SEVERANCE AGREEMENT
Exhibit 10.1
This Severance Agreement (“Agreement”), effective July 2, 2008, is between Intervoice, Inc., a
Texas corporation (“Intervoice”), and Xxxxxx X. Xxxxxxx (the “Executive”).
WHEREAS, the Executive has previously served as the President and Chief Executive Officer, and
presently serves as Chief Executive Officer, of Intervoice pursuant to the terms of an executive
employment agreement (the “Employment Agreement”) dated and effective December 1, 2004, which was
amended by the First Amendment to Employment Agreement effective May 8, 2006 (the “First
Amendment”) and the Second Amendment to Employment Agreement effective February 28, 2008 (the
“Second Amendment”) that modified certain terms of the Employment Agreement; and
WHEREAS, the Employment Agreement, as amended by the First Amendment and Second Amendment (the
“Amended Employment Agreement”) expires by its terms on August 31, 2008;
WHEREAS, upon the expiration of the Amended Employment Agreement, the Executive will retire
from Intervoice and his employment with Intervoice and any of its Affiliates (as defined in
Paragraph 1.1 below) will then end; and
WHEREAS, Intervoice and the Executive now wish to enter into an agreement providing for
certain severance benefits to be provided to the Executive in exchange for a waiver and general
release and other consideration upon the ending of the Executive’s employment pursuant to the
expiration of the Amended Employment Agreement;
NOW, THEREFORE, the parties hereto agree as follows:
1.0 Definitions. As used in this Agreement, the following terms have the following
meanings:
1.1 “Affiliate” means any other corporation, organization, association, partnership, sole
proprietorship, or other type of entity, whether incorporated or unincorporated, directly or
indirectly controlling or controlled by or under direct or indirect common control with Intervoice.
1.2 “Board” means the Board of Directors of Intervoice.
1.3 “Code” means the Internal Revenue Code of 1986, as amended.
1.4 “General Release Agreement” means an agreement, in the form and with the terms as shown in
Exhibit A hereto, by which the Executive releases Intervoice and its Affiliates and all other
released parties named therein from all claims he has or may have against them.
1.5 “Section 409A” means Section 409A of the Code and the Treasury Regulations and other
guidance thereunder.
1.6 “Separation from Service” has the meaning determined by Intervoice in accordance with
Treasury Regulations § 1.409A-1(h).
2.0 Compensation and Obligations Upon Expiration of the Amended Employment Agreement.
2.1 Upon the expiration of the Amended Employment Agreement, as provided in Paragraph 3 of the
Amended Employment Agreement, the Executive will retire from Intervoice and any of its Affiliates
by whom he is then employed, and his employment with Intervoice and any such Affiliates will end.
Intervoice and the Executive acknowledge that upon his retirement at the expiration of the Amended
Employment Agreement, the Executive will be entitled only to the compensation and benefits, if any,
provided for under the Amended Employment Agreement. Intervoice and the Executive understand and
agree that such compensation and benefits do not include any severance pay, salary compensation
beyond the last day of employment, or incentive compensation other than pursuant to the terms of
any applicable incentive plans. In the event of any termination of the Executive’s employment with
Intervoice prior to the expiration of the Amended Employment Agreement, the terms of the Amended
Employment Agreement shall control the compensation, if any, to which the Executive is entitled.
2.2 Intervoice and the Executive acknowledge that upon his retirement at the expiration of the
Amended Employment Agreement, the Executive will be bound by the provisions of the Amended
Employment Agreement that have obligations continuing beyond the end of the Executive’s employment.
Such provisions include but are not limited to Paragraph 8 (Confidential Information), Paragraph 9
(Noncompetition and Nondisparagement Obligations), Paragraph 10 (Intellectual Property), and
Paragraph 13 (Assistance in Litigation). The Executive acknowledges and reaffirms his obligations
under such provisions and any other applicable provision of the Amended Employment Agreement.
