Exhibit 10.11
SEVERANCE AGREEMENT AND GENERAL RELEASE
THIS SEVERANCE AGREEMENT AND GENERAL RELEASE ("Severance Agreement") is
made between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Golden") and ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, inc., a Michigan
corporation, its predecessors, successors and assigns (referred to herein,
collectively and individually, as "coolsavings" or the "Company") on this 30th
day of July, 2001.
A. REASONS FOR AGREEMENT
1. Golden and coolsavings entered into a Terms of Employment agreement
dated December 15, 1999 attached hereto as Exhibit A (the "Standard Terms
Agreement").
2. Subsequently, Golden and coolsavings entered into an Employment
Agreement dated as of April 1, 2001 attached hereto as Exhibit B (the
"Employment Agreement").
3. Golden's employment with coolsavings will terminate effective July 30,
2001 (the "Effective Date").
4. The parties desire to supercede the terms of Golden's severance under
the Employment Agreement with the "Special Termination Package" described below
and to set forth additional terms in regard to this employment separation.
B. AGREEMENT
For and in consideration of the mutual promises and commitments specified
herein, the parties agree as follows:
1. Special Termination Package. coolsavings agrees to provide to Golden
the following benefits, which are referred to as the "Special Termination
Package":
(a) coolsavings will pay to Golden the salary that Golden would have
received over the original term of the Employment Agreement ($1,035,000) based
on Golden's annual salary of $345,000 less that which he has already received
(the "Effective Salary Payment"); specifically, the balance of the $345,000
owing for the remainder of the employment year presently in effect (4/1/01
through 3/31/02), and $345,000 for each of the two years thereafter (4/01/02
through 3/31/03 and 4/01/03 through 3/31/04). The Effective Salary Payment shall
be paid to Golden in accordance with coolsavings' normal payroll procedures as
if Golden remained in the employ of the Company and shall be subject to normal
withholding and applicable payroll taxes.
(b) Until March 31, 2004, the Company shall continue to provide such
medical and dental coverage under the Company's benefit plans as may be
determined by the Board to be consistent with the Company's standard policies;
provided, however, with respect to any benefit in which Golden is no longer
eligible to participate or which otherwise reasonably cannot be continued for
him, the Company, in its sole discretion, shall until March 31, 2004, either
provide a substantially equivalent form of benefit to Golden, or pay a monthly
amount equal to the amount necessary for Golden to obtain benefits substantially
equivalent to that which Golden
would have received under the Company's benefit plans; provided, further, that
if Golden accepts alternative employment during such period, the Company shall
be relieved of any obligation to provide such benefits to Golden to the extent
that the benefits are duplicative of benefits provided to Golden by his new
employer. Additionally, the Company shall pay directly to Golden a gross amount
that is sufficient to pay the premiums on a term life insurance policy on his
life in the amount of Seven Hundred Fifty Thousand Dollars ($750,000.00), and
the applicable taxes on such amount. Golden shall be responsible for the payment
of the applicable taxes on all such gross amounts received.
(c) Until March 31, 2004, the Company shall compensate Golden in an
amount that is sufficient to pay the premiums on a disability insurance policy
("Disability Policy") and all applicable taxes on such amount. The Disability
Policy shall, at a minimum, provide for the payment of 70% of $345,000 until he
reaches the age of sixty-five (65), after a 180-day waiting period. The gross
amounts necessary to cover the premiums on said Disability Policy and the
applicable taxes thereon shall be paid directly to Golden and he shall be
responsible for the payment of the applicable taxes on all such gross amounts
received. Golden shall be the owner of such policy.
(d) Until March 31, 2004, the Company shall continue to make monthly
payments with respect to the lease of Golden's Jaguar and pay all insurance
thereon; provided, if such lease terminates prior to such date, the Company
shall on a monthly basis pay Golden until March 31, 2004 a monthly amount
equivalent to the monthly lease and insurance payments applicable to such
vehicle immediately prior to the lease termination.
(e) The exercise price on all options to purchase shares of the
Company's common stock previously granted to Golden (including but not limited
to that option to purchase 150,000 shares granted in the Employment Agreement)
is hereby amended to fifty cents ($0.50) per share. Coolsavings hereby confirms
and agrees that all said options are fully vested and immediately exercisable
and may be exercised for a period of ten (10) years from the original date of
grant of each such option. The Company shall immediately take all action
necessary to re-issue Golden's existing options in accordance with the terms of
this subsection. Golden hereby acknowledges that such options shall be reissued
as non-qualified options and that Golden has sought and obtained his own tax
advice.
