EXHIBIT 10.10
August 23, 1999
Mr. ▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇▇▇:
This letter sets forth the substance of the separation agreement (the
"Agreement") which Chordiant Software, Inc. (the "Company") is offering to you
to aid in your employment transition.
1. Separation. Your last day of work with the Company will be August 26,
1999 (the "Separation Date"). You will be placed on unpaid leave and your
employment will terminate six months following the Separation Date on February
26, 2000.
2. Accrued Salary and Paid Time Off. On the Separation Date, the Company
will pay you all accrued salary, and all accrued and unused vacation earned
through the Separation Date, subject to standard payroll deductions and
withholdings. You are entitled to these payments regardless of whether or not
you sign this Agreement.
3. Severance Benefits. Although the Company has no policy or procedure for
providing severance benefits, the Company will continue your base salary in
effect on the Separation Date for the six (6) month paid leave following the
Separation Date until February 26, 2000. These payments will be made on the
Company's ordinary payroll dates, and will be subject to standard payroll
deductions and withholdings. There will also be no accrual of paid time off or
vacation time during this six-month period and you will not be eligible for
further vesting on any stock options after the Separation Date.
4. Health Insurance. To the extent provided by the federal COBRA law or,
if applicable, state insurance laws, and by the Company's current group health
insurance policies, you will be eligible to continue your group health insurance
benefits at your own expense. Later, you may be able to convert to an individual
policy through the provider of the Company's health insurance, if you wish. If
you elect continued coverage under COBRA, the Company, as part of this
Agreement, will pay your COBRA premiums for coverage through February 26, 2000.
5. Stock Purchase Agreement and Promissory Note. As provided in your stock
option agreements, you will have the right to exercise your vested stock options
for a period up to either thirty (30) days or ninety (90) days of the date of
the termination of your employment on February 26, 2000. To assist you in
exercising your vested options, the Company is prepared to allow you to exercise
your vested options on 376,098 shares of Company common stock with a full-
recourse promissory note for the full exercise price of the options of Fifty-One
Thousand Forty-One Dollars and Thirty-Nine Cents ($51,041.39) on the terms in
the stock purchase
agreement (and attachments thereto) in the form attached as Exhibit C. If you
wish to exercise all of your options using the promissory note, you must do so
with within thirty (30) days of the date of termination of your employment on
February 26, 2000. The promissory note will bear interest at the lowest rate
permitted by the Internal Revenue Service at which you will not be deemed to
receive imputed income under Section 7872 of the Internal Revenue Code (which,
for August 1999, is 5.36% per year, compounded semi-annually). The interest and
principal payable under the promissory note will not be due until the end of
eighteen months (18) months. The promissory note will be secured by a pledge of
the stock purchased with the stock options which will be placed in escrow with
the Company's legal counsel, ▇▇▇▇▇▇ Godward LLP.
6. Other Compensation or Benefits. You acknowledge that, except as
expressly provided in this Agreement, you will not receive any additional
compensation, severance or benefits after the Separation Date.
7. Expense Reimbursements. You agree that, within ten (10) days of the
Separation Date, you will submit your final documented expense reimbursement
statement reflecting all business expenses you incurred through the Separation
Date, if any, for which you seek reimbursement. The Company will reimburse you
for these expenses pursuant to its regular business practice.
8. Return of Company Property. By the Separation Date, you agree to return
to the Company all Company documents (and all copies thereof) and other Company
property that you have had in your possession at any time, including, but not
limited to, Company files, notes, drawings, records, business plans and
forecasts, financial information, specifications, computer-recorded information,
tangible property (including, but not limited to, computers), credit cards,
entry cards, identification badges and keys; and, any materials of any kind that
contain or embody any proprietary or confidential information of the Company
(and all reproductions thereof).
9. Proprietary Information Obligations. You acknowledge your continuing
obligations under your Proprietary Information and Inventions Agreement not to
use or disclose any confidential or proprietary information of the Company
without prior written authorization from a duly authorized representative of the
Company. A copy of your Proprietary Information and Inventions Agreement is
attached hereto as Exhibit C.
