Exhibit 10.25
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SEVERANCE COMPENSATION AGREEMENT
This agreement is entered into effective as of October 19, 1994, between
Delphi Information Systems, Inc. ("Delphi") and David J. Torrence ("Mr.
Torrence") for the purpose of setting forth their mutual agreements and
understandings concerning Mr. Torrence's severance of his employment with
Delphi and related compensation arrangements as follows:
1. Mr. Torrence voluntarily resigns as Chief Executive Officer and as
a member of Delphi's Board of Directors effective October 31, 1994. Mr.
Torrence voluntarily resigns all other positions with Delphi, including as an
employee, effective as of December 31, 1994.
2. Subject to F.I.C.A. and federal and state withholding taxes, Delphi
(a) shall continue to pay $19,562 per month to Mr. Torrence in accordance with
its standard payroll practices for executives through December 31, 1995, and (b)
on December 31, 1994, shall pay to Mr. Torrence any accrued but unpaid vacation
(up to four weeks). Subsequent to December 31, 1994, Mr. Torrence shall no
longer accrue any vacation.
3. No further bonuses shall be payable to Mr. Torrence.
4. Subject to the terms thereof and to the extent that such plans (or
replacements therefor) continue to be maintained by Delphi, Mr. Torrence
shall continue to participate at Delphi's expense in the medical, life
insurance and long-term disability insurance plans of Delphi in which he was
participating at October 19, 1994, (or their replacements) until the earlier
of (a) December 31, 1995, or (b) the date on which he becomes eligible to
participate in comparable plans offered by another employer. Beyond December
31, 1995, Mr. Torrence shall have such right as is provided by COBRA to
continue to participate in the medical plan of Delphi at his expense.
5. Subject to the terms thereof, Mr. Torrence may continue to
participate in Delphi's stock purchase plan and Section 401(k) plan through
December 31, 1995.
6. Pursuant to the 1993 Stock Incentive Plan, Mr. Torrence shall be
granted a 50,000 share non-qualified stock option at a per share exercise price
equal to the "Market Price" effective October 19, 1994. Subject to paragraph
10(b), the vesting schedule will be:
12,500 shares vesting 6/1/95
12,500 shares vesting 1/1/96
12,500 shares vesting 6/1/96
12,500 shares vesting 1/1/97
Subject to the terms of the 1993 Stock Incentive Plan, the vested
portion of the stock option shall remain exercisable until 7/1/97. Market
Price" shall mean the average of the closing prices for Delphi's common
shares on the NASDAQ National Market System as reported in THE WALL STREET
JOURNAL for the ten days most immediately prior to October 19, 1994, on which
a trade for such shares was reported.
7. Mr. Torrence's obligation under the November 11, 1991, agreement to
lend Mr. Torrence $66,000, which is being ratably forgiven over the first
four years of his employment, will continue to be ratably forgiven following
the execution of this agreement, regardless of the changes in Mr. Torrence's
employment status.
8. At its election, Delphi will either (a) reimburse Mr. Torrence up
to $400 per month for out-of-pocket expenses through December 31, 1995,
incurred by him to maintain an office and for telephone and secretarial
services, or (b) provide similar services to Mr. Torrence. Such
reimbursements will be made by Delphi promptly upon submission by Mr.
Torrence of documentation of such expenses.
9. As a condition to the receipt of payments and benefits (including the
vesting of options) described above, Mr. Torrence agrees:
a. To provide consulting assistance to Delphi by telephone or in
person for 24 months commencing January 1, 1995, but such consulting services
shall not require more than 20 hour per month on Mr. Torrence's part, and shall
not be required at such times or in such manner as would interfere with Mr.
Torrence's other employment or business activities, if any.
b. To refrain from competing with Delphi and its subsidiaries,
whether as proprietor, employee, officer, director, partner, shareholder,
consultant or otherwise, in any business that Delphi is engaged in on January
1, 1995, (the "Commencement Date"), in any geographical area where Delphi and
its subsidiaries are actually and actively competing in such businesses at
the Commencement Date, for a period of two years from the Commencement Date.
The foregoing shall not prevent Mr. Torrence from acquiring or holding up to
a 5% equity interest in any publicly held corporation.
c. To refrain from using or disclosing to others any trade secret
or proprietary information of Delphi obtained by him while an employee or
director of Delphi (including, without limiting the generality of the
foregoing, business strategy, customer lists, pricing information, and source
codes). This obligation shall not apply, however, to any such information
which has become publicly available without fault on the part of Mr. Torrence.
d. To refrain from hiring, or from advising any other person,
firm or corporation to hire, any active employee of Delphi, and to refrain
from inducing any employee of Delphi to leave such employment, for a period
of two years from the Commencement Date. This obligation shall not, however,
prevent Mr. Torrence from responding to any request for a reference from any
existing or former employee of Delphi who is seeking alternative employment
with a person, firm or corporation which is not Mr. Torrence's employer. Ms.
