Exhibit 10.4

 

SEVERANCE AND GENERAL RELEASE AGREEMENT

 

This Agreement (the “Agreement”) is entered into by and among Eric Harber
(“Employee”), Augme Technologies, Inc. and Hipcricket, Inc. (collectively,
“Augme,” or “Employer” or “the Company”) to describe the terms of Employee’s
separation from employment with the Company. For the consideration described
herein, Employee and the Company agree as follows:

 

1.                                      SEPARATION FROM EMPLOYMENT

 

Employee’s employment with the Company (in any capacity including any officer
positions in the Company or any of its subsidiaries including without
limitations the offices of Chief Operating Officer) will end effective June 20,
2012 (the “Separation Date”).  The Company will pay Employee for all services
provided through the Separation Date. The Employee and Employer understand and
agree that neither the marking of this Agreement nor the fulfillment of any
condition or obligation of this Agreement constitutes an admission of any
liability or wrongdoing by either the Employee or the Employer.

 

2.                                      PAID TIME OFF, EXPENSE REIMBURSEMENT

 

2.1                                 Payment for Paid Time Off. With the next
regularly-scheduled payroll after the Separation Date, the Company shall pay
Employee for any earned but unused paid time off (166.79 hours) which totals
$22,852.56, less lawful withholdings and deductions.

 

2.2                                 Reimbursement for Expenses Incurred. The
Company shall reimburse Employee for reasonable and necessary business expenses
incurred before the Separation Date to the extent such expenses are reimbursable
under the Company’s normal expense reimbursement policies and procedures, and
provided that receipts or other acceptable documentation for such expenses are
submitted in accordance with standard Company policy.

 

3.                                      SEVERANCE PAY AND SEVERANCE BENEFITS

 

3.1                                 Severance Pay. The Company agrees to pay
Employee eighteen (18) months of his regular base salary as severance pay (the
“Severance Payment”). The Severance Payment shall be subject to withholding and
deduction for payroll taxes and other deductions as are required by federal and
state law. The Severance Payment shall be in equal installments in conjunction
with the Company’s regular payroll beginning after the Effective Date.

 

4.                                      GROUP MEDICAL BENEFITS
COVERAGE/STOCK/OTHER BENEFITS

 

After the Separation Date, Employee and/or his dependents shall be eligible to
elect a temporary extension of group health plan coverage under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as subsequently amended (“COBRA”).
Provided Employee and his dependents elect COBRA continuation coverage, Augme
will pay the COBRA premium for coverage for Employee and his dependents from the
Separation Date for eighteen (18) months, or until Employee becomes eligible for
another employer’s group health insurance plan, whichever occurs first. After
the Separation Date, Employee’s rights and obligations with respect to all other
benefits plans, including any stock rights, stock options, 401(k), disability
and

 

E Harber Agt

 

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life insurance, shall be governed by the terms of all applicable plans and laws
except as specifically stated in this Agreement.

 

5.                                      RESIGNATION

 

Effective as of the Separation Date, Employee will be deemed to have resigned as
the Chief Operation Officer of the Company. Furthermore, on the Separation Date,
Employee will deliver to the Company an executed resignation letter, in
substantially the form attached hereto as Exhibit A. The contents of the
resignation letter shall form the substance of the Company’s 8-k filing with
respect to the Employee’s departure.

 

6.                                      STOCK OPTIONS

 

As of the Separation Date, Employee has the following fully-vested, qualified
stock options: (i) 89,000 options exercisable at $3.04 per share, and
(ii) 39,583 options exercisable at $2.15 per share pursuant to the attached
stock option agreement(s). In addition, provided Employee signs this Agreement,
some of Employee’s options that are not vested as of the Separation Date shall
be immediately vested, provided that such accelerated vesting is approved by the
Augme Board of Directors or its designee. This includes the following stock
options:

 

Date of Grant

 

Previously Vested as
of Separation Date

 

Vesting Accelerated as of
Separation Date for the Options

 

Option Price

 

8/25/2011

 

89,000

 

61,000

 

$

3.04

 

12/29/2011

 

39,583

 

150,415

 

$

2.15

 

 

All remaining unvested options shall expire as of the Separation Date (except
any equity interests provided to Employee as a result of the earn-out described
in Section 7 below). Upon approval by the Augme Board of Directors or its
designee, Employee may exercise any of his vested options for up to the
remainder of the expiration period for each option grant, which is five years
from the date of each grant.

