EXHIBIT 10.16
SEVERANCE AGREEMENT AND MUTUAL RELEASE
OF XXXXXXX X. XXXXXXX
This Severance Agreement and Mutual Release (this "Agreement") is made
and entered into by and between XXXXXXX X. XXXXXXX (hereinafter referred to as
"Employee") and MICROTEST, INC. (hereinafter referred to collectively with all
of its subsidiaries (where appropriate) as the "Company").
WHEREAS, the parties have mutually agreed that is in their respective
best interests to bring their employment relationship to an amicable conclusion,
effective immediately.
NOW, THEREFORE, in consideration of the acts, payments, covenants and
mutual agreements herein described and agreed to be performed, Employee and the
Company agree as follows:
1. TERMINATION OF EMPLOYMENT. Employee hereby resigns his positions as
President and Chief Operating Officer of the Company and all subsidiaries,
effective December 4, 1998.
2. CONSULTING SERVICES. From time to time upon the reasonable request
of the Chief Executive Officer, Employee agrees to render consulting services to
the Company for the period from December 4, 1998 through July 31, 1999. However,
the Employee shall not have to consult for more than 10 hours in any one month
and consulting services shall be rendered at reasonable, mutually agreed upon
times.
3. PAYMENTS. The Company shall pay to Employee his current salary as a
consulting fee through July 31, 1999, payable in bi-weekly installments.
Employee shall be responsible for all income taxes, self-employment taxes and
similar obligations with respect to any payments made hereunder, and shall
defend, indemnify and hold harmless the Company and the affiliated persons
enumerated in Paragraph 5 below against any tax liabilities, payments, interest
and penalties and related attorneys' fees and costs that may arise therefrom.
4. BENEFITS AND OPTIONS.
a. Effective December 4, 1998, Employee shall be entitled to COBRA
benefits to the extent provided by law. The Company shall pay for these
benefits until he obtains coverage through a subsequent employer, or until
December 31, 1999, whichever occurs first.
b. The Company has granted to Employee unexercised options to acquire
an aggregate of 60,000 shares of vested common stock. Options will stop
vesting as of December 2, 1999 and all unvested options will terminate. The
Company hereby agrees to extend the exercise period for vested shares
through October 31, 1999.
5. RELEASE AND COVENANT NOT TO XXX. Employee hereby forever releases,
discharges, cancels, waives, and acquits for himself, his spouse and his heirs,
executors, administrators and assigns, the Company and any and all of its
affiliates, subsidiaries, corporate parents, agents, directors, officers,
owners, employees, attorneys, successors and assigns, 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 Employee has, had or may hereafter have against them, or any of
them arising out of, or by reason of, any cause, matter, or thing whatsoever
existing as of the date of execution of this Agreement, WHETHER KNOWN TO THE
PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT OR NOT, other than for breach
of this Agreement.
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
Employee 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, the
Arizona Civil Rights Act, the Family and Medical Leave Act of 1993, Worker's
Compensation Claims, or any other federal, state, or local statute, or any
contract, agreement, plan or policy. Employee 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 and/or
any and all of its affiliates, subsidiaries, corporate parents, directors,
agents, officers, owners, employees, successors and assignees 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.
Employee acknowledges that the considerations afforded him under this
Agreement, including the payments and considerations described in Paragraphs 3
and 4 above, are in full and complete satisfaction of any claims Employee may
have, or may have had relating to the Company, including any arising out of his
employment with the Company (or any subsidiary) or the termination thereof.
Company hereby forever releases, discharges, cancels, waives, and
acquits Employee 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 Company has had or may
hereafter have against him from the date of this Agreement, WHETHER KNOWN OR
UNKNOWN TO THE PARTIES AT THE TIME OF EXECUTION OF THIS AGREEMENT, other than
for breach of this Agreement, and except for any action or omission as to which
the Employee is not entitled to mandatory indemnification under ss.145 of the
Delaware Corporate Code, or as to any matter set forth in ss.102(b)(7)(i) to
(iv) thereof (as if Employee were a director).
