SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is entered into between ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇") and Logix Communications Enterprises, Inc.
("Logix").
Whereas, the employment relationship between ▇▇▇▇▇▇▇ and Logix has been
severed and the parties wish to document the terms of the agreement between
them concerning severance benefits.
Now, therefore, it is agreed:
1. DATE OF SEPARATION. The date of separation of employment and the
effective date of this Agreement is March 15, 2000.
2. SEVERANCE PAYMENTS. Subject to the terms of this Agreement and
applicable tax and withholding requirements, ▇▇▇▇▇▇▇ shall
(i) be paid his base salary, plus 34% of his base salary in lieu of all
incentive compensation, each month for a period ending on March 14, 2003 (the
"Payment Period").
(ii) receive continued health insurance coverage during the Payment
Period, provided that such coverage may be changed or reduced so long as the
coverage provided ▇▇▇▇▇▇▇ is consistent with the coverage provided to Logix
employees generally.
(iii) be entitled to continued participation in the Logix 401(k)
retirement plan during the Payment Period, provided that the 401(k) plan may
be changed or reduced so long as such changes or reductions apply to all
401(k) participants generally.
The obligation in (ii) above shall automatically cease at such time as
▇▇▇▇▇▇▇ obtains employment and qualifies for insurance coverage with an
employer (including a company controlled by ▇▇▇▇▇▇▇) which offers or could
offer substantially the same health and medical coverage. At the sole option
of Logix it may elect at any time during the Payment Period to accelerate the
amount payable under (i) above and pay the full amount for all remaining
months in one lump payment, discounted to present value at the rate of 12%
per annum, and in the event of such lump sum payment the obligations in (ii)
and (iii) above shall also cease. Such lump sum payment shall not shorten
the Payment Period as it applies to the other provisions of this Agreement.
▇▇▇▇▇▇▇ may retain his cell phone and the Oak Tree Country Club membership,
but all expenses of such telephone and membership after the effective date of
this Agreement shall be solely the responsibility of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ shall
change the responsible account party to himself as soon as possible, and
▇▇▇▇▇▇▇ indemnifies and saves Logix harmless from all such expenses. ▇▇▇▇▇▇▇
may also retain internet equipment located in his house.
Except as expressly set forth above, all benefits, reimbursements and
perquisities heretofore provided to ▇▇▇▇▇▇▇, including, without limitation,
life and disability insurance, club memberships, telephone and internet
service, and credit cards, shall terminate on the effective date of this
Agreement, and all property, equipment, files and information of Logix shall
be returned to Logix.
3. STOCK OPTION PROVISIONS.
(a) VESTED OPTIONS. Logix shall pay ▇▇▇▇▇▇▇ the sum of $50,000 as
compensation for relinquishment and return to Logix of 208,500 Logix
Incentive Stock Options previously granted by Logix which have vested. In
consideration of this Agreement ▇▇▇▇▇▇▇ agrees that all rights that he may
have concerning all vested Logix options are null and void and of no effect
and such options are returned to Logix. Such amount shall be paid on or
before May 1, 2000.
(b) UNVESTED OPTIONS. All terms and conditions of the Logix Incentive Stock
Option Plan and the option agreements between Logix and ▇▇▇▇▇▇▇ entered into
under such plan, except as expressly modified in this Agreement, remain in
full force and effect and unchanged. ▇▇▇▇▇▇▇ acknowledges that none of the
Incentive Stock Options granted to ▇▇▇▇▇▇▇ by Logix, other than the vested
options provided for in subparagraph (a) above, have vested, and that due to
his separation no other Logix options will ever vest per the terms of the
Logix option plan and the agreements between ▇▇▇▇▇▇▇ and Logix governing such
options, and that the unvested options granted are null and void and of no
effect and are relinquished and returned to Logix.
(c) TEXAS UTILITIES TRANSACTION. If, on or before April 30, 2000, a "Texas
Utilities Transaction" (as hereinafter defined) occurs between Logix or its
shareholders and Texas Utilities (which as used herein shall include Texas
Utilities or any person or entity directly or indirectly controlling,
controlled by or under common control with Texas Utilities), the provisions
of subparagraphs (a) and (b) above shall be inoperative. Instead of and in
lieu of the provisions of subparagraphs (a) and (b) above, ▇▇▇▇▇▇▇ shall have
the rights that he would have had if he were still employed by Logix under
the "change of control" provisions of the Logix Incentive Stock Option Plan
and his options had not terminated due to his severance. For purposes of
this subsection (c), a "Texas Utilities Transaction" shall mean the
consummation (or the execution of a letter of intent or definitive agreement
on or before April 30, 2000 which subsequently results in consummation) by
Logix or a majority in interest of Logix's shareholders of (i) a sale to
Texas Utilities of at least 51% of the capital stock of Logix, (ii) a merger,
consolidation or similar combination of Logix with Texas Utilities, or (iii)
a sale to Texas Utilities of at least 51% of the assets of Logix.