3.0 Special Compensation and Benefits to the Executive Under this Agreement. Upon the
Executive’s satisfaction of the terms and conditions of this Agreement, particularly including but
not limited to timely compliance with the requirements to sign and not subsequently revoke the
General Release Agreement as provided in Paragraph 4.2 herein, Intervoice will provide to the
Executive the following special compensation and benefits:
3.1 Intervoice will make a severance payment to the Executive in the amount of $592,500,
representing 1.5 times the Executive’s current annual base salary. Such payment shall be made in
lump sum within 40 days following the date of the Executive’s Separation from Service.
3.2 If, at the time his employment ends, the Executive participates in one or more health
plans offered by Intervoice and the Executive is eligible for and elects to receive continued
coverage under such plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of
1985 (“COBRA”) or any successor law, or pursuant to the terms of the retiree health plan option, if
applicable, Intervoice will reimburse the Executive for 18 months, or, if shorter than that period,
the period of such actual COBRA continuation coverage (or retiree
health plan option, if applicable), the difference between the total amount of the monthly
COBRA (or retiree health plan option, if applicable) premiums actually paid by the Executive for
such continued health plan benefits and the total monthly amount of the premiums charged to
Severance Agreement, Page 2
active
executive employees of Intervoice for the same health insurance coverage. Such reimbursement shall
be made within the 60-day period following the Executive’s payment of each monthly COBRA (or
retiree health plan option, if applicable) premium. Provided,
however, that Intervoice’s
reimbursement obligation under this Paragraph 3.2 shall terminate upon the earlier of (i) the
expiration of the time period(s) described above or (ii) the date the Executive becomes eligible
for health insurance coverage under a subsequent employer’s plan without being subject to any
preexisting-condition exclusion under that plan, which occurrence the Executive shall promptly
report to Intervoice. The Executive’s eligibility for the retiree health plan option shall be
determined solely by the terms of the applicable Intervoice plan, except that the ending of the
Executive’s employment as set out in this Agreement shall be considered a retirement under such
plan.
3.3 Intervoice shall take action within 10 days following execution of this Agreement to cause
those unvested options to purchase common stock in Intervoice listed on Exhibit B hereto to become
fully vested effective as of the expiration of the Amended Employment Agreement.
3.4 Intervoice shall take action within 10 days following execution of this Agreement to
extend the period during which the Executive may exercise those options to purchase common stock in
Intervoice listed on Exhibit B hereto to the earlier of (i) the date on which each such stock
option would otherwise expire in the absence of the Executive’s retirement or other termination of
employment or (ii) the date that is 18 months after the Executive’s retirement upon the expiration
of the Amended Employment Agreement.
3.5 Within 10 days after the Executive’s Separation from Service, Intervoice will transfer to
the Executive ownership of the laptop computer and cellular telephone that the Executive had most
recently used during his employment with Intervoice. Before, and within the 120-day period after,
such a transfer, Intervoice shall have the right, at times and in a manner within Intervoice’s sole
discretion, to inspect the laptop computer and cellular telephone and remove any confidential
information or other Intervoice-related information in whatever manner Intervoice believes is
appropriate. Intervoice will permit the Executive to continue to use his Intervoice e-mail account
until November 30, 2008. In using such e-mail account after August 31, 2008, the Executive shall
not make any representations indicating that he is still an employee or officer of Intervoice or is
in any way permitted to bind Intervoice. The Executive shall take reasonable steps to preserve the
confidentiality of Intervoice-related information in any e-mails or otherwise located on the
electronic devices described in Paragraph 3.5.
3.6 Intervoice will pay the Executive’s reasonable legal and out-of-pocket expenses incurred
in connection with the preparation and negotiation of this Agreement or other draft agreements the
parties have discussed in connection with the impending expiration of the term of the Amended
Employment Agreement, up to a maximum total payment of $50,000. The Executive will provide written
notice related to such expenses to Intervoice no later than August 31, 2008, and such payment will
be made by Intervoice after receipt of such notice and before October 1, 2008.
4.0 Conditions to Entitlement to Special Compensation Under this Agreement. In order to be
entitled to any of the compensation or benefits set forth in Paragraph 3, each of the following
conditions must be satisfied:
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4.1 The ending of the Executive’s employment must result solely from the Executive’s
retirement upon expiration of the term of the Amended Employment Agreement as set out in Paragraph
3 of the Amended Employment Agreement and not from a termination because of Death, Inability to
Perform, Cause, Good Reason, or by either party without Cause or Good Reason (all as defined in the
Amended Employment Agreement) prior to the expiration of the term of the Amended Employment
Agreement.
