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EXHIBIT 99.1
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (hereinafter
"Agreement") is hereby entered into January 2, 1998, effective as of January 1,
1998, between ACE*COMM Corporation (hereinafter "the Company") and ▇▇▇▇▇ ▇.
▇▇▇▇▇ (hereinafter "▇▇. ▇▇▇▇▇"), who are collectively referred to herein as the
"Parties."
WHEREAS, ▇▇. ▇▇▇▇▇ has served as Vice President - Marketing of the
Company; and
WHEREAS, for personal reasons, ▇▇. ▇▇▇▇▇ is resigning as officer of the
Company; and
WHEREAS, the Parties desire to enter into this Agreement on the date
hereof to set forth their agreement with respect to ▇▇. ▇▇▇▇▇'▇ resignation and
certain other matters in connection therewith; and
WHEREAS, the Parties desire that this Agreement supersede any
agreement, arrangement or understanding with respect to ▇▇. ▇▇▇▇▇'▇ terms of
employment by the Company to the extent set forth herein.
NOW, THEREFORE, In consideration of the mutual promises contained
herein, and other good and valuable consideration as hereinafter recited, the
receipt and adequacy of which is hereby acknowledged, the Parties, intending to
be legally bound, agree as follows:
1. Resignation; Termination of employment. The Company and ▇▇. ▇▇▇▇▇ have
agreed that, effective immediately, he hereby tenders his resignation as an
officer of the Company, and that he will remain as an active status
employee of the Company until May 30, 1998 (or such earlier time as he
breaches a term of this Agreement), whereupon his employment with the
Company shall terminate.
2. Special Projects. During the balance of the term of his employment, ▇▇.
▇▇▇▇▇ shall perform such special projects as may be assigned to him from
time to time by the Chief Executive Officer of the Company.
3. Non-competition, non-solicitation and confidentiality. ▇▇. ▇▇▇▇▇ agrees
that, for a period of three (3) years from the date of this Agreement, he
will not, either within or without the United States, directly or
indirectly, as a stockholder, partner, investor, director, officer,
employee, consultant, contractor, agent or in any other capacity, engage
any business that is in competition with the business presently conducted
by the Company (the "Business"), provided that the foregoing shall not
prohibit ▇▇. ▇▇▇▇▇ from owning beneficially less than 5% of the outstanding
stock of any class of
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stock of a corporation the securities of which are regularly traded or
quoted on a national securities exchange or on an inter-dealer quotation
system. Specifically, but without limiting the generality of the
foregoing, ▇▇. ▇▇▇▇▇ shall not directly or indirectly:
(a) Contract with, represent, solicit business or engage in the
Business to develop, market or sell billing data collection or network
management systems;
(b) Solicit business or in any other way interfere with or disrupt
the Company's business relationships with any persons in the Business;
(c) Solicit, hire, contract with or enter into any business dealings
with, entice or aid, or cooperate with others in soliciting or
enticing any current or future employees of the Company to leave the
Company and join any other company in the Business;
(d) Divulge any confidential information regarding the business to
anyone not connected with the Company;
(e) "indirect" competition shall include any competition undertaken
through an entity owned in whole or in part by ▇▇. ▇▇▇▇▇ or any agent
or affiliate thereof.
▇▇. ▇▇▇▇▇ shall at all times hold in confidence any and all
confidential information that may have come into his possession or within
his knowledge concerning research activities, products and services offered
or being considered, mergers and other major corporate transactions being
considered, inventions, innovations, designs, ideas, plans, trade secrets,
proprietary information, advertising, distribution and sales methods and
systems, customer lists, and relationships between, or information about,
the Company and its employees, consultants, dealers, distributors,
customers and others who have had or will have business dealings with the
Company ("Confidential Information"). ▇▇. ▇▇▇▇▇ acknowledges that such
Confidential Information is a valuable and unique asset and shall not
disclose any such Confidential Information directly or indirectly unless
such information has become generally available to the public other than as
a result of a breach of contract or fiduciary duty or unless required to do
so by court order.
