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Exhibit 10.1
SEPARATION AND RELEASE AGREEMENT
This Separation and Release Agreement ("Agreement") by and
between David Gould ("Mr. Gould"), a resident of Atlanta, Georgia,
and Witness Systems, Inc. (the "Company"), a Delaware corporation,
is effective this 3 rd day of January, 2007.
1.
Resignation . The Board accepted Mr.
Gould’s resignation as Chairman of the Company’s Board
of Directors as of December 6, 2006. On December 6, 2006, the
Board also accepted Mr. Gould’s resignation as a Director and
Chief Executive Officer effective on January 3, 2007 (the
"Separation Date"). Mr. Gould shall, at the same time he
executes this Agreement, execute the resignation letter attached to
this Agreement as Exhibit A, by which he further resigns, effective
upon acceptance by the Board, his employment and all other officer
or director positions he holds with any of the Company’s
subsidiaries or affiliates. Until such acceptance, Mr. Gould
shall continue to receive his current salary and benefits.
2.
Employment Agreement . Except as
otherwise provided in this Agreement, this Agreement extinguishes
the Employment Agreement between Mr. Gould and the Company dated
February 2, 1999, as amended (the "Employment Agreement"),
effective January 3, 2007. Except as may otherwise be
provided in this Agreement, the cessation of the Employment
Agreement on January 3, 2007, without more, does not and will not
result in the vesting, acceleration, or triggering of any
employment benefit in Mr. Gould’s favor, including, but not
limited to, any post-termination payment obligation or any
separation payment or benefit, vesting of stock options, or any
other right which Mr. Gould may have as an option holder, officer,
or employee or under any agreement or understanding between the
Parties, including, but not limited to, the Employment
Agreement.
3.
Separation Payments . The Company
shall make payments to Mr. Gould in twelve (12) equal monthly
installments on the last day of each month (the "Separation
Payments"). The Separation Payments shall commence on the
last day of the month that begins six (6) months following the
Separation Date. Each of the equal monthly installments shall
be for an amount equal to Twenty Nine Thousand Three Hundred Thirty
Three Dollars and Thirty Three Cents ($29,333.33). If the
last day of the month falls on a weekend or a legal holiday, the
respective Separation Payment will be paid on the business day
immediately preceding such day. Except as provided in the
previous sentence, under no circumstances will any Separation
Payment to be made under this paragraph be accelerated or
deferred. Mr. Gould shall be solely responsible for the
payment of all taxes incurred with respect to the payments set
forth in this paragraph, including, but not limited to, federal and
state income taxes, subject to the Company’s obligation to
withhold applicable state and federal taxes and social security, as
determined by the Company in its sole and absolute
discretion.
4.
Consulting Engagement . The Company
shall engage Mr. Gould as a Consultant to the Company beginning on
the Board’s acceptance of Mr. Gould’s resignation from
Company employment and continuing until the earlier of (a)
termination by Mr. Gould and/or the Company, or (b) June 30, 2007
(the "Consulting Term"). The Consulting Engagement may be
terminated at any time simply by written notification to the other
party. Upon termination of the Consulting Engagement for any
reason, the Company shall pay Mr. Gould the amount of any accrued,
but unpaid Consulting Compensation (as defined in Section 4(b)
below) through the date of such termination. Termination of
the Consulting Engagement shall have no effect on the
Company’s obligation to provide the Separation Payments in
Section 3 pursuant to the terms and conditions set forth
therein. After the end of the Consulting Term, Mr. Gould and
the Company may mutually agree to extend the Consulting Engagement
thereafter from
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month to month upon the same terms and conditions
as set forth in this Section 4 (or such other terms as they may
then agree).
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(a)
Consulting Services . During the
Consulting Term, Mr. Gould agrees to perform all consulting
services as directed by the Company from time to time, in such
manner and with such limitations as the Company may direct (the
"Services"). Mr. Gould agrees to perform the Services
faithfully, diligently, and industriously.
(b)
Consulting Compensation . During the
Consulting Term, the Company shall pay Mr. Gould Thirty Thousand
Dollars ($30,000.00) per month (the "Consulting Fee") for Services
rendered under this Section 4. The Company shall pay the
Consulting Fee within five (5) business days after the end of each
calendar month of the Consulting Term. If either party
terminates the consulting engagement prior to the end of a calendar
month, the Company shall pay Mr. Gould a pro-rata share of the
Consulting Fee for such month. Mr. Gould acknowledges and
agrees that he is solely responsible, and Company has no
responsibility, to pay any and all taxes applicable to the
compensation Mr. Gould receives from the Company for the
Services.
(c)
Relationship of the Parties . Mr.
Gould acknowledges and agrees that during the Consulting Term, Mr.
Gould will be act as an independent contractor and will not be: (i)
eligible to participate in any employee benefit plan or program
offered by the Company to its employees or agents; or (ii) covered
under Company’s worker’s compensation insurance or
unemployment insurance coverages.
5.