4.2 The Executive must execute a General Release Agreement on each of the occasions and upon
the terms specified below. Intervoice advises the Executive to consult with an attorney in
connection with his decision regarding whether to sign the General Release Agreement.
4.2.1 As a condition to the effectiveness of the actions to be taken by Intervoice pursuant to
the provisions of Paragraphs 3.3 and 3.4 above, the Executive must, by not later than the
twenty-second day after the final terms of the General Release Agreement have been provided to him
for review and consideration, sign and return the General Release Agreement to Intervoice, and not
thereafter revoke such General Release Agreement.
4.2.2 As a prerequisite to Intervoice’s obligation to take the actions specified in Paragraphs
3.1, 3.2, 3.5, and 3.6 above, the Executive must within the three business days after, but not
before, his Separation from Service with Intervoice (which date is more than 21 days after the
final terms of the General Release Agreement have been provided to the Executive for review and
consideration) sign and return the General Release Agreement to Intervoice, and not thereafter
revoke such General Release Agreement.
4.3 The Executive must comply in all respects with his continuing obligations under the
Amended Employment Agreement.
5.0 Limited Release from Intervoice. Contingent on the Executive’s compliance with all of
the terms and conditions of the Amended Employment Agreement and this Agreement, Intervoice
provides to the Executive the following release of claims, which shall become effective only after
the Executive has executed and returned to Intervoice both of the forms of General Release
Agreement referred to in Paragraph 4 of this Agreement and only if the Executive does not exercise
his right to revoke either of the General Release Agreements:
5.1 Intervoice releases and discharges the Executive and his heirs, successors, and assigns
from, and waives to the maximum extent permitted by law, any and all claims, liabilities, demands,
and causes of action, whether fixed or contingent, that Intervoice may have or claim against any of
them. Notwithstanding the foregoing, any claims, liabilities, demands, and causes of action based
upon any of the following conduct are not waived or released, and Intervoice preserves the right to
pursue all appropriate legal and equitable relief with respect to such conduct:
5.1.1 Conduct that occurs or first becomes known to Intervoice after the date this Agreement
is signed;
5.1.2 Conduct that constitutes a violation of Xxxxxxxxx 0, Xxxxxxxxx 9, or Paragraph 10 of the
Amended Employment Agreement;
Severance Agreement, Page 4
5.1.3 Conduct that constitutes a felony, a violation of federal or state securities laws, or a
criminal offense punishable by imprisonment or jail term of one year or more;
5.1.4 Conduct for which any civil enforcement action is brought against the Executive and/or
Intervoice by any regulatory agency, for actions or omissions related to the Executive’s employment
with Intervoice; and
5.1.5 Conduct that is a violation of Intervoice’s Code of Conduct or other policies and for
which any lawsuit or other legal proceeding is brought against Intervoice.
5.2 For purposes of Paragraph 5.1 and its subparagraphs, the term “Intervoice” includes
Intervoice and its Affiliates.
6.0 Compliance with Section 409A. Any provision of this Agreement to the contrary
notwithstanding, all compensation payable pursuant to this Agreement that is determined by
Intervoice in its sole judgment to be subject to Section 409A shall be paid in a manner that
Intervoice in its sole judgment determines meets the requirements of Section 409A and any related
rules, regulations, or other guidance. If Intervoice determines that the Executive is a “specified
employee” (as defined by Intervoice in accordance with Section 409A) on the date of the Executive’s
Separation from Service, then, notwithstanding any provision of this Agreement to the contrary, no
payment of compensation or provision of any benefit under this Agreement that is subject to Section
409A shall be made to the Executive during the period lasting six months from the date of the
Executive’s Separation from Service unless Intervoice determines that there is no reasonable basis
for believing that making such payment or providing such benefit would cause the Executive to
suffer adverse tax consequences pursuant to Section 409A and the regulations and other guidance
thereunder. If any payment to the Executive is delayed pursuant to the foregoing sentence, such
amount instead shall be paid, without interest, on the first day of the month following the
expiration of the six-month period referred to in the prior sentence. For purposes of Section
409A, each payment amount or benefit due under this Agreement shall be considered a separate
payment and Executive’s entitlement to a series of payments or benefits under this Agreement is to
be treated as an entitlement to a series of separate payments.
