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CLARIFICATION OF
AGREEMENT REGARDING SEVERANCE PACKAGE
This Clarification is made this 8th day of May, 1999 between Voice Control
Systems, Inc. ("VCS") and Xxxxx X. Xxxxxx.
Background Information
VCS and Xx. Xxxxxx have entered into an Agreement Regarding Severance Package
dated February 24, 1999 (the "Agreement"). As part of the severance package
described in Exhibit A to the Agreement, VCS agreed, "Xx. Xxxxxx and his
dependents shall continue to be covered by the health insurance, including
vision and dental coverage, that VCS carries for its employees, or any
substitutes for such plans, and VCS shall pay all of the premiums for the
coverage of Xx. Xxxxxx and 75% of the premium for coverage of his dependents"
(the "Health Insurance Benefit"). VCS and Xx. Xxxxxx intended that the Health
Insurance Benefit would continue for a period of two years, but omitted to
include this time frame in the Agreement.
The parties wish to clarify the Agreement by stating the time frame during which
the Health Insurance Benefit must be provided.
Accordingly, in consideration of the above and the terms and conditions set
forth below, VCS and Xx. Xxxxxx agree as follows:
Substantive Provision
The final paragraph in Exhibit A to the Agreement is amended to read in its
entirety as follows:
For a period of two years from the date of the event giving rise to the
obligation to make the payment described in the first paragraph of this
Exhibit A, Xx. Xxxxxx and his dependents shall continue to be covered by
the health insurance, including vision and dental coverage, that VCS
carries for its employees, or any substitutes for such plans, and VCS
shall pay all of the premiums for the coverage of Xx. Xxxxxx and 75% of
the premium for coverage of his dependents.
VOICE CONTROL SYSTEMS, INC.
By:
----------------------------- --------------------------------------
Xxxxx X. Xxxxxx
Its:
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AGREEMENT REGARDING SEVERANCE PACKAGE
This Agreement is made this 24th day of February, 1999, by and between Voice
Control Systems, Inc., for itself and on behalf of its subsidiary, Voice Request
Corporation, ("VCS") and Xxxxx X. Xxxxxx.
Background Information
Xx. Xxxxxx has been employed at VCS since 1985, served as Chief Executive
Officer until 1998, and has most recently served as Chief Executive Officer of
Voice Request Corporation. VCS and the Company entered an employment agreement
dated June 18, 1993, that terminated in June 1998 (the "Employment Agreement").
The parties anticipate that Xx. Xxxxxx'x employment with VCS may soon terminate
although that termination will not affect his position on the Board of
Directors. Xx. Xxxxxx is currently involved in negotiations on behalf of VCS
with Philips International B.V. ("Philips") and the parties wish to continue Xx.
Xxxxxx'x cooperation in those negotiations and his cooperation in a smooth
transition upon his termination. They also wish to memorialize the severance
package Xx. Xxxxxx will receive upon termination of his employment.
Accordingly, in consideration of the above and the provisions set forth below,
VCS and Xx. Xxxxxx agree as follows:
Substantive Provisions
1. Xx. Xxxxxx shall continue in his position as Chief Executive Officer of Voice
Request Corporation, at his current pay, until such time as he is terminated. In
conjunction therewith he will assist VCS in its negotiations with Philips and
will assist VCS for three months in its transition to another executive who will
be in charge of Voice Request Corporation. Such employment may be terminated by
Voice Request Corporation or VCS at any time on notice to Xx. Xxxxxx.
2. If a transaction with Philips is closed so that Philips acquires VCS, whether
through merger, stock purchase, asset purchase or otherwise, then VCS will pay
Xx. Xxxxxx a bonus of $75,000 at closing.
3. If Xx. Xxxxxx complies with the provisions of Section 1 through the date
payment is due, he shall receive in addition to his compensation the severance
package set forth in Exhibit A upon signing the Severance Agreement and General
Release set forth in Exhibit B. This will be payable upon the earliest of
termination of his employment, diminution of Xx. Xxxxxx'x responsibilities
without his consent, or a change in control of VCS.
