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EXHIBIT 10.27
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release ("Severance Agreement") is
entered into as a binding contract between Xxxxxx X. Xxxxxx ("Employee") and
BrightStar Information Technology Group, Inc. ("the Company"), as of the last
date executed.
W I T N E S S E T H:
WHEREAS, Employee and the Company (collectively, "the Parties") have
been parties to an Executive Employment Agreement dated as of August 16, 1997
("the Employment Agreement");
WHEREAS, Employee was a founder of the Company and has served as Chief
Financial Officer, Executive Vice President, and Treasurer of the Company since
its inception, has made valuable and important contributions to the Company in
connection with its recent public offering and acquisitions, and has
demonstrated a high level of principle, skill, energy and expertise in these
and other areas; and
WHEREAS, the Company has named a new Chief Executive Officer and other
officers and has resolved to move its base of operations;
NOW, THEREFORE, the Parties agree as follows:
1. TERMINATION OF EMPLOYMENT. The Parties agree that Employee's
employment under the Employment Agreement shall terminate effective January
31,1999 or at such earlier time as the Parties may agree or the Company may
determine. Employee and the Company agree that the termination of employment
shall be deemed "termination without cause" under Section 7(c) of the
Employment Agreement, and shall not be deemed a termination with "cause" nor
repudiation or renunciation of the Employment Agreement or a voluntary
cessation of employment under Section 2 the Stock Repurchase Agreement between
Employee and the Company, dated April, 1998. The Stock Repurchase Agreement is
hereby terminated and will be of no further force and effect. The Parties
further agree that the rights and obligations of the Parties shall continue as
provided by this Severance Agreement, the Employment Agreement, and the
Non-Qualified Stock Option Agreement described in Section 2 of this Severance
Agreement except to the extent expressly amended or modified herein. Prior to
the date of termination, Employee will have normal and customary access to all
Company data, employees, officers, directors and outside consultants and
professionals consistent with his duties and the usual and customary functions
of Chief Financial Officer. The Parties further agree that Employee shall be
entitled to the following compensation as a result of such termination:
a. As provided by Section 7(c) of the Employment Agreement,
Employee will continue to receive his current base salary, consistent with the
Company's normal payroll practices, through July 31, 2000. Unpaid compensation
of $6,250 will be paid on or before January 31, 1999. Employee will be
reimbursed for reasonable business expenses incurred prior to termination
pursuant to Section 6 of the Employment Agreement.
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b. Employee will be paid for 20 days of accrued, unused
vacation time on or before January 31, 1999.
c. Employee will be paid $5,000 representing 1997 automobile
allowance on or before January 31, 1999. The Company will continue to pay an
automobile allowance of $1,000 per month to Employee, payable in a manner
consistent with the Company's prior payment practices, with respect to each
month through July, 2000.
d. The Company will continue benefit coverages for Employee
for up to twelve (12) months after the date of termination, under the same
limitations and conditions as provided in the Employment Agreement. These
benefits will terminate upon the earlier of Employee's participation in other,
similar plans, or 12 months following the date of termination (the "Benefits
Period"). On or soon after the termination date, the Company will provide
Employee with a COBRA election form for health coverage. Employee will complete
the form and elect full continuation of benefits. The Company will pay the cost
of COBRA coverage during the Benefits Period.
2. STOCK OPTIONS. Under terms of that certain Incentive Stock Option
Agreement between Employee and the Company dated as of April 16, 1998, Employee
has been granted options (the "ISOs") to purchase 68,000 shares of the
Company's common stock at an exercise price of $13.00 per share, under certain
terms and conditions. The ISOs must be exercised by Employee within three
months following termination of employment pursuant to the Employment
Agreement. In consideration for the immediate termination of all of Employee's
rights to the ISOs and all of Employee's rights under the Incentive Stock
Option Agreement, and in consideration for Employee's full release, set forth
below, of any and all claims relating to the Company and all related persons
and entities, the Company will grant options (the "NQSOs") to purchase 68,000
shares of the Company's common stock pursuant to a Non-Qualified Stock Option
Agreement in the form attached hereto as Exhibit "A". The NQSOs shall be
exercisable, in whole or in part, at an exercise price of $13.00 per share at
any time, and from time to time, during the period beginning upon expiration of
the seven-day period described in Section 11.c of this Agreement (provided that
Employee has not elected to revoke this Agreement pursuant to such provision)
until 5:00 p.m.
