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Exhibit 10.1
RELEASE OF ALL CLAIMS AGREEMENT
This Release of All Claims (Agreement) is made by and between Kintera, Inc. (the Company) and Harry Gruber (Employee) based on the following facts:
a. Employee resigned from Employees position as Chief Executive Officer effective February 28, 2007 (Separation Date).
b. The Company has offered, and Employee has accepted, additional benefits in exchange for a general release of all claims. This Agreement is therefore entered into by the Company and Employee to document the parties agreement regarding the terms of Employees separation from the Company.
WHEREFORE, the Company and Employee agree as follows:
1. Employee has received all wages, bonuses, commissions, accrued vacation, compensation of any kind (other than as specifically set forth in paragraph 4 below) and benefits to which Employee is entitled as a result of Employees employment with the Company. The Company will reimburse Employee for any currently unreimbursed reasonable business expenses pursuant to its applicable policies.
2. Employee agrees to promptly return all Company property remaining in Employees possession, including but not limited to credit cards, hardware, software, data, keys and documents (Company Property). Employee also agrees to promptly return any subsequently discovered Company Property.
3. Employee hereby resigns as an officer and director of all subsidiaries of the Company, including but not limited to BNW Software, Inc., Integrated Strategies Consulting, Inc., 5 Winds, Inc., American Fundware, Involve Acquisition, Inc., Kamtech, Inc., MasterPlanner Media, Inc., Prospect Information Network, LLC, Charity Gift Acquisition Corp., Collaborative Standards, GivingCapital, Inc., Kindmark, and VS Asset Acquisition, Inc.
4. In consideration for the promises and representations of Employee as described in this Agreement:
a. Subject to subparagraph (ii) below, the Company will provide Employee with total gross severance pay in the sum of $300,000.00, less federal and state withholdings, (Severance Pay) in three separate payments as follows: (I) $100,000.00 within three business days after the Effective Date (as defined below in paragraph 9); (II) $100,000.00 following a report of positive Adjusted EBITDA (as defined below in Paragraph 4(a)(i)) for a financial quarter occurring after the Effective Date; and (III) $100,000.00 following a report of positive Adjusted EBITDA for a second financial quarter occurring after the Effective Date (collectively Triggering Events). Except for the payment due within three business days after the Effective Date, Severance Pay will be provided to Employee on the first regularly scheduled month-end payday following the applicable Triggering Event. Employee acknowledges that Employee would not be entitled to receive any portion of the Severance Pay absent this Agreement.
i. The term Adjusted EBITDA as used herein shall mean earnings before interest, taxes, depreciation, amortization, stock-based compensation expense and restructuring charges as reported in earnings releases issued by the Company and filed with the Securities and Exchange Commission as an exhibit to a Current Report on Form 8-K pursuant to Item 2.02 thereof.
ii. In lieu of the cash payment of the Severance Pay, Employee shall have the right to receive the value of any unpaid Severance Pay in the form of shares of Company common stock as provided in this subparagraph (ii). At any time that any portion of the Severance Pay remains unpaid, Employee may notify the Company in writing of his intention to accept shares of Company common stock in lieu of all or a portion of the unpaid Severance Pay. The value of the shares to be issued in lieu of such cash payment shall be deemed to be equal to the last reported sales price of the common stock on the Nasdaq Global Market on the date immediately preceding the date of the receipt by the Company of such notice. Such notice shall specify the amount of cash value of Severance Pay being foregone in consideration for issuance of the shares of common stock. The shares shall be issued as fully vested shares of registered stock under the Companys 2003 Equity Incentive Plan, subject to compliance with the terms of that plan and applicable laws. To the extent that the value of the shares Employee elects to receive is less than the full amount of remaining unpaid Severance Pay, then the value of the shares received shall be applied to reduce the next cash payment of the Severance Pay.