 

7.                                      EARN-OUT UNDER ASSET PURCHASE AGREEMENT

 

7.1                                 Upon the Effective Date of this Agreement,
Employee shall be fully vested in his interest in the earn-out provisions of the
Asset Purchase Agreement dated August 25, 2011, between Hipcricket, Inc. and
Augme Technologies, Inc. (“APA”). Employee shall be entitled to no less than 18%
(eighteen percent) of the employee earn-out payments described in
Section 2.3(g)(ii) of the APA. To the extent that such earn-out is paid by an
equity grant, such grant shall be subject to the same rights and restrictions as
if Employee were still employed by the Company. Any provision requiring Employee
to remain employed by the Company for any specified period after the closing
date of that transaction shall be void for the purposes of payment of Employee’s
earn-out bonus.

 

7.2                                 Upon the Effective Date of this Agreement,
Mr. Thomas J. Virgin, Chief Financial Officer, will replace Employee as one of
the designated officers in the allocation of employee earn-out payments
described in Schedule 2.3(G) of the APA. Following this change, the details of
Schedule 2.3(G) of the APA will be mutually agreed upon by Mr. Virgin, Mr. Ivan

 

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Braiker, and the Chief Executive Officer. Employee agrees to sign any documents
necessary to implement this change.

 

8.                                      FULL PAYMENT

 

Employee agrees that, with the payment of his final pay through the Separation
Date, the Company has paid Employee all compensation arising out of Employee’s
employment, including, but not limited to, base pay, bonus, commission, and any
other compensation or benefit, including those identified in his employment
agreement.

 

9.                                      GENERAL RELEASE OF CLAIMS

 

9.1                                 Release. In consideration of the Company’s
provision of severance pay and other benefits, employee hereby releases the
Company, any Company-sponsored employee benefit plan in which employee
participates, and any of their employees, agents, officers, directors,
shareholders, insurers, successors and assigns (and their respective marital
communities), from all claims, demands, actions or causes of action of any kind
or nature whatsoever which employee may now have or may ever have had against
any of them, whether such claims are known or unknown including claims under
local, state, federal or common law with respect to any of the following:
(a) breach of contract; (b) harassment, discrimination, retaliation, or
constructive or wrongful discharge; (c) lost wages, lost employee benefits,
physical and personal injury, stress, mental distress, or impaired reputation;
(d) claims arising under the Age Discrimination in Employment Act, Title VII of
the Civil Rights Act, the Equal Pay Act, Americans with Disabilities Act, Family
and Medical Leave Act, the Workers Adjustment and Retraining Notification Act,
the Older Workers Benefits Protection Act, or any other federal, state or local
laws or regulations governing the employer-employee relationship or prohibiting
employment discrimination; (e) attorneys’ fees; and (f) any other claim arising
from or relating to employee’s employment with the Company and/or employee’s
separation from employment. Employee acknowledges that he may hereafter discover
facts different from or in addition to those which employee now believes to be
true with respect to such claims; nevertheless, employee agrees that the release
shall be and remain effective in all respects. This release shall not prohibit
Employee from filing an administrative charge with the Equal Employment
Opportunity Commission but shall constitute a release and waiver of any claim or
right to monetary damages or relief in such a charge or claim.

