EMPLOYMENT SEPARATION AND GENERAL RELEASE
AGREEMENT
This
Employment Separation and General Release Agreement (this
“
Separation Agreement ”)
is entered into this seventh day of December, 2007, by and between
Nand Gangwani, an individual (“
Individual ”),
and Napster, Inc., a Delaware corporation (the “
Company ”).
WHEREAS ,
Individual is employed as the Vice President and Chief Financial
Officer of the Company; and
WHEREAS ,
Individual and the Company have mutually agreed to terminate
Individual’s employment relationship with the Company
effective as of December 31, 2007 (the “Separation
Date”) upon the terms set forth herein;
NOW, THEREFORE ,
in consideration of the covenants undertaken and the releases
contained in this Separation Agreement, Individual and the Company
agree as follows:
I.
Resignation
. Individual’s
employment by the Company will terminate on the Separation Date.
Individual hereby irrevocably resigns as an officer, director,
employee, member, manager and in any other capacity with the
Company and each of its affiliates effective as of the Separation
Date and that, as of the Separation Date, he will hold no such
position with the Company or any of its affiliates. The Company
confirms that it and each of its affiliates accepts such
resignation effective as of the Separation Date.
Individual agrees that he has no consulting relationship with the
Company or any of its affiliates. Individual waives any right or
claim to reinstatement as an employee of the Company and any
affiliate of the Company (if any) by which he is or was previously
employed. Individual acknowledges and agrees that, as of the date
hereof, he has received all compensation to which he is entitled
(including, but not limited to, any overtime, bonus, commissions,
or other wages), reimbursement of expenses, and usual benefits
(other than his base wages for the current pay period and his
accrued and heretofore unpaid vacation), that he will not be
entitled to any severance in connection with the termination of his
employment except as expressly set forth in this Separation
Agreement, and that all payments due to Individual from the Company
and its affiliates after the Separation Date shall be determined
under this Separation Agreement. Until
the Separation Date, the Company shall continue to pay Individual a
base salary at the rate currently in effect, but Individual shall
not be entitled to any other compensation. Individual will also be
entitled to reimbursement by the Company for his reasonable
out-of-pocket expenses through the Separation Date, subject to the
Company’s current expense reimbursement
policies.
II.
Termination of Employment Agreement
.
Effective as of the Separation Date, that certain employment
agreement, dated as of January 29, 2004, by and between Individual
and the Company, as amended by that certain agreement, dated as of
November 8, 2006, by and between Individual and the Company, is
hereby terminated in its entirety.
III.
Severance
. The
Company has granted restricted stock awards to Individual, a
portion of which awards are outstanding and unvested as of the
Separation Date (the “
Restricted Stock Awards ”).
The Restricted Stock Awards shall become fully vested as to 56,250
shares of Company common stock subject to such awards (the portion
otherwise scheduled to vest on June 1, 2008) as of the later of (1)
the Separation Date, or (2) the date the Release set forth in
Section V hereof becomes irrevocable by Individual under the Age
Discrimination in Employment Act of 1967. Any portion of the
Restricted Stock Awards that do not so vest shall terminate on the
Separation Date and Individual shall have no further rights with
respect thereto or in respect thereof. On the Separation Date, the
Company shall also pay Individual his accrued and theretofore
unpaid wages and vacation time.
IV.
Stock Options .
For
purposes of clarity, any stock options granted by the Company to
Individual that are not vested on the Separation Date shall
terminate on the Separation Date and any stock options granted by
the Company to Individual that are vested on the Separation Date
shall continue to be exercisable by Individual in accordance with
the terms and conditions of the applicable awards only for the
limited post-termination of employment exercise period applicable
to those awards as determined under the applicable award agreement
and plan under which the award was granted.
V.
