Exhibit 10.1
SEPARATION AGREEMENT AND GENERAL RELEASE
Dolan Media Company and its affiliates, subsidiaries, divisions, successors and
assigns and its current and former employees, officers, directors and agents
(collectively, “Employer”) and Mark Baumbach (“Baumbach”) hereby agree as
follows:
1. End of Employment Relationship. The parties mutually agreed to end their
employment relationship effective at the close of business July 22, 2009 (the
“Last Day of Employment”).
2. Release of Claims by Baumbach. In exchange for the Severance Payment set out
in Paragraph 3 below, Baumbach knowingly and voluntarily releases and forever
discharges Employer, of and from any and all claims, known and unknown, which
Baumbach, his heirs, executors, administrators or successors and assigns
(collectively, “Baumbach”) have or may have as of the Last Day of Employment,
including, but not limited to the following (the “Release”):

  a.  
all claims that arise out of or that relate to his employment, or the end of the
employment relationship, with Employer;

  b.  
all claims that arise out of or that relate to the statements or actions of
Employer;

  c.  
all claims for any alleged violation of (i) the National Labor Relations Act, as
amended; (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) the
Civil Rights Act of 1991; (iv) Sections 1981 through 1988 of Title 42 of the
United States Code, as amended; (v) the Employee Retirement Income Security Act
of 1974, as amended; (vi) the Immigration Reform Control Act, as amended;
(vii) the Americans with Disabilities Acts of 1990, as amended; (viii) the
Rehabilitation Act of 1973, 29 U.S.C. §791 et seq.; (ix) the Age Discrimination
Act of 1967, as amended; (x) the Equal Pay Act of 1963, as amended, (xi) the
Occupational Safety and Health Act, as amended; (xii) the Consolidated Omnibus
Budget Reconciliation Act of 1985, 26 U.S.C. §4980B; (xiii) the Minnesota Human
Rights Act, Minn. Stat. §363A.01, et. seq.; (xiv) the Minnesota wage-hour and
wage payment laws; (xv) Minnesota’s Whistleblower Act, Minn. Stat. §181.932; and
(xvi) retaliation under Minn. Stat. §176.82;

  d.  
all claims for an alleged violation of any other federal, state, city or local
human rights, civil rights, wage-hour, wage payment, pension, employee benefits,
labor or other laws, rules, regulations, and/or guidelines, constitutions,
ordinances, public policy, contract or tort laws;

  e.  
any and all other claims for alleged (i) breach of contract; (ii) assault or
battery; (iii) defamation; (iv) employment discrimination; (v) sexual or other
harassment; (vi) retaliation; (vii) reprisal; (viii) wrongful termination; (ix)
constructive discharge; (x) pain and suffering; (xi) invasion of privacy;
(xii) false imprisonment; (xiii) fraud; (xiv) intentional or negligent
misrepresentation; (xv) interference with contractual or business relationships;
(xvi) negligence, (xvii) mental anguish; (xviii) intentional and/or negligent
infliction of emotional distress; (xix) breach of fiduciary duty; (xx) breach of
the covenant of good faith and fair dealing; and (xxi) promissory or equitable
estoppel;

  f.  
any and all other claims arising under the common law, whether state or federal,
or any other action, based upon any conduct of the Employer occurring up to and
including the Last Day of Employment;

 

 

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  g.  
all claims arising out of the execution, performance, or termination of any
employment agreement or any other agreement or contract of any kind with
Employer; provided, however that all rights pursuant to this Separation
Agreement are exempted from the terms of this Release;

  h.  
all claims to any non-vested ownership interest in the Employer, contractual or
otherwise, including but not limited to claims for stock, stock options or
restricted stock; provided however that the Vested Stock Option given pursuant
to this Separation Agreement is exempted from the terms of this Release; and

  i.  
all claims for compensatory damages, liquidated damages, punitive damages,
attorney’s fees, costs and disbursements.

