and
apply to any rights and/or claims: (i) arising under any contract, express or
implied, written or oral; (ii) for wrongful dismissal or termination of
employment; (iii) arising under any applicable federal, state, local or other
statutes, orders, laws, ordinances, regulations or the like, or case law, that
relate to employment or employment practices and/or, specifically, that prohibit
discrimination based upon age, race, religion, sex, national origin, disability
or any other unlawful bases, including without limitation, the Civil Rights Act
of 1964, as amended, the Civil Rights Act of 1991, as amended, the Civil Rights
Acts of 1866 and 1871, as amended, the Age Discrimination in Employment Act of
1967, as amended, the Americans with Disabilities Act of 1990, as amended, the
Family Medical Leave Act of 1993, as amended, the Employee Retirement Income
Security Act of 1990, as amended, the Fair Labor Standards Act, as amended, the
Vietnam Era Veterans' Readjustment Assistance Act, as amended, the Equal Pay
Act, as amended, and any similar applicable statutes, orders, laws, ordinances,
regulations or the like, or case law, of the State of New York or any political
subdivision thereof, including without limitation, the N.Y. Executive Law, as
amended, the N.Y. Labor Law, as amended, the N.Y. Civil Rights Law, as amended,
the Administrative Code of the City of New York, as amended, and all applicable
rules and regulations promulgated pursuant to or concerning any of the foregoing
statutes, orders, laws, ordinances, regulations or the like; (iv) based upon any
other federal, state or local statutes, orders, laws, ordinances, regulations or
the like, or case law; (v) for tortious or harassing conduct, infliction of
mental distress, interference with contract, fraud, libel or slander; and (vi)
for damages, including without limitation, punitive or compensatory damages, or
for attorneys' fees, expenses, costs, wages, injunctive or equitable relief.
4. This Release shall not apply to and shall not release or waive any
rights or claims that Employee may have for benefits under the provisions of any
pension or employee benefit plans maintained by any Releasee or Employee's
rights: (a) under the Letter Agreement; (b) under this Release; and (c) to
indemnification and/or payment of defense costs in any actions in which Employee
is made a party or held liable as a result of work he performed for the Company
that was within the scope of his duties and responsibilities.
-2-
5. Releasor represents and warrants that Employee has not filed or
commenced any complaints, claims, actions or proceedings of any kind against any
Releasee with any federal, state or local court or any administrative,
regulatory or arbitration agency or body, and Releasor agrees not to file or
commence any complaint, claim, action or proceeding of any kind against any
Releasee with any federal, state or local court or any administrative,
regulatory or arbitration agency or body, based upon events occurring on or
prior to the date of this Release, including without limitation, with respect to
any aspect of Employee's employment with the Company, the payment or nonpayment
of any wages or compensation, the performance of services for the Company or any
Releasee or the termination of such employment or services.
6. By executing this Release, Releasor acknowledges that: (a) Employee has
been advised by the Company to consult with an attorney before executing this
Release; (b) he was provided adequate time (i.e, at least twenty-one (21) days)
to review it and to consider whether to sign the Release; and (c) he has been
advised that he has seven (7) days following execution to revoke it ("Revocation
Period").
7. Notwithstanding anything to the contrary contained herein or in the
Letter Agreement, this Release will not be effective or enforceable until the
Revocation Period has expired, and the Termination Consideration is not payable
and shall not be delivered or paid by the Company until the Revocation Period
has expired and Employee has confirmed in writing, in the form annexed hereto as
Exhibit A, that this Release has not been revoked.
8. This Release and/or any payments made hereunder are not intended to be,
shall not be construed as and are not an admission or concession by any Releasee
of any wrongdoing or illegal or actionable acts or omissions. Employee, as and
on behalf of Releasor, hereby represents and agrees that he shall not directly
or indirectly make, and he shall not authorize any person or entity on his
behalf to make: (i) any written or oral statements, suggestions or
representations that any Releasee has made or implied any such admission or
concession; or (ii) any written or oral negative, disparaging or adverse
statements, suggestions or representations of or concerning the Company.
