Exhibit 10.14
February 26, 2009
Mr. Carlton H.
Baab
Dear Carlton:
This letter sets forth the substance
of the separation and consulting agreement (the
“Agreement”) that TigerLogic Corporation (the
“Company”) is offering to you.
1. General.
Your employment termination date is
Thursday, February 26, 2009 (the “Separation
Date”). You acknowledge and confirm that as of the Separation
Date, you have resigned as President and Chief Executive Officer of
the Company and resigned as a member of the Board of Directors of
the Company and that you are no longer an employee of the Company.
Your resignation will be considered an “involuntary
termination” for the purposes of benefits provided in section
5(a) of that certain Amended Change of Control and Severance
Agreement by and between you and the Company, dated
December 18, 2008 (the “Amended Severance
Agreement”).
2. Accrued Salary and Paid Time
Off. You acknowledge that
on the Separation Date, the Company paid you all accrued salary,
and all accrued and unused vacation (160 hours) earned through the
Separation Date, subject to standard payroll deductions and
withholdings.
3. Severance Benefits.
Subject to the conditions set forth
herein, the Company will provide you with the following severance
benefits (the “Severance Benefits”) provided that you
sign, date, return and allow to become effective this
Agreement.
(a) Severance
Payments. The Company
will pay you such base salary amount as is due pursuant to section
5(a) of the Amended Severance Agreement, subject to section 5(e) of
the Amended Severance Agreement (the “Severance
Payment”). The Severance Payment shall be made in one lump
sum on the date that is six (6) months and one (1) day
following the Separation Date.
(b) Cash Bonus.
The Company does not intend to pay
any bonus to any employee or officer of the Company within six
(6) months of the date hereof, and you hereby represent to the
Company that, as of the date of this Agreement, you have not made
any representations with respect to any bonus payment to any of the
employees or officers of the Company. In the event, however, that
the Company does pay a bonus within six (6) months of the
Separation Date to any of the employees set forth on Schedule 1
attached hereto, you will be entitled to a bonus in an amount equal
to the percentage of your final base annual salary as of the
Separation Date equivalent to the highest percentage bonus payment
made (as a percentage of such employees’ respective base
annual salaries) to any of such employees.
(c) Dental, Vision and Health
Insurance. You are not
currently a participant in the Company group health plan. To the
extent provided by federal COBRA law or, if applicable, state
insurance laws (collectively, “COBRA”), and by the
Company’s current group dental and vision insurance policies,
you will be eligible to continue your group dental and vision
insurance benefits at your own expense following the Separation
Date. Later, you may be able to convert to an individual policy
through the provider of the Company’s dental and vision
insurance, if you wish. As an additional severance benefit, if you
timely elect continued group dental and vision coverage through
COBRA, the Company will reimburse your COBRA premium payments
sufficient to continue your dental and vision coverage at the level
in effect as of the Separation Date (including dependent coverage,
if applicable), for up to twelve (12) months following the
Separation Date (the “COBRA Payments”), but in no event
later than the date you cease to be eligible for such coverage (
e.g. , you become eligible for coverage through a new
employer). In addition to the foregoing, the Company will reimburse
your health insurance premium payments sufficient to continue your
current health insurance coverage at the level in effect as of the
Separation Date (including dependant coverage, if applicable and
including any rate changes, if applicable), for up to twelve
(12) months following the Separation Date (“Health
Insurance Payments”), but in no event later than the date
you
terminate such coverage ( e.g. , you
become eligible for coverage through a new employer). You hereby
agree to promptly notify the Company in writing if you become
eligible for group health, dental or vision insurance coverage
through a new employer during the twelve (12) month period
following the Separation Date.
Section 3 of this Agreements
sets forth the full extent to which you are eligible for severance
benefits under this Agreement, the Amended Severance Agreement, any
other agreement between you and the Company, or pursuant to any
other Company plan, policy or practice.
4. Consulting Period.
Subject to the termination
provisions set forth in section 4(d) of this Agreement, you will
serve as a consultant to the Company (the “Consulting
Relationship”) from February 27, 2009, through
August 27, 2009 (the “Consulting Period”), in
accordance with the following terms:
(a) Consulting Duties.
During the Consulting Period, you
will be expected to provide engineering advice on an as-needed
basis, as requested by the Company in writing or via email (the
“Consulting Duties”), subject to your reasonable
availability. During the Consulting Period: (i) you will not
be required to appear at the Company’s offices, except as
specifically requested by the Company; (ii) you will have no
management responsibilities and may not delegate work or give work
assignments to Company employees without the prior written approval
of the Company’s Chief Executive Officer; and (iii) in
no event will you be required to spend more than thirty
(30) hours per month in performing your Consulting Duties.
Following the termination of the Consulting Period, the Consulting
Relationship may be continued on a month-to-month basis, at the
Company’s sole discretion.
(b) Consulting
Payments. The Company
will pay you an aggregate of $124,000 during the Consulting Period
(the “Consulting Fees”), which amount shall be payable
in bimonthly installments. The Company will reimburse you for
reasonable out-of-pocket expenses incurred by you in performing
your consulting duties, but only if those expenses were
pre-approved by the Company in writing. The Company will not
withhold taxes, social security or any other payroll deductions
from the Consulting Fees. You will be solely responsible for all
federal, state and local taxes which may be due as a result of
these payments. The Company will report amounts paid to you by
filing Form 1099-MISC with the Internal Revenue Service as required
by law.
(c) Stock Options.
During the Consulting Period, your
Company stock options will continue to vest and any expiration of
those stock options will be in accordance with the terms of the
equity incentive plans and/or related stock option agreements
pursuant to which they were issued.
(d) Termination of Consulting
Relationship.
(i) Termination by
You. The Consulting
Relationship is terminable by you at will. Accordingly, you may
terminate the Consulting Relationship at any time, with or without
cause, and with or without advance notice. In the event you
terminate the Consulting Relationship, you will continue to receive
the Severance Benefits specified in section 3 of this Agreement (as
scheduled). You will not, however, receive any further Consulting
Fees from the Company, nor will your stock options continue to vest
after the termination of the Consulting Relationship.
(ii) Termination by the
Company. The Company may
terminate the Consulting Relationship immediately upon your willful
material breach of this Agreement or any other written agreement
between you and the Company. In that event, you will not be
entitled to any further compensation or benefits from the Company,
including (without limitation) any further Severance Payment,
Health Insurance Payments or continued vesting. Any expiration of
those stock options will be in accordance with the terms of the
equity incentive plans and/or related stock option agreements
pursuant to which they were issued. For the purposes of this
Agreement, and for avoidance of doubt, the term
“willful” in the context of a “willful material
breach” shall mean an act (or an omission) that is done
knowingly and intentionally, as distinguished from an act (or an
omission) done carelessly, accidentally or inadvertently, including
(but not limited to) uncooperative, disruptive, divisive or abusive
behavior in performance of the consulting duties in any manner
reasonably likely to cause demonstrative harm to the
Company’s business or reputation or resulting in damage to
the Company.
(e) Protection of
Information. You agree
that, during the Consulting Period and thereafter, you will not use
or disclose any confidential or proprietary information or
materials of the Company that you obtain or develop in the course
of performing the Consulting Services. Any and all work product you
create in the course of performing the Consulting Services will be
the sole and exclusive property of the Company. You hereby assign
to the Company all right, title, and interest in all inventions,
techniques, processes, materials, and other intellectual property
developed in the course of performing the Consulting
Services.
5. Other Compensation or
Benefits. You acknowledge
that, except as expressly provided in this Agreemen
