SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (this "Agreement"), by and
between Xxxxxxx Xxxxxxxxx ("Xxxxxxxxx"), an individual residing at 0000 X. 00xx
Xxxxxx, Xxxxxxxxx, XX 00000, and Precept Business Services, Inc., a Texas
corporation ("Precept") is made and entered into as of the date of Xxxxxxxxx'
execution of this Agreement.
RECITAL
Xxxxxxxxx and Precept have agreed that it is in the best interests of
Xxxxxxxxx and Precept to terminate their relationship as provided herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. RESIGNATION. Simultaneously with the execution of this Agreement,
Xxxxxxxxx has tendered to Precept his resignation, a copy of which is
attached as Exhibit A hereto, effective as of the close of business on June
30, 1998, (the "Resignation Date") as an officer, director, employee and
agent of Precept and its affiliates, and after the Resignation Date, except
as specifically provided in Section 4, neither Xxxxxxxxx nor Precept shall
represent or state to any party that Xxxxxxxxx has any authority to act for
or on behalf of Precept or its affiliates or has any relationship with
Precept or its affiliates other than as a shareholder. The resignation
letter reflects that Xxxxxxxxx voluntarily resigned from any and all
positions of officer and/or director he held with Precept, its affiliates and
subsidiaries.
2. SEVERANCE. For a period commencing as of the Resignation Date
and ending March 31, 2000 (the "Severance Period"), Precept shall (A) pay to
Xxxxxxxxx on a monthly basis, net of any applicable withholding for taxes and
any other authorized deductions, an amount equal to $21,075 (the "Monthly
Payment"), (B) maintain in full force and effect Precept's health, disability
and life insurance currently available to Xxxxxxxxx to the same extent and in
the same manner as would be available to Xxxxxxxxx if he remained as a
full-time Vice Chairman of Precept; including, but not limited to, all
deductions required to cover Xxxxxxxxx' contribution to the monthly cost of
such insurance and (C) pay the premiums associated with the current personal
life insurance policy covering Xxxxxxxxx' life (not to exceed 5 quarterly
amounts of $12,500 for an aggregate of $62,500), with gross proceeds payable
to the Xxxxxxxxx Family Trust.
3. MUTUAL RELEASES. (a) Xxxxxxxxx hereby for himself and on behalf
of anyone claiming through him irrevocably and unconditionally releases,
acquits and discharges forever Precept, its successors, assigns, divisions,
subsidiaries, shareholders, affiliates, predecessors, employees, agents,
officers, directors, and attorneys (the "Releasees") from any and all causes
of action, claims and demands existing on or before the date of this
Agreement, whether known or unknown, including, but not limited to, claims
arising in any way from his employment with Precept, its affiliates or
predecessors, the separation of his employment with Precept and its
affiliates, his service as an officer and director of Precept or its
affiliates or predecessors (hereafter in this Section 3(a) collectively
referred to as the "Claims" or individually as the "Claim"). Said Claims
include, but are not limited to, Claims for: (1) violation of the Age
Discrimination in Employment Act of 1967, as amended, (2) employment
discrimination (including
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claims of sex discrimination or sexual harassment) or retaliation under Title
VII (42 U.S.C. section 2000 et seq., and under 42 U.S.C. Section 1981 through
Section 1983); (3) disputed wages; (4) wrongful discharge or breach of any
alleged employment contract, express or implied; and (5) any tort, including
invasion of privacy, defamation, fraud and infliction of emotional distress.
The release contained in this Section 3 (a) shall not affect any rights that
may be granted to Xxxxxxxxx, or obligations of Precept, under the terms of
this Agreement, that certain Registration Rights Agreement, dated March 19,
1998, by and among Precept, Xxxxxxxxx and The Xxxxxxxxx Family Trust; and
that certain Agreement and Plan of Reorganization, dated November 16, 1997,
by and among U.S. Transportation Systems, Inc., Precept and Precept
Transportation Services, L.L.C. Xxxxxxxxx hereby agrees to not bring any
legal action, either civil or criminal, against any of the Releasees for any
Claim released under this Agreement and represents and warrants that no such
Claim has been transferred and that no such legal action has been filed to
date. Xxxxxxxxx agrees that he will not accept any award of damages if any
Claim is brought on his behalf and further will assign any such award to
Precept.
