EXHIBIT 10.29
EMPLOYMENT TERMINATION
AND SEVERANCE AGREEMENT
This EMPLOYMENT TERMINATION AND SEVERANCE AGREEMENT (this "Agreement")
made and entered into as of April 29, 1998, by and among GSE Systems, Inc., a
Delaware corporation ("GSE"), GSE Erudite Software, Inc., a Delaware
corporation ("Erudite" and together with GSE, the "Companies"), and Xxxxxx
Xxxxxxxxx (the "Employee" and together with the Companies, the "Parties").
W I T N E S S E T H :
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WHEREAS, the Employee has entered into an Employment Agreement dated as
of May 17, 1996 with GSE relating to such Employee's employment as an officer
or employee of one or more of the Companies (the "Employment Agreement");
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Companies are executing and delivering an Asset Purchase
Agreement (the "Xxxxx Agreement") with Xxxxx, Inc. ("Xxxxx") relating to the
sale to Xxxxx of substantially all of the assets of Erudite and the assumption
by Xxxxx of certain liabilities of Erudite (the "Sale Transaction");
WHEREAS, the Parties have agreed that effective upon consummation of the
Sale Transaction (the "Effective Time"), the Employee shall resign all
employment, director and other positions he may hold with either of the
Companies or their affiliates, the Employment Agreements shall terminate, the
Employee shall execute and deliver the noncompetition agreement attached as
Exhibit E to the Xxxxx Agreement (the "Noncompetition Agreement") and the
Employee shall accept employment with Xxxxx pursuant to the terms of the offer
letter presented to him by Xxxxx (the "Offer Letter"), all as provided herein;
NOW, THEREFORE, in consideration of the mutual agreements set forth herein
and intending to be legally bound hereby, the Parties hereby agree as follows:
1. Termination of Employment; Releases .
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(a) The Employee hereby resigns each and every employment,
director or other position such Employee may hold with either of the
Companies or any of their affiliates. The Employment Agreement is hereby
terminated and has no further force or effect.
(b) The Employee hereby releases and forever discharges the
Companies, their affiliates, and their respective officers, directors,
employees and agents (the "Released Persons") from and waives any and all
claims, demands, controversies, actions, causes of action, obligations, damages
and liabilities of any nature whatsoever, whether at law or in equity, known or
unknown, suspected or unsuspected, absolute or contingent (collectively,
"Claims"), that the Employee ever had, now has, or may hereafter have against
any of the Released Persons arising out of, resulting from or related to the
Employee's service as an officer, director, employee or agent of either of the
Companies or any of their affiliates, including without limitation any Claims
that may arise out of, result from or relate to the Employment Agreement,
except that nothing contained herein shall release (i) GSE from its obligations
under Article VI of GSE's Bylaws as in effect on the date hereof or Section 145
of the Delaware General Corporation Law or (ii) either of the Companies from
their obligations under this Agreement. The Employee hereby agrees and
acknowledges that all stock options previously issued to the Employee pursuant
to GSE's 1995 Long-Term Incentive Plan are hereby terminated and surrendered.
(c) Effective upon the first anniversary of the Effective Time,
each of the Companies hereby releases and forever discharges the Employee from
and waives any and all Claims that either of the Companies ever had, now has,
or may hereafter have against the Employee arising out of, resulting from or
related to such Employee's service as an officer, director, employee or agent
of either of the Companies or any of their affiliates, including without
limitation any Claims that may arise out of, result from or relate to such
Employee's Employment Agreement, except that nothing contained herein shall
release the Employee from (i) any Claims as to which either of the Companies
has provided the Employee with written notice on or prior to the first
anniversary of the Effective Time or (ii) his obligations under this Agreement.
2. Acceptance of Employment with Xxxxx. The Employee hereby agrees
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to accept the offer of employment made by Xxxxx pursuant to the Offer Letter
and to execute and deliver the Offer Letter and the Noncompetition Agreement.
3. Certification. The Employee hereby certifies, represents and
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warrants to the Companies as follows:
(a) The Employee has carefully reviewed the representations and
warranties made by the Companies in the Xxxxx Agreement and the information
contained in the Disclosure Schedule to the Xxxxx Agreement, is not aware of
any inaccuracy contained in any such representation, warranty or information
or any breach of any such representation or warranty not fully disclosed in
such Disclosure Schedule, and knows of no information inconsistent with such
representations, warranties and information or necessary to make any thereof
true, correct, accurate and complete in all respects on the date hereof.
(b) The Employee will cooperate with Erudite and Xxxxx in the
preparation of financial statements of Erudite for the period ended April 30,
1998, which are required by the Xxxxx Agreement to be delivered to Xxxxx within
15 days after consummation of the Sale Transaction. The Employee will
carefully review such financial statements and hereby represents, warrants and
covenants with the Companies that such financial statements will be true,
correct, accurate and complete.
4. Severance Payments. In consideration of the agreements and
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certifications set forth in Sections 1-3 of this Agreement and the Employee's
prior service to the Companies, Erudite hereby promises to pay to the Employee
the following severance payments:
(a) Within seven days after the Effective Time, the Companies
shall cause to be paid to the Employee, a severance payment in the amount of
$100,000.