Houston, Texas, time on October 31, 2000.
3. EMPLOYEE'S NON-DISPARAGEMENT AGREEMENT. Employee agrees that he
will not in any way disparage the Company or its affiliates, including their
current or former officers, directors and employees, except as may be necessary
to comply with a valid order, subpoena or law and after reasonable notice has
been given to the Company that Employee is or may become under a legal duty to
make disparaging remarks, opinions or disclosures. To the extent permitted by
law, Employee agrees to refer all inquiries concerning the Company or its
affiliates, including their current or former officers, directors and
employees, to the Company.
4. THE COMPANY'S NON-DISPARAGEMENT AGREEMENT. The Company agrees that
it will not in any way disparage Employee, nor cause its officers, directors,
employees agents and representatives to disparage Employee, except as may be
necessary to comply with a valid order, subpoena or law and after reasonable
notice has been given to the Employee that the Company is or may become under a
legal duty to make disparaging remarks, opinions or disclosures. The Company
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agrees to respond to all inquiries concerning Employee, to the extent permitted
by law, by confirming dates of employment and positions held pursuant to the
Company's customary policy.
5. EMPLOYEE'S RELEASE OF CLAIMS. Except as otherwise expressly
provided herein, Employee, on behalf of himself, and anyone who may now or
later have the right to xxx for or through him, his descendants, heirs,
executors, administrators, and assigns, promises never to xxx, and fully and
forever releases and discharges the Company, its parents, subsidiaries,
affiliates, successors and assigns, together with its and their past and
present directors, officers, agents, insurers, employees, and any employee
benefit plans established or maintained by any such entities, together with
such plans' fiduciaries and agents (collectively, the "Employee Released
Parties"), from any and all claims, demands, obligations, damages, or
liabilities of any kind whatsoever, at law, in equity, or otherwise, whether
now known or unknown, suspected or unsuspected, which Employee now owns or
holds, or has ever owned or held, against the Employee Released Parties.
a. The claims released include all claims arising out of or
in any way connected with Employee's employment with the Company, Employee's
termination from the Company, or any other transactions, occurrences, acts, or
omissions, or any losses, damage, or injury whatsoever, known or unknown,
suspected or unsuspected, resulting from any act or omission by or on the part
of any of the Employee Released Parties, committed or omitted prior to the date
of this Agreement. Employee does not release any claims against any of the
Employee Released Parties which arise after he signs this Agreement.
b. The claims hereby released include, without limitation,
claims under Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section
2000e; the Civil Rights Act of 1866, 42 U.S.C. Section 1981; the Age
Discrimination in Employment Act, 29 U.S.C. Sections 621 et seq.; the Americans
With Disabilities Act, 42 U.S.C. Section 12101 et seq.; the Texas Commission on
Human Rights Act, TEX. LABOR CODE Section 21.001 et seq.; any claim for
severance pay, bonus, salary, sick leave, holiday pay, vacation pay, life
insurance, health or medical insurance, or any other fringe benefit,
compensation, or disability benefit; or any other federal, state or local
statute, executive order, or regulation regarding employment or the termination
of employment, or the common law of any state relating to torts, employment
contracts, and employment terminations; before any state or federal court or
administrative agency, civil rights agency, or any other forum.
c. This Agreement will not impair Employee's rights, if any,
to continue health care benefits coverage under COBRA, 29 U.S.C. Sections
1161-68, or to any vested rights under any retirement plan maintained by the
Company.
6. THE COMPANY'S RELEASE OF CLAIMS. The Company, on behalf of all
predecessors, successors, assignees, beneficiaries, subrogees, agents,
representatives, employees, officers, directors, partners, insurers, parents,
subsidiaries, and affiliates, and all other persons, natural or otherwise,
claiming by, under, or through the Company, promises never to xxx and fully and
forever releases and discharges Employee, his successors, assignees,
beneficiaries, executors, administrators, subrogees, agents, representatives,
and all other persons, natural or otherwise, in privity with him (collectively,
the "Company Released Parties") of and from any and all claims demands,
obligations, damages, or liabilities of any kind whatsoever, at law, in equity,
or otherwise; in contract, in tort, or otherwise;
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for any act or omission whether negligent, reckless, intentional, or malicious;
for damages or compensation of any type, including attorney fees, court costs,
expenses, or other costs that the Company might have or might claim to have,
whether currently known or unknown, suspected or unsuspected, which Company now
owns or holds, or has ever owned or held, against the Company Released Parties.
