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EXHIBIT 10
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is entered into effective
as of the 12th day of December, 1997, by and between Xxxxxxx Communications
Corporation, a Utah corporation (the "Company"), and Xxxxxxx X. Xxxxxxx, a
resident of the State of Utah ("Xx. Xxxxxxx").
WHEREAS, Xx. Xxxxxxx has been the Chairman of the Board of Directors
("Chairman"), President, Chief Executive Officer of the Company, and a Director
of the Company; and
WHEREAS, the Board of Directors of the Company and Xx. Xxxxxxx have
negotiated the terms and conditions of Xx. Xxxxxxx'x departure from all Company
offices and the Board of Directors, on the terms set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Resignation from All Offices. Xx. Xxxxxxx hereby resigns as President
and Chief Executive Officer of the Company, as of the date hereof. Xx. Xxxxxxx
will resign as a Director and as Chairman effective the date of the Closing (as
defined below).
2. Severance Package. In connection with the termination of Xx.
Xxxxxxx'x relationship with the Company, the Company has delivered or will
deliver at or prior to the Closing, the following items described in this
Section 2:
2.1 Xx. Xxxxxxx has received $38,261.30 in salary between the date of
this Agreement and the Closing. At the Closing, he will receive an additional
$15,692.64 in salary ("Additional Salary"); thereafter, he will receive no
further salary or bonus from the Company;
2.2 Xx. Xxxxxxx will retain his split dollar life insurance policy
and the Company will release its lien thereon as of the Closing;
2.3 The Company will transfer to Xx. Xxxxxxx the title to the 1993
Nissan Pathfinder that the Company currently provides to Xx. Xxxxxxx;
2.4 The Micron lap top computer issued and the cellular phone and
electronic organizer previously issued to Xx. Xxxxxxx as an employee, all right,
title and interest thereto to pass automatically to Xx. Xxxxxxx at the Closing
without further action of the parties; and
2.5 The parties agree that the value of the items set forth in
Sections 2.3 and 2.4 is $13,000.00.
3. Acknowledgment of Payments. Xx. Xxxxxxx acknowledges that, as of the
date hereof, he has received full and complete payment to him of all salary,
benefits, accrued vacation days, insurance payments, and other entitlements
earned by Xx. Xxxxxxx in connection with his employment through December 12,
1997 except for normal employee withholdings. Xx. Xxxxxxx further acknowledges
that he is not entitled to any other payments from the Company, except as set
forth herein. The Company acknowledges that Xx. Xxxxxxx is not obligated to the
Company for further payments or the return of Company property to which he is
not entitled.
4. Confidential Information. Xx. Xxxxxxx acknowledges that he is bound
by an obligation of confidentiality to the Company. To the extent that Xx.
Xxxxxxx possesses materials containing confidential information of the Company
he has, or as of the Closing will, return such materials to the Company.
5. Inventions. Xx. Xxxxxxx hereby assigns all "employment inventions",
if any, to the Company that he has developed in the course of this employment by
the Company. Xx. Xxxxxxx will execute all instruments as may be reasonably
requested by the Company to give full effect to the assignment set forth in this
section. For purposes hereof, "employment inventions" shall have the meaning set
forth in Section 34-39-2 of the Utah Employment Inventions Act.
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6. Covenant Not to Compete.
6.1 Xx. Xxxxxxx agrees that from the date hereof through June 30,
1998 (the "Non-Compete Period"), he will not compete with the Company. For
purposes hereof, "compete" means owning, managing, operating or controlling, or
participating in the ownership, management, operation or control, or being
connected with or having any interest in, as a stockholder, director, officer,
employee, agent, consultant, sole proprietor, partner or otherwise, of any
business (other than the Company) which markets and sells the following products
or services: teleconferencing echo cancellation products including products
directly competing with the AP-800, broadcast telephone products, remote site
control products, assistive listening products, and conference calling services
(each, a "Competing Business"). Provided, however, that this prohibition shall
not apply to ownership of less than one percent (1%) of the voting stock in
companies whose stock is traded on a national securities exchange or in the over
the counter market. Additionally, during the Non-Compete Period, Xx. Xxxxxxx
agrees that he will not solicit employees of the Company for the purpose of
inducing them to leave the Company's employ. During the Non-Compete Period, Xx.
Xxxxxxx agrees that he will not solicit the Company's customers, sales
representatives, and dealers for the purpose of providing them with products or
services competing with those of the Company described above.
