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EXHIBIT 10.48
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement"), entered into on this 28th day
of October, 1996, by and between Capitol Multimedia, Inc., a Delaware
corporation (the "Company"), and Xxxxxxxxx X. Xxxxxx ("Employee").
WITNESSETH
WHEREAS, Employee has been a key employee of the Company and has made
outstanding contributions to the Company;
WHEREAS, the Company desires to reward Employee for Employee's loyalty
and distinguished service to the Company prior to the Employee's resignation
from the Company;
WHEREAS, the Company desires to provide Employee, as additional
compensation for her service to the Company, with a severance package over and
above the compensation currently earned by Employee;
NOW, THEREFORE, in consideration of the above recitals, the terms and
covenants of this agreement, and other valuable consideration, the receipt and
sufficiency of which is acknowledged, the parties agree as follows:
1. Severance. Employee and the Company agree that Employee's
employment with the Company and that certain employment agreement dated August
18, 1992, as amended and modified, between the Company and the Employee will
terminate on February 28, 1997 (the "Termination Date"). Upon the termination
of the Employee's employment on such date, Employee shall receive, subject to
Employee's execution of a letter in the form attached hereto (a "Waiver
Letter") as required by Section 11 hereof and provided Employee has not
resigned prior to such date, a lump sum cash payment equal to $61,250 plus any
earned and unused vacation.
2. Options. In substitution for the options previously granted
to Employee, the Company hereby grants to Employee under the Company's Amended
and Restated 1991 Non-Qualified Employee Stock Option Plan options to purchase
102,176 shares of Common Stock at the exercise prices set forth in the attached
schedule. Such options shall become fully exercisable on the Termination Date
unless Employee shall have resigned as an employee of the Company effective as
of a date prior to the Termination Date. Once vested, such options shall be
exercisable, notwithstanding the termination of Employee's employment with the
Company, for the periods set forth in the schedule attached hereto. Employee
hereby consents to the issuance of such options in substitution for the options
previously
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granted to Employee by the Company and identified in the schedule attached
hereto.
3. Termination. The severance payment and option grants to be
made pursuant to Sections 1 and 2 of this Agreement shall not be payable in the
event that Employee is terminated by the Company for Cause prior to February
28, 1997 or voluntarily resigns or terminates her employment prior to such
date. For the purposes of this Agreement, the Company shall have "Cause" for
termination of Employee's employment only (i) if Employee is convicted of or
pleads guilty to any felony (except if committed upon advice from counsel to
the Company), or (ii) if Employee has engaged in conduct or activities
involving moral turpitude materially damaging to the business or reputation of
the Company or (iii) if Employee knowingly or willfully violates any law, rule,
regulation or order of any governmental authority, thereby exposing the Company
to potential material civil or criminal penalties unless the Employee has done
so upon advice from counsel to the Company; or (iv) in the event of Employee's
gross misfeasance, intentional misconduct or fraud in the performance of her
responsibilities to the Company as set forth by the Board of Directors of the
Company, or (v) if Employee knowingly misappropriates for her own purpose and
benefit, any property of the Company or unlawfully appropriates any corporate
opportunity of the Company.
4. Payment. The Company shall pay Employee all amounts owed to
Employee under this Agreement not later than fifteen (15) days after the date
of Employee's termination; provided that Employee has executed and delivered to
the Company a Waiver Letter.
5. Governing Law. This Agreement shall be construed and
governed in all aspects by the laws of the State of Delaware (exclusive of
conflicts of law principles).
6. Modification. This Agreement shall not be modified or
amended except as agreed to in writing signed by each party or an authorized
representative of each party.
7. No Waiver. The failure of either party to this Agreement to
insist upon the performance of any of the terms and conditions of this
Agreement, or the waiver of any breach of any of the terms and conditions of
this agreement, shall not be construed as thereafter waiving any such terms and
conditions, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred.
8. Headings. Titles to the sections of this Agreement are solely
for the convenience of the parties and shall not be used to
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explain, modify, simplify, or aid in the interpretation of the provisions of
this Agreement.
9. Entire Agreement. This Agreement constitutes the entire
agreement and understanding, and merges and supersedes all prior discussions,
agreements and understandings between the parties regarding the subject matter
described herein.
10. Survival of Indemnification. All indemnification obligations
undertaken by the Company on behalf of the Employee whereby the Company has
agreed to indemnify Employee against and in respect of any damages, losses,
claims, or liabilities, including, where applicable, any costs, expenses, and
reasonable fees incident or related thereto (including reasonable attorney's
fees) whether arising by contract or under the Articles of Incorporation or
Bylaws of the Company or otherwise shall survive the execution of this
Agreement, the termination of Employee's employment and the execution by
Employee of a Waiver Letter.
11. Condition to Receipt of Benefits. As a condition precedent to
receiving the benefits provided for under this Agreement, Employee must sign
the attached Waiver Letter on the date of Employee's termination.
12. This Agreement shall supersede and render null and void any
prior termination agreement between the Company and Employee.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the date first above written.
