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SOURCEFORGE, INC.
SEPARATION AGREEMENT AND RELEASE
This
Separation Agreement and Release (“
Agreement ”)
is made by and between Ali
Jenab (“
Employee ”)
and SourceForge, Inc. (the “
Company ”,
collectively referred to with Employee as the “
Parties ”
or each individually referred to as a “
Party ”).
WHEREAS ,
Employee was employed by the Company;
WHEREAS ,
Employee signed an Employment,
Confidential Information and Assignment of Inventions
Agreement
with
the Company on August 3, 2000 (the “
Confidentiality Agreement ”);
WHEREAS ,
Employee signed offer letters with the Company relating to his
employment with the Company on July 28, 2000 and February 27, 2001
(the “
Offer Letters ”);
WHEREAS ,
Employee and the Company entered into an Indemnification Agreement
dated December 31, 2001 (the “
Indemnification Agreement ”);
WHEREAS ,
on August 31, 2006, Employee was granted a restricted stock award
of 175,000 shares of the Company’s stock, with time-based
vesting made pursuant to the Company’s 1998 Stock Option Plan
(the “
Plan ”),
and memorialized in the Restricted Stock Purchase Agreement dated
August 31, 2006 (the “
2006 RSPA ”),
and on June 11, 2007, Employee was granted a restricted stock award
of 280,000 shares of the Company’s stock, with time-based
vesting made pursuant to the Plan, and memorialized in the
Restricted Stock Purchase Agreement dated August 31, 2006 (the
“
2007 RSPA ”,
and together with the 2006 RSPA, the “
RSPAs ”);
WHEREAS ,
the Company granted Employee an option on February 16, 2001 to
purchase 700,000 shares of the Company’s common stock
pursuant to the Plan, memorialized in a Stock Option Agreement
dated March 2, 2001 (as amended by the Option Cancellation
Agreement (as defined below), the “
March 2001 Stock Option Agreement ”),
an option on June 14, 2001 to purchase 400,000 shares of the
Company’s common stock pursuant to the Plan, memorialized in
a Stock Option Agreement dated July 24, 2001 (the “
July 2001 Stock Option Agreement ”),
an option on October 11, 2001 to purchase 2,000,000 shares of the
Company’s common stock pursuant to the Plan, memorialized in
a Stock Option Agreement dated October 31, 2001 (the “
October 2001 Stock Option Agreement ”),
an option on December 4, 2002 to purchase 200,000 shares of the
Company’s common stock pursuant to the Plan, memorialized in
a Stock Option Agreement dated December 16, 2002 (the
“
December 2002 Stock Option Agreement ”),
an option on December 10, 2003 to purchase 325,000 shares of the
Company’s common stock pursuant to the Plan, memorialized in
a Stock Option Agreement dated January 8, 2004 (the “
January 2004 Stock Option Agreement ”),
an option on July 1, 2004 to purchase 204,080 shares of the
Company’s common stock pursuant to the Plan, memorialized in
a Stock Option Agreement dated July 27, 2004 (the “
July 2004 ISO Stock Option Agreement ”),
an option on July 1, 2004 to purchase 283,420 shares of the
Company’s common stock pursuant to the Plan, memorialized in
a Stock Option Agreement dated July 27, 2004 (the “
July 2004 NSO Stock Option Agreement ”
and together with the March 2001 Stock Option Agreement, the July
2001 Stock Option Agreement, the October 2001 Stock Option
Agreement, the December 2002 Stock Option Agreement, the January
2004 Stock Option Agreement, and the July 2004 ISO Stock Option
Agreement, the “
Stock Option Agreements ”,
and collectively with the RSPAs, the “
Stock Agreements ”);
WHEREAS ,
Employee and the Company entered into an Option Cancellation
Agreement on June 5, 2003 (the “
Option Cancellation Agreement ”)
pursuant to which Employee and the Company agreed that the options
granted to Employee on August 2, 2000 and December 6, 2000 would be
cancelled in their entirety and 306,250 of the share of Common
Stock underlying the March
2001 Stock Option Agreement would be cancelled, such that Employee
was entitled to purchase up to up to 393,750 shares of Common Stock
under and pursuant to the terms of the March 2001 Stock Option
Agreement following the execution of the Option Cancellation
Agreement.
WHEREAS ,
Employee resigned all positions as an officer, director and
employee with the Company effective as of June 10, 2008 (the
“
Termination Date ”);
WHEREAS ,
the Company and Employee desire to enter into a consulting
agreement pursuant to which Employee shall perform consulting
services for the Company, which consulting services shall commence
immediately upon the resignation of Employee’s other
positions such that Employee’s service to the Company shall
continue uninterrupted; and
WHEREAS ,
the Parties wish to resolve any and all disputes, claims,
complaints, grievances, charges, actions, petitions, and demands
that Employee may have against the Company and any of the Releasees
(as defined below), including, but not limited to, any and all
claims arising out of or in any way related to Employee’s
employment with or separation from the Company.