6.2 Xx. Xxxxxxx may not use the name "Xxxxxxx" as a part of the name,
"dba", "aka", or otherwise, in any Competing Business. However, in the event the
Company ceases to use the name "Xxxxxxx" in the name of the Company and as a
brand name, Xx. Xxxxxxx may freely use the name "Xxxxxxx" at any time subsequent
to 24 months after the Company ceases final use of the name. In the event that
Xx. Xxxxxxx thereafter uses the name the Company may not revert to the use of
the name "Xxxxxxx". In addition, Xx. Xxxxxxx hereby grants to the Company an
irrevocable license to the use of the name "Xxxxxxx". Such license shall cover
any and all intellectual property rights that Xx. Xxxxxxx may have in the name
"Xxxxxxx", including common law or registered trademarks, whether now existing
or hereafter obtained. The Company agrees that it will only use the "Xxxxxxx"
name in association with products and services of a high quality.
7. Release of Claims.
7.1 Xx. Xxxxxxx, on behalf of himself and each of his partners,
affiliates, associates, agents, representatives, predecessors, successors, and
assigns, past, present, and future, hereby releases and forever discharges the
Company and each of its respective affiliates, associates, officers, directors,
shareholders, employees, attorneys, accountants, insurers, agents,
representatives, predecessors, successors, and assigns, past, present, and
future, from any and all legal claims, demands, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, controversies, debts,
costs, expenses, damages, judgments, orders, and liabilities of whatever kind or
nature in law, equity, or otherwise, whether now known or unknown, suspected or
unsuspected, concealed or hidden, of any kind or nature whatsoever arising from
his separation from the Company, employment by the Company, service as a
director and officer of the Company, and for which Xx. Xxxxxxx had actual
knowledge.
7.2 The Company on behalf of itself, board of directors, officers,
its employees, attorneys, accountants, insurers, associates, agents,
representatives, predecessors, successors, and assigns, past present, and
future, hereby releases and forever discharges Xx. Xxxxxxx from any and all
legal claims, demands, liens, agreements, contracts, covenants, actions, suits,
causes of action, obligations, controversies, debts, costs, expenses, damages,
judgments, orders, and liabilities of whatever kind or nature in law, equity, or
otherwise, arising from Xx. Xxxxxxx'x service to the Company as an employee,
officer, director or shareholder, and of which the Board of Directors had actual
knowledge.
8. Closing and Conditions to Closing.
8.1 The "Closing" of the matters described herein shall occur at
the offices of Jones, Waldo, Xxxxxxxx & XxXxxxxxx, P.C. on April 15, 1998 at
5:00 P.M., or such other date and time mutually agreeable to the parties.
8.2 The Company's conditions to Closing are as follows:
8.2.1 execution and delivery of this Agreement;
8.2.2 the simultaneous closing of the transactions
described in and contemplated by that certain Stock and Options
Purchase Agreement between Xx. Xxxxxxx and E. Xxxxxxxxx Xxxxxxx, as
the "Seller" thereunder, and Xxxxxx Xxxxxx Xxxxxx as the
"Purchaser" thereunder (the "Purchase
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Agreement"), pursuant to which Xx. Xxxxxxx (and E. Xxxxxxxxx
Xxxxxxx, as applicable) will sell all Shares and Options (as
defined therein) held by them in the Company to Purchaser;
8.2.3 receipt of Xx. Xxxxxxx'x resignation from the Board
of Directors dated as of the date hereof; and
8.2.4 approval of this Agreement by the Board of Directors
of the Company.
8.3 Xx. Xxxxxxx'x conditions to Closing are as follows:
8.3.1 execution and delivery of this Agreement;
8.3.2 the simultaneous closing of the transactions set
forth in the Purchase Agreement;
8.3.3 delivery of a payroll check for the Additional
Salary;
8.3.4 delivery of the title or other mutually acceptable
instruments for the Nissan Pathfinder described in Section 2.3,
above;
8.3.5 execution and delivery of the Written Consent of the
Compensation Committee of the Board of Directors; and
8.3.6 a letter from the Company Vice President for Finance
stating that the Company's lien described in Section 2.2, above, is
released.
9. Post-Separation Actions. The parties desire to provide for an
amicable separation and, accordingly, covenant and agree that after the date
hereof they shall not do anything to disparage or impair the business or
business reputation of the other party. In this regard, the parties have agreed
to the statement attached hereto as Exhibit A. The preceding sentences shall not
preclude either party from making legally required disclosures. The parties
agree that liquidated damages of $5,000 per incident shall apply to a breach of
this Section.
10. Miscellaneous.
10.1 Non-Assignment of Claims. Xx. Xxxxxxx and the Company
represent and warrant that they have not assigned or transferred or attempted to
assign or transfer to anyone any right, suit, demand, action, or cause of action
based upon or arising out of or pertaining to or concerning or connected with
any of the matters or things released herein. Each party shall indemnify and
hold harmless the other from and against any and all actions or causes of action
based upon or arising in connection with any such assignment or transfer or any
attempted assignment or transfer or any such action or other matter.