Baumbach hereby agrees that the Release set forth in this paragraph is a general
release and waives and assumes the risk of any and all claims for damages which
exist as of the Last Day of Employment of which he does not know, whether
through ignorance, error, oversight, negligence or otherwise, and which, if
known, would materially affect his decision to enter this Separation Agreement
and General Release (the “Agreement and Release”).
3. Payments to Baumbach. Employer will make the payments and provide the other
benefits set forth in this paragraph to Baumbach, only if (i) Baumbach signs
this Agreement and Release; returns it to the Employer no later than the last
day of the review period set forth in paragraph 7 and does not rescind this
Agreement and Release within the Rescission Period described in paragraph 8; and
(ii) Baumbach has not breached his obligations pursuant to this Agreement and
Release, including without limitation, those set forth in paragraph 5 below or
under the Restrictive Covenant Agreement (defined below). The payments described
in this Agreement and Release will not modify or terminate the parties’
obligations to each other as established by this Agreement and Release.
a. Severance Pay. Employer will pay to Baumbach $271,750.00 (“Severance
Payment”), less applicable withholdings and other lawful deductions, said amount
representing (1) fifty-two weeks pay, at the rate in effect on the Last Day of
Employment, and (2) fifty percent of the expected annual cash bonus that would
be earned by Baumbach if he were employed with the Company through December 31,
2009, assuming that he would have fully satisfied all performance targets.
b. Health and Dental Benefits. Employer shall pay on behalf of Baumbach both the
Company and Baumbach’s portion of the premium for health and dental coverage
(the “Premium Payment”) through the earlier of (x) July 31, 2010, or (y) the
date Baumbach becomes eligible for coverage under the health plan of a new
employer. Baumbach understands and agrees that he is only entitled to the
benefits under this subparagraph 3(b) if he timely elects continuation of
coverage under COBRA.
c. Outplacement Services. Employer will reimburse up to $10,000 to Baumbach,
which he has reasonably incurred for resume writing, interviewing skills, job
searching and other similar outplacement services (the “Outplacement
Reimbursement”).
d. Immediate Vesting of Incentive Stock Option. Employer will immediately vest
the unvested portion of the incentive stock option to purchase 4,500 shares
(post-split) of the Employer’s common stock, which the Employer granted to
Baumbach on October 11, 2006 under that certain Incentive Stock Option Agreement
between Employer and Baumbach dated as of October 11, 2006. Such unvested
portion represents an option to purchase 1,125 shares (the “Vested Stock
Option”).

 

 

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e. Extension of Time to Exercise Vested Stock Options. Baumbach may exercise the
vested portion of any stock options granted to him during his employment,
including the Vested Stock Option, for a period of 120 days following the Last
Day of Employment. Baumbach acknowledges and understands that he forfeited the
unvested portion of any stock options granted to him, except the Vested Stock
Option, on the Last Day of Employment
f. Laptop. Employer will allow Baumbach to keep the laptop, exclusive of any
peripherals, that he used while he was employed with the Company (the “Laptop”);
provided that Baumbach surrenders it immediately upon the termination of his
employment so that the Company may remove all information and data related to
the Company.
The Severance Payment, the Premium Payment, the Outplacement Reimbursement, the
Vested Stock Option and the Laptop are collectively referred to hereafter as the
“Total Benefits.” Baumbach understands, acknowledges and agrees that he would
not receive the Total Benefits specified in this paragraph 3, except for his
execution of this Agreement and Release and the fulfillment of the promises it
contains.
4. Method of Payment. The Severance Payment will be made in two lump sum
payments. The first lump sum payment , in the amount of $95,113.00, will be made
on the first regularly scheduled payroll date following the expiration of the
Rescission Period. The second lump sum payment, in the amount of $176,637.00,
will be made on the first regularly scheduled payroll date following January 1,
2010. Such payments will be sent by first-class mail to Baumbach’s last known
residence address, unless he advises Employer in writing that he wants the
payment(s) sent to a different address. To receive reimbursement for the
outplacement services described in paragraph 3.c, Baumbach must submit receipts
to Dolan Media Company, Attn. Scott Pollei, 222 South Ninth Street, Suite 2300,
Minneapolis, MN 55402, which will be reimbursed in accordance with the Company’s
usual practice, but, in no case, earlier than the expiration of the Rescission
Period. The Vested Options shall vest effective the business day immediately
following the expiration of the Rescission Period. The Laptop will be available
for Baumbach to pick up or for delivery, at Baumbach’s sole expense, the
business day immediately following the expiration of the Rescission Period.
5. Expectations of Employee. Baumbach hereby represents, warrants and agrees as
follows:
a. Business Protection. He agrees to abide by the terms of that certain
Restrictive Covenant Agreement between Baumbach and the Company dated effective
August 1, 2007 (the “Restrictive Covenant Agreement”), a copy of which is
attached to and incorporated by reference into this Agreement as Exhibit A.
b. Return of Employer Property. He hereby warrants and represents that he has
returned all property belonging to Employer in his possession or control,
including without limitation, cell phone, any keys, access cards, equipment,
tools, documents and files, except the Laptop.
c. Further Assurances. Baumbach hereby agrees to respond to and assist Employer
with reasonable requests for information relating to the work Baumbach performed
for Employer prior to the Last Day of Employment.
6. Employee Affirmations/Full Compensation. Baumbach confirms that he has not
filed, caused to be filed, or is not a party to any claim, charge, complaint or
action against Employer in any forum or form. Baumbach further confirms that he
has no known workplace injuries, that he has reported and been paid for all
hours worked and that he has received all compensation, benefits and leaves to
which he has been entitled. Baumbach understands that the payments made and
other benefits provided by Employer under this Agreement and Release will fully
compensate Baumbach for and extinguish any and all of the claims Baumbach is
releasing, including, but not limited to, any claim for attorney’s fees and
costs and any and all claims for any type of legal or equitable relief he may
have under local, state or federal law. Baumbach further acknowledges that
Employer has advised him that, pursuant to COBRA, he has the right to elect
continued coverage under the Employer’s group health plan for a period of
eighteen months and that such election must be made within sixty days from the
Last Day of Employment.

