EXHIBIT 10(b)
August 22, 1994
Mr. Charles W. Oswald
National Computer Systems, Inc.
11000 Prairie Lakes Drive
Eden Prairie, MN 55344
Dear Charley,
The purpose of this letter is to set forth the agreement reached
by and between Charles W. Oswald ("Oswald") and David C. Cox,
on behalf of the Board of Directors of National Computer Systems,
Inc. ("NCS") and as approved by the Board of Directors of NCS
at a regularly scheduled Board of Directors meeting held on
August 22, 1994. Oswald, Chairman of the Board of Directors and
Chief Executive Officer, was not present at the Board meeting
during the time these matters were discussed and did not
participate therein.
1. Oswald will continue employment with NCS at his current
salary level through May 31, 1995. Oswald will not be eligible
for bonuses based on periods after January 31, 1995.
2. Oswald's Long-Term Incentive Plan Award will be 100% vested
as of January 31, 1995. Accordingly, the release of the awarded
shares of Common Stock and the payment of the awarded cash
amount will be completed as soon as practicable thereafter.
3. Incentive stock options issued to Oswald and dated May 23,
1991; May 21, 1992; and May 20, 1993 will be forfeited as of
August 22. Non-qualified options to acquire NCS Common Stock
will be issued on August 22, 1994, subject to Shareholder
approval, in the same number of shares, at a comparable option
price per share and with the same remaining term as was available
under the above described incentive options which are being
forfeited.
4. In recognition of the key role that Oswald has performed in
the long-term success of NCS and as a continuing valuable
resource to the Company, its officers and directors, Oswald will
be granted, as of August 22, 1994, and subject to Shareholder
approval, a non-qualified option to acquire up to 50,000 shares
of NCS Common Stock at the option price of $13.13 per share, the
Fair Market Value of the Stock as of this date. Said option will
be 100% exercisable after 6 months following date of grant or
upon Shareholder approval, whichever is later, and will be
exercisable for a term of 5 years following date of grant.
5. NCS will, beginning June 1, 1995 and continuing through May
31, 1998, pay the premiums for Medicare and Medicare supplemental
coverage, excluding dental or life insurance coverage, to provide
for medical benefits to Oswald and his wife, Sally, approximately
comparable to those provided for NCS employees.
6. Should NCS medical benefits change, the method of delivery of
such benefits change or other medical benefits are delivered
because of governmental laws or regulations, NCS may make changes
to coverage provided, in accordance with the stated intent of
providing coverage comparable to that provided to NCS employees.
7. If Oswald should die prior May 31, 1998, the coverage as
agreed to and set forth above will be maintained for Oswald's
wife, Sally, until May 31, 1998.
8. NCS, for a period of 5 years beginning June 1, 1995, will
reimburse Oswald up to $65,000 annually for actual offsite office
and secretarial expenses.
9. The Board of Directors of NCS urges Oswald's continuation on
the Board and will, unless Oswald is unable to or desires not to
serve, include Oswald as one of the directors to be presented to
the NCS Shareholders as management's nominee for election as a
Director at the next annual meeting of Shareholders.
10. Oswald agrees to be available to advise Mr. Russell Gullotti
as requested in the future.
11. In consideration of this agreement, Oswald, with the advice
of counsel, hereby releases and discharges NCS, its employees,
directors, officers, agents, successors, and assigns from any and
all liability for damages or claims of any kind and agrees not to
institute any claim for damages or otherwise, by charge or
otherwise, nor authorize any other party, governmental or
otherwise, to institute any claim via administrative or legal
proceedings against NCS for any such claims including, but not
limited to, any claims arising under or based upon the Minnesota
Human Rights Act, Minn. Stat. Section 363.01 et seq.; Title VII
of the Civil Rights Act, 42 U.S.C. Section 2000e et seq.; the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq.;
or the American With Disabilities Act, 42 U.S.C. Section 12101 et
seq.; and any contract, quasi contract, or tort claims, whether
developed or undeveloped, arising from or related to Oswald's
employment with NCS, and/or the cessation of Oswald's employment
with NCS.
12. Oswald has been informed of his right to rescind this
agreement as far as it extends to potential claims under Minn.
Stat. Section 363.01 et seq. (prohibiting discrimination in
employment) by written notice to NCS within fifteen (15) calendar
days following his execution of this agreement. To be effective,
such written notice must either be delivered by hand or sent by
certified mail, return receipt requested, addressed to Mr. J. W.
Fenton, Jr., Secretary-Treasurer, National Computer Systems,
Inc., 11000 Prairie Lakes Drive, P.O. Box 9365, Minneapolis, MN
55440, delivered or post-marked within such fifteen (15) day
period. Oswald understands that NCS will have no obligations
under this agreement in the event such notice is timely
delivered.
13. Oswald has been informed of his right to revoke this
agreement as far as it extends to potential claims under the Age
Discrimination in Employment Act, 29 U.S.C. Section 621 et seq.
by informing NCS of his intent to revoke this agreement within
seven (7) calendar days following his execution of this
agreement. To be effective, such written notice must either be
delivered by hand or sent by certified mail, return receipt
requested, addressed to Mr. J. W. Fenton, Jr., Secretary-
Treasurer, National Computer System, Inc., 11000 Prairie Lakes
Drive, P.O. Box 9365, Minneapolis, MN 55440, delivered or post-
marked within such seven (7) day period. This agreement shall
not become effective or enforceable until the seven (7) day
period has expired.
14. Oswald has also been informed that the terms of this
agreement shall be open for acceptance by him for a period of
twenty-one (21) days during which time he may consider whether to
accept this agreement.
15. This agreement constitutes a contract enforceable against
either party and shall be construed and enforced in accordance
with the laws of the State of Minnesota. Nothing contained in
this agreement is intended to violate any applicable law. If any
part of this agreement is construed to be in violation of a state
and/or federal law, then that part shall be null and void, but
the balance of the provisions of this agreement shall remain in
full force and effect.
16. The terms of this agreement shall remain strictly
confidential between the parties hereto, and shall not be
disclosed to third persons unless required by law.
17. Oswald hereby affirms and acknowledges that he has read the
foregoing agreement and that he has been advised to consult with
an attorney prior to signing this agreement. Oswald agrees that
the provisions set forth in this letter are written in language
understandable to him and further affirms that he understands the
meaning of the terms of this agreement and their effect. Oswald
represents that he enters into this agreement freely and
voluntarily.
/s/ DAVID C. COX
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David C. Cox for
National Computer Systems, Inc.
and its Board of Directors
Date: 11-9-94 /s/ CHARLES W. OSWALD
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Charles W. Oswald