EXHIBIT 10.14
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (the "Agreement") is entered into as of this 27th
day of February, 1998, but shall be effective as of the 1st day of January,
1998, by and between AVATECH SOLUTIONS, INC., a Delaware corporation
(hereinafter referred to as the "Avatech"), and V. XXXX XXXXXXXXX (hereinafter
referred to as the "Executive").
EXPLANATORY STATEMENT
WHEREAS, the Board of Directors of Avatech Solutions, Inc. directed Avatech
to negotiate and enter into a severance agreement with the Executive, subject to
the terms set forth below, to provide him with compensation in the event he is
terminated for any reason other than cause and to ensure his continued
cooperation and consultation during the eighteen (18) months following his
severance from the Corporation; and
WHEREAS, Executive desires to enter into this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants, promises,
agreements, representations, and warranties of the parties hereto, each to the
other made, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto covenant,
promise, agree, represent, and warrant as follows:
SECTION 1. SEVERANCE PAYMENTS.
1.1 TERMINATION OTHER THAN FOR CAUSE. In the event Executive is
terminated for any reason other than "cause" as defined below, Avatech shall pay
monthly severance payments equivalent to the Executive's base salary of
$8,400.00 monthly for eighteen (18) months following Executive's termination for
so long as Executive complies with the restrictive covenants set forth in
Section 2 hereof.
1.2 DEFINITION OF "CAUSE". For purposes of Section 1.1 hereof, the
term "cause" shall include, but not be limited to:
(i) fraud, misappropriation, or intentional material damage to
the property or business of Avatech; or
(ii) a violation of Section 2 of this Agreement.
1.3 RESIGNATION. No severance payments shall be due hereunder in the
event the Executive resigns or his employment is terminated by Avatech for
"cause."
SECTION 2. RESTRICTIVE COVENANTS.
2.1 ACKNOWLEDGMENTS. Executive recognizes and acknowledges that
Avatech's relationship with its customers is special and unique and is based
upon the development and maintenance of good will by Avatech and its executives.
Executive also recognizes and acknowledges that as a result of Executive's
service with Avatech, Executive will gain valuable information about Avatech's
relationships with its customers, their respective special needs, and other
matters that Executive would not otherwise know and that is not otherwise
readily available, and that such knowledge is essential to Avatech's business.
2.2 COVENANTS. Executive shall not divulge any customer lists or
other confidential information of Avatech, except to the extent Avatech
authorizes in writing or as may be required by law.
Executive promises, agrees, and covenants that:
(a) If Executive's employment is terminated or ceases for any reason,
then Executive, for a period of eighteen (18) months following the cessation of
Executive's employment, shall not, whether as an Executive, independent
contractor, stockholder, partner, advisor, or sole practitioner, within a radius
of five hundred (500) air miles from the location of the any office of Avatech,
engage in any business that competes with the business of Avatech. Executive
expressly acknowledges that five hundred (500) air miles is a reasonable radius
restriction considering the broad area that Avatech serves;
(b) Executive shall not, for a period of eighteen (18) months
following the cessation of Executive's employment under this Agreement for any
reason (and during the Term of this Agreement), directly or indirectly, for
Executive's own account or for the account of others (including without
limitation any other person in which Executive has an interest, whether as a
stockholder, director, officer, investor, lender, partner, Executive, sole
proprietor, independent contractor, or consultant), solicit any customers of
Avatech; and
(c) Executive shall not, for a period of eighteen (18) months
following the cessation of Executive's employment under this Agreement for any
reason (and during the Term of this Agreement), directly or indirectly, for
Executive's own account or for the account of others (including without
limitation any other person in which Executive has an interest, whether as a
stockholder, director, officer, investor, lender, partner, Executive, sole
proprietor, independent contractor, or consultant), urge, induce, entice, or in
any manner whatsoever solicit any Executives to leave Avatech's employ.
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Avatech may within thirty (30) days of the cessation of Executive's employment
under this Agreement send Executive a list of those persons that were
"customers" under Section 2.2(b); provided, however, that the failure by Avatech
to send such list shall not affect the enforceability of this Section 2.