▇▇. ▇▇▇▇▇ acknowledges that there is no adequate remedy at law for a
breach of this Paragraph 3 and that, in the event of such breach, or
attempted breach, the Company shall be entitled to injunctive or other
equitable relief to prevent any such breach, attempted breach or continuing
breach, without prejudice to any other remedies for damages or otherwise.
▇▇. ▇▇▇▇▇ agrees that the covenants in this Paragraph are separate and
reasonable in their scope and duration and that he shall not raise any
issue of reasonableness as a defense in any proceeding to enforce this
covenant. Notwithstanding the foregoing, should any court determine that
this Paragraph shall be unenforceable with respect to scope, duration or
geographic area, the Parties agree
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that such court shall be empowered to substitute, to the extent
enforceable, provisions similar hereto or other provisions so as to provide
to the Company, to the fullest extent permitted by applicable law, the
benefits intended by this Agreement. The validity, legality or
enforceability of any remaining provisions of this Agreement shall not be
affected by any such modification.
4. Salary and loan forgiveness. As consideration for his continued employment
and the agreements in Paragraph 3, the Company agrees (i) to continue to
pay ▇▇. ▇▇▇▇▇ through the date of termination of his employment his salary
at the rate in effect on the date of this Agreement, on a bi-weekly basis,
and (ii) to forgive on each of the next three anniversaries of the date of
this Agreement repayment of one third of the outstanding principal and
interest of that certain Note dated June 5, 1997 in the principal amount of
$133,000 (the "Note"), subject to ▇▇. ▇▇▇▇▇'▇ continuing compliance with
the terms and conditions of this Agreement. In the event that ▇▇. ▇▇▇▇▇
breaches one or more of the provisions of this Agreement, without limiting
the Company's other remedies, including any right to damages, the
unforgiven amounts under the Note shall remain due and payable in full in
accordance with the terms of the Note.
▇▇. ▇▇▇▇▇ will have no other benefits of employment, including
compensation, access to premises, use of equipment and contact with
suppliers, employees and customers, except to the extent otherwise
expressly set forth herein. ▇▇. ▇▇▇▇▇ agrees that, but for this Agreement,
he is not otherwise entitled to the above-described consideration from the
Company.
5. Stock options. Attached as Exhibit A is an Amended and Restated Stock
Option Agreement dated as of August 14, 1996 exercisable for 63,000 shares
and as Exhibit B, an Amended and Restated Stock Option Agreement dated as
of April 30, 1997 exercisable for 4,500 shares (together, these option
agreements are referred to as the "Option Agreements"). The Option
Agreements shall become exercisable in full on May 14, 1998.
For purposes of Section 4.1 of the Option Agreements, ▇▇. ▇▇▇▇▇ will
be deemed to be employed by the Company until the earlier of May 30, 1998,
or such earlier time, if any, as he breaches a term of this Agreement. The
Option Agreements are subject to the terms of the Company's Amended and
Restated Omnibus Stock Plan, as amended from time to time, (the "Plan")
and, to the extent the terms of the Option Agreements are inconsistent with
the terms of the Plan, the terms of the Plan shall prevail as, interpreted
in good faith by the Board of Directors of the Company. Section 5.3 of the
Option Agreements is hereby deleted. The Option Agreements shall be
nontransferable otherwise than by will or the laws of descent and
distribution. Until the Option Agreements are terminated (which shall
occur no later than May 30, 1998), in the event of a change of control of
the Company, the options granted thereunder shall be treated in
substantially the same manner as those of other officers and directors of
the Company.
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The Parties agree that ▇▇. ▇▇▇▇▇ is not entitled to any other stock options
and that any agreements with respect to stock options other than the Option
Agreements hereby are terminated and are superseded by the terms of this
Agreement. The Option Agreements shall otherwise continue in full force
and effect in accordance with their terms except to the extent otherwise
modified pursuant to the terms of this Agreement.
6. Taxes. ▇▇. ▇▇▇▇▇ agrees that he is solely responsible for any and all
taxes on payments or other compensation described herein, subject to any
required withholding by the Company, as to which ▇▇. ▇▇▇▇▇ hereby consents.