(f) Within 10 business days of receipt thereof, the Company shall
reimburse Golden for all reasonable and necessary business expenses incurred by
Golden since his last expense reimbursement by the Company. Golden represents
that such amount will not exceed $1000. Further, the Company shall ensure that
the last expense reimbursement check issued to Golden (which has not cleared the
bank as of this date) is paid or a replacement check issued in the same amount
by August 3, 2001.
(g) Golden's unlimited "piggyback" rights granted in Section 12 of
the Employment Agreement (which Section is hereby incorporated by reference)
shall remain in full force and effect.
(h) The obligations set forth in Section 5(f) of the Employment
Agreement, "Settlement of Litigation" (which Section is hereby incorporated by
reference) shall remain in full force and effect.
The benefits provided to Golden hereunder are unique to Golden's
termination. Nothing herein shall be deemed to establish a severance or other
employee benefit plan or program available to other coolsavings employees.
2. COBRA Rights. The qualifying event concerning Golden's rights under
the Consolidated Omnibus Budget Reconciliation Act, 29 U.S.C. (S) 116 et seq.
("COBRA") shall be the Effective Date.
3. Related Resignations and Cooperation.
(a) Golden is hereby deemed to have resigned as Chairman of the Board
of the Company and from all offices held in the Company, including Chief
Executive Officer. Notwithstanding Section 8 of the Employment Agreement, Golden
shall not be required to resign, and shall not be deemed to have resigned, from
coolsavings' Board of Directors and Golden shall continue to serve as a director
for the remaining term for which he has been elected and shall be eligible for
reelection.
(b) For sixty (60) days after the date hereof, Golden hereby agrees
to provide the Company and ▇▇▇▇ ▇▇▇▇ with assistance in transitioning the
responsibilities and duties of the CEO office to Moog, which assistance shall be
rendered during such regular business hours as the Company may reasonably
request; provided, Golden shall not be required to provide more than two (2)
days of service in any week or more than forty (40) hours a month.
(c) In furtherance of those certain transactions contemplated under
that certain Securities Purchase Agreement dated the date hereof among the
Company, Landmark Communications, Inc. and Landmark Ventures VII, LLC (the
"Purchase Agreement"), Golden acknowledges his obligations under the Voting
Agreement (as defined in the Purchase Agreement) executed as of the date hereof
and agrees to execute and deliver at the First Tranche Closing (as defined in
the Purchase Agreement), in the capacity designated for Golden therein, the
Shareholders Agreement (as defined in the Purchase Agreement).
4. General Release.
(a) Golden agrees, for himself and his heirs, representatives,
successors and assigns, that he has been separated from employment with
coolsavings as of July 30, 2001, that his Employment Agreement is terminated and
all of his rights thereunder extinguished as of such date except for the
Surviving Covenants (defined in Section B6 herein and as otherwise specifically
provided in this Severance Agreement and that he hereby waives, releases and
forever discharges and covenants not to ▇▇▇ coolsavings and all related
entities, their directors, officers, employees and agents, from any and all
claims, known or unknown, that he has or may have relating in any way to or
arising out of his employment with coolsavings and the termination thereof,
including but not limited to any claims of wrongful discharge, breach of express
or implied contract, fraud, misrepresentation, defamation, liability in tort,
claims of any kind that may be brought in any court or administrative agency,
any claims under Title VII of the
Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act,
the Americans with Disabilities Act, the Employee Retirement Income Security
Act, the Fair Labor Standards Act, or any other federal, state or local law
relating to employment, employee benefits or the termination of employment, any
claim arising out of or relating to the Employment Agreement or any other claim
arising out of or relating to Golden's employment, except for (i) any claims for
indemnification as a director, officer or employee under any written agreement
with indemnity rights between coolsavings and Golden, under coolsavings'
Articles of Incorporation, By Laws, or any other organizational document, or as
otherwise provided by law, and (ii) any claims of breach under this Severance
Agreement, including but not limited to a breach of Section B.1 herein.
(b) coolsavings, for itself and its successors and assigns, hereby
waives, releases and forever discharges and covenants not to ▇▇▇ ▇▇▇▇▇▇, his
heirs and assigns, from any and all claims, known or unknown, that it has or may
have relating in any way to or arising out of his employment with coolsavings
and the termination thereof, including but not limited to any claims of breach
of express or implied contract, misrepresentation, defamation, liability in
tort, and claims of any kind that may be brought in any court or administrative
agency, except for (i) any claim arising out of Golden's fraudulent conduct as a
director and/or officer of coolsavings and (ii) any claims of breach under this
Severance Agreement, including but not limited to, a breach of the Surviving
Covenants.