(b) Promptly after the final resolution of all claims for
Damages made by Xxxxx against either of the Companies under Article VI of the
Xxxxx Agreement, the Companies shall cause to be paid to the Employee an
additional severance payment equal to the Additional Amount (as defined below)
plus interest thereon at a simple annual rate of 6% for the period from the
Effective Time to the date such additional severance payment is made to the
Employee. As used herein, the "Additional Amount" means the difference between
(i) $50,000 minus (ii) the product of (A) 0.2970 multiplied by (B) the actual
dollar amount paid or payable by either of the Companies pursuant to Article VI
of the Xxxxx Agreement (after taking into account the provisions of Section 6.5
thereof and including any reduction in the principal amount of the Note issued
by Xxxxx pursuant to the Xxxxx Agreement as a payment made by the Companies
pursuant to such Article VI) provided that (x) the dollar amount reflected in
clause (B) of this sentence shall not include (1) any amounts paid or payable
by the Companies that result from the inability of Xxxxx to collect any account
receivable that it acquired pursuant to the Xxxxx Agreement if the Employee can
demonstrate that the payor of such account receivable became bankrupt or
insolvent after the Effective Time and that none of the Employee,
Xxxxxx Xxxxxxxxx, Xxxx Xxxx, or Xxxxxxx Xxxxxx had any knowledge at the
Effective Time of any information that suggested that such account receivable
might be uncollectible due to the payor's financial condition or (2) any
amounts payable by the Companies that result from a liability to SSI of up to
$40,000 and (y) the dollar amount reflected in clause (B) of this sentence
shall include only 50% of the first $50,000 of any amounts paid or payable by
either of the Companies pursuant to Article VI of the Xxxxx Agreement.
5. Representations and Warranties. Each Party hereby represents and
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warrants to each other Party as follows: (a) such Party has carefully
considered and reviewed the provisions of this Agreement and consulted with
such Party's counsel regarding this Agreement and (b) this Agreement is a valid
and binding obligation of such Party enforceable in accordance with its terms.
6. Miscellaneous.
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(a) Successors. This Agreement shall be
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binding upon and inure to the benefit of the respective successors and assigns
of each Party.
(b) Interpretation and Construction. The headings of the
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Sections of this Agreement have been inserted for convenience of reference only
and shall not be deemed to be a part of this Agreement. Words such as
"herein," "hereof," "hereby," "hereunder" and words of similar import refer to
this Agreement as a whole and not to any particular Section of this Agreement,
unless the context clearly indicates otherwise.
(c) Severability. In the event any provision of this Agreement
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shall finally be determined to be unlawful or unenforceable, such provision
shall be deemed to be severed from this Agreement, and every other provision of
this Agreement shall remain in full force and effect.
(d) Notices. All notices, requests and other communications
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hereunder shall be in writing and shall be deemed to have been duly given at
the time of receipt if delivered by hand or by facsimile transmission or three
days after being mailed, registered or certified mail, return receipt
requested, with postage prepaid to the address or facsimile number listed below
such Party's name on the signature page hereto or if any Party shall have
designated a different address or facsimile number by notice to the other
Parties given as provided above, then to the last address or facsimile number
so designated.
(e) Complete Agreement. This Agreement sets forth the entire
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understanding of the Parties with respect to the subject matter hereof and
supersedes all prior letters of intent, agreements, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
Party or any officer, employee or representative of any Party.
(f) Third Parties. This Agreement is not intended to, and shall
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not, create any rights in or confer any benefits upon anyone other than the
Parties and their successors and assigns.
(g) Governing Law; Consent to Jurisdiction. This Agreement
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shall be governed by, and construed in accordance with, the laws of the State
of Maryland, without giving effect to the conflicts of laws provisions thereof.
THE PARTIES HEREBY AGREE TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL
OR STATE COURTS SITTING IN THE STATE OF MARYLAND, IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT. THE PARTIES AGREE TO ACCEPT SERVICE OF
PROCESS PURSUANT TO THE PROCEDURES SET FORTH IN SECTION 6(d) HEREOF.
(i) Waiver. The waiver by any Party of any matter provided for
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herein shall only be effective if made in writing signed by such Party, but
such waiver shall not be deemed to be a waiver of any other such matter.
(j) Counterparts. More than one counterpart of this Agreement
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may be executed by the Parties , and each fully executed counterpart shall be
deemed an original.
(k) Amendment of this Agreement. Any amendment to this Agreement
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must be effected by the written consent of each Party who is to be bound or
adversely affected by such Amendment.
(l) Effectiveness of this Agreement. This Agreement shall be
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effective as of the Effective Time. In the event the Xxxxx Agreement is
terminated or the Sale Transaction is otherwise not consummated, this Agreement
shall terminate automatically and be of no further force or effect.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
Parties as of the date first above written.
GSE SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Executive Vice President
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Address:
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Fax No.: 000-000-0000
GSE ERUDITE SOFTWARE, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Secretary
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Address:
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Fax No.: 000-000-0000
Xxxxxx Xxxxxxxxx
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XXXXXX XXXXXXXXX
Address:
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Fax No.:________________