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(d) ▇▇▇▇▇▇ AGREEMENTS UNAFFECTED. This Agreement is between ▇▇▇▇▇▇▇ and
Logix only and does not affect any rights or obligations of ▇▇▇▇▇▇▇ under any
other agreement arising out of or related to his employment by ▇▇▇▇▇▇
Communications Corporation ("▇▇▇▇▇▇"). Without limiting the generality of
such statement, this Agreement and the general release contained in this
Agreement shall have no effect on any rights or obligations under or as a
result of his interest in (i) the Consulting Agreement between ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ substantially in the form of Exhibit "A" hereto, (ii) ▇▇▇▇▇▇'▇ 1996
Stock Option Plan as amended, (iii) DCC PIK, L.L.C., or (iv) ▇▇▇▇▇▇ Equity,
L.L.C.
4. CONFIDENTIALITY AND NO DISPARAGEMENT. In consideration of the Severance
Payments, ▇▇▇▇▇▇▇ agrees that he will not disclose the terms of this
Agreement and will not make or publish any negative comments or disparaging
remarks about Logix or any of its direct or indirect shareholders, or any of
its officers or directors. Logix may disclose the existence and terms of
this Agreement as required by law or as necessary for its business purposes.
Logix agrees that none of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇, so
long as they are officers, directors or employees of Logix, will make any
statement for the purpose of harming ▇▇▇▇▇▇▇; provided, however, this shall
in no way limit said officers or Logix from candidly describing the
historical performance of Logix and the reasons therefore, even if such
information would reflect poorly on ▇▇▇▇▇▇▇, nor shall this provision in any
event or in any way create any liability to ▇▇▇▇▇▇▇ arising out of any
statement with respect to ▇▇▇▇▇▇▇ which is true.
5. NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION AND TRADE SECRETS.
▇▇▇▇▇▇▇ agrees and acknowledges that Logix's confidential information and
trade secrets belong to and are of great value to Logix. As used herein
"Logix confidential information and trade secrets" includes but is not
limited to the names, addresses, telephone numbers and service and product
preferences of Logix customers and potential customers, as well as other
customer information, financial information, cost and pricing information,
business plans, expansion plans (including Mongoose information), Logix
services information, Logix product and product development information, and
Logix sales and marketing plans and programs, but does not include
information which at the effective date of this Agreement is generally known
to Logix's competitors. In consideration of the Severance Payments, ▇▇▇▇▇▇▇
agrees not to disclose to any third party or use any such confidential
information or trade secrets of Logix. ▇▇▇▇▇▇▇ further represents and
warrants that he has no written confidential information or trade secrets of
Logix or computer files containing the same in his possession, and he will
not remove from Logix's premises any property, customer lists, documents,
files, records, notes, correspondence or other papers (including copies of
these materials) relating to the business of Logix, except with the
permission of Logix.
6. NON-SOLICITATION OF LOGIX'S EMPLOYEES OR CUSTOMERS. In consideration of
the Severance Payments
Page 3
(i) ▇▇▇▇▇▇▇ agrees that he will not for any reason, directly or
indirectly, in any way, solicit, induce, influence, refer, divert or
participate in the referral, solicitation, or diversion of any customer of
Logix to switch to or contract for telecommunication services provided by any
other company in any of the geographic areas and LATAs (Local Access and
Transport Areas) in which Logix transacts business.
(ii) ▇▇▇▇▇▇▇ agrees that he will not, either directly or indirectly,
separately or in association with others, hire, solicit, persuade or entice
any Logix employee to discontinue employment with Logix.
7. TIME LIMIT OF ▇▇▇▇▇▇▇'▇ COVENANTS. ▇▇▇▇▇▇▇'▇ obligations under paragraph
4 of this Agreement shall never terminate. ▇▇▇▇▇▇▇'▇ obligations under
paragraphs 5 and 6 of this Agreement shall terminate at the termination of
the Payment Period. ▇▇▇▇▇▇▇ acknowledges that he will be able to earn a
livelihood without violating the foregoing restrictions and that the
foregoing restrictions are reasonable both in geographical scope and in time.