(c) Golden further agrees that he shall not seek unemployment benefits
at any time while he is receiving the Effective Salary Payment in accordance
with the terms of this Severance Agreement.
5. Special ADEA Waiver and Release Notification. The General Release,
paragraph B.4(a) above of this Severance Agreement, includes a waiver and
release of all claims under the Age Discrimination in Employment Act ("ADEA")
and, therefore, pursuant to the requirements of the ADEA, Golden acknowledges
that he has been (a) advised that this waiver and release includes, but is not
limited to, all claims under the ADEA arising up to and including the date of
his execution of this waiver and release, (b) advised to consult with an
attorney and/or other advisor of his choosing concerning his rights and
obligations under this Severance Agreement prior to his execution of it, (c) is
entitled to 21 days in which to consider this Severance Agreement, and (d)
advised that he has 7 days following the execution of this Severance Agreement
to revoke it by sending written notice to ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc.,
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Golden acknowledges
that in the event he revokes this Agreement under this Section B.5 he shall not
be entitled to the Special Termination Package.
6. Surviving Covenants.
(a) The "Surviving Covenants" are as follows:
(i) Golden and coolsavings acknowledge and agree that the terms
of Sections 11 and 13 of the Employment Agreement shall survive the termination
effected hereunder except that (x) the duration of the covenants in Section 11
shall be two years from the Effective Date only, and (ii) the "Business", as
defined therein, shall be deemed to include
"soliciting orders for, selling, distributing, promoting or otherwise marketing
electronic delivery of coupons, gift certificates or other savings
certificates"); and
(ii) Golden and coolsavings further acknowledge and agree that
Sections 3, 5 and 6 of the Standard Terms Agreement are incorporated herein by
this reference as if set out in full and shall survive the termination effected
hereunder.
(b) Golden agrees that any breach of any provision of the Surviving
Covenants may cause irreparable damage to coolsavings and that in the event of
such breach coolsavings shall have, in addition to any and all remedies of law,
the right to an injunction, specific performance or other equitable relief
(without the showing of special, imminent or irreparable damages and without any
obligation to post bond or other security or surety) to prevent the violation of
the Surviving Covenants.
(c) Golden hereby agrees that each provision of Section B.6(a) shall
be treated as a separate and independent clause, and the unenforceability of any
one clause shall in no way impair the enforceability of any of the other clauses
of Section B.6(a).
7. Assignment. coolsavings shall have the right to assign this Severance
Agreement to its successors and assigns, and all covenants and agreements and
benefits hereunder shall inure to the benefit of and be enforceable by the
parties and their respective heirs, successors and assigns.
8. No Waiver of Breach or Remedy. A waiver by coolsavings of the breach
of any of the provisions of this Severance Agreement by Golden shall not be
deemed a waiver by coolsavings of any subsequent breach, nor shall recourse to
any remedy hereunder be deemed a waiver of any other or further relief or remedy
provided for herein.
9. Governing Law. This Severance Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois without giving
effect to the principles of conflicts of laws in Illinois. Any and all
controversies and claims arising out of or relating to this Agreement, or the
breach thereof, shall be settled by final and binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association
then in effect. The arbitrator shall be selected from a panel of arbitrators of
the American Arbitration Association in accordance with the rules of the
American Arbitration Association. Judgment upon the decision rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Nothing
contained in this Section B.9 shall be construed to preclude the Company or
Golden from obtaining injunctive or other equitable relief. The arbitrator or
court shall award reasonable attorney's fees and costs to the substantially
prevailing party.
10. Entire Agreement.
(a) The parties understand and agree that all terms of this Severance
Agreement are contractual and are not a mere recital, and represent and warrant
that they are competent and possess the full and complete authority to covenant
and agree as herein provided.
(b) Golden understands, agrees, and represents that the covenants
made herein and the releases herein executed may affect rights and liabilities
of substantial extent. Golden
represents and warrants that, in negotiating and executing this Severance
Agreement, he has had an adequate opportunity to consult with competent counsel
or other representatives of his choosing concerning the meaning and effect of
each term and provision hereof, and that there are no representations, promises
or agreements other than those expressly set forth in writing herein.
(c) The parties have carefully read this Severance Agreement in its
entirety; fully understand and agree to its terms and provisions; intend and
agree that it is final and binding and understand that, in the event of a
breach, either party may seek relief, including damages, restitution and
injunctive relief, at law or in equity, in a court of competent jurisdiction.