10. Confidentiality. The provisions of this Agreement will be held in
strictest confidence by you and the Company and will not be publicized or
disclosed in any manner whatsoever; provided, however, that: (a) you may
disclose this Agreement to your immediate family; (b) the parties may disclose
this Agreement in confidence to their respective attorneys, accountants,
auditors, tax preparers, and financial advisors; (c) the Company may disclose
this Agreement as necessary to fulfill standard or legally required corporate
reporting or disclosure requirements; and (d) the parties may disclose this
Agreement insofar as such disclosure may be necessary to enforce its terms or as
otherwise required by law. In particular, and without limitation, you agree not
to disclose the terms of this Agreement to any current or former Company
employee.
11. Nondisparagement. Both you and the Company agree not to disparage the
other party, and the other party's officers, directors, employees, shareholders
and agents, in any manner likely to be harmful to them or their business,
business reputation or personal reputation; provided that both you and the
Company will respond accurately and fully to any question, inquiry or request
for information when required by legal process.
12. Release. In partial exchange for the salary continuation, COBRA
payments, Stock Purchase Agreement (including the continuing opportunity to
purchase Company stock with a promissory note) and other consideration under
this Agreement to which you would not otherwise be entitled, you agree to
execute the Employee Agreement and Release attached hereto as Exhibit A. If
requested by the Company, you agree to execute another Employee Agreement and
Release in the form attached as Exhibit A to be effective as of the date of the
termination of your employment.
13. Noninterference. You acknowledge that during your employment with the
Company, you obtained proprietary and confidential information about employees,
independent contractors and consultants, including but not limited to, salary
history, bonuses, performance evaluations and other confidential personnel
information. Accordingly and in further partial exchange for the salary
continuation, COBRA payments, Stock Purchase Agreement (including the continuing
opportunity to purchase Company stock with a promissory note) and other
consideration under this Agreement, you agree that for the period of two years
after the Separation Date, you will not induce any employee, independent
contractor or consultant to terminate their relationship with the Company to
become an employee, independent contractor or consultant for any other company,
person or entity, because you acknowledge that to do so would require you to
draw upon confidential Company information you obtained during your employment
with the Company. In addition, you acknowledge that during your employment with
the Company, you obtained proprietary and confidential information about Company
customers, including but not limited to, customer lists, key customer contacts,
prices and costs, special customer needs and characteristics, billing rates,
profit margins and other customer financial information, and the preferences of
the customer's key decision makers and the most effective approaches to these
key decision makers. You also agree that for two years after the Separation
Date, you will not solicit the business of any client or customer of the Company
on behalf of any other person or entity, because you acknowledge that to do so
would require you to disclose Company proprietary information.
14. Non-Competition. In partial exchange for the salary continuation,
COBRA payments, Stock Purchase Agreement (including the continuing opportunity
to purchase Company stock with a promissory note) and other consideration under
this Agreement to which you would not otherwise be entitled, you agree that you
will not directly or indirectly engage or aid another person or entity (in any
capacity such as a consultant, agent, principal, director, partner, shareholder
or employee) to engage in a business which competes with any business of the
Company for the period of your paid leave and the eighteen-month period of the
promissory note following thereafter. A breach of the foregoing provision will
result in the immediate acceleration of the amounts owed under the promissory
note and repayment by you to the Company of the promissory note, salary
continuation, COBRA payments and other consideration under this Agreement. If
the immediately preceding provisions in this section are determined to be
invalid or unenforceable, in whole or in part, this determination will not
affect any other
provision of this Agreement and the foregoing provisions will be modified by the
court for such period of time and in such manner so as to be rendered
enforceable.