7.0 No Obligation to Pay. With regard to any payment due to the Executive under this
Agreement, it shall not be a breach of any provision of this Agreement for Intervoice to fail to
make such payment to the Executive if (i) Intervoice is legally prohibited from making the payment;
(ii) Intervoice would be legally obligated to recover the payment if it was made; or (iii) the
Executive would be legally obligated to repay the payment if it was made.
8.0 Withholding Taxes. Intervoice shall withhold from any payments to be made to the
Executive pursuant to this Agreement such amounts (including Social Security and Medicare
contributions and federal income taxes) as shall be required by federal, state, and local
withholding tax laws.
9.0 Assumption by Successor. Intervoice shall ensure that any successor or assignee
(whether direct or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all the business and/or assets of Intervoice, either by operation of law or written
agreement, assumes the obligations of this Agreement. As used in this Agreement, “Intervoice”
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shall include any successor or assignee (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all the business and/or assets of Intervoice
that executes and delivers the agreement provided for in this Paragraph 9 or that otherwise becomes
obligated under this Agreement by operation of law.
10.0 Binding Effect; No Assignment by the Executive; No Third Party Benefit. This
Agreement shall be binding upon and inure to the benefit of the parties and their respective heirs,
legal representatives, successors, and assigns; provided,
however, that the Executive shall not
assign or otherwise transfer this Agreement or any of his rights or obligations under this
Agreement. Intervoice is authorized to assign or otherwise transfer this Agreement or any of its
rights or obligations under this Agreement to an Affiliate of Intervoice. The Executive shall not
have any right to pledge, hypothecate, anticipate, or in any way create a lien upon any payments or
other benefits provided under this Agreement; and no benefits payable under this Agreement shall be
assignable in anticipation of payment either by voluntary or involuntary acts, or by operation of
law, except by will or pursuant to the laws of descent and distribution. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any person other than the
parties, and their respective heirs, legal representatives, successors, and permitted assigns, any
rights, benefits, or remedies of any nature whatsoever under or by reason of this Agreement.
11.0 Governing Law; Venue. This Agreement shall be governed by the laws of the State of
Texas except for its laws with respect to conflicts of laws. The exclusive forum for any lawsuit
arising from or related to this Agreement shall be a state or federal court in Dallas County,
Texas. This provision does not prevent Intervoice from removing to an appropriate federal court
any action brought in state court. THE EXECUTIVE HEREBY CONSENTS TO, AND WAIVES ANY OBJECTIONS TO,
REMOVAL TO FEDERAL COURT BY INTERVOICE OF ANY ACTION BROUGHT AGAINST IT BY THE EXECUTIVE.
12.0 JURY TRIAL WAIVER. IN THE EVENT THAT ANY DISPUTE ARISING FROM OR RELATED TO THIS
AGREEMENT RESULTS IN A LAWSUIT, BOTH INTERVOICE AND THE EXECUTIVE MUTUALLY WAIVE ANY RIGHT THEY MAY
OTHERWISE HAVE FOR A JURY TO DECIDE THE ISSUES IN THE LAWSUIT, REGARDLESS OF THE PARTY OR PARTIES
ASSERTING CLAIMS IN THE LAWSUIT OR THE NATURE OF SUCH CLAIMS. INTERVOICE AND THE EXECUTIVE
IRREVOCABLY AGREE THAT ALL ISSUES IN SUCH A LAWSUIT SHALL BE DECIDED BY A JUDGE RATHER THAN A JURY.
13.0 Attorney’s Fees. Either Intervoice or the Executive, as applicable, shall have the
right, pursuant to TEX. CIV. PRAC. & REM. CODE XXX. §38.001 et seq., to recovery of reasonable
attorney’s fees, in addition to the amount of a valid claim and costs, for breach of this
Agreement.
14.0 Entire Agreement. This Agreement contains the entire agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements and understandings,
written and oral, between the parties with respect to the subject matter of this Agreement.