iii. Notwithstanding the provisions of Section 4(a)(ii):
A. Employee may not elect to receive stock at anytime prior to January 1, 2008, except Employees personal representative may elect to receive stock at anytime in the event of Employees death or Employee may elect to take stock prior to January 1, 2008, in the event of a change in the ownership or effective control of Company, or in the ownership of a substantial portion of the assets of Company (as defined in Section 1.409A-3(i)(5) of the Treasury Regulations Section);
B. If either EBITDA Trigger Date has not occurred by the Companys fiscal quarter ending September 30, 2009, the remaining Severance Pay shall in all events be paid in shares of stock on or prior to December 31, 2009; and
C. In no event will the aggregate amount of the payments made to the Employee under this Section 4(a) (whether in cash or stock) exceed the applicable limit set forth in Section 1.409A-1(b)(9)(iii)(A) of the Treasury Regulations.
b. The Company will pay for eighteen months of health and dental insurance coverage (reasonably similar to coverage previously provided) pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA) for Employee pursuant to the Companys current or equivalent plan, provided Employee timely completes all necessary documentation necessary to obtain such coverage and Employee qualifies for such coverage (Health Insurance Pay), and provided further that the provision of such coverage shall comply in all respects with Section 1.409A-1(b)(9)(v)(B) of the Treasury Regulations. The Health Insurance Pay obligation of the Company, however, shall cease immediately if Employee obtains subsequent employment
through which Employee is offered health insurance. The Company shall have no further or additional obligation or liability for continuation of any benefits, including but not limited to medical, dental, disability, death, travel/accident, and/or life insurance.
5. As part of the Companys compensation plan for non-employee members of its Board of Directors, the Company will grant Employee an option to purchase an additional 50,000 shares of the Companys Common Stock on the date of the Companys annual meeting of stockholders to be held in July 2007 (Stock Option), and the Stock Option will vest on a pro-rata basis over a period of four years (subject to a one-year cliff vesting provision). Employees entitlement to the Stock Option is conditioned upon Employees signing of the Companys Stock Option Agreement, and is subject to its terms and the terms of the applicable Stock Option Plan and related documents adopted by the Companys Board, except as expressly provided herein. While Employee remains a member of the Company Board of Directors, Employee will continue to vest in the Stock Option and all other unvested options held by Employee. The Stock Option is being provided to Employee in place of any other stock options to be awarded to Employee pursuant to any Company non-employee director compensation plan at the Companys annual meeting of stockholders to be held in July 2007.
6. Except for the rights and obligations expressly set forth herein, Employee on the one hand and the Company on the other, for themselves and for each of their respective past and present agents, assigns, transferees, heirs, spouses, relatives, executors, attorneys, administrators, officers, directors, stockholders, employees, predecessors, subsidiaries, parents, affiliates, successors, insurers, and representatives (Releasors), hereby release and discharge the other and their respective past and present agents, assigns, transferees, heirs, spouses, relatives, executors, attorneys, administrators, officers, directors, stockholders, employees, predecessors, subsidiaries, parents, affiliates, successors, insurers, and representatives (Releasees) from any and all claims and causes of action, known or unknown, which Releasors now have or may have against any of the Releasees arising through the date of this Agreement, including but not limited to claims arising out of or relating to Employees employment or the severance of Employees employment from the Company (Released Claims). This release is intended to be interpreted broadly and is intended to include, without limitation, all common law claims (including but not limited to: breach of contract, breach of the covenant of good faith and fair dealing, wrongful discharge in violation of public policy, infliction of emotional distress, negligence, invasion of privacy, interference with contractual relationship, defamation and fraud), as well as any statutory claims (including but not limited to claims arising under: the Age Discrimination in Employment Act as amended, 29 U.S.C. § 621 et seq.; Title VII of the Civil Rights Act of 1964, as amended by the Civil Rights Act of 1991, 42 U.S.C. § 2000 et seq.; the Civil Rights Act of 1866, 42 U.S.C. § 1981; the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.; the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et seq.; the False Claims Act , 31 U.S.C. § 3729 et seq.; the Fair Labor Standards Act, 29 U.S.C. § 215 et seq., as well as claims under the California Fair Employment and Housing Act, Cal. Govt. Code § 12900 et seq.; the California False Claims Act, Cal. Govt. Code § 12650 et seq.; the California Corporate Criminal Liability Act, Cal. Penal Code § 387; or under the California Labor Code or under the laws of the State of California, or any other claim whatsoever arising out of Employees employment or the termination of Employees employment, other than those that cannot be released as a matter of law. Employee and the Company agree that the Released Claims shall not include claims for







