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SEVERANCE AGREEMENT
This
SEVERANCE AGREEMENT (this “ Agreement ”) is made
and entered into freely and voluntarily, by and between JOHN W.
SMOLAK (hereinafter referred to as “ Officer ”)
and HYPERCOM CORPORATION (hereinafter referred to collectively with
all of its subsidiaries and controlled affiliates as the "
Company ”).
WHEREAS , the parties mutually wish to memorialize the terms
and conditions of the termination of Officer’s employment
with the Company.
NOW,
THEREFORE , in consideration of the acts, payments, covenants
and mutual agreements herein described and agreed to be performed,
Officer and the Company agree as follows:
1.
Resignation . Officer hereby resigns from all positions with
the Company (including as an officer of Hypercom and an officer or
director of various subsidiaries), effective as of 3:00 p.m.,
Phoenix time, March 21, 2005 (the “ Effective
Date ”).
2.
Economic Terms . The Company agrees that, in consideration
for Officer’s covenants herein, Officer will be entitled to
receive, through the one (1) year anniversary of the Effective
Date, continued payments aggregating $330,000, payable equally over
the severance payment term, in accordance with the Company’s
normal payroll practices provided, however, that the first of such
payments shall be applied (net of tax withholding) to offset the
overpayment of a bonus to Officer relating to 2004 in the amount of
$10,000. Officer acknowledges that he will not be paid any bonus,
vacation, sick or other pay during his severance payment period. In
addition, Officer and the Company acknowledge and agree that the
Stock Option Agreements between them dated April 22, 2002 and
July 26, 2002 (the “Options”), shall remain in
effect, and ultimately terminate, in accordance with their
respective terms. For purposes of this Agreement and the Options,
Officer shall be deemed terminated without “cause”.
3.
Release and Covenant Not to Sue .
(a) Each party hereby forever releases, discharges, cancels,
waives, and acquits the other party and its or his representatives
(which shall include, as applicable, spouse, heirs, executors,
administrators, successors, assigns, affiliates, subsidiaries,
corporate parents, agents, directors, officers, owners, attorneys)
of and from any and all rights, claims, demands, causes of action,
obligations, damages, penalties, fees, costs, expenses, and
liability of any nature whatsoever, whether in law or equity, which
a party has, had or may hereafter have against it arising out of,
or by reason of, any cause or matter, existing as of the date of
execution of this Agreement, WHETHER KNOWN TO THE PARTY AT THE TIME
OF EXECUTION OF THIS AGREEMENT OR NOT, other than for breach of
this Agreement.
(b) This FULL WAIVER OF ALL CLAIMS includes, without
limitation, attorney’s fees, any claims, demands, or causes
of action arising out of, or relating in any manner whatsoever to,
the employment and/or termination of the employment of Officer by
the Company, such as, BUT NOT LIMITED TO, any charge, claim,
lawsuit or other proceeding arising under the Civil Rights Act of
1866, 1964, 1991, Title VII as amended by the Civil Rights Act of
1991, the Americans with Disabilities Act, the Age Discrimination
in Employment Act (ADEA), the Labor Management Relations Act
(LMRA), the Employee Retirement Income Security Act (ERISA), the
Consolidated Omnibus Budget Reconciliation Act, the Fair Labor
Standards Act (FLSA), the Equal Pay Act, the Rehabilitation Act of
1973, and the Family and Medical Leave Act of 1993, worker’s
compensation laws, or any other federal, state, or local statute,
or any contract, agreement, plan or policy.
(c) Each party further covenants and agrees not to institute,
nor cause to be instituted, any legal proceeding, including filing
any claim or complaint with any government agency alleging any
violation of law or public policy or seeking worker’s
compensation, against the Company (or any of its representatives)
premised upon any legal theory or claim whatsoever, including
without limitation, contract, tort, wrongful discharge, personal
injury, interference with contract, breach of contract, defamation,
negligence, infliction of emotional distress, fraud, or deceit,
except to enforce the terms of this Agreement.
(d) Each party acknowledges that the considerations afforded
the party under this Agreement are in full and complete
satisfaction of any claims a party may have or had to the date
hereof, including any arising out of Officer’s employment
with the Company or the termination thereof.
(e) The foregoing shall not apply to any conduct that
constituted fraud, involved an intentional or reckless misstatement
or omission, or was not performed in good faith and in (or at least
not opposed to) the best interests of the Company.
(f) Nothing herein shall limit or modify the Company’s
obligations to indemnify you and advance expenses to you, as more
fully provided in the Company’s certificate of incorporation
and bylaws.
4.
Non-Competition; Non-Solicitation .
(a) For a period of one (1) year from the date hereof,
Officer will not, directly or indirectly, either as an officer,
partner, owner, lender, director, adviser or consultant or in any
other capacity or through any entity:
(i) engage in the design, manufacture or sale of electronic
payment solutions, including point of sale/point of transaction
terminals, peripheral devices, transaction networking devices,
transaction management systems and application software, and
related support and services (collectively, the “
Competitive Activities ”), within the Protected
Territory (as defined below); provided , that Officer may
own stock in the Company and less than 1% of any other publicly
traded company engaged in any or all of the Competitive
Activities.
(ii) solicit for hire, or hire, any person who is, or within
the one (1) year period preceding the date of such activity
was, an employee of or consultant to the Company (other than as a
result of a general solicitation for employment); or
(iii) solicit any customer or supplier of the Company or
otherwise attempt to induce any such customer or supplier to
discontinue or materially modify its relationship with the
Company.
As used
herein, the term “ Protected Territory ” means
the entire world; provided, however, that if (and only if) required
by a final court or arbitrator’s order in order for the
provisions of this Agreement to remain valid and enforceable
against Officer, “Protected Territory” shall mean any
country in which the Company does any business as of the Effective
Date; provided, further, that if (and only if) such reduced
territory is not sufficient in the determination of the court or
arbitrator issuing such order, “Protected Territory”
shall mean the United States, Canada, Brazil, Chile, Argentina,
Colombia, Venezuela, Mexico, European Community (including the
United Kingdom), China, Hong Kong, Taiwan, Japan, Turkey,
Singapore, Russia, South Korea, Australia and Puerto Rico.
(b) Officer represents to the Company that he is willing and
able to engage in businesses that are not competing businesses
hereunder and that enforcement of the restrictions set forth in
this Section 4 would not be unduly burdensome to Officer.
Officer hereby agrees that the period of time provided for in this
Section 4 and other provisions and restrictions set forth
herein are reasonable and necessary to protect the Company and its
successors and assigns in the use and employment of the goodwill of
the busine
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