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3. Xx. Xxxxxx acknowledges and affirms his confidentiality obligations, his
obligations with respect to competing with the Company, and his other continuing
obligations under Article VII of the Employment Agreement.
4. VCS for itself, its subsidiaries, successors and assigns, does hereby forever
release and discharge Xx. Xxxxxx, his heirs, successors and assigns of and from
all debts, claims, demands, damages, causes of action, losses and expenses of
whatsoever kind or character, whether in contract or in tort, whether arising
under common law or by virtue of statute, federal or state, whether known or
unknown, suspected or unsuspected, or whether having arisen or hereafter to
arise, whether for damages already suffered or yet to be suffered, which the
undersigned ever had, now has or claims to have, or hereafter can, shall, or may
for any reason have, against Xx. Xxxxxx arising out of any matter, event, action
or omission occurring contemporaneously with or before the execution of this
Agreement ("Claims"), including specifically, but without limitation of the
generality of the foregoing, all Claims arising out of Xx. Xxxxxx'x employment
with VCS.
VOICE CONTROL SYSTEMS, INC.
By /s/ Xxxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX
Its Chairman of the Board
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EXHIBIT A
SEVERANCE PACKAGE
VCS shall pay Xx. Xxxxxx $225,000.00, less applicable withholding, FICA and
Medicare taxes.
VCS shall pay Xx. Xxxxxx the program fee to attend one session of the Harvard
Business School Advanced Management Program in 1999.
The agreements described in Attachment A-1 whereby VCS issued Xx. Xxxxxx options
to purchase common stock of VCS are hereby amended as follows:
All options are hereby exercisable;
All options shall terminate on the third anniversary of the termination of
Xx. Xxxxxx'x employment with VCS and its subsidiaries; and
Xx. Xxxxxx acknowledges that this amendment may have the effect that some
of the options that become exercisable in the year in which his employment
terminates are not eligible for tax treatment as incentive stock options
under Section 422 of the Internal Revenue Code of 1986, as amended.
Xx. Xxxxxx and his dependents shall continue to be covered by the health
insurance, including vision and dental coverage, that VCS carries for its
employees, or any substitutes for such plans, and VCS shall pay the premiums for
the coverage of Xx. Xxxxxx and 75% of the premium for coverage of his
dependents.
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ATTACHMENT A-1
NUMBER OF SHARES SUBJECT
TO OPTIONS
(AS ADJUSTED FOR EVENTS
ORIGINAL GRANTOR GRANT DATE SUBSEQUENT TO GRANT)
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VCS Industries, Inc. 5/7/92 35,916
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VCS Industries, Inc. 5/7/92 24,488
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VCS Industries, Inc. 5/7/92 24,488
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VCS Industries, Inc. 5/7/92 10,775
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VCS Industries, Inc. 5/1/93 22,856
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VCS Industries, Inc. 10/1/93 46,788
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Voice Control Systems, Inc. 10/7/94 39,181
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Voice Control Systems, Inc. 10/4/95 50,000
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Voice Control Systems, Inc. 11/13/97 50,000
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Voice Control Systems, Inc. 5/14/98 100,000
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TOTAL 404,492
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EXHIBIT B
SEVERANCE AGREEMENT AND GENERAL RELEASE
In consideration of the receipt by the undersigned of the severance
package described in Exhibit A attached hereto and incorporated herein by
reference from Voice Control Systems, Inc. ("VCS") in conjunction with a change
in the basis of his employment with VCS effective 4-12-99, the receipt and
sufficiency of which is hereby acknowledged, the undersigned, Xxxxx X. Xxxxxx,
for himself, his heirs, executors, administrators, successors and assigns, does
hereby forever release and discharge VCS, its affiliates, directors, officers,
employees, agents and attorneys and their heirs, successors and assigns ("VCS,
et al.") of and from all debts, claims, demands, damages, causes of action,
losses and expenses of whatsoever kind or character, whether in contract or in
tort, whether arising under common law or by virtue of statute, federal or
state, whether known or unknown, suspected or unsuspected, or whether having
arisen or hereafter to arise, whether for damages already suffered or yet to be
suffered, which the undersigned ever had, now has or claims to have, or
hereafter can, shall, or may for any reason have, against VCS, et al. or any of
them arising out of any matter, event, action or omission occurring
contemporaneously with or before the execution of this Release ("Claims"),
including specifically, but without limitation of the generality of the
foregoing, all Claims arising out of the undersigned's employment with VCS or
the termination of that employment.