NOW,
THEREFORE, in consideration of the mutual promises made
herein, the Company and Employee hereby agree as
follows:
1.
Consideration .
a.
Cash Severance .
The
Company hereby agrees that contingent upon the effectiveness of
this Agreement, the Company will pay Employee cash
severance in an amount equal to Seven Hundred Thirty-Five Thousand
Dollars ($735,000) (the “
Cash Severance ”),
less applicable withholding, in one lump sum on the third business
day following the Effective Date (as defined below).
b.
Fourth Quarter Fiscal 2008 Bonus .
The Company hereby agrees that contingent upon the effectiveness of
this Agreement, Employee will be eligible to receive a cash payment
equal to the fourth quarter fiscal 2008 bonus that otherwise would
have been paid to Employee under the standard terms and conditions
of the Company’s Named Executive Officer Bonus Policy and
Plan for the Company’s fiscal year ending July 31, 2008 (the
“
Named Executive Officer Plan ”),
a copy of which was attached as Exhibit 10.1 to the Current Report
Form 8-K dated September 5, 2007, if Employee had been a named
executive officer of the Company at the time eligibility for fourth
quarter fiscal 2008 bonuses was determined thereunder. Employee
acknowledges and understands that this provision is not a guarantee
of any future payments and that it is possible that no payments
will be made pursuant to this provision. Any payments pursuant to
this provision shall be made contemporaneously with the payment of
fourth quarter fiscal 2008 bonuses, if any, to the Company’s
named executive officers pursuant to the terms and conditions of
the Named Executive Officer Plan.
c.
Vesting .
The
Parties hereby agree that as of the earlier of (i) termination of
the Consulting Agreement (as defined below) and (ii) the end of the
term of the Consulting Agreement, contingent upon and subject to
the effectiveness of this Agreement, Employee shall receive
accelerated vesting with respect to that number of shares of
Company Common Stock underlying the Stock Agreements that Employee
would have vested in during the twelve (12) month period following
the termination of the Consulting Agreement or the end of the term
of the Consulting Agreement, whichever occurs first, had Employee
continued to vest during such period (the “
Accelerated Shares ”).
For
the avoidance of doubt, the Parties acknowledge and agree that (i)
Employee shall be deemed to be a “Service Provider” (as
such term is defined in the Plan) during the term of the Consulting
Agreement, (ii) that Employee’s status as a “Service
Provider” shall be continuous and uninterrupted during the
period of his employment and through, and to the conclusion, of the
term, or earlier termination pursuant to Section 6 thereof, of the
Consulting Agreement such that there shall be no change in
Employee’s status as a “Service Provider”
throughout this period, (iii) that Employee shall continue to vest
in shares subject to the Stock Agreements during the term of the
Consulting Agreement if and to the extent permitted under the terms
of the Stock Agreements and (iv) the calculation of the number of
Accelerated Shares shall be based upon and performed as of the date
on which the Consulting Agreement is terminated or the end of the
term of the Consulting Agreement, whichever occurs first, pursuant
to the provisions thereof. For
further avoidance of doubt and to facilitate the calculation of the
Accelerated Shares, the Parties acknowledge and agree that the
Stock Agreements provide that Employee shall vest, subject to the
terms thereof, in the following number of shares of the
Company’s Common Stock on the following dates: (a) under the
2006 RSPA, Employee shall vest in an additional 43,750 shares of
Company Common Stock on August 31, 2008 and an additional 87,500
shares of Company Common Stock on August 31, 2009 and (b) under the
2007 RSPA, Employee shall vest in an additional 93,334 shares of
Company Common Stock on June 11, 2008, an additional 93,333 shares
of Company Common Stock on June 11, 2009 and an additional 93,333
shares of Company Common Stock on June 11, 2010.
d.
Extended Exercise Period .
Subject to this Agreement becoming effective on the Effective Date,
Employee shall have a twelve (12) month period following the
termination of the Consulting Agreement or the end of the term of
the Consulting Agreement, whichever occurs first, during which
Employee may exercise any and all of his vested shares of Common
Stock underlying any of the Stock Agreements. The exercise of
Employee’s vested stock options shall continue to be governed
by the terms and conditions of the Stock Option Agreements.
Employee
understands that these amendments may disqualify any of the options
subject to the Option Agreements from qualifying as incentive stock
options and result in such options being considered non-statutory
stock options. Employee
acknowledges that in any event, three (3) months and one (1) day
from the Termination Date the portion of Employee’s vested
but unexercised options under the Stock Option Agreements that
formerly qualified as incentive stock options shall cease to
qualify as incentive stock options and will be treated for tax
purposes as non-statutory stock options.
e.