Peggy Cacioppo, Mr. Torrence's Executive Assistant, is excluded from this
condition.
e. To refrain from any act or statement that would or might cause
competitive damage to Delphi (including, without limiting the generality of
the foregoing, any disparagement of Delphi or its products, systems or
management) for a period of two years from the date hereof.
f. To refrain from disclosing to any subsequent employer or
prospective employer the terms of Paragraphs 1 through 8 of this Agreement.
g. At Delphi's request, to resign as a director of Alliance for
Productive Technology, Inc. and discontinue participation in its activities.
10. Mr. Torrence acknowledges that damages would not be an adequate
remedy to Delphi for any breach by him of any of the provisions of Paragraph
9 hereof and that accordingly, in the event of any such breach Delphi shall
be entitled (a) to suspend payments and benefits to Mr. Torrence hereunder,
(b) terminate the future vesting of the stock options described in paragraph
6 above, and (c) to obtain an order of specific performance and/or a
restraining order or injunction, as appropriate.
11. It is the intention of Delphi and Mr. Torrence that their
relationship subsequent to October 19, 1994, shall be governed solely by this
Agreement and that all prior agreements, understandings and arrangements
between them shall be superseded by this Agreement. Delphi hereby releases
Mr. Torrence, and Mr. Torrence hereby releases Delphi, to the fullest extent
permitted by law, from all claims and causes of action that the releasing
party may have that arise from their agreements, understandings and
arrangements superseded hereby, or that arise from the employment
relationship, prior to October 19, 1994.
12. Without by implication limiting the foregoing, in consideration of
the promises referred to herein, the sufficiency of which is hereby
acknowledged, Mr. Torrence, on behalf of himself and his heirs and personal
representatives, does hereby fully, finally and unconditionally release and
forever discharge Delphi and its affiliated entities, and their respective
former and present officers, agents, employees and directors, and all of
their respective predecessors, successors, heirs, personal representatives
and assigns ("Releasees"), in both their personal and corporate capacities,
from any and all rights, claims, liabilities, obligations, charges, damages,
costs, expenses, attorneys' fees, suits, actions, causes of action and
demands, of any and every kind, nature and character, known or unknown,
liquidated or unliquidated, absolute or contingent, in law and in equity,
enforceable or arising under any local, state or federal common law,
constitution, statute, regulation or ordinance of the United States or any of
the states of the United States or any municipality or other governmental
entity in the United States, including without limitation rights and claims
arising under the Age Discrimination in Employment Act of 1967, as amended,
29 U.S.C. Section 621 ET SEQ., Title VII of the Civil Rights Act of 1964, as
amended, 42 U.S.C. Section 2000e ET SEQ., the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. Section 1001 ET SEQ., the
Americans with Disabilities Act of 1990, as amended, 42 U.S.C. Section 12101
ET SEQ., the Consolidated Omnibus Reconciliation Act of 1985, as amended,
I.R.C. Section 4980B, the Fair Labor Standards Act of 1938, as amended, 29
U.S.C. Section 201 ET SEQ., the Civil Rights Act of April 9, 1866, 42 U.S.C.
Section 1981 ET SEQ., the National Labor Management Relations Act, 29 U.S.C.
Section 141 ET SEQ., the Occupational Safety and Health Act, 29 U.S.C.
Section 651 ET SEQ., the Illinois Human Rights Act, as amended, 775 ILCS
5/1/-101 ET SEQ., the Illinois Wage Payments and Collection Act, 820 ILCS
115/1 ET SEQ., and the Chicago Human Rights Ordinance, as amended, Chicago,
Ill. Code Section 2-160-010 ET SEQ., which Mr. Torrence or his heirs or
personal representatives many now have, have ever had or may in the future
have, which arise out of or are in any way connected with Mr. Torrence's past
employment with Delphi or its affiliates or any of the Releasees or the
termination of said employment or which arise out of or are in any way
connected with any past actions or omissions of Delphi or its affiliates or
any of the Releasees, including without limitation claims for compensation,
wages and benefits except as specifically provided for in this Agreement.
Mr. Torrence covenants not to sue or to file any actions, lawsuits or claims
of any kind against Delphi,
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or its affiliates or any of the Releasees with respect to rights and claims
covered by this release, except for a violation of the terms of this Agreement.
13. Mr. Torrence acknowledges that he was advised by Delphi to consult
with an attorney prior to executing this Agreement and that he could have
twenty-one days within which to consider this Agreement.
14. Mr. Torrence acknowledges that he has read this Agreement, that he
understands the provisions of this Agreement and that he is executing this
Agreement voluntarily, of his own free will. Mr. Torrence further represents
that in executing this Agreement, he does not rely on any inducements,
promises or representations made by Delphi or its representatives, other than
those expressly embodied herein.
15. This agreement shall be governed by and construed in accordance with
the laws of the State of Illinois. This Agreement may be executed in
counterparts, but all counterparts shall be considered as a single instrument.
This Agreement supersedes all prior agreements and understandings between the
parties relating to these subjects.
16. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, legal representation and assigns.
Delphi shall be responsible for all payments and obligations hereunder.
IN WITNESS WHEREOF, this Agreement has been executed by the parties
of October 19, 1994.
DELPHI INFORMATION SYSTEMS, INC.
/s/ David J. Torrence By: /s/ M. Denis Connaghan
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David J. Torrence President and Chief Operating Officer
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