▇▇. ▇▇▇▇▇ further agrees to indemnify and hold harmless the Company from
any and all costs, expenses, including but not limited to, reasonable
attorneys' fees, judgments, liabilities, tax liabilities or penalties,
interest, claims, payment of moneys, demands, losses, damages, and
penalties, except for the Company's share of FICA payments, which the
Company may hereafter sustain, incur or be required to pay as a consequence
of, for or by reason of, resulting from, arising out of, or relating in any
way to this payment to ▇▇. ▇▇▇▇▇. While the payments made herewith are
intended by the parties to be other than back pay, ▇▇. ▇▇▇▇▇ understands
and acknowledges that the Company makes no representations to him regarding
the income tax treatment or consequences of any consideration paid in
connection herewith.
7. Health, life and disability insurance. The Company further agrees to
provide ▇▇. ▇▇▇▇▇ and his dependents continuing coverage under the
Company's health, life and disability policies at his current level of
benefits until May 30, 1998, to the extent permitted under these policies
and, thereafter, only to the extent expressly required under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended.
▇▇. ▇▇▇▇▇ recognizes that for purposes of the continuation coverage
requirements of group health plans under and the group health provisions of
the Maryland Annotated Code, a "qualifying event" and "applicable change in
status" occurs at the earlier of May 30, 1998 or the date that ▇▇. ▇▇▇▇▇ is
earlier terminated as an employee of the Company.
8. Surrender of Company property and no authority. ▇▇. ▇▇▇▇▇ agrees that upon
the termination of his employment with the Company, he will surrender to
the Company every item and every document that came into ▇▇. ▇▇▇▇▇'▇
possession in the course of his employment at the Company or that is the
Company's property (including but not limited to keys, records, computers,
peripherals, computer files and disks, notes, memoranda, models, inventory
and equipment) or contains Company information, in whatever form. All of
these materials are the sole and absolute property of the Company. In
addition, ▇▇. ▇▇▇▇▇ shall not represent to any third party that he is an
employee or agent of the Company and he acknowledges that as of the date
hereof, he has no authority to, and will not attempt to, legally bind or
otherwise obligate the Company.
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9. References. All reference requests from ▇▇. ▇▇▇▇▇'▇ prospective employers
shall be made in writing addressed to the attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, and
shall include a written authorization signed by ▇▇. ▇▇▇▇▇ for the release
of the information. The Company will provide to prospective employers the
following information: ▇▇. ▇▇▇▇▇'▇ dates of employment; ▇▇. ▇▇▇▇▇'▇ job
title; and ▇▇. ▇▇▇▇▇'▇ last annual compensation.
10. Release of the Company. ▇▇. ▇▇▇▇▇ agrees that, in consideration of the
payments and consideration described above, on behalf of himself and anyone
claiming through him, he will, and hereby does, forever and irrevocably,
release and discharge the Company, its officers, directors, stockholders,
employees, agents, affiliates, predecessors, purchasers, assigns,
representatives, successors, successors in interest, and customers from any
and all grievances, claims, demands, debts, defenses, actions or causes of
action, obligations, contracts, promises, damages, judgments, expenses, and
liabilities, known or unknown, whatsoever, which he now has, has had, or
may have, whether the same be at law, in equity, or mixed, in any way
arising from or relating to any act, occurrence, or transaction before the
date of this Agreement, including without limitation his anticipated
separation of employment. This is a General Release. ▇▇. ▇▇▇▇▇ expressly
acknowledges that this General Release includes, but is not limited to, ▇▇.
▇▇▇▇▇'▇ intent to release the Company from any claim relating to his
employment at the Company, including, but not limited to, tort and contract
claims, arbitration claims, statutory claims, claims under any state or
federal wage and hour law or wage collection law, and claims of age, race,
color, sex, religion, handicap, disability, national origin, ancestry,
citizenship, marital status, retaliation, or any other claim of employment
discrimination under the Age Discrimination In Employment Act (29 U.S.C.
Sections 626 et seq., "ADEA"), Title VII of the Civil Rights Acts of 1964
and 1991 as amended (42 U.S.C. Sections 2000e et seq.), the ▇▇▇▇▇
Retirement Income Security Act (29 U.S.C. Sections 1001 et seq.), the
Consolidated Omnibus Budget Reconciliation Act of 1985 (29 U.S.C. Sections
1161 et seq.), the Americans With Disabilities Act (42 U.S.C. Sections
12101 et seq.), the Rehabilitation Act of 1973 (29 U.S.C. Sections 701 et
seq.), the Family and Medical Leave Act (29 U.S.C. Sections 2601 et seq.),
the Fair Labor Standards Act (29 U.S.C. Sections 201 et seq.), the
Annotated Code of Maryland, and any other law prohibiting employment
discrimination.