 

9.2                                 No Action on Released Claims. Employee
agrees not to sue or pursue any court or administrative action against the
Company, or any of its employees, agents, officers, directors or shareholders,
regarding any claims released herein or otherwise arising from Employee’s
employment with the Company or Employee’s separation from employment, except
with respect to any breach by the Company of its obligations under this
Agreement. If any government agency brings any claim or conducts any
investigation against Employer, nothing in this Agreement forbids Employee from
cooperating in such proceedings or providing truthful testimony, but by this
Agreement, Employee waives and agrees to relinquish any damages or other
individual relief that may be awarded as a result of any such proceedings.

 

9.3                                 Release of Liability. The Company shall also
release Employee from any liability arising from Employee’s actions performed
within the scope of his assigned duties

 

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during his employment with the Company. The Company will also indemnify Employee
for claims arising during his employment with the Company to the extent allowed
by law.

 

10.                               REVIEW AND REVOCATION PERIOD; EFFECTIVE DATE

 

Employee has been given 21 days to review this Agreement (the “Review Period”)
beginning with the date that it is first provided to him. Employee is encouraged
to consult an attorney to review its terms. In the event that Employee signs
this Agreement before expiration of this 21-day period, he waives all remaining
time to consider this Agreement. By signing this Agreement, Employee
acknowledges that (a) the Company has advised Employee to consult with counsel,
and (b) Employee has either consulted an attorney or has voluntarily elected not
to do so. After signing the Agreement, Employee may revoke this Agreement by
providing written notice of the decision to revoke the Agreement to the Company
at the following address: 350 7th Ave., 2nd Floor, New York, NY 10001 (Attn:
Kyla Scott) within seven days after the date Employee signed this Agreement.
This Agreement will become effective on the first day after the seven-day
revocation period expires (the “Effective Date”).

 

11.                               RETURN OF COMPANY PROPERTY

 

As a condition of receiving Severance Payment, Employee agrees that he will not,
for any purpose, attempt to access or use any Company computer or computer
system and will disclose to the Company all passwords necessary to enable the
Company to access all information, which is password-protected on any of its
computer equipment or on its computer network or system. Employee shall return
to the Company all Company-owned communication devices, equipment, except for
the laptop the Company provided, and property and any documents, files or
records of any nature, or any copy thereof that belong to the Company. Employee
shall be permitted to retain the laptop computer the Company provided to him
during this employment provided that he agrees to provide the entire laptop to
Jim Crawford, Chief Information Officer, within one week of the Separation Date,
so that Mr. Crawford can obtain Company documents, files or records from
Employee’s laptop. Mr. Crawford will return Employee’s laptop within 72 hours.

 

12.                               CONFIDENTIALITY/NONDISPARAGEMENT

 

Employee agrees to protect and maintain the confidentiality of all information
in his possession related to the Company, including information about its
finances, technology, employees, sales or prospective sales, strategies,
customers and all other information not publicly known or available. Employee
agrees to abide by, and hereby reaffirms, his obligations with respect to
confidentiality, non-solicitation and other protections contained in his
employment agreement dated August 25, 2011. Employee agrees that he will not
disparage or criticize the Company, its Board of Directors, management, products
or services and will not otherwise do or say anything that could interfere in
any way with the Company’s business interests, its reputation or any of its
customer or other business relationships. The Company’s Board of Directors and
its corporate officers, speaking on behalf of the Company, shall not disparage
Employee.

 

13.                               COVENANT NOT TO COMPETE

 

Employee agrees that for twelve months after the Separation Date, he will not,
directly or indirectly, enter into the employment of, render services to, or
acquire any interest whatsoever,

 

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whether as a sole proprietor, partner, associate, shareholder, officer,
director, consultant, trustee, lessor, creditor, or otherwise, in any business
trade or occupation in competition with business of Employer. Employee agrees
that damages for breach of this covenant will be difficult to determine and
therefore consent that this provision may be enforced by temporary or permanent
injunction, without the necessity of a bond. Such injunctive relief shall in
addition to and not in place of any remedies at law. Employee agrees that the
provisions of this paragraph are reasonable. However, should any court ever find
that any provision within this paragraph is unreasonable, either in period of
time, geographical area, or otherwise, then and in that event Employee agrees
that this paragraph shall be interpreted and enforced to the maximum extent
which the court deems reasonable.