(d) If one or more of the provisions contained in this Severance
Agreement shall for any reason beheld to be excessively broad as to scope,
activity, subject or otherwise so as to be unenforceable at law, such provision
or provisions shall be construed by the appropriate judicial body by limiting or
reducing it or them, so as to be enforceable to the maximum extent compatible
with applicable law. The parties hereto hereby further agree that the language
of this Severance 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.
(e) NOTWITHSTANDING ANYTHING CONTAINED IN THIS SEVERANCE AGREEMENT
WHICH CAN BE CONSTRUED TO THE CONTRARY, IN THE ABSENCE OF AN ORDER OR JUDGMENT
OF A COURT OF COMPETENT JURISDICTION, THE COMPANY SHALL NOT BE ENTITLED TO
TERMINATE, SUSPEND, DELAY, SET-OFF AGAINST, OR OTHERWISE POSTPONE OR DECREASE
ANY BENEFIT PROVIDED GOLDEN IN SECTION B.1 OF THIS AGREEMENT; PROVIDED, HOWEVER,
SHOULD THE COMPANY ALLEGE A BREACH BY GOLDEN OF ANY OF THE SURVIVING COVENANTS
HEREUNDER, THE COMPANY SHALL CONTINUE TO PERFORM AND PAY, IN FULL, ITS
OBLIGATIONS HEREUNDER, AS AND WHEN DUE, UNTIL SUCH TIME AS THE COMPANY RECEIVES
A JUDGMENT AGAINST GOLDEN, UNLESS IN CONNECTION WITH THE COMMENCEMENT OF
ARBITRATION OR LITIGATION WITH RESPECT TO SUCH BREACH THE COMPANY PAYS WHEN DUE
ALL AMOUNTS INTO AN ESCROW ACCOUNT WITH AN INDEPENDENT NATIONALLY RECOGNIZED,
FDIC INSURED COMMERCIAL BANK (OR SUCH ESCROW AGENT AS THE ARBITRATOR MAY
DESIGNATE). SUCH AMOUNTS SHALL BE HELD IN ESCROW PENDING THE RESOLUTION OF THE
ARBITRATION OR LITIGATION AT WHICH POINT THEY SHALL BE PAID OVER TO THE COMPANY
OR GOLDEN AS REQUIRED BY ANY SETTLEMENT OR JUDGMENT. ANY FAILURE OF THE COMPANY
TO TIMELY PERFORM ITS OBLIGATIONS UNDER SECTION B1 OF THIS AGREEMENT, WHICH IS
NOT CURED WITHIN FIVE (5) BUSINESS DAYS OF WRITTEN DEMAND TO CURE, SHALL BE
DEEMED A MATERIAL DEFAULT OF THIS AGREEMENT BY THE COMPANY; PROVIDED HOWEVER
THAT THE COMPANY SHALL NOT BE ENTITLED TO MORE THAN THREE (3) CURE PERIODS IN
ANY EMPLOYMENT YEAR (I.E., FROM 4/1 - 3/31). SHOULD THE COMPANY COMMIT MORE THAN
THREE (3) MATERIAL DEFAULTS UNDER THIS AGREEMENT IN ANY EMPLOYMENT YEAR, GOLDEN
SHALL BE ENTITLED TO ACCELERATE ALL MONIES PAYABLE TO HIM UNDER SECTION B1
HEREIN AND TO RECOVER ALL COSTS AND EXPENSES (INCLUDING ATTORNEY FEES) INCURRED
BY HIM IN ENFORCING THE TERMS OF THIS SEVERANCE AGREEMENT.
(f) Notices. All notices and other communications, required or
permitted to be given under this Severance Agreement shall be given in writing
and shall be deemed sufficiently given, served and received for all purposes
upon the first to occur of actual receipt, or delivery by generally recognized
overnight courier service, or three (3) days after deposit in the United States
mail, postage prepaid, registered or certified, return receipt requested
addressed, to the following address (or to a revised address provided to the
other party):
If to the Company:
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇.
360. ▇. ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
_______________
_______________
_______________
If to Golden:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇ ▇▇. ▇▇▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
IN WITNESS WHEREOF, and intending to be legally bound, the parties have
executed the foregoing Severance Agreement this 30th day of July, 2001.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
____________________________ By:___________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:______________________
Title:_____________________
STATE OF _____________________
CITY/COUNTY OF _______________
Acknowledged before me by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ on this _____ day of
_______________, 2001.
_____________________________________
Notary Public
My Commission Expires:____________________
STATE OF _________________
CITY/COUNTY OF _______________
Acknowledged before me by ________________________, _______________________
of ▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ inc., on this ______ day of ___________________, 2001.
______________________________________
Notary Public
My Commission Expires:_________________________