10.2 Notices. All notices and other communications given hereunder
shall be deemed to have been duly given when delivered in person, by mail
(registered or certified postage prepaid, return receipt requested) by telefax,
or by overnight courier, to the respective parties, as follows
To the Company: Xxxxxxx Communications Corporation
0000 Xxxxxxxx Xxx
Xxxx Xxxx Xxxx, XX 00000
Fax: 000-000-0000
Attention: Xxxxxxx Xxxxx, President
With a copy to: Jones, Waldo, Xxxxxxxx & XxXxxxxxx, P.C.
000 Xxxxx Xxxx Xx., Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
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To Xx. Xxxxxxx: Xxxxxxx X. Xxxxxxx
0000 Xxxx Xxxx Xxxxx
Xxxx Xxxx, XX 00000
Fax: 000-000-0000
With a copy to: Xxxxx, Xxxxxxxx & Xxxxx, X.X.
000 Xxxx Xx., Xxxxx 000
Xxxx Xxxx, XX 00000-0000
Fax: 000-000-0000
Attention: Xxxxxx Xxxxx, Esq.
Notice shall be deemed given on the date of delivery in person, on the date
indicated on the return receipt in the case of notice by mail, and on the date
of receipt of a correct electronic acknowledgment in the case of notice by
telefax. Any party may change its address for notice by a notice duly given as
aforesaid.
10.3 Entire Agreement. This Agreement constitutes the final
agreement of the parties hereto in relation to the matters set forth herein and
supersedes any prior written or oral negotiation, correspondence, or
understandings relating to the matters contemplated herein.
10.4 Successors and Assigns. This Agreement shall be the obligation
of Pledgor and shall be binding upon its respective heirs, personal
representatives, successors, and permitted assigns. This Agreement may only be
assigned with the consent of all of the parties hereto.
10.5 Attorneys' Fees. If any action is brought by either party to
enforce the terms of this Agreement, the prevailing party shall be entitled to
reimbursement from the non-prevailing party for all expenses incurred in
connection with such action, including reasonable attorneys' fees.
10.6 Further Assurances. The parties intend this Agreement to be a
complete and final settlement of all matters between them. Accordingly, each
party agrees to execute such further documents and to take such further actions
as may be necessary or desirable to finally and fully settle all matters which
have arisen or which may subsequently arise between them.
10.7 Equitable Remedies. Each party acknowledges and agrees that
the breach or threatened breach of certain provisions of this Agreement would
cause irreparable harm for which damages at law would be an inadequate remedy.
Accordingly, each party hereby agrees that, in any such instance, the threatened
or injured party shall be entitled to seek injunctive or other equitable relief
in addition to any other remedy to which he (or it) may be entitled, including
money damages. Moreover, other than the right to seek immediate injunctive
relief, the parties agree that all disputes and alleged breaches of this
agreement shall first be submitted to binding arbitration Salt Lake City, Utah,
in accordance with the applicable rules and regulations of the American
Arbitration Association.
10.8 Severability. If any provision of this Agreement is found to
be unenforceable by a court of competent jurisdiction, the remaining provisions
shall nevertheless remain in full force and effect.
10.9 Entire Agreement. This Agreement constitutes the full and
complete understanding of the parties hereto with respect to the subject matter
covered herein and supersedes all prior oral or written understandings and
agreements with respect thereto. No modification or amendment to this Agreement
shall be effective unless it is contained in a written document that is signed
by both parties.
10.10 Governing Law., This Agreement shall be governed and
construed in accordance with the laws of the State of Utah.
IN WITNESS WHEREOF, the parties have each signed this Agreement
either personally or by his (or its) duly authorized representative.
XXXXXXX COMMUNICATIONS CORPORATION
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx, President
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EXHIBIT A
Xxxxxxx Communications Announces Change in Board of Directors
Salt Lake City, Utah -- Xxxxxxx Communications announced today that former Chief
Executive Officer and President, Xxxxxxx X. Xxxxxxx has resigned his position as
Chairman and member of the Board of Directors, and is no longer associated with
the Company in any way.
Xx. Xxxxxxx'x resignation is effective immediately. A board meeting is scheduled
in the near future.
Xxxxxxx Communications Corporation develops and manufactures audio solutions for
the broadcast, teleconferencing, and assistive listening markets. Xxxxxxx'x
mission is to help build synergistic relationships between people who are
geographically separated by providing customers with total audio solutions. The
Company has a wide product and service mix featuring telephone interface
products, audio conferencing products, assistive listening systems, and a
nationwide conference calling service, 0-000-XXXX-XXXX(TM).
CONTACT:
Xxxxxxx X. Xxxxx, President
000-000-0000
xxxxxx@xxxxxxx.xxx