▇▇. ▇▇▇▇▇ represents that he has not heretofore assigned or
transferred, or purported to assign or transfer, to any person or entity,
any claim against the Company or portion thereof or interest therein, and
that any such claim is not assignable or transferable.
11. Agreement not to ▇▇▇. ▇▇. ▇▇▇▇▇ agrees not to ▇▇▇ the Company or to join
in any lawsuit against the Company, or any other person or entity specified
in Paragraph 10, concerning any matter which arose prior to the date of
this Agreement. ▇▇. ▇▇▇▇▇ further agrees and covenants not to make, file,
assist or encourage others in making or filing any lawsuits, complaints, or
other proceedings, including but not limited to any
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suits in the local or state courts, the United States Federal District
Courts or any other court, against the Company, or any other person or
entity specified in Paragraph 10.
12. No wrongdoing. ▇▇. ▇▇▇▇▇ agrees that the consideration set forth herein is
not to be construed as an admission of any wrongdoing or liability on the
part of the Company under any statute or otherwise, but that on the
contrary, any such wrongdoing or liability is expressly denied by the
Parties.
13. No prevailing party. ▇▇. ▇▇▇▇▇ agrees that neither this Agreement nor the
negotiations in pursuance thereof shall be construed or interpreted to
render ▇▇. ▇▇▇▇▇ a prevailing party for any reason, including but not
limited to an award of attorney's fees or costs under any statute or
otherwise.
14. Confidentiality. ▇▇. ▇▇▇▇▇ agrees that the terms, provisions, and
conditions of this Agreement and the negotiations in pursuance thereof are
strictly confidential, that he may not disclose them to any person or
entity and that the Company will not disclose them except as required by
law, provided that ▇▇. ▇▇▇▇▇ agrees that he will provide, and the Company
may provide, a copy of Paragraph 3 to any future employer. ▇▇. ▇▇▇▇▇
further agrees that a violation of the terms of this Paragraph regarding
the confidentiality of this Agreement is a material breach of this
Agreement, entitling the Company to recover any payments made to ▇▇. ▇▇▇▇▇
under this Agreement, to stop any payments or obligations owing under this
Agreement, to recover the costs and attorneys' fees the Company incurs to
recover under this paragraph and to obtain injunctive, monetary or other
relief permitted by law.
15. No comment on Company. ▇▇. ▇▇▇▇▇ agrees that after the date of the
execution of this Agreement, he will not, either by conversation or any
other oral expression, by letter or any other written expression, or by any
other deed or act of communication (including, but not limited to allowing
himself to be referred to or quoted as the source of information) to the
public or to any individual person or entity or groups of persons or
entities, specifically including but not limited to such persons or
entities as are, have been, or may be, employees, customers, or business
associates of the Company, disparage, criticize, condemn or impugn the
reputation or character of the Company or any of the actions or writings,
specifically including but not limited to any of the policies, practices,
procedures or advertisements, which are, have been or may be taken or
produced by the Company or its predecessors, subsidiaries, parents,
successors, successors in interest, assigns, trustees, officers, directors,
agents, attorneys, servants or employees on behalf of the Company. ▇▇.
▇▇▇▇▇ understands that by agreeing to the provisions of this Paragraph, he
is waiving rights guaranteed by the First Amendment of the United States
Constitution and State counterparts. ▇▇. ▇▇▇▇▇ further agrees that a
violation of the terms of this Paragraph is a material breach of this
Agreement, entitling the Company to recover any payments made to ▇▇. ▇▇▇▇▇
under this Agreement, to stop any payments, benefits or obligations owing
under this Agreement, to recover the costs and attorneys' fees the Company
incurs to
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recover under this Paragraph and to obtain injunctive, monetary or other
relief permitted by law.