15. Miscellaneous. This Agreement, including all of its Exhibits,
constitutes the complete, final and exclusive embodiment of the entire agreement
between you and the Company with regard to this subject matter. It is entered
into without reliance on any promise or representation, written or oral, other
than those expressly contained herein, and it supersedes any other such
promises, warranties or representations. This Agreement may not be modified or
amended except in a writing signed by both you and a duly authorized officer of
the Company. This Agreement will bind the heirs, personal representatives,
successors and assigns of both you and the Company, and inure to the benefit of
both you and the Company, their heirs, successors and assigns. If any provision
of this Agreement is determined to be invalid or unenforceable, in whole or in
part, this determination will not affect any other provision of this Agreement
and the provision in question will be modified by the court so as to be rendered
enforceable. This Agreement will be deemed to have been entered into and will be
construed and enforced in accordance with the laws of the State of California as
applied to contracts made and to be performed entirely within California.
If this Agreement is acceptable to you, please sign below and on the attached
Employee Agreement and Release, which is part of this Agreement, and return the
originals of both to me.
I wish you good luck in your future endeavors.
Sincerely,
Chordiant Software, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
EVP-Chief Financial Officer
Exhibit A - Employee Agreement and Release
Exhibit B - Stock Purchase Agreement
Exhibit C - Proprietary Information and Inventions Agreement
Agreed:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
Exhibit A
EMPLOYMENT AGREEMENT AND RELEASE
I agree to the terms in the foregoing letter Agreement.
Except as otherwise set forth in this Agreement, I hereby release, acquit
and forever discharge the Company, [its parents and subsidiaries, and] its [and
their] officers, directors, agents, servants, employees, attorneys,
shareholders, successors, assigns and affiliates, of and from any and all
claims, liabilities, demands, causes of action, costs, expenses, attorneys fees,
damages, indemnities and obligations of every kind and nature, in law, equity,
or otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events, acts or
conduct at any time prior to and including the execution date of this Agreement,
including but not limited to: all such claims and demands directly or
indirectly arising out of or in any way connected with my employment with the
Company or the termination of that employment; claims or demands related to
salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law, statute, or cause of action including, but not
limited to, the federal Civil Rights Act of 1964, as amended; the federal
Americans with Disabilities Act of 1990; the federal Age Discrimination in
Employment Act of 1967, as amended ("ADEA"); the California Fair Employment and
Housing Act, as amended; tort law; contract law; wrongful discharge;
discrimination; harassment; fraud; defamation; emotional distress; and breach of
the implied covenant of good faith and fair dealing.
I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the ADEA, as amended. I also acknowledge that the
consideration given for the waiver and release in the preceding paragraph hereof
is in addition to anything of value to which I was already entitled. I further
acknowledge that I have been advised by this writing, as required by the ADEA,
that: (a) my waiver and release do not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) I have been advised hereby
that I have the right to consult with an attorney prior to executing this
Agreement; (c) I have twenty-one (21) days to consider this Agreement (although
I may choose to voluntarily execute this Agreement earlier); (d) I have seven
(7) days following the execution of this Agreement by the parties to revoke the
Agreement; and (e) this Agreement will not be effective until the date upon
which the revocation period has expired, which will be the eighth day after this
Agreement is executed by me, provided that the Company has also executed this
Agreement by that date ("Effective Date").
I UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND
UNKNOWN CLAIMS. In giving this release, which includes claims which may be
unknown to me at present, I acknowledge that I have read and understand Section
1542 of the California Civil Code which reads as follows: "A general release
does not extend to claims which the creditor does not know or suspect to exist
in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor." I hereby expressly
waive and relinquish all rights and benefits under that section and any law of
any jurisdiction of similar effect with respect to my release of any unknown or
unsuspected claims I may have against the Company.
Date: 27-Aug-99 By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
Exhibit C
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
[LOGO] Employee Confidentiality & Invention Agreement
In consideration of my employment or continued employment with ▇. ▇▇▇▇▇
Consulting, Inc., a California corporation ("▇. ▇▇▇▇▇"), I agree to the
following:
1. I understand that during the term of my employment with ▇. ▇▇▇▇▇, I may
produce, obtain, make known or learn about certain information which has
commercial value in the business in which ▇. ▇▇▇▇▇, is engaged and which is
treated by ▇. ▇▇▇▇▇ as confidential. This information may have been
created, discovered or developed by ▇. ▇▇▇▇▇ or otherwise received by ▇.