/s/ Xxxxxxxxx X. Xxxxxx
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Xxxxxxxxx X. Xxxxxx
Capitol Multimedia, Inc.,
a Delaware corporation
/s/ Xxxx X. Xxxxxxx
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By: Xxxx X. Xxxxxxx
Its: Chief Executive Officer
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Xxxxxxxxx X. Xxxxxx
Xxxxxxxxx Agreement Option Schedule
Options Granted per Severance Agreement and pursuant to the
Options Previously Granted Company's Amended and Restated 1991 Employee Stock Option Plan
-------------------------- --------------------------------------------------------------
Number of Shares Exercise Price Date Expiration Number of Shares Exercise Price Date Expiration
Underlying Option Per Share Exercisable Date Underlying Option Per Share Exercisable Date
----------------- -------------- ----------- ---------- ----------------- -------------- ----------- ----------
1,172 $3.9625 9/13/95 4/1/97 1,172 $3.9625 2/28/97 4/1/97
1,004 $3.9625 9/13/95 4/1/98 1,004 $3.9625 2/28/97 4/1/98
15,000 $3.9625 9/13/95 3/31/00 15,000 $3.9625 2/28/97 3/31/00
15,000 $3.9625 4/1/96 3/31/01 15,000 $3.9625 2/28/97 3/31/01
15,000 $3.9625 9/13/95 2/2/03 15,000 $3.9625 2/28/97 2/2/03
7,500 $3.9625 9/13/95 3/31/03 7,500 $3.9625 2/28/97 3/31/03
7,500 $3.9625 9/13/95 3/31/04 7,500 $3.9625 2/28/97 3/31/04
40,000 $3.7500 4/1/97 3/31/05 40,000 $3.7500 2/28/97 3/31/05
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102,176 102,176
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WAIVER LETTER
Xx. Xxxxxxxxx X. Xxxxxx
[Home Address]
Dear Xx. Xxxxxx:
In connection with your termination as an employee of Capitol
Multimedia, Inc. (the "Company"), you and the Company have agreed to the terms
and conditions as contained in the Severance Agreement (to which the form of
this letter is an attachment) concerning your termination from employment as of
February 28, 1997 (the "Termination Date").
In consideration of the Company's agreement to provide the benefits,
payments, and other items described in the Severance Agreement, some of which
are in addition to anything which you would otherwise be entitled to receive
and the receipt and sufficiency of which is hereby acknowledged, you hereby
release and forever discharge the Company, its officers, directors, agents,
servants, and employees, their successors, assigns, and insurers, and their
parents, subsidiaries and affiliates, and any and all other persons, firms
organizations, and corporations from any and all damage, losses, causes of
action, expenses, demands, liabilities, and claims on behalf of yourself, your
heirs, executors, administrators, and assigns with respect to all matters
relating to the Company and you hereby accept the cash payments, benefits, and
other items described in the Severance Agreement in full settlement of all such
damages, losses, causes of action, expenses, demands, liabilities, and claims
you now have or may have with respect to such matters.
This release includes, but is not limited to, claims arising under the
Age Discrimination in Employment Act, the Older Workers' Benefit Protection
Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, the Family and Medical Leave Act, any claims for breach of contract, tort
or personal injury of any sort, and any claim under any other state or federal
statute or regulation. Further, by accepting the payments described in the
Severance Agreement, you agree not to xxx the Company or the related persons
and entities described above. You affirm and agree that as of the Termination
Date your employment relationship has ended and waive all rights in connection
with such relationship except to vested benefits and the payments and
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Xxxxxxxxx X. Xxxxxx
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benefits described in the Severance Agreement. You acknowledge that you have
been advised in writing to consult with an attorney prior to signing this
letter agreement and have had an adequate opportunity to seek advice of your
own choosing. You acknowledge that you have read this letter agreement, have
had an opportunity to ask questions and have it explained to you and that you
understand that this letter agreement will have the effect of knowingly and
voluntarily waiving any action you might pursue, including breach of contract,
personal injury, retaliation discrimination on the basis of race, age, sex,
national origin, or disability and any other claims arising prior to the date
of this letter agreement. Notwithstanding the foregoing, as provided in
Section 10 of the Severance Agreement, the execution of this letter agreement
by you will not constitute the waiver of any indemnification rights that may
otherwise be available to you.
The purpose of the arrangements described in this letter and the
Severance Agreement is to arrive at a mutually agreeable and amicable basis
upon which to separate your employment with the Company. You and the Company
agree to refrain from any criticisms or disparaging comments about each other
or in any way relating to your termination from employment. Furthermore, you
agree that you have returned or will return immediately, and to maintain in
strictest confidence and not to use in any way, any proprietary, confidential,
or other nonpublic information or documents relating to the business and
affairs of Company and its affiliates.
Very truly yours,
Capitol Multimedia, Inc.
/s/ Xxxx X. Xxxxxxx
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By: Xxxx X. Xxxxxxx
Its: Chief Executive Officer
AGREED TO AND ACCEPTED this
28th day of February, 1997
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Xxxxxxxxx X. Xxxxxx