Provided, however, that this Agreement does not supersede the terms of (i) the Amended Employment
Agreement, and (ii) the Employee Agreement on Ideas,
Inventions and Confidentiality executed by the
Executive on December 4, 2000.
Severance Agreement, Page 6
15.0 Modification; Waiver. No person, other than pursuant to a resolution duly adopted by
the members of the Board, shall have authority on behalf of Intervoice to agree to modify, amend,
or waive any provision of this Agreement. Further, this Agreement may not be changed orally, but
only by a written agreement signed by the party against whom any waiver, change, amendment,
modification, or discharge is sought to be enforced. The Executive acknowledges and agrees that no
breach by Intervoice of this Agreement or failure to enforce or insist on its rights under this
Agreement shall constitute a waiver or abandonment of any such rights or defense to enforcement of
such rights.
16.0 Construction. This Agreement is to be construed as a whole, according to its fair
meaning, and not strictly for or against any of the parties.
17.0 Severability. If any provision of this Agreement shall be determined by a court to be
invalid or unenforceable, the remaining provisions of this Agreement shall not be affected thereby,
shall remain in full force and effect, and shall be enforceable to the fullest extent permitted by
applicable law.
18.0 Counterparts. This Agreement may be executed by the parties in any number of
counterparts, each of which shall be deemed an original, but all of which shall constitute one and
the same agreement.
IN WITNESS WHEREOF, Intervoice has caused this Agreement to be executed on its behalf by its
duly authorized representative, and the Executive has executed this Agreement, effective as of the
date first set forth above.
| INTERVOICE, INC. | XXXXXX X. XXXXXXX | |||||
By: |
/s/ Xxxxx X. Xxxxxxxxxxx | /s/ Xxxxxx X. Xxxxxxx | ||||
Printed Name: |
Xxxxx X. Xxxxxxxxxxx | |||||
Title: |
Chairman of the Board | |||||
Severance Agreement, Page 7
EXHIBIT A TO SEVERANCE AGREEMENT
GENERAL RELEASE AGREEMENT
This General Release Agreement is entered into pursuant to the provisions of the Severance
Agreement between Xxxxxx X. Xxxxxxx and Intervoice, Inc. (“Intervoice”) that became effective on
July 2, 2008 (the “Severance Agreement”).
NOTICE TO XXXXXX X. XXXXXXX — READ CAREFULLY:
• This General Release Agreement (1) does not have any effect (except as affected by the Jury
Waiver provision below) on any claim you may have against the Released Parties unrelated to your
employment or with respect to any rights or claims that may arise after the date this General
Release Agreement is executed, and (2) does not extend to or prevent you from enforcing your vested
(i.e. non-forfeitable) rights to your accrued benefits (within the meaning of Sections 203
and 204 of the Employee Retirement Income Security Act of 1974, as amended), as of the date of
termination of your employment, under the Intervoice, Inc. Employee Savings Plan (401(k) Plan).
• You must execute this form of General Release Agreement on two occasions, as specified in
Paragraphs 4.2.1 and 4.2.2 of the Severance Agreement, and then on each of such occasions promptly
return the executed instrument to Intervoice, to the attention of Xxx Xxxxx, Senior Vice President
Human Resources and Real Estate, at the Dallas corporate headquarters facility. After you have
signed and returned this General Release Agreement in such manner, on each occasion you will still
have an additional seven days to reconsider and revoke your acceptance, if you wish. In order to
be effective, a revocation by you must be in writing and received by Intervoice, to the attention
of Xxx Xxxxx at the Dallas corporate headquarters facility, within the seven-day revocation period.
• You are advised and encouraged to discuss this release with your attorney. In any event, you
should thoroughly review and understand the effect of this document before signing it.
1. GENERAL RELEASE:
(a) In exchange for Intervoice providing to me the special compensation and benefits set forth
in Paragraph 3 of the Severance Agreement, I hereby release and discharge the Released Parties (as
defined below) from, and waive to the maximum extent permitted by law, any and all claims,
liabilities, demands, and causes of action, known or unknown, fixed or contingent, which I may have
or claim against any of them.