(b) Precept on behalf of itself and its subsidiaries and other entities
under its control, hereby releases and discharges forever Xxxxxxxxx, his
family, heirs, successors, assigns, agents, and attorneys from any and all
causes of action, claims and demands existing on or before the date of this
Agreement, whether known or unknown, including, but not limited to, claims
arising in any way from Xxxxxxxxx' employment by Precept or its affiliates or
predecessors, his service as an officer, employee, or director of Precept or
its affiliates or predecessors, and his status as a shareholder of Precept or
its affiliates or predecessors; provided, however, that the release contained
in this Section 3 (b) shall not affect any rights that may be granted to
Precept, or obligations of Xxxxxxxxx, under the terms of this Agreement, that
certain Registration Rights Agreement, dated March 19, 1998, by and among
Precept, Xxxxxxxxx and The Xxxxxxxxx Family Trust; and any executory
obligations of Xxxxxxxxx, individually, as an officer and/or director of
Transportation Equities, Inc. ("TEI"), and as trustee of the Liquidating
Trust all as contemplated by and pursuant to that certain Agreement and Plan
of Reorganization, dated November 16, 1997, by and among U.S. Transportation
Systems, Inc., Precept and Precept Transportation Services, L.L.C. Precept
hereby agrees to not bring any legal action, either civil or criminal,
against Xxxxxxxxx for any claim released under this Agreement and represents
and warrants that no such claim has been filed to date.
(c) Xxxxxxxxx and Precept agree that Xxxxxxxxx will not, directly or
indirectly, disclose the fact of and terms of this Agreement, including the
severance benefits, to anyone, except legal and tax advisors (each of which
must be informed of, and must agree to comply with, this confidentiality
provision) or as otherwise required by law.
4. FINDER. (a) During the Severance Period Xxxxxxxxx agrees to assist
Precept exclusively in acquiring through merger, stock or asset purchase, the
entities listed on Exhibit B (collectively the "Companies" and individually
the "Company") or otherwise entering into a transaction with substantially
such effect (a "Transaction"). Xxxxxxxxx may submit additional names of
prospects for consideration to Xxxxxxx X. Xxxxxx ("Xxxxxx"), the President
and Chief Operating Officer of Precept. A prospect will not be added and
included if the prospect has been previously introduced to Precept by a
person other than Xxxxxxxxx. Xxxxxxxxx shall use his best efforts to assist
Precept in consummating the Transaction, including introducing the parties,
providing information to Precept which would be helpful in analyzing the
transaction subject to any applicable
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legal restrictions; and otherwise assisting Precept as reasonably requested
until the closing of the Transaction. Although Xxxxxxxxx shall at all times
act as an independent contractor and not as an agent or partner of Precept,
Xxxxxxxxx shall cooperate with Precept as reasonably required by Precept in
order to ensure an appropriate and satisfactory introduction and continuing
relationship between Precept and the Company.
(b) Xxxxxxxxx shall be paid a fee in cash (the "Fee") on the
basis set forth on Exhibit B at the final legal closing of the Transaction
("Closing"). In the event a definitive agreement, with respect to a prospect
listed on Exhibit B, is fully executed within 6 months of when the "Finder"
relationship between Xxxxxxxxx and Precept expires, then Xxxxxxxxx shall be
paid upon the Closing of the Transaction contemplated in such definitive
agreement.