2.3 ENFORCEMENT. Executive acknowledges the extreme importance being
placed on the foregoing covenants and his agreement in Section 2.2 and fully
agrees that these restrictions are fair and reasonable. Executive also
acknowledges the law governing the restrictive covenants is based on the facts
and circumstances and therefore specifically agrees that in the event any court
to which a dispute over these restrictions is referred shall find any of these
restrictions overboard or unreasonable, Executive authorizes such court to
enforce the restrictions to the greatest extent it deems reasonable, and
Executive further agrees that in the event of a breach of any of the terms of
this Section or Section 2.2, Avatech shall be entitled to secure an order in any
suit brought for these purposes to enjoin such Executive from further violating
any of the provisions of this Section or Section 2.2. Pending the hearing and
decision of the application for such an order, Avatech shall be entitled to a
temporary restraining order without prejudice to any other remedy available to
Avatech. Such Executive shall be responsible for all costs incurred by Avatech
resulting from his breach of these provisions, including reasonable attorneys'
fees.
2.4 SEVERABILITY. If any court or tribunal of competent jurisdiction
shall refuse to enforce one or more of the agreements or covenants in this
Section 2 (the "Separate Covenants") because the time limit applicable thereto
is deemed unreasonable, it is expressly understood and agreed that such Separate
Covenant or Separate Covenants shall not be void but that for the purpose of
such proceedings such time limitation shall be deemed to be reduced, and the
parties request that such court make such reduction, to the extent necessary to
permit the enforcement of such Separate Covenant or Separate Covenants.
If any court or tribunal of competent jurisdiction shall refuse to
enforce any or all of the Separate Covenants because, taken together, they are
more extensive (whether as to geographic area, scope of business, or otherwise)
than is deemed to be reasonable, it is expressly understood and agreed between
the parties hereto that such Separate Covenant or Separate Covenants shall not
be void but that for the purpose of such proceedings the restrictions contained
therein (whether as to geographic area, scope of business or otherwise) shall be
deemed to be reduced, and the parties request that such court make such
reduction, to the extent necessary to permit the enforcement of such Separate
Covenant or Separate Covenants.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Executive represents and
warrants that no agreement, contract, or understanding prohibits or interferes
with the execution and delivery of this Agreement and the performance of his
services under this Agreement.
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SECTION 4. MISCELLANEOUS. The Avatech is expressly permitted to assign all
of its rights and obligations under this Agreement to one or more direct or
indirect subsidiaries or affiliates. The validity, legality, and construction of
this Agreement or of any of its provisions shall be determined under the laws of
the State of Delaware, it being agreed that this Agreement is made in the State
of Delaware. If any provision contained in this Agreement cannot be enforced to
its fullest extent, then such provision shall be enforced to the maximum extent
permitted by law, and the parties hereto consent and agree that such provision
may be judicially modified accordingly in any proceeding brought to enforce such
provision. The invalidity, illegality, or inability to enforce any provision of
this Agreement shall not affect or limit the validity and enforceability of any
other provision hereof. Where context requires, the plural shall include the
singular and vice versa.
SECTION 5. NOTICES. All notices and communications hereunder shall be in
writing and shall be deemed given when sent postage prepaid by registered or
certified mail, return receipt requested, by hand delivery with a signed
returned copy, or delivery by a nationally recognized overnight delivery
service, and addressed as follows:
If intended for Avatech: Avatech Solutions, Inc.
00000 Xxxxxxxx Xxxxx, Xxxxx X
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx, Chairman and
Chief Executive Officer
with a copy to: Xxxxxxx and Xxxxxxx
00 Xxxxx Xxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Attention: A Xxxxx Xxxxxxx, Esquire
If intended for Executive: V. Xxxx Xxxxxxxxx
0000 Xxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
If, however, a party furnishes another party with notice of a change of address,
as provided in this Section, then all notices and communications thereafter
shall be addressed as provided in such notice.
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SECTION 6. ENTIRE AGREEMENT. This Agreement contains the entire
understanding between Avatech and Executive with respect to matters set forth
herein and supersedes all other oral and written agreements or understandings
between them with respect to matters set forth herein. Nothing in this Agreement
constitutes a commitment to issue stock in Avatech to Executive. No modification
or addition hereto or waiver or cancellation of any provision shall be valid
except as provided in a writing signed by the party against whom such
modification, addition, waiver, or cancellation is being enforced.
IN WITNESS WHEREOF, the parties hereto have executed this Severence
Agreement as of the day and year first above written.
WITNESS: AVATECH SOLUTIONS, INC.
By: (SEAL)
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V. Xxxx Xxxxxxxxx, Executive Xxxxx X. Xxxxxx, Chairman and
Vice President Chief Executive Officer
and Secretary
WITNESS:
(SEAL)
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V. Xxxx Xxxxxxxxx
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