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EXHIBIT 10.28
SEVERANCE AGREEMENT AND RELEASE
This Severance Agreement and Release is entered into as a binding
contract between Xxxxxxxx Xxxx ("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 January 1, 1998
("the Employment Agreement");
WHEREAS, the Parties wish to make clear their positions and
understandings and to provide additional understandings relating to the
termination of Employee's employment under the Employment Agreement;
NOW, THEREFORE, the Parties agree as follows:
1. TERMINATION OF EMPLOYMENT. The Parties hereto agree that Employee's
employment under the Employment Agreement shall terminate effective January
31,1999. Employee further agrees to submit his resignation from the Company's
Board of Directors effective January 31, 1999. 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
Parties further agree that the rights and obligations of the Parties shall
continue as provided by such agreements except to the extent expressly amended
or modified herein, and 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 base salary of $175,000 per annum, paid
semi-monthly, consistent with the Company's normal payroll practices, through
December 31, 2000.
b. Employee will be paid for 20 days of accrued, unused
vacation time on or before December 31, 1998.
c. 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 December, 2000.
d. The Company will continue benefit coverages for Employee
and his family 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
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of benefits. The Company will pay the difference between the cost of COBRA
coverage and Employee's regular employee contribution, if any, during the
Benefits Period.
2. CONSULTING AGREEMENT. The Employee agrees to advise and consult with
the Company from time to time during the ninety day period immediately following
termination of employment under the Employment Agreement as reasonably called
upon to do so by the Company during normal and customary business hours on
normal and customary business days. Expenses incurred by Employee in connection
with any such consulting services shall be paid by the Company. In consideration
of such services, the Company agrees to pay Employee a one-time fee of fifty
thousand dollars ($50,000) on or before January 31, 1999.
3. 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 76,000 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 76,000 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 12.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 March 31, 2001.
4. 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.
5. THE COMPANY'S NON-DISPARAGEMENT AGREEMENT. The Company agrees that
it will not in any way 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 agrees to respond to
all inquiries concerning Employee, to the extent permitted by law, by confirming
dates of employment and positions held and by giving a positive reference.
6. 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,
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successors and assigns, together with its and their past and present directors,
officers, agents, attorneys, insurers, employees, stockholders, and any employee
benefit plans established or maintained by any such entities, together with
their fiduciaries and agents (collectively, the "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 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 Released Parties, committed or omitted prior to the date of this
Agreement. Employee does not release any claims against any of the 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.
7. THE COMPANY'S RELEASE OF CLAIMS. The Company, on behalf of all
predecessors, successors, assignees, beneficiaries, subrogees, agents,
representatives, employees, officers, directors, shareholders, partners,
insurers, parents, subsidiaries, and affiliates, and all other persons, natural
or otherwise, claiming by, under, or through the Company, releases and forever
discharges Employee, his predecessors, successors, assignees, beneficiaries,
executors, administrators, subrogees, agents, representatives, and all other
persons, natural or otherwise, in privity with him of and from any and all
claims whatsoever, at common law, statutory, or otherwise; in contract, in tort,
or otherwise; 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.
8. SURVIVAL. This Severance Agreement and Release shall survive the
Death or Disability of Employee and all the rights and entitlements of Employee
under the Severance Agreement and Release, the Employment Agreement and
Non-Qualified Stock Option Agreement shall inure to the
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benefit of Employee's personal representatives, heirs, administrators and
executors and shall be binding on the Company and its successors and assigns.
9. ATTORNEYS FEES. The Parties agree that, if any action is brought by
either Party to the Employment Agreement, this 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.
10. POST-EMPLOYMENT COVENANTS. Company agrees to waive Employee's
post-employment covenants contained in Section 8(c) of the Employment Agreement
with respect to any business which Employee represents, engages in, or carries
on in Xxxxxx County, Texas and contiguous counties. As to further waiver,
Employee may request in writing a waiver of Employee's post-employment covenants
described in Section 8 of the Employment Agreement. Company agrees to respond to
any such request within ten (10) working days of receipt and that no such
request will be unreasonably refused. So long as Employee is receiving
compensation pursuant to Section 1(a) above, Employee shall respond to
reasonable and customary inquiries from BrightStar during normal and customary
business hours on normal and customary business days regarding Employee's
knowledge of the business of the Company.
11. 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 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.
12. ACKNOWLEDGMENTS OF EMPLOYEE.
a. Employee acknowledges that Company has advised him to
consult with an attorney of his own choice before signing this Agreement.
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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.
Xxxxxxxx Xxxx BrightStar Information Technology
Group, Inc.
/s/ XXXXXXXX X. XXXX By: /s/ XXXXXX X. XXXXXX
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Xxxxxxxx Xxxx
Date: February 1, 1999 Date:
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