(c) In the event 75% of the aggregate of all Fees paid to Xxxxxxxxx
shall exceed $63,225 (the "Fee Threshold") then the Monthly Payment for each
of January, February and March 2000 shall be reduced, dollar for dollar, by
the amount by which such 75% exceeds the Fee Threshold. Such reduction can in
no event exceed $63,225. For example, if 75% of all Fees, at any time,
totaled $83,225, than the March, 2000 Monthly Payment would be reduced by
$20,000.
5. COOPERATION. During the Severance Period Xxxxxxxxx shall provide
the following as reasonably requested by Precept:
(a) information relating to Xxxxxxxxx and his ownership of Precept
Class A common stock that is required for filings under the Securities Act of
1933 and reports filed by Precept under the Securities Exchange Act of 1934
("Exchange Act");
(b) assistance in any litigation in which Precept is involved that
relates to matters in which Xxxxxxxxx participated or about which Xxxxxxxxx
may have knowledge; and
(c) technical advice relating to transportation services matters.
Precept shall cause Xxx Xxxxx to be reasonably available to
Xxxxxxxxx with respect to matters involving TEI and The Liquidating Trust and
shall cooperate with Xxxxxxxxx, TEI and The Liquidating Trust with respect to
making available documents, information and the like for purposes of the
winding up and liquidation of TEI and The Liquidating Trust.
6. CONFIDENTIALITY AND NON-COMPETITION. In his various positions with
Precept and its affiliates, and their predecessors, Xxxxxxxxx has had access
to and has become acquainted with various confidential information.
Xxxxxxxxx agrees to treat such information as confidential and not to
disclose any such information to anybody. Until the end of the Severance
Period, Xxxxxxxxx shall not, without the prior written consent of Precept,
directly or indirectly, engage in any non transportation business similar to
what Precept or any of its affiliates is currently involved, or
transportation service businesses of the type currently conducted by Precept
or its affiliates in the geographical locations such business are conducted
or any business which Xxxxxxxxx is paid a Fee pursuant to Section 4 of this
Agreement.
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7. OTHER AGREEMENTS. (a) Simultaneously with the execution of this
Agreement, that certain Executive Employment Agreement by and between
Xxxxxxxxx and Precept, dated Xxxxx 00, 0000, xxxxx xxxxxxxxx.
(x) Any other written agreements or instruments that may exist on
the date of this Agreement shall remain in place and shall not be affected by
the terms and provisions of this Agreement.
8. GENERAL.
(a) AMENDMENT AND WAIVER. This Agreement may not be amended or
modified or any provision hereof waived except by an instrument in writing
signed by or on behalf of each of the parties hereto. Notwithstanding
anything to the contrary contained herein, a wavier that does not adversely
affect all of the parties hereto may be executed only by the adversely
affected party.
(b) HEADINGS. The descriptive headings contained in this Agreement
are for convenience of reference only and shall not affect in any way the
meaning on interpretation of this Agreement.
(c) ASSIGNMENT. Neither party may assign its rights or delegate
its obligations hereunder without the prior written consent of the other
party.
(d) NOTICES. All notices required or permitted to be given
hereunder shall be in writing and shall be given or made by delivery in
person, by courier services, telecopy, telegram, telex or registered or
certified mail (postage prepaid, return receipt required) to the respective
parties at the following addresses:
If to Precept: Precept Business Services
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
If to Xxxxxxxxx: Xxxxxxx Xxxxxxxxx
0000 X. 00xx Xxxxxx
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxx Xxxxxx, Esq.
Xxxxxxxx, Xxxxx & Xxxx
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
(e) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral,
among the parties hereto with respect to the subject matter.
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(f) GOVERNING LAW. This Agreement will be governed by, and
constructed in accordance with, the laws of the State of Texas.
(g) SEVERABILITY. If any term or other provision of this
Agreement is finally determined by a court of competent jurisdiction to be
invalid, illegal or incapable of being enforced under any law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto will negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner. Specifically excepted from this requirement to negotiate
are any questions concerning the reasonableness of the limitations upon
competition.