▇▇▇▇▇ from third parties subject to a duty to maintain the confidentiality
of such information. All such information is hereinafter called
"Proprietary Information." Proprietary Information includes, but is not
limited to, trade secrets, inventions, (whether patentable or not), ideas,
processes, programs, formulas, materials, substances, technology, research,
know-how, improvements, discoveries, developments, designs, inventions,
techniques, marketing plans, strategies, forecasts, new products,
unpublished financial statements, budgets, projections, prices, costs, and
customer lists.
2. I understand that all Proprietary Information shall be the sole property of
▇. ▇▇▇▇▇ and ▇. ▇▇▇▇▇ shall be the sole owner of all patents, copyrights
and other rights in connection therewith. I hereby assign to ▇. ▇▇▇▇▇ any
rights I may have or acquire in such Proprietary Information and in any
Proprietary Information that I may make or conceive while working for ▇.
▇▇▇▇▇. I will promptly disclose to ▇. ▇▇▇▇▇ any Proprietary Information
that is made or conceived or reduced to practice or learned by me, either
alone or jointly with others, during the period of my services to ▇. ▇▇▇▇▇
that are related to or useful in the business of ▇. ▇▇▇▇▇ or result from
tasks assigned me by ▇. ▇▇▇▇▇ or result from use of premises owned, leased,
or contracted for by ▇. ▇▇▇▇▇. At all times, both during the term of my
employment with ▇. ▇▇▇▇▇ and after its termination, I will keep in
strictest confidence and trust all Proprietary Information, and I will not
use, reproduce or disclose any Proprietary Information without the written
consent of ▇. ▇▇▇▇▇, except as may be necessary in the ordinary course of
performing my duties as an employee of ▇. ▇▇▇▇▇.
3. I further agree to do all acts necessary, both during and after the
termination of my employment, to assist ▇. ▇▇▇▇▇ in every proper way to
obtain and enforce patents or copyrights on Proprietary Information in any
and all countries, and to that end I will execute all documents for use in
applying for and obtaining such patents thereon and enforcing same, as J.
▇▇▇▇▇ ▇▇▇ desire, together with any assignments thereof to ▇. ▇▇▇▇▇ or
persons designated by it. ▇. ▇▇▇▇▇ shall pay all reasonable expenses
related to such activities.
4. I understand that any provision in this Agreement requiring me to assign my
rights in any invention does not apply to any invention which qualifies
under the provisions of Section 2870 of the California Labor Code, which
states the following:
(a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in
an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without
using the employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the employer.
(b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is
against the public policy of this state and is unenforceable.
5. I understand that, in performing my work for ▇. ▇▇▇▇▇, I am not to breach
any obligation of confidentiality or duty that I have to any former
employer or other, person. If my work for ▇. ▇▇▇▇▇ begins to involve an
area of research or any other aspect of ▇. ▇▇▇▇▇'▇ business that I believe
would conflict with any obligation of confidentiality that I may have to a
former employer or any other person, I will promptly notify my direct
supervisor or an officer of ▇. ▇▇▇▇▇ so that any potential conflict can be
avoided or resolved.
6. I understand that nothing contained in this Agreement implies an obligation
on the part of ▇. ▇▇▇▇▇ to retain my services as an employee for any
specified period of time. I acknowledge and agree that my employment with
▇. ▇▇▇▇▇ is at will and may be terminated by ▇. ▇▇▇▇▇ or me at any time for
any or for no reason.
By signing this Agreement, I acknowledge that I have received a copy of this
Agreement and written notification of the provisions of Labor Code Section 2870.
Name (please print): ▇▇▇▇ ▇. ▇▇▇▇▇▇ Date: Aug 5, 1996
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Employee Signature: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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