8. RELEASE OF ALL CLAIMS. By the execution of this Agreement, ▇▇▇▇▇▇▇
agrees to and does hereby release and disc harge and forever forego any
claims, demands, suits, causes of action or other legal rights which he has
or may have against Logix, ▇▇▇▇▇▇ Communications Corporation, their
affiliates and related companies, employees, agents, owners, directors,
officers or other representatives which presently exist as a result of his
employment with Logix or result from the termination of his employment with
Logix. These claims include, but are not limited to, claims under The Civil
Rights Act of 1964, The Civil Rights Act of 1991, The Age Discrimination in
Employment Act, The Older Workers Benefits Protection Act, The Americans with
Disability Act, and any other claim for breach of contract, express or
implied, or for liability sounding in tort, and any claim under any state or
federal statute or regulation. ▇▇▇▇▇▇▇ acknowledges that he has received
monetary consideration for waiver of any claims that he may have under The
Older Workers Benefits Protection Act and The Age Discrimination in
Employment Act. ▇▇▇▇▇▇▇ acknowledges that his signing of this Agreement will
serve as his acknowledgement of the receipt of and the acceptance of the
considerations described herein as the complete and final settlement and full
compensation for any claims or damages of whatever nature suffered in
connection with his employment with and the termination of that employment at
Logix. This release shall be considered to be final and shall be a complete
bar to any legal or equitable action which might be brought by ▇▇▇▇▇▇▇ in
connection with his employment with or the termination of that employment at
Logix, except for (i) actions brought to enforce the terms of this Agreement,
(ii) those matters set out in paragraphs 3(c) and 3(d) above, (iii) the Logix
401(k) retirement plan and other benefits set out in paragraph 2 above, or
(iv) any expense reimbursement requests by ▇▇▇▇▇▇▇ that are unprocessed on
the date of this Agreement.
Page 4
9. SEVERABILITY. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason,
the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect. In the event that any provision or
portion of this Agreement shall be determined to be invalid or unenforceable
for any reason, the invalid or unenforceable provision shall not effect any
other provision of this Agreement, and this Agreement shall be construed as
if the invalid or unenforceable provision had never been contained in it.
10. AGREEMENT SUBJECT TO NON-VIOLATION OF FINANCING AGREEMENTS. The
obligations of Logix under this agreement are subject to any covenants
contained in any present financing, equity sale, or other existing agreement
entered into for the purpose of raising operating capital. In the event any
such covenant impedes Logix's ability to perform this Agreement (considered
in conjunction with similar agreements with other terminated employees),
Logix shall nevertheless perform to the extent possible without violating the
covenant, and the balance of Logix's performance shall be deferred until it
may be permissibly taken.
11. BREACH OF AGREEMENT. Any breach of any term or condition of this
Agreement which is uncured before the 30th day following reasonable notice
given to ▇▇▇▇▇▇▇ by Logix of the default will release Logix from any further
liability to make the Severance Payments or provide benefits to ▇▇▇▇▇▇▇, but
will not release ▇▇▇▇▇▇▇ from his obligations under this Agreement.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
13. ENTIRE AGREEMENT, NO ORAL MODIFICATION. This Agreement states the
entire agreement between the parties concerning the premises, and no
amendment, waiver or modification of any provision of this Agreement shall be
valid unless in writing and executed by the parties.
In Witness Whereof, the parties have executed this Agreement with the
intent to be bound and obligated to the terms of the Agreement.
Logix Communications Enterprises, Inc.
By:
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., CEO
--------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Page 5
EXHIBIT "A"
▇▇▇▇▇▇ Communications Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
March 29, 2000
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Employment Agreement
Dear Chip:
This letter will constitute the employment agreement with ▇▇▇▇▇▇
Communications Corporation ("▇▇▇▇▇▇") for consulting services to be performed
by you as an employee of ▇▇▇▇▇▇. The services to be performed will be those
that are mutually agreed between us from time to time. Your compensation
will be $1,000 per year to be paid annually in arrears, without proration for
partial years, and will be subject to applicable withholding. You will have
no employee benefits other than the specified yearly compensation and
continuation of your vesting in the stock options previously granted to you,
as such vesting is provided for under the terms and conditions of the ▇▇▇▇▇▇
Communications Corporation 1996 Stock Option Plan, as amended ("▇▇▇▇▇▇ Option
Plan").
This agreement will be for a period of one year from January 1, 2000, and
will be renewed automatically a maximum of two renewals on each anniversary
of that date, unless you give notice to ▇▇▇▇▇▇ that you elect to not renew on
or before the expiration of the agreement. This agreement may be immediately
terminated by ▇▇▇▇▇▇ at any time for cause, which shall include, but not be
limited to, any of the actions specified in paragraph 7 of the ▇▇▇▇▇▇ Option
Plan.
Page 6
This agreement is contingent upon your execution of a severance agreement
containing a general release of Logix Communications Enterprises, Inc.
("Logix") concerning the termination of your employment with Logix, and your
full and continued compliance with that agreement. Your employment hereunder
with ▇▇▇▇▇▇ is not contingent upon continued employment with Logix or its
affiliates. If this agreement is acceptable to you, please sign this letter
in the space provided below.
Sincerely,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
AGREED:
---------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