 

 

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7. Time to Consider Agreement. Baumbach understands that he may take up to 45
calendar days to decide whether to sign this Agreement and Release, which 45-day
period will commence on July 22, 2009, the date on which Baumbach first received
a copy of this Agreement and Release for review. Baumbach agrees that any
changes made to the Agreement and Release after July 22, 2009, do not restart
the running of this 45-day period. Baumbach represents that if he signs this
Agreement in fewer than 45 days, he did so knowingly and voluntarily and because
he did not need the entire 45-day period within which to consider the Agreement.
8. Right to Rescind or Revoke. Baumbach understands that he has the right to
rescind or revoke this Agreement and Release for any reason within fifteen
(15) calendar days after he signs this Agreement and Release to reinstate claims
under the Minnesota Human Rights Act and seven (7) calendar days after he signs
this Agreement and Release to reinstate federal claims under the Age
Discrimination in Employment Act (the “Rescission Period”). The seven and
fifteen days shall run concurrently and not consecutively. To be effective, any
rescission within the applicable Rescission Period must be in writing and
delivered to Dolan Media Company, Attn. Candice Hoppe, 222 South Ninth Street,
Suite 2300, Minneapolis, MN 55402, either by hand or by mail within the
rescission period. If delivered by mail, the rescission must be (1) postmarked
within the Rescission Period; (2) properly addressed to Employer; and (3) sent
by certified mail, return receipt requested. If Baumbach rescinds the Release or
any part of it, then the remaining provisions of this Agreement and the Release
will be and are void, Baumbach will not be entitled to the Total Benefits, or
any portion of them, specified in this Agreement, and will return any and all
consideration, including any portion of the Total Benefits, received from
Employer subsequent to the date on which he signed the Release.
9. Confidentiality. Baumbach agrees not to disclose any information regarding
the existence or the substance of this Agreement and Release, except to his
spouse or an attorney with whom Baumbach chooses to consult regarding his
consideration of this Agreement and Release.
10. No Admission of Wrongdoing. Baumbach understands that this Agreement does
not constitute an admission that Employer has violated any local ordinance,
state or federal statute, or principle of common law, or that Employer has
engaged in any improper or unlawful conduct or wrongdoing against Baumbach.
Baumbach will not characterize this Agreement or the Severance Payment as an
admission that Employer has engaged in any improper or unlawful conduct or
wrongdoing against him. This Agreement and Release is entered into solely to
resolve fully all matters related to or arising out of Employee’s employment
with and termination from Employer, and its execution, and implementation may
not be used as evidence, and shall not be admissible in a subsequent proceeding
of any kind, except one alleging a breach of this Agreement and Release.
11. Authority. Baumbach represents and warrants that he has the authority to
enter into this Agreement and the Release, and that no causes of action, claims,
or demands released pursuant to this Agreement and the Release have been
assigned to any person or entity not a party to this Agreement and the Release.
12. Representation. Baumbach acknowledges that he has been given the opportunity
to consult with his own attorney regarding this matter, that he has had a full
opportunity to consider this Agreement and the Release, that he has had a full
opportunity to ask any questions that he may have concerning this Agreement and
Release, or the settlement of his potential claims against Employer, and that he
has not relied upon any statements or representations made by Employer or its
attorneys, written or oral, other than the statements and representations that
are explicitly set forth in this Agreement and Release, and any employee benefit
plans sponsored by Employer in which Baumbach is a participant.