Release
. Individual,
on behalf of himself, his descendants, dependents, heirs,
executors, administrators, assigns, and successors, and each of
them, hereby covenants not to sue and fully releases and discharges
the Company and each of its parents, subsidiaries and affiliates,
past and present, as well as its and their trustees, directors,
officers, members, managers, partners, agents, attorneys, insurers,
employees, stockholders, representatives, assigns, and successors,
past and present, and each of them, hereinafter together and
collectively referred to as the “
Releasees ,”
with respect to and from any and all claims, wages, demands,
rights, liens, agreements or contracts (written or oral),
covenants, actions, suits, causes of action, obligations, debts,
costs, expenses, attorneys’ fees, damages, judgments, orders
and liabilities of whatever kind or nature in law, equity or
otherwise, whether now known or unknown, suspected or unsuspected,
and whether or not concealed or hidden (each, a “
Claim ”),
which he now owns or holds or he has at any time heretofore owned
or held or may in the future hold as against any of said Releasees
(including, without limitation, any Claim arising out of or in any
way connected with Individual’s service as an officer,
director, employee, member or manager of any Releasee,
Individual’s separation from his position as an officer,
director, employee, manager and/or member, as applicable, of any
Releasee, or any other transactions, occurrences, acts or omissions
or any loss, damage or injury whatever), whether known or unknown,
suspected or unsuspected, resulting from any act or omission by or
on the part of said Releasees, or any of them, committed or omitted
prior to the date of this Release Agreement including, without
limiting the generality of the foregoing, any Claim under Title VII
of the Civil Rights Act of 1964, the Age Discrimination in
Employment Act of 1967, the Americans with Disabilities Act, the
Family and Medical Leave Act of 1993, the California Fair
Employment and Housing Act, the California Family Rights Act, or
any other federal, state or local law, regulation, or ordinance, or
any Claim for severance pay, bonus, sick leave, holiday pay,
vacation pay, life insurance, health or medical insurance or any
other fringe benefit, workers’ compensation or disability
(the “
Release ”);
provided, however, that the foregoing release does not apply to any
obligation of the Company to Individual pursuant to any of the
following: (1) any right to indemnification that Individual may
have pursuant to the Bylaws of the Company, its Certificate of
Incorporation or under any written indemnification agreement with
the Company (or any corresponding provision of any subsidiary or
affiliate of the Company) or applicable state law with respect to
any loss, damages or expenses (including but not limited to
attorneys’ fees to the extent otherwise provided) that
Individual may in the future incur with respect to his service as
an employee, officer or director of the Company or any of its
subsidiaries or affiliates; (2) with respect to any rights that
Individual may have to insurance coverage for such losses, damages
or expenses under any Company (or subsidiary or affiliate)
directors and officers liability insurance policy; (3) any rights
to continued medical or dental coverage that Individual may have
under COBRA; or (4) any rights to payment of benefits that
Individual may have under a retirement plan sponsored or maintained
by the Company that is intended to qualify under Section 401(a) of
the Internal Revenue Code of 1986, as amended. In addition, this
Release does not cover any Claim that cannot be so released as a
matter of applicable law. Individual acknowledges and agrees that
he has received any and all leave and other benefits that he has
been and is entitled to pursuant to the Family and Medical Leave
Act of 1993.
VI.
1542 Waiver
.
It
is the intention of Individual in executing this Separation
Agreement that the same shall be effective as a bar to each and
every Claim hereinabove specified. In furtherance
of
this intention, Individual hereby expressly waives any and all
rights and benefits conferred upon his by the provisions of SECTION
1542 OF THE CALIFORNIA CIVIL CODE and expressly consents that this
Separation Agreement (including, without limitation, the Release
set forth above) shall be given full force and effect according to
each and all of its express terms and provisions, including those
related to unknown and unsuspected Claims, if any, as well as those
relating to any other Claims hereinabove specified. SECTION 1542
provides:
“A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.”
Individual
acknowledges that he may hereafter discover Claims or facts in
addition to or different from those which Individual now knows
or believes to exist with respect to the subject matter of
this Separation Agreement and which, if known or suspected at
the time of executing this Separation Agreement, may have
materially affected this settlement. Nevertheless, Individual
hereby waives any right, Claim or cause of action that might
arise as a result of such different or additional Claims or
facts. Individual acknowledges that he understands the
significance and consequences of the foregoing Release and
such specific waiver of SECTION 1542.
VII.
ADEA Waiver
. Individual
expressly acknowledges and agrees that by entering into this
Separation Agreement, he is waiving any and all rights or claims
that he may have arising under the Age Discrimination in Employment
Act of 1967, as amended (“
ADEA ”),
which have arisen on or before the date of execution of this
Separation Agreement. Individual further expressly acknowledges and
agrees that:
(a)
In
return for this Separation Agreement, he will receive consideration
beyond that which he was already entitled to receive before
entering into this Separation Agreement;
(b)
He
is hereby advised in writing by this Separation Agreement to
consult with an attorney before signing this Separation
Agreement;
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