Release . In exchange for the
consideration stated in this Agreement, Mr. Gould releases, waives
and discharges the Company,(1) and the Company releases, waives and
discharges Mr. Gould, from any claim, demand or liability, whether
known or unknown, fixed or contingent, which one party ever had,
now has or may have against the other party, arising out of or
relating to any claim (whether heretofore or hereafter brought) for
any breach of contract under or termination of the Employment
Agreement occurring on or before Mr. Gould’s execution of
this Agreement. Mr. Gould further releases, waives and
discharges the Company from any claim, demand or liability, whether
known or unknown, fixed or contingent, which Mr. Gould ever had,
now has or may have against the Company for compensation
arising out of or relating to his service (or resignation) as
chairman of the Board or a director of the Company. Mr. Gould
further agrees that he has suffered no harassment, retaliation,
employment discrimination, or work-related injury or
illness. The foregoing releases do not waive Mr.
Gould’s right to (a) receive benefits under the
Company’s 401(k) plan that either (i) have accrued or vested
prior to the date of this Agreement, or (ii) are intended, under
the terms of such plan, to survive Mr. Gould’s separation
from the Company; or (b) enforce the terms of this Agreement,
including any agreements incorporated by reference; or (c) exercise
stock options that by their terms or by the terms of their
governing plans or agreements or by the terms of this Agreement he
may be entitled to exercise; or (d) receive advancement of or
indemnification for attorney’s fees and related costs,
litigation costs, settlements, and expenses as set forth in (i)
Section 8 of this Agreement, (ii) the Request, Affirmation And
Undertaking With Respect To Advancement Of Expenses In Advance Of
Final Disposition Of A Proceeding, signed by Mr. Gould on September
7, 2006, (iii) Mr. Gould’s Indemnification Agreement
(1) For purposes of the Release (Section 5) and
ADEA/OWBPA Waiver (Section 6), the term "Company" means the
Company, the Company’s parents, subsidiaries, affiliates, and
all related companies, as well as their respective officers,
directors, shareholders, employees, agents, and any other
representatives, any employee benefits plan of the Company, and any
fiduciary of those plans.
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with the Company dated January 19, 2000, and (iv)
the Fifth Amended and Restated Certificate of Incorporation and
Bylaws of the Company.
6.
ADEA/OWBPA Waiver . Mr. Gould also
specifically releases and waives any right or claim against the
Company, as defined in footnote 1, arising out of his employment or
his resignation of employment with the Company under the Age
Discrimination in Employment Act, as amended, 29 U.S.C. § 621
et seq. ("ADEA"), the Older Workers Benefit Protection Act, 29
U.S.C. § 621 et seq. ("OWBPA"), or the Georgia Prohibition of
Age Discrimination in Employment, O.C.G.A. § 34-1-2 (such
release and waiver referred to as the "Waiver"). Mr. Gould
understands and agrees that (i) this Agreement is written in a
manner that he understands; (ii) he does not release or waive
rights or claims that may arise after he signs this Agreement;
(iii) he waives rights and claims he may have had under the OWBPA
and the ADEA, but only in exchange for payments and/or benefits in
addition to anything of value to which he is already entitled; (iv)
Mr. Gould has been advised to consult with an attorney before
signing this Agreement; (v) he has twenty one (21) calendar days
(the "Offer Period") from receipt of this Agreement to consider
whether to sign it. If Mr. Gould signs before the end of the
Offer Period, Mr. Gould acknowledges that his decision to do so was
knowing, voluntary, and not induced by fraud, misrepresentation, or
a threat to withdraw, alter, or provide different terms prior to
the expiration of the Offer Period. Mr. Gould agrees that
changes or revisions to this Agreement, whether material or
immaterial, do not restart the running of the Offer Period; (vi)
Mr. Gould has seven (7) calendar days after signing this Agreement
to revoke this Agreement (the "Revocation Period"). If Mr.
Gould revokes, the Agreement shall not be effective or enforceable
and Mr. Gould shall not be entitled to the payments or benefits
provided for in Sections 3, 4(b), or 7 of this Agreement. To
be effective, the revocation must be in writing and received by
Pete Sinisgalli, member of the Board of Directors, at Witness
Systems, Inc., 300 Colonial Center Parkway, Roswell, Georgia,
30076, prior to expiration of the Revocation Period; and (vii) this
Waiver shall not become effective or enforceable until the
Revocation Period has expired.
7.
Stock Options . Notwithstanding
anything to the contrary set forth in any prior agreement, option
grant, or other compensatory arrangement, the following will govern
the options to purchase Company stock previously granted to Mr.
Gould, and which vest or have vested as of the last day of Mr.
Gould’s employment in accordance with the terms and
conditions of the respective stock option plans ("Option Plans")
and/or stock option agreements ("Option Agreements") pursuant to
which they were granted (the "Vested Options"): Mr. Gould
shall not exercise any of the Vested Options until after the
conclusion of the option inquiry currently being undertaken by the
Company and any prohibition on exercising options has been lifted,
and the Company may instruct its Transfer Agent that Mr. Gould has
so agreed and that the Transfer Agent shall not permit any shares
to be issued pursuant to a purported exercise of a Vested Option
not in accordance with this Agreement. Mr. Gould agrees that
the Company has the right to (1) increase the exercise price of
Vested Options that were granted to Mr. Gould on or after February
10, 2000 to a price equal to the closing price of the
Company’s common stock, as reported by the NASDAQ Stock
Market, Inc., on the date that the Company determines in its sole
and absolute discretion to be the correct measurement date for such
Vested Options, or (2) make such other adjustments, as determined
in the Company’s sole and absolute discretion, as may be
required to offset the economic benefit that Mr. Gould would
otherwise derive from such lower exercise price. Subject to
the adjustments contemplated by the preceding sentence, the Vested
Opti
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