The undersigned assigns all Claims to VCS.
Specifically included in this Agreement and Release are, among other things, any
and all claims of alleged employment discrimination under the Age Discrimination
in Employment Act, Title VII of the Civil Rights Act of 1964, the Employee
Retirement Income Security Act of 1974 or the Americans with Disabilities Act of
1990, any claims under the Family and Medical Leave Act of 1993, the
Occupational Safety and Health Act or any other federal, state or local statute,
rule or regulation, as well as any claims for alleged wrongful discharge,
negligent or intentional infliction of emotional distress, invasion of privacy,
breach of contract, fraud, or any other unlawful behavior. The undersigned also
agrees not to institute administrative proceedings or a lawsuit against VCS in
regard to any claims, demands, causes of action, damages, losses and expenses,
and he represents and warrants that he has not assigned any claims or any
interest therein to any third party and that no other person or entity has
initiated or will initiate such administrative proceedings or lawsuit on his
behalf. This Agreement and Release shall remain effective in accordance with its
terms even if facts which any with party now believes are true are later found
to be different.
The undersigned shall cooperate with VCS in regard to any claims made or
litigation brought against VCS, as well as in regard to investigations by any
governmental agency.
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This Agreement and Release shall not be construed as an admission by VCS of any
liability or acts of wrongdoing or discrimination, nor shall it be considered or
utilized as evidence of such liability, wrongdoing or discrimination, or for any
purpose other than to secure enforcement of the terms of this Agreement and
Release.
In the event that the Company performs its obligations under this Agreement and
Release and any of VCS, et al. is required to defend a lawsuit or charge of
discrimination filed by the undersigned or on his behalf that is in breach of
this Agreement and Release, the undersigned shall be liable for all reasonable
expenses (including reasonable discovery and other court costs and reasonable
attorneys' fees) incurred by such releasee in defending the same, regardless of
the outcome.
The undersigned acknowledges that signing this Agreement and Release is a
voluntary act on his part and that he has been advised by VCS to consult with an
attorney, and the undersigned shall have seven (7) days from the date of the
execution of this Agreement and Release to change his mind and revoke the
Agreement and Release, in which event the payments set forth in Exhibit "A" will
not be made.
The undersigned affirms that the only consideration for his signing this
Agreement and Release is that stated above and that no other promise or
agreement of any kind has been made to or with him by any person or entity to
cause him to execute this document.
The nature and terms of this Agreement and Release are strictly confidential and
shall not be disclosed by the undersigned at any time to any person outside his
immediate family and legal advisors without the prior written consent of VCS,
except as necessary in any legal proceedings based upon the provisions and terms
of this Agreement and Release, to prepare and file income tax forms, or pursuant
to court order after notice to VCS. Similarly, the Company agrees not to
disclose the nature and terms of this Agreement and Release, except as is
necessary to obtain approval of it, to inform employees and officials with a
"need to know," in any relevant legal proceedings, in any public reporting
documents (to the extent required by law, rule or regulation), and to prepare
proper documentation in tax, legal, accounting, and claim records.
The undersigned acknowledges his obligations regarding trade secrets,
competition and inventions under the Confidentiality and Non-Competition
Agreement with Assignment of Inventor's Rights which he previously executed and
reaffirms that he shall comply with the terms of such agreement.
EXECUTED this 12th day of April, 1999.
/s/ Xxxxx X. Xxxxxx
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