9. Employee hereby represents and agrees that he has kept confidential and
has not disclosed orally or in writing directly or indirectly to any person, and
in further consideration of the Company's agreement to deliver the Termination
Consideration and except as may be required by law in response to compulsory
legal process or in a legal proceeding relating to the terms of this Release
and/or of the Letter Agreement, Releasor shall keep confidential and shall not
disclose orally or in writing directly or indirectly to any person (other than
to Employee's attorney, accountant and immediate family, each of whom shall be
directed by Employee not to disclose such information), any and all information
concerning any aspect of Employee's employment with the Company, the payment or
nonpayment of any regular, overtime or other wages or compensation, the
performance of services for the Company or any Releasee or the termination of
such employment or services, including without limitation: (a) any facts, claims
or assertions relating or referring to any conduct or practices by or on behalf
of any Releasee; (b) any facts, claims or assertions relating or referring to
any experiences of
-3-
Employee or treatment he received by or on behalf of any Releasee during his
employment through the date of this Release, which experiences or treatment
could have provided a factual or legal basis for any claim of any kind in any
action or proceeding before any court or administrative or arbitral body; (c)
the existence or terms of this Release; and (d) the amount of any payment made
hereunder. Notwithstanding the foregoing, in response to any inquiry concerning
any of the foregoing or otherwise, Employee (i) has stated and may state that he
voluntarily resigned his employment with the Company, that the Company has
agreed to provide him with office space and that recent changes to the Company's
health insurance plan made him eligible for continued participation in the group
health plan at his own expense at the group rate, and (ii) may describe the
positions he held and compensation he received, the job duties and functions he
performed, and the dates of commencement and termination of his employment.
10. (a) Employee hereby acknowledges that during his employment he may have
acquired proprietary, private and/or otherwise confidential information
("Confidential Information," as defined and described in this sub-paragraph)
concerning or relating to (i) the Company and any Releasee, (ii) any current or
former employee of the Company or any Releasee, (iii) any person or entity with
whom or which the Company or any Releasee transacted business during Employee's
employment (iv) any person or entity with respect to whom or which the Company
acquired any non-public information, and (v) any aspect of the operation of the
business of the Company or any Releasee, including without limitation, all
financial, operational and statistical information.
(b) Employee hereby represents and agrees that upon execution of this
Release: (i) he has returned to the Company, and has not retained any copies of,
all documents, records or materials of any kind, whether written or
electronically created or stored, which contain, relate to or refer to any
Confidential Information ("Confidential Materials"); (ii) he has not disclosed
any Confidential Information or Confidential Materials to any person or entity
without the express authorization of an authorized officer of the Company; and
(iii) in consideration of the Company's agreement to deliver the Termination
Consideration pursuant to the terms of this Release and the Letter Agreement,
Employee and/or any Releasor shall not disclose any Confidential Information or
Confidential Materials, in any manner directly or indirectly, except as shall be
required by law.
(c) In the event that Employee and/or any Releasor receives a subpoena
or any other written or oral request for any Confidential Information,
Confidential Materials or any other information concerning the Company or any
Releasee, Employee shall, within two (2) business days from his actual notice of
the service of such subpoena or other request (i) notify the Company in writing,
by fax to ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Chief Executive Officer of the Company (or his
successor), and (ii) provide a copy to the Company of such subpoena or other
request if in writing, and/or disclose the nature of the request for information
if oral.
(d) Employee also represents and agrees that upon the execution of this
Release he has returned to the Company all other property of the Company or any
Releasee, including without limitation, any building or other identification
related to Employee's employment, and all keys to all offices at ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ and any other premises under the management or
control of any Releasee.
-4-
11. Employee will comply with all reasonable requests from the Company for
assistance and/or information in connection with any matters and/or issues
relating to or encompassed within the duties and responsibilities of Employee's
employment with the Company, including without limitation, consulting with the
Company's employees and attorneys with respect to, and/or appearing as a witness
in, any dispute, controversy, action or proceeding of any kind, and in
connection with the transition of on-going matters to other employees of the
Company. The Company agrees to promptly reimburse Employee for all expenses
incurred in connection with compliance with his obligations under this
paragraph.