 

14.                               NO ADMISSION

 

Employee understands and acknowledges that neither the Severance Payment and
other benefits offered nor the execution and delivery of this Agreement by the
Company constitutes an admission by the Company to (i) any breach of an
agreement with Employee (ii) any violation of a federal, state or local statute,
regulation or ordinance, or (iii) any other wrongdoing.

 

15.                               COOPERATION/CONFIDENTIALITY OF AGREEMENT

 

Employee agrees to cooperate with the Company with respect to all matters
arising during or related to his employment. Employee will keep the terms
including the amount of this Agreement completely confidential and will not
disclose, directly or indirectly, any information concerning this Agreement to
any person other than his attorneys, accountants, tax advisors, immediate
family, or as otherwise required by law. Employee further agrees that if he
provides any information regarding the terms including the amount of this
Agreement to his attorneys, accountants, tax advisors or immediate family, he
will inform them that they must keep such information including the terms and
amount completely confidential.

 

16.                               INFORMED AND VOLUNTARY AGREEMENT

 

Employee declares that Employee has read and fully understands the terms of this
Agreement, and its significance and consequence. Employee understands and
acknowledges that, except as specifically reserved herein, in exchange for the
Severance Payment and other benefits, Employee is waiving and giving up every
possible claim arising out of employment with the Company and/or the termination
of that employment.

 

17.                               GOVERNING LAW/SEVERABILITY

 

The parties acknowledge that this Agreement shall be interpreted under and
enforced by and consistent with the laws of the State of Washington. The
provisions of this Agreement are severable, and if any part of it is found to be
unlawful or unenforceable, the other provisions of this Agreement shall remain
fully valid and enforceable to the maximum extent consistent with applicable
law.

 

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18.                               COMPLETE AGREEMENT

 

This Agreement represents and contains the entire understanding between the
Employee and Employer in connection with the subject matter of this Agreement.
The Employee and Employer expressly acknowledge and recognize that there are no
oral agreements, understandings or representations in connection with the
subject matter of this agreement between the parties other than those contained
in this Agreement and any such prior agreements or understandings are
specifically terminated. This Agreement shall be binding upon and shall inure to
the benefit of the executors, administrators, personal representatives, heirs,
and/or successors and assigns of the parties. Facsimile signatures are to be
given the same force and effect as original signatures.

 

PLEASE READ CAREFULLY. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND
UNKNOWN EMPLOYMENT CLAIMS.

 

EMPLOYEE: ERIC HARBER

AUGME TECHNOLOGIES, INC.

 

 

Signature:

/s/ Michael Eric Harber

 

By

/s/ Paul R. Arena

 

 

 

 

 

Printed Name:

Michael Eric Harber

 

Title

Chairman and Chief Executive Officer

 

 

 

 

 

Date:

June 20, 2012

 

Date:

June 20, 2012

 

 

 

 

 

 

 

 

HIPCRICKET, INC.

 

 

 

 

 

By

/s/ Paul R. Arena

 

 

 

 

 

 

Title

Chairman and Chief Executive Officer

 

 

 

 

 

 

Date:

June 20, 2012

 

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EXHIBIT A

 

Form of Resignation Letter

 

[SEE ATTACHED DOCUMENT]

 

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June 15, 2012

 

Paul Arena

Hipcricket, Inc. and Augme Technologies, Inc.

350 7th Avenue, 2nd floor

New York, New York 10001

 

Dear Paul:

 

I hereby resign as Chief Operating Officer of Hipcricket, Inc, and Augme
Technologies, Inc., (the “Company”), effective June 15, 2012. My resignation is
not because of a disagreement with the Company on any matters relating to the
Company’s operations, policies, or practices. I have decided to pursue other
career opportunities and wish the Company the best of luck in its future
endeavors.

 

 

 

Sincerely,

 

 

 

/s/ Michael Eric Harber

 

Michael Eric Harber

 

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