a. The claims released include all claims arising out of or
in any way connected with Employee's employment with the Company, Employee's
termination from the Company, or any other transactions, occurrences, acts, or
omissions, or any losses, damage, or injury whatsoever, known or unknown,
suspected or unsuspected, resulting from any act or omission by or on the part
of any of the Company Released Parties, committed or omitted prior to the date
of this Agreement. The Company does not release any claims against any of the
Company Released Parties which arise after the Company signs this Agreement.
7. SURVIVAL. This Severance Agreement shall survive the Death or
Disability of Employee and all the rights and entitlements of Employee under
this Severance Agreement, the Employment Agreement and Non-Qualified Stock
Option Agreement shall inure to the benefit of Employee's personal
representatives, heirs, administrators and executors and shall be binding on
the Company and its successors and assigns.
8. ATTORNEYS FEES. The Parties agree that, if any action is brought by
either Party to the Employment Agreement, this Severance Agreement or the
Non-Qualified Stock Option Agreement, all reasonable costs and expenses of suit
(including attorneys fees) shall be awarded to the prevailing party.
9. POST-EMPLOYMENT COVENANTS. Sections 8(a), 8(b), 8(c), 8(d) and 8(f)
of the Employment Agreement are deleted in their entirety. So long as Employee
is receiving compensation pursuant to Section 1(a) above, Employee shall
respond to inquiries from BrightStar regarding Employee's knowledge of the
business of the Company.
10. INDEMNITY. The Parties acknowledge that Employee has served as
director, officer, agent, employee or representative of the Company and/or
certain affiliates of the Company in the course of his employment by the
Company (the "Service") and that Employee may be subject to legal claims in
connection with his performance of the Service. Notwithstanding anything herein
to the contrary, the Company agrees to indemnify and hold harmless Employee
against any and all claims, suits, actions, damages, liability, expenses
(including attorneys fees and costs of litigation), costs, judgments, fines or
amounts paid in settlement that are reasonably and actually incurred by
Employee in connection with any proceeding or investigation concerning any of
Employee's Service. This indemnity shall not extend to punitive damages unless
the Company has a current obligation to Employee to indemnify Employee for such
damages, in which case the Company shall indemnify the Employee for such
damages to the extent and under the conditions that may now exist. In all other
respects, the Company shall indemnify the Employee to the fullest extent
permitted by applicable law. The Company shall have the right to control the
defense of any action to the extent of its indemnity obligation. Neither the
Company nor Employee will settle or compromise any claims on any basis that
would impose liability, limitation, or restriction on the other without both
Parties' express written
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consent. This indemnity obligation shall not be deemed limited by the scope of
any insurance coverage in effect, nor shall this obligation be deemed
exclusive, or in limitation of, any indemnity rights to which Employee may be
entitled under law, the Company's certificate of incorporation, by-laws, vote
of the shareholders, determination of the Company's board of directors or
otherwise. To the extent that Employee is required to separately incur
reasonable and necessary legal costs and expenses in connection with any claim
indemnified herein, Company shall advance Employee any amounts which may be
necessary to pay all such costs and expenses promptly upon the receipt by the
Company of a written request therefor.
11. ACKNOWLEDGMENTS OF EMPLOYEE.
a. Employee acknowledges that the Company has advised him to
consult with an attorney of his own choice before signing this Agreement.
b. Employee has acknowledges that he has been given up to
twenty-one (21) days after he received this Agreement to sign it.
c. Employee understands that he has seven (7) days after he
signs this Agreement during which he may revoke it. If Employee revokes this
Agreement, it will not be effective, and Employee will not receive any of the
payments or benefits described above. Employee understands and agrees that he
will not receive any of these payments or benefits until after the seven days
have passed.
IN WITNESS WHEREOF, the Parties have caused this Severance Agreement
and Release to be executed and delivered as of the last date executed.
Xxxxxx X. Xxxxxx BrightStar Information Technology Group, Inc.
/S/XXXXXX X. XXXXXX By:/S/XXXXXX X. XXXXXX
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Xxxxxx X. Xxxxxx
Date: January 20, 1999
Date: January 18, 1999 ---------------------------
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