 

 

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13. Attorneys Fees. Baumbach agrees to pay all costs and expenses, including
reasonable attorneys’ fees, incurred by Employer in connection with enforcing
the terms and conditions of this Agreement and Release, including the
Restrictive Covenant Agreement, and regardless of whether Employer commences any
legal proceeding against Baumbach.
14. Successors and Assigns. This Agreement will be binding upon and inure to the
benefit of the parties and their respective heirs, representatives, successors,
and assigns.
15. Invalidity. In the event that any provision of this Agreement and Release is
determined by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such a determination shall not affect the
validity, legality, or enforceability of the remaining provisions of this
Agreement or the Release and the remaining provisions of this Agreement and
Release shall continue to be valid and enforceable, and any court of competent
jurisdiction may modify the objectionable provision so as to make it valid and
enforceable.
16. Entire Agreement. This Agreement and Release, the Restrictive Covenant
Agreement and any employee benefit plans sponsored by Employer in which Baumbach
is a participant are intended to define the full extent of the legally
enforceable undertakings of the parties, and no promises or representations,
written or oral, that are not set forth explicitly in these documents are
intended by either party to be legally binding, and all other agreements and
understandings between the parties are hereby superseded.
17. Headings. The descriptive headings of the paragraphs and subparagraphs of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
18. Counterparts. This Agreement and Release may be executed by facsimile or
email transmission and simultaneously in one or more counterparts, each of which
will be deemed an original, but all of which together shall constitute one and
the same instrument.
19. Governing Law. This Agreement and Release will be interpreted and construed
in accordance with, and any dispute or controversy arising from any breach or
asserted breach of this Agreement and Release will be governed by, the internal
laws of the State of Minnesota without reference to its conflicts of law
principles.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date below,
which shall be the Effective Date.

          Dated: July 28, 2009  /s/ Mark Baumbach       Mark Baumbach           
Dolan Media Company
      By:   /s/ James P. Dolan         James P. Dolan, its Chairman, Chief
Executive Officer and President            By:   /s/ John C. Bergstrom        
John C. Bergstrom, its Compensation Committee Chair   

 

 

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Exhibit A
Restrictive Covenants Agreement
THIS AGREEMENT (this “Agreement”), effective as of August 1, 2007 (the
“Effective Date”), is between Dolan Media Company, a Delaware corporation (the
“Company”), and Mark E. Baumbach (“Executive”).
PRELIMINARY RECITALS
The Company currently employs Executive as its Vice President, Technology.
The Company desires to continue to employ Executive and Executive desires to be
employed by the Company as the Vice President, Technology of the Company on the
terms and conditions contained herein.
The Company has approved the Dolan Media Company Executive Change in Control
Plan (the “Plan”) and has designated the Executive as a Participant pursuant to
Section 3.1 of the Plan.
Upon the execution of this Agreement, the Executive shall be a Participant in
the Plan.
AGREEMENT
In consideration of the premises, the mutual covenants of the parties
hereinafter set forth and other good and valuable consideration, including, but
not limited to, the continued employment of the Executive and the benefits under
the Plan, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Confidential Information. Other than in the performance of his or her duties
hereunder, while employed by the Company and thereafter, Executive shall keep
secret and retain in strictest confidence, and shall not, without the prior
written consent of the Board, furnish, make available or disclose to any third
party or use for Executive’s own benefit or the benefit of any third party, any
Confidential Information. As used herein, “Confidential Information” shall mean
any information relating to the business or affairs of the Company, including,
but not limited to, the Company’s products, servicing methods, development
plans, costs, finances, marketing plans, equipment configurations, data, data
bases, access or security codes or procedures, business opportunities, names of
customers, research and development, inventions, algorithms, know-how and ideas,
and other proprietary information used by the Company in connection with its
business; provided, however, that Confidential Information shall not include any
information which is in the public domain or becomes generally known in the
industry other than as a result of Executive’s breach of the covenant contained
in this Paragraph 1 or the disclosure of which may be required by law or in a
judicial or administrative proceeding. Executive acknowledges that the
Confidential Information is vital, sensitive, confidential and proprietary to
the Company.

 

 