(b) This General Release Agreement includes but is not limited to any and all claims arising
under federal, state, or local laws prohibiting employment discrimination, including the Age
Discrimination in Employment Act of 1967, as amended (the “ADEA”), or claims growing out of any
legal restrictions, contractual or otherwise, on the right of Intervoice or any of its Affiliates
(as that term is defined in the Severance Agreement) to establish and administer the terms and
conditions and to terminate the employment of its or their employees. This General Release
Agreement does not, however, waive claims under the ADEA that do not exist as of the date on which
I have signed this General Release Agreement.
General Release Agreement, Page 1 of 2
(c) The Released Parties are (i) Intervoice, Inc.; (ii) any Affiliates of Intervoice, Inc., as
that term is defined in the Severance Agreement; and (iii) the past, present, and future officers,
directors, shareholders, partners, fiduciaries, agents, employees, benefit plans, benefit plan
sponsors and administrators, representatives, insurers, attorneys, heirs, successors, and assigns
of the entities or persons named in (i) and (ii).
2. MY UNDERSTANDINGS:
I acknowledge and agree that:
(a) Absent this General Release Agreement Intervoice has no legal obligation to provide me
with the special compensation and benefits set forth in Paragraph 3 of the Severance Agreement.
(b) I have carefully read and fully understand all of the provisions of this General Release
Agreement.
(c) This General Release Agreement is knowing and voluntary on my part.
(d) I have been allowed at least 21 days to deliberate regarding the terms of this General
Release Agreement.
(e) I have had the right and have been encouraged by Intervoice to consult with an attorney in
connection with this General Release Agreement.
(f) I am not relying on any written or oral statement or promise other than as set out in this
General Release Agreement and the Severance Agreement (including my prior agreements referred to
therein).
(g) After signing this General Release Agreement, I have seven days to revoke its terms in
which case it will not become effective or enforceable.
3. JURY WAIVER: On behalf of myself and any other party who might assert a claim derivative of my
own, I hereby irrevocably and unconditionally waive the right to a trial by jury in any action or
proceeding (i) seeking to enforce, or alleging the breach of, any provision of this General Release
Agreement, or (ii) making any claim against any of the Released Parties, regardless of whether such
claim is covered by this General Release Agreement.
4. This General Release Agreement shall be governed by and construed in accordance with the laws of
the State of Texas except for its laws with respect to conflicts of laws.
Date
signed: |
|
|
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| Xxxxxx X. Xxxxxxx | |||||
Date
signed: |
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| Signature of Witness |
General Release Agreement, Page 2 of 2
EXHIBIT B TO SEVERANCE AGREEMENT
SCHEDULE OF STOCK OPTIONS
ACCELERATION OF VESTING AND EXTENSION OF EXERCISE PERIODS
ACCELERATION OF VESTING AND EXTENSION OF EXERCISE PERIODS
| Option Grant Date | Option Exercise Price | Unexercised Options | Plan | Unvested Options* | Description of Option Change(s) | |||||||||||||||
| 12/1/2000 | 7.51550 | 100,000 | 1999 Plan | — | Extend exercise period under Paragraph 3.4** |
|||||||||||||||
| 4/22/2003 | 1.88000 | 40,000 | 1999 Plan | — | Extend exercise period under Paragraph 3.4 |
|||||||||||||||
| 8/20/2003 | 7.11500 | 200,000 | 2003 Plan | — | Extend exercise period under Paragraph 3.4 |
|||||||||||||||
| 7/21/2004 | 9.10500 | 150,000 | 2003 Plan | — | Extend exercise period under Paragraph 3.4 |
|||||||||||||||
| 7/13/2005 | 9.53500 | 122,500 | 2005 Plan | 122,500 | Extend exercise period under Paragraph 3.4 and |
|||||||||||||||
accelerate option vesting under Paragraph 3.3 |
||||||||||||||||||||
| 7/13/2006 | 6.97500 | 150,000 | 2005 Plan | 50,000 | Extend exercise period under Paragraph 3.4 and |
|||||||||||||||
accelerate option vesting under Paragraph 3.3 |
||||||||||||||||||||
| 762,500 | 172,500 | |||||||||||||||||||
| * | As of August 31, 2008. | |
| ** | Paragraph references are to Paragraphs in the Severance Agreement. |