Consulting Agreement .
The Company and Employee hereby agree to enter into a consulting
agreement in substantially the form attached hereto as
Exhibit A (the
“
Consulting Agreement ”),
pursuant to which Employee will provide the consulting services
described therein for a period of three (3) months in exchange for
the Company’s payment of a monthly consulting fee equal to
$35,000, on the terms and subject to the conditions set forth in
the Consulting Agreement.
f.
COBRA Payments .
If Employee properly elects continuation coverage under the
Company’s group health plan pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“
COBRA ”),
the Company will reimburse Employee for COBRA premiums paid by
Employee for Employee and his enrolled family members for the
period beginning on July 1, 2008, and ending on the earlier of (a)
October 31, 2009, (b) the date Employee first becomes eligible for
coverage under any group health plan maintained by another employer
of Employee or his spouse, or (c) the date such COBRA continuation
coverage otherwise terminates as to Employee under the provisions
of the Company’s group health plan. Nothing herein shall be
deemed to extend the otherwise applicable maximum period in which
COBRA continuation coverage is provided or supersede the plan
provisions relating to early termination of such COBRA continuation
coverage.
g.
Personal Computer, Mobile Telephone and E-mail Account
.
During the term of the Consulting Agreement, Employee may continue
to utilize his current personal computer, mobile telephone and
e-mail address that was provided to him by the Company for his use
during his employment with the Company. Employee shall return the
personal computer and mobile telephone to the Company on or before
the termination of the Consulting Agreement or the end of the term
of the Consulting Agreement, whichever occurs first. Employee
covenants and agrees that he will not make or retain copies of any
information contained on the personal computer or mobile telephone
other than for the purpose of fulfilling Employee’s
obligations to the Company. To ensure that all of its confidential
and proprietary information and/or computer programs have been
removed from Employee’s personal computer, the Company may,
at its sole option, exchange the hard drive contained in the laptop
computer for a new hard drive provided that the new hard drive has
at least the same processing speed, memory capacity, and other
similar characteristics.
2.
Benefits .
Employee’s health insurance benefits shall cease on June 30,
2008, subject to Employee’s right to continue his health
insurance under COBRA. Except as specifically provided in this
Agreement, Employee’s participation in all benefits and
incidents of employment, including, but not limited to the accrual
of bonuses, vacation, and paid time off, ceased as of the
Termination Date and Employee is not entitled to and will not
receive any benefits pursuant to the Offer Letters.
3.
Payment of Salary and Receipt of All Benefits
.
Employee acknowledges and represents that (a) other than the
consideration set forth in this Agreement, the Company has paid or
provided all salary, wages, bonuses, accrued vacation/paid time
off, premiums, housing allowances, relocation costs, interest,
severance, outplacement costs, fees, reimbursable expenses for
which reimbursement documentation has been submitted to the
Company, commissions, stock, stock options, vesting, and any and
all other benefits and compensation due to Employee, (b) other than
pursuant to the Stock Agreements, the Company has no obligation to
issue or gra nt
to Employee any securities of the Company, whether pursuant to
stock options, stock grants, or otherwise and
(c) Employee is not entitled to and will not receive any benefits
pursuant to the Offer Letters.
4.
Release of Claims .
Employee agrees that the foregoing consideration represents
settlement in full of all outstanding obligations owed to Employee
by the Company and its current and former officers, directors,
employees, agents, investors, attorneys, shareholders,
administrators, affiliates, benefit plans, plan administrators,
insurers, trustees, divisions, and subsidiaries, and predecessor
and successor corporations and assigns (collectively, the
“
Releasees ”).
Employee, on his own behalf and on behalf of his respective heirs,
family members, executors, agents, and assigns, hereby and forever
releases the Releasees from,
and agrees not to sue concerning, or in any manner to institute,
prosecute, or pursue, any claim, complaint, charge, duty,
obligation, demand, or cause of action relating to any matters of
any kind, whether presently known or unknown, suspected or
unsuspected, that Employee may possess against any of the Releasees
arising from any omissions, acts, facts, or damages that have
occurred up until and including the Effective Date of this
Agreement, including, without limitation :
5.
The
Company agrees that, prior to demanding arbitration or
otherwise initiating legal action against Employee based upon
any alleged material breach of this Agreement, the
Confidentiality Agreement or the Consulting Agreement, that
Company will first provide Employee five days written notice
of its belief that a breach has occurred and the basis for the
alleged breach, to enable the Employee to respond to the
Company's allegations with further information, in the event
Employee elects to do so.
a.
any
and all claims relating to or arising from Employee’s
employment relationship with the Company and the termination
of that relationship;
b.
any
and all claims relating to, or arising from, Employee’s
right to purchase, or actual purchase of shares of stock
of
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