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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 Employee’s 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 Employee’s
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 Employee’s 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
Employee’s 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 Company’s 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 Employee’s 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 Company’s 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 Company’s 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
Company’s 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 Company’s Common
Stock on the date of the Company’s 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).
Employee’s entitlement to the Stock Option is conditioned
upon Employee’s signing of the Company’s Stock Option
Agreement, and is subject to its terms and the terms of the
applicable Stock Option Plan and related documents adopted by the
Company’s 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 Company’s 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 Employee’s
employment or the severance of Employee’s 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, in
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