(h) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
irreparable damage would occur in the event any provision of this Agreement
was not performed in accordance with the terms hereof and that neither party
will have an adequate remedy at law in such case. Accordingly, the parties
hereto agree and consent that the other will be entitled to a decree of
specific performance, injunctive relief mandamus or other appropriate remedy
to enforce performance of this Agreement, in addition to any other remedy at
law or equity.
(i) FEDERAL OLDER WORKS BENEFIT PROTECTION ACT. Xxxxxxxxx
acknowledges that he has been informed of his rights under the Federal Older
Workers Benefit Protection Act that:
(A) He has the right to consult with an attorney before signing
this Agreement;
(B) He does not release rights or claims under the Age
Discrimination in Employment Act of 1967, as amended, that
may arise after the date this Agreement is executed by
Xxxxxxxxx;
(C) He has twenty-one (21) days from the date above to consider
this Agreement; and
(D) He has seven (7) days after signing this Agreement to revoke
this Agreement, but only to the extent it releases a claim
for age discrimination under the Age Discrimination in
Employment Act of 1967, as amended. This revocation can be
made by delivering a written notice of revocation to
Precept's General Counsel, at the following address: 0000
Xxxxxxx Xxxxxxx Xxx, Xxxxxx, Xxxxx 00000. For this
revocation to be effective, written notice must be received
by Precept no later than 5:00 p.m. on the seventh day after
Xxxxxxxxx signs this Agreement. Xxxxxxxxx understands that
the severance allowance will not be paid until after the
seven-day revocation period has passed without Xxxxxxxxx
having given notice of revocation.
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(j) NO DISPARAGING REMARKS. Xxxxxxxxx agrees to refrain from
making disparaging, negative or other similar remarks concerning Precept or
any of its subsidiary or affiliated corporations or entities, or their past
and present respective officers, directors, shareholders, clients or
employees.
(k) TAXABILITY. Xxxxxxxxx agrees and acknowledges that no
representations have been made to him or to his representatives concerning
the taxable nature of any consideration provided to him pursuant to this
Agreement.
(l) ARBITRATION. Any controversy or claim arising out of, or
relating to, this Agreement, or its breach, shall be settled by arbitration
in the City of Chicago in accordance with the then governing rules of the
American Arbitration Association. Judgement upon the award rendered may be
entered and enforced in any court of competent jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement.
PRECEPT BUSINESS SERVICES, INC.
By:
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Chairman of the Board
and Chief Executive Officer
------------------------------
Date
---------------------------------------
Xxxxxxx Xxxxxxxxx
------------------------------
Date
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EXHIBIT A
---------
July 1, 1998
Xx. Xxxxx X. Xxxxx
Chairman of the Board
and Chief Executive Officer
Precept Business Services, Inc.
0000 Xxxxxxx Xxxxxxx Xxx. Xxxxx 000
Xxxxxx, Xxxxx 000000
Dear Xxxxx:
As we discussed and agreed, I hereby voluntarily tender my resignation
effective as of the close of business on July 1, 1998, on the terms and
conditions set forth in the Severance Agreement between Precept Business
Services, Inc. ("Precept") and me dated as of July 1, 1998, as Vice Chairman
of the Board of Directors of Precept, and, as appropriate, as an officer,
director, employee and agent of any and all Precept affiliates. My
resignation is not conditioned upon acceptance by the Precept Board of
Directors or the Board of Directors of any of its affiliates.
Best wishes for your continued success.
Sincerely yours,
Xxxxxxx Xxxxxxxxx
cc: Precept Board of Directors
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EXHIBIT "B"
-----------
IDENTIFICATION OF THE COMPANY:
------------------------------
EXPENSES: Expenses will be reimbursed only in the event they have been approved
-------- by Xxxxx X. Xxxxx.
FINDER'S FEE:
-------------
1% of the last twelve months revenue of the Company as reflected in the
most recent, available financial statements of the Company used in
determining the purchase price in the Transaction.
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