16. Binding on successors and permitted assigns; amendments. The Parties
further agree that this Agreement shall be binding upon and inure to the
benefit of the personal representatives, heirs, executors, and
administrators of ▇▇. ▇▇▇▇▇ (who may not assign this Agreement) and the
assigns, affiliates, successors, officers, purchasers, agents,
representatives, directors and employees of the Company, that this
Agreement contains and comprises the entire agreement and understanding of
the Parties, that there are no additional promises or terms of the
Agreement among the Parties other than those contained herein, and that
this Agreement shall not be modified except in writing signed by each of
the Parties hereto.
17. Governing law. The Parties further agree that this Agreement and the
rights and obligations hereunder shall be governed by, and construed in
accordance with, the laws of the State of Maryland regardless of any
principles of conflicts of laws or choice of laws of any jurisdiction. The
state courts of the State of Maryland and, if the jurisdictional
prerequisites exist at the time, the United States District Court for the
District of Maryland, shall have sole and exclusive jurisdiction to hear
and determine any dispute or controversy arising under or concerning this
Agreement. ▇▇. ▇▇▇▇▇ consents to the jurisdiction of such courts in any
such suit, action or proceeding and waives any objection he may have to
venue in such courts.
18. Interpretation. If any terms of the above provisions of this Agreement are
found null, void or inoperative, for any reason, the remaining provisions
will remain in full force and effect. The language of all parts of this
Agreement shall in all cases be construed as a whole, according to its fair
meaning, and not strictly for or against either of the Parties.
19. Cost of enforcement. If the Company seeks a restraining order, injunction
or any other relief, including but not limited to damages, against ▇▇.
▇▇▇▇▇ as a result of his breach of any provision of this Agreement, and
recovers any such relief, ▇▇. ▇▇▇▇▇ shall reimburse the Company for the
attorney's fees, costs and other expenses it incurred obtaining that relief
(even if other relief were denied).
20. Understanding of agreement. ▇▇. ▇▇▇▇▇ represents that he has read this
Agreement, that he understands all of its terms, that he had a reasonable
amount of time to consider his decision to sign it, that he had the
opportunity to discuss the terms of this Agreement with an attorney of his
choice, that in executing this Agreement he does not rely and has not
relied upon any representation or statements made by any of the Company's
agents, representatives, or attorneys with regard to the subject matter,
basis, or effect of the Agreement, and that he enters into this Agreement
voluntarily, of his own free will and with knowledge of its meaning and
effect.
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21. Consideration of agreement. ▇▇. ▇▇▇▇▇ understands that he has up to
twenty-two (22) days from the date of his receipt of this Agreement, which
was December 19, 1997, to consider his decision to sign it. By signing
this Agreement, ▇▇. ▇▇▇▇▇ expressly acknowledges that his decision to sign
this Agreement was knowing and voluntary and of his own free will.
22. Limited right to revoke. ▇▇. ▇▇▇▇▇ acknowledges that he may revoke this
Agreement only as it pertains to claims under the ADEA for up to and
including seven (7) days after his execution of this Agreement, and that
the aspects of this Agreement regarding his release of claims under the
ADEA shall not become effective until the expiration of seven (7) days from
the date of his execution of this Agreement. This provision regarding
revocation shall have no effect on the validity and enforceability of any
other term, condition or provision of this Agreement, which becomes
effective when signed by the Parties.
23. Counsel. THE COMPANY HEREBY ADVISES ▇▇. ▇▇▇▇▇ TO CONSULT WITH AN ATTORNEY
PRIOR TO EXECUTING THIS AGREEMENT.
24. Headings. All Paragraph headings are for convenience only.
25. Entire agreement. ▇▇. ▇▇▇▇▇ acknowledges and agrees that payments made or
to be made and benefits provided or to be provided under this Agreement are
in lieu of any and all compensation and benefits of any nature which may
otherwise have been due to ▇▇. ▇▇▇▇▇ under the terms of any agreement,
arrangement or understanding (whether written or oral) binding upon the
Company and ▇▇. ▇▇▇▇▇.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day
and year first above written.
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▇▇▇▇▇ ▇. ▇▇▇▇▇ Date
ACE*COMM CORPORATION
By:
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Date
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