6. TIME PERIOD OF CONSIDERING OR CANCELING THIS AGREEMENT. Employee
acknowledges that he has been offered a period of time of at least twenty-one
(21) days to consider whether to sign this Agreement, which he hereby waives,
and the Company agrees that Employee may cancel this Agreement at any time
during the seven (7) days following the date on which this Agreement has been
signed by all parties to this Agreement. In order to cancel or revoke this
Agreement, Employee must deliver to the Company at 0000 Xxxxx 00xx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000-0000, attention Xxxxxxx Xxxxx, written notice stating
that Employee is canceling or revoking this Agreement. If this Agreement is
timely canceled or revoked, none of the provisions of this Agreement shall be
effective or enforceable and the Company shall not be obligated to make the
payments to Employee or to provide Employee with the other benefits described in
this Agreement.
7. CONFIDENTIALITY. Employee and the Company agree to maintain in
confidence the terms and existence of this Agreement and the discussions that
led to its creation and execution, with the exception that the Company may
disclose this Agreement and its terms to the extent required or appropriate
under applicable securities exchange or other laws or regulations and that the
Employee may disclose such matters to any attorney who is providing advice to
Employee, to any accountant or federal or state tax agency for purposes of
complying with any tax laws, or as otherwise required by law. Further, Employee
acknowledges his continuing obligations to the Company under paragraphs 10, 11,
12, 13, 14, 16 and 23 of Employment Agreement dated June 9, 1997, which is
incorporated herein by reference and shall apply to this agreement as if fully
set forth herein, and acknowledges that he has returned to the Company and has
not retained in his possession any confidential or proprietary information or
any copy or embodiment thereof. These obligations, as well as any other duties
imposed upon Employee by law or any separate confidentiality or similar
agreement the Employee has entered into with the Company, shall survive the
termination of Employee's employment. Employee shall be permitted to obtain
employment that is not otherwise inconsistent with paragraph 10 of his
Employment Agreement without losing any of the benefits of paragraphs 3 and 4
hereof. The Company acknowledges that Employee shall be permitted to use and/or
work in the field of the service initiative which Employee presented to the
Board of Directors in October 1998 and that such employment by Employee will not
violate paragraph 10 of Employee's Employment Agreement or constitute use by
Employee of the Company's proprietary information. Nothing contained herein
preclude the Company from engaging in the same or similar business as the
service initiative which Employee presented to the Board of Directors in October
1998 or from using information developed or compiled by Employee in connection
therewith.
8. RELIANCE. Employee warrants and represents that: (i) he has relied
on his own judgment regarding the consideration for and language of this
Agreement; (ii) he has been given a reasonable period of time to consider this
Agreement, has been advised to consult with counsel of his own choosing before
signing this Agreement, and has consulted with counsel or voluntarily elected
not to consult with independent counsel; (iii) the Company has not in any way
coerced or unduly influenced him to execute this Agreement; and (iv) this
Agreement is written in a manner that is understandable to him and he has read
and understood all paragraphs of this Agreement.
9. NATURE OF THE AGREEMENT. This Agreement and all provisions thereof,
including all representations and promises contained herein, are contractual and
not a mere recital and shall continue in permanent force and effect. Except as
provided in paragraph 7, above, this Agreement constitutes the sole and entire
agreement of the parties with respect to the subject matter hereof, superseding
all prior agreements and understandings between the parties, and there are no
agreements of any nature whatsoever between the parties hereto except as
expressly stated herein. This Agreement may not be modified or changed unless
done so in writing, signed by both parties. In the event that any portion of
this Agreement is found to be unenforceable for any reason whatsoever, the
unenforceable provision shall be considered to be severable, and the remainder
of the Agreement shall continue to be in full force and effect. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Arizona without regard to choice of law principles.
10. NO ADMISSION OF LIABILITY. Nothing contained in this Agreement
shall be construed in any manner as an admission by any party that they have
violated any statue, law or regulation, or breached any contract or agreement.
11. NO DISPARAGEMENT. The Company agrees to use reasonable efforts to
ensure that the current officers and directors of the Company during the term of
their employment do not, and Employee agrees that he will not, make disparaging
or derogatory remarks, whether oral or written, about the other party or, in the
case of Employee, the Company or its subsidiaries, affiliates, officers,
directors, employees or agents.
12. PRESS RELEASE. The parties acknowledge that the press release
attached hereto as Exhibit A is mutually acceptable and will be issued promptly
following the date hereof.
13. REFERENCE. The parties acknowledge that the letter attached hereto
as Exhibit B is mutually acceptable to both parties and may be utilized by Xx.
Xxxxxxx for presentation to future employers.
XXXXXXX X. XXXXXXX MICROTEST, INC.
/s/ Xxxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
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Its:
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Dated: Dated:
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