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2. Non-Competition and Interference with Relationships. During employment and
for a period of twelve (12) months following the Separation of Service (as such
term is defined in the Plan) of the Executive (the “Restricted Term”), Executive
shall not, directly or indirectly, alone or in combination with any other firm,
partnership, company, corporation or person:
(a) (i) engage in, participate in or otherwise assist (whether as an owner,
officer, partner, principal, joint venturer, shareholder, director, member,
manager, investor, employee, agent, independent contractor, consultant or
otherwise) any other person, entity or business (a “Competitor”) engaged in or
planning to engage in the Business of the Company (as defined below) in any
State of the United States of America, or in any foreign country in which the
Company or an affiliate or subsidiary of the Company is conducting such Business
of the Company on the date of such termination (the “Restricted Territory”),
unless (x) at the time of the proposed action by Executive, (1) the revenues of
any such Competitor from a Business of the Company for the preceding fiscal year
of such Competitor constituted less than fifteen percent (15%) of the total
revenues of such Competitor for such fiscal year and (2) Executive provides the
Company with a signed certificate from the independent accountants for such
Competitor stating that, in such independent accountants’ good faith reasonable
judgment, the annual revenues of such Competitor from a Business of the Company
will be less than fifteen percent (15%) of the total annual revenues of such
Competitor during the Restricted Term, or (y) the sole action of Executive with
respect to a Competitor that is a publicly traded company consists of acquiring
not more than 1% of the outstanding shares of such Competitor; or (ii) solicit
or encourage any customer or partner of the Company or its affiliates
(determined as of the date of the Separation of Service) to terminate or
otherwise alter his or her, her or its relationship with the Company; or
(b) employ, retain or solicit or attempt to solicit for employment or retention
as an independent contractor, or otherwise attempt to hire or assist in the
hiring of (or assist any other party to take any such action regarding), any
individual employed or engaged by the Company during the Restricted Term; or
encourage, induce, or persuade any such person to terminate his or her or her
employment or other relationship with the Company.
(c) For purposes hereof, “Business of the Company” means (i) the “court and
commercial” newspaper and/or “business journal” publishing business, (ii) the
business of providing mortgage default processing services and/or appellate
services to the legal profession, or (iii) any additional business in which the
Company becomes engaged or has actively and substantially implemented plans to
become engaged as of the date of termination of the Employment Period; provided
that in the event any of the foregoing businesses are sold or are discontinued
during the Restricted Period, the “Business of the Company” shall cease to
include such sold or discontinued business as of the date of sale or
discontinuation; provided further that if the Company becomes re-engaged or
implements plans to become re-engaged in any such sold or discontinued business,
the “Business of the Company” shall again include such business.
3. Mutual Non-Disparagement. Neither party shall, at any time while the
Executive is employed by the Company or thereafter, make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally or otherwise, or take any action which may, directly or indirectly,
disparage or be damaging to the other party (including any of the Company’s
subsidiaries, other affiliates, officers, directors, employees, partners or
stockholders); provided that nothing in this Paragraph 3 shall preclude either
party from making truthful statements or disclosures that are required by
applicable law, regulation or legal process.
4. Scope and Severability. The parties acknowledge that the Business of the
Company is and will be national in scope and thus the covenants in this
Agreement would be particularly ineffective if the covenants were to be limited
to a particular geographic area of the United States. If any court of competent
jurisdiction at any time deems the Restricted Term unreasonably lengthy, or the
Restricted Territory unreasonably extensive, or any of the covenants set forth
in this Agreement not fully enforceable, the other provisions of this Agreement,
and this Agreement in general, will nevertheless stand and to the fullest extent
consistent with law continue in full force and effect, and it is the intention
and desire of the parties that the court treat any provisions of this Agreement
which are not fully enforceable as having been modified to the extent deemed
necessary by the court to render them reasonable and enforceable and that the
court enforce them to such extent (for example, that the Restricted Term be
deemed to be the longest period permissible by law, but not in excess of the
length provided for in Paragraph 2, and the Restricted Territory be deemed to
comprise the largest territory permissible by law under the circumstances, but
not in excess of the territory provided for in Paragraph 2).

 

 

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5. Remedies. Executive acknowledges and agrees that the covenants set forth in
this Agreement (collectively, the “Restrictive Covenants”) are reasonable and
necessary for the protection of the Company’s business interests, that
irreparable injury will result to the Company if Executive breaches any of the
terms of the Restrictive Covenants, and that in the event of Executive’s actual
or threatened breach of any of the Restrictive Covenants, the Company will have
no adequate remedy at law. Executive accordingly agrees that in the event of any
actual or threatened breach by him of any of the Restrictive Covenants, the
Company shall be entitled to immediate temporary injunctive and other equitable
relief, without bond and without the necessity of showing actual monetary
damages. Nothing contained herein shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of any damages or other remedies as specified in
Section 4.4 of the Plan. The provisions of this Agreement shall survive the
expiration or earlier termination of this Agreement for any reason.

                          DOLAN MEDIA COMPANY    
 
               
/s/ Mark E. Baumbach
 
Executive Signature
      By:   /s/ James P. Dolan
 
Title: President    
 
               
Mark E. Baumbach
 
Executive Name (print)
               
 
                Dated: August 21, 2007       Dated: August 21, 2007    

 

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