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EXHIBIT 10.40
[CLAYTON LOGO]
CLAYTON SERVICES, INC.
August 30, 2005
Mr. Brian C. Newman
219 Grandview Road.
Southbury, CT 06488
Re: Separation
Agreement and Mutual Release
Dear Brian:
Together with Appendix A which is incorporated into this letter
in
full, this letter shall be referred to as the "AGREEMENT" and
contains the terms
of the separation agreement and mutual release between you, on the
one hand ,
and Clayton Services, Inc., a Delaware corporation ("Clayton"), on
the other
hand.
1. Your last day
of active employment with the Company will be August
31, 2005. You will receive payment through that date consistent
with Company's regular payroll practices.
2. You will
receive salary continuation for the period commencing on
September 1, 2005 through August 31, 2006. During that time
period, and contingent upon your compliance with the terms of
Paragraphs 9 - 12 of this Agreement and the Mutual Release
(defined below), you will receive in equal installments the
aggregate sum of One Hundred Sixty Eight Thousand Three Hundred
and Seventy Two Dollars ($168,372.00), less all applicable
taxes
and withholdings, payable beginning with the start of the first
regularly scheduled pay period falling at least eight days
after
you have returned a
signed copy of this letter agreement. Based
upon your having executed the Agreement by August 31, 2005 and
provided you do not revoke your acceptance of the Agreement
within
such eight day period, the first payroll date on which you will
receive payment will be September 9, 2005. You will be paid a
retention bonus in the amount of $108,333.36 not later than
September 9, 2005.
3. You will
receive health insurance continuation for twelve (12)
months commencing on September 1, 2005 and terminating on
August
31, 2006. Clayton will pay your health insurance premium
payments
during that period in the same proportion as shared by Clayton
and
yourself prior to your termination. To the extent that Clayton
may
change its health insurance plans during this one year period
you
will have the right to receive continuation in the "best and
highest" plan offered by Clayton to its employees, or you may
elect to have Clayton pay you the premium payments that Clayton
is
currently paying on your behalf as of the date of this
Agreement
and you may elect your own coverage with a carrier independent
of
Clayton. To the extent you are eligible, elect to, and in fact
receive continued health insurance coverage under COBRA,
coverage
pursuant to which commences on September 1, 2006, the cost of
any
premium will be paid by you and Clayton will have no COBRA
premium
obligation whatsoever. It is expressly understood and agreed
that
nothing in this Agreement is designed to guarantee, promise,
convey, or covenant coverage or continuation coverage under any
insurance or benefit plan except as expressly set forth herein.
4. You will
receive payment for accrued but unused vacation pay, less
applicable taxes.
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5.
Simultaneously with the execution of this Agreement, and as
consideration for the undertakings set forth herein, you and an
officer of Clayton will execute the Mutual Release attached
hereto
as APPENDIX A (the "Mutual Release"). Your agreement to, and
non-revocation of, the Mutual Release is a material term of
this
Agreement and failure to agree to the same will nullify any and
all obligations of Clayton and any all of your rights under
this
Agreement;
6. All amounts
payable to you pursuant to this Agreement shall be
subject to applicable taxes and withholding;
7.
You agree to
return to Clayton, no later than the close of
business on August 31, 2005, all property of Clayton in your
possession, including by way of example and not by way of
limitation, any and all files, documents, books, records,
reports,
credit cards, cell phones, computers, computer equipment,
networking equipment hardware, software, source code, object
code,
customer lists, customer information, pricing lists, marketing
materials and other proprietary information.,
8. The parties
agree to keep the existence and terms of this
Agreement completely confidential other than (i) as may be
necessary for each party to enforce its rights against the
other
under the terms of the this Agreement or the Mutual Release, or
(ii) to the extent necessary to comply with any applicable
legal
process. In any case, you may disclose the terms of this
Agreement
and the Mutual Release to your immediate family, and each of
the
parties may disclose the terms of this Agreement to its legal
counsel and tax and accounting advisors. Furthermore, you agree
not to disparage Clayton or any of their respective
subsidiaries,
affiliates, officers, directors, shareholders, agents or
employees
to any third party; and Clayton agrees not to disparage you to
any
third party.
9. You shall not
use or disclose Confidential Information, as defined
in this Paragraph 9, to any person or entity for any for any
reason or purpose whatsoever. You acknowledge that (i) Clayton
has
expended time, effort and money to obtain and develop
Confidential
Information, (ii) the Confidential Information constitutes
special, valuable and unique assets of Clayton, whether or not
any
of the Confidential Information is embodied in tangible or
intangible form; and (iii) all materials containing
Confidential
Information are the property of Clayton or its affiliates, as
the
case may be. You agree and acknowledge that for purposes of
this
Agreement, "CONFIDENTIAL INFORMATION" means information and
data
not generally known outside of Clayton that you prepared,
acquired, learned, or had reasonable access to during your
employment with Clayton or any of its respective predecessors,
subsidiaries or affiliates, including, but not limited to,
research, design, development, strategies, production,
presentation, methodologies, margins, and budgets, and costs
related thereto; information and materials used in marketing or
presenting the business, products or services of Clayton or any
of
its respective affiliates including without limitation, style,
format and content; customer lists and potential customer lists
and information pertaining to customer goals and strategies;
prices and terms offered or paid for products and services by
customers; information and materials related to determining
whether products and services should be offered or sold to a
customer; supplier, vendor and contractor lists, contacts,
prices,
specifications and other information; techniques, source code,
object code, software documentation, software
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diagrams, software flow charts, procedures, processes,
formulas,
equipment, methods, technical data and compilations; business
proposals and plans and financial and operational information
and
strategies; the financial and capital structure of Clayton and
its
affiliates; creditors, debtors and financial data; any other
material
or information of whatever nature which provides any of
the Clayton or any of its affiliates, an opportunity to gain an
advantage over competitors; and any and all trade secrets or
proprietary and confidential information or materials of
Clayton
and its affiliates, or any customer or any potential customers
of
which you had knowledge or reasonable access to; PROVIDED,
HOWEVER, that: (1) the foregoing confidentiality obligation
shall
not apply to any information or material to the extent it is or
becomes publicly known (other than as a result of any act by
you
in violation of this Agreement or others in violation of an
obligation of confidentiality); and (2) the foregoing
confidentiality obligation shall not prevent you from
disclosing
information pursuant to court order, or order agency of
competent
jurisdiction, or to a government or law enforcement agency if
you
have reasonable cause to believe that the information discloses
a
violation of a State or federal law, rule, or regulation;
PROVIDED
FURTHER, HOWEVER, to the extent permitted by law, that you
notify
Clayton in writing no less than five (5) business days in
advance
of any such disclosure under this Paragraph 9 and that you
further
notify Clayton within five (5) business days of your receipt of
any subpoena, court order, administrative order, or other legal
process requiring disclosure of information subject to this
confidentiality provision. Notwithstanding anything herein to
the
contrary, Clayton agrees that it will provide you with copies
of
Confidential Information required for you to comply with a
regulatory investigation upon presentation of a s