12. ▇▇▇▇▇▇▇▇ agrees to execute any other writings and/or documents
consistent with this Release and/or the Letter Agreement and reasonably
necessary to effectuate the terms of this Release and/or the Letter Agreement,
and further agrees to appear in any court or other tribunal upon thirty (30)
business days' notice if such appearance is necessary to effectuate the terms of
this Release. The Company agrees to promptly reimburse Employee for all expenses
incurred in connection with compliance with his obligations under this
paragraph.
13. The covenants, representations and acknowledgments made by Releasor in
this Release and/or the Letter Agreement shall survive the execution of this
Release and the Letter Agreement and the delivery of the Termination
Consideration. The Company shall be excused and released from any obligation to
make payment of the Termination Consideration, and Releasor shall be obligated
to return to the Company any such Termination Consideration that has been paid,
in the event that: (a) Releasor is found to have made a material misstatement
in, or has committed or commits a material breach of any term, condition,
covenant, representation or acknowledgment in this Release and/or the Letter
Agreement; and/or (b) this Release and/or the Letter Agreement is determined to
be invalid or unenforceable, or Releasor claims in any forum that this Release
and/or the Letter Agreement is invalid or unenforceable.
14. Except as contained in the Letter Agreement, this Release constitutes
the sole and complete understanding and agreement between the parties with
respect to the matters set forth herein, and there are no other agreements or
understandings, whether written or oral and whether made contemporaneously or
otherwise. No term, condition, covenant, representation or acknowledgment
contained in this Release and/or the Letter Agreement may be amended unless in a
writing signed by both parties. If any section of this Release and/or the Letter
Agreement is determined to be void, voidable or unenforceable, it shall have no
effect on the remainder of this Release and/or the Letter Agreement which shall
remain in full force and effect. If any provision of this Release and the Letter
Agreement are inconsistent or in conflict, the terms of this Release shall
control.
15. Any dispute, controversy or claim between Releasor and Releasee
("Claims", as further defined below) shall be submitted to and finally
determined by binding arbitration to be held in New York, New York before one
arbitrator according to the rules of the American Arbitration Association, with
the party not prevailing in such proceeding to be responsible for prompt
reimbursement to the prevailing party of the reasonable attorneys' fees and
costs incurred in prosecuting and/or defending such arbitration. Claims subject
to this arbitration provision are and shall be: (a) those claims which arise out
of or relate to the Letter
-5-
Agreement and/or this Release, including the enforceability and/or violation of
any term or provision of the Letter Agreement and/or this Release; and/or (b) in
the event that paragraph 3 of this Release is determined or deemed to be void or
unenforceable, in whole or in part, those claims which arise out of or relate to
any rights or claims, or constituting any claims, that are described in and/or
are referred to, and were intended to be waived and released, in paragraph 3 of
this Release. This Release and the Letter Agreement, and any arbitration
hereunder or thereunder, shall in all respects be subject to, governed by and
enforced and construed pursuant to and in accordance with, the laws of the State
of New York, without regard to and excluding New York choice of law rules and
except that the interpretation and enforceability of this arbitration clause
shall be governed by the Federal Arbitration Act.
16. Employee agrees and acknowledges that: (a) he has had an adequate
opportunity to review this Release and the Letter Agreement and all of their
respective terms; (b) he understands all of the terms of this Release and the
Letter Agreement, and such terms are fair, reasonable and are not the result of
any fraud, duress, coercion, pressure or undue influence exercised by or on
behalf of any Releasee; and (c) he has agreed to and entered into this Release
and the Letter Agreement and all of the terms hereof and thereof, knowingly,
freely and voluntarily.
-------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 10th day of March, 1999, personally came ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and being
duly sworn, acknowledged that he is the person described in and who executed the
foregoing Release and acknowledged that he executed same.
-------------------------------
Notary Public
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EXHIBIT A
March 18, 1999
BY HAND
▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ llc
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇:
I acknowledge that pursuant to the General Release and Waiver ("Release")
executed by me on March 10, 1999, I had the right to revoke the Release within
seven (7) days after the execution of the Release (the "Revocation Period"). I
hereby confirm that the Revocation Period has expired and I have not revoked the
Release.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK)
On the 18th day of March, 1999, personally came ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and being
duly sworn, acknowledged that he is the person described in and who executed the
foregoing Release and acknowledged that he executed same.
-------------------------------
Notary Public