SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") is made and entered into this 28th
day of October, 2002 (the "Effective Date"), by and between Conference Plus,
Inc., a Delaware corporation (the "Company"), and Tim Reedy (the "Executive").
RECITALS
A. The Company desires to hire Executive and recognizes the valuable
services the Executive is expected to render in the future, and desires
assurance the Executive will provide his active participation in the
business of the Company; and
B. The Executive wishes to be hired and to serve the Company but desires
the assurances and benefits provided by this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, the Company and the Executive
hereby agree as follows:
AGREEMENT
ARTICLE 1. DEFINED TERMS
For the purposes of this Agreement, the following terms shall have the
following assigned meanings:
"Board" - means the board of directors of the Company.
"Business" - means the audio, video and date conferencing
services business of Conference Plus, Inc. and
its subsidiaries, and any additional or related
businesses entered into or planned by them
during Executive's employment.
"Cause" - means termination of Executive's employment by
the Company because of: (i) the failure of the
Company to meet any periodic (quarterly or
other) performance target set by the Board
followed by the failure of the Company, after
notice to the Executive of such failure to meet
the next periodic performance target established
by the Board. or (ii) Executive's continued
failure to comply with the specific directions
of the Board after a cure period determined by
the Board, as communicated in a written notice
from the Board or appropriate senior officer,
which notifies him of the specific failure to
comply; or Executive's taking of any action
contrary to specific direction of the Board; or
(iii) the engaging by the Executive in willful,
reckless or grossly negligent misconduct which,
in the good faith determination of the Board, is
materially injurious to the Company, its clients
and customers or their reputations, monetarily
or otherwise, or (iv) the aiding or abetting a
competitor or other breach by the Executive of
his fiduciary duty of loyalty to the Company; or
(v) a breach (other than an immaterial and
inadvertent breach) by Executive of his
obligations of confidentiality or nondisclosure
or (if applicable) any breach of his obligations
of noncompetition or nonsolicitation under any
other written agreement in effect between
Executive and the Company; or (vi) unlawful use
or possession of illegal drugs on the Company's
premises; or (vii) conviction of executive or
pleading guilty or no contest to any felony or
crime involving moral turpitude.
"Change in Control" of the Company shall be deemed to have
occurred as of the first day that any one or
more of the following conditions shall have been
satisfied:
(i) the consummation of the purchase
by any person, entity or group of persons,
within the meaning of Section 13(d) or 14(d)
of the United States Securities Exchange Act
of 1934, as amended, of ownership of fifty
percent (50%) or more of either the total
number of shares of outstanding common stock
of the Company of all classes of or the
combined voting power of the Company's then
outstanding voting securities entitled to
vote generally (but a change of control of
Westell Technologies, Inc. shall not itself
constitute a Change in Control of the
Company);
(ii) a reorganization, merger or
consolidation of the Company, in each case,
with respect to which persons who were
shareholders of the Company immediately prior
to such reorganization, merger or
consolidation do not, immediately thereafter,
own more than fifty percent (50%) of the
combined voting power entitled to vote
generally of the Company or the surviving or
resulting entity (as the case may be);
(iii) a sale of all or substantially all of
the Company's assets.
"Company" means Conference Plus, Inc. subsidiary of
Westell Technologies, Inc. , and in the event of
a Change in Control through purchase of Business
and assets, the purchaser thereof..
"Entity" - means any business, whether a corporation,
partnership, sole proprietorship, limited
liability company, joint venture or other
entity.
"Good Reason" - means without the Executive's written approval,
concurrent with or following a Change in
Control, the Company reduces the Executive's
base salary (as it may be increased from time to
time), unless such reduction is in connection
with a change in the salary structure
commensurate, in the good faith determination of
the Board, with changes in salary for other
executives of the Company generally (but, if
occurring after a sale or merger of the Company
to or with another entity or, if occurring after
employment of Executive by an entity which has
purchased Company assets, only if commensurate,
in the good faith determination of the board of
such entity, with changes in salary for other
executives of such entity.
"Participate In" - means the having of any direct or indirect
interest in any Entity, whether as a partner,
shareholder, member, operator, sole proprietor,
agent, representative, independent contractor,
consultant, franchiser, franchisee, joint
venturer, owner or otherwise, or the rendering
of any direct or indirect service or assistance
to any Entity (whether as a director, officer,
manager, supervisor, employee, agent, consultant
or otherwise); provided that the term
"Participate In" shall not include the mere
ownership of less than 5% of the stock of a
publicly-held corporation whose stock is traded
on a national securities exchange or in the
over-the-counter market.
"Restricted Period" - means the period commencing on the date of any
termination of Executive's employment with the
Company and expiring six months thereafter.
"Severance Pay" - means payment in an amount equal to the
Executive's base salary in effect at the time of
termination of employment, payable in
installments over the year following termination
at the times Executive's base salary would have
been paid if Executive's employment had not
terminated.
"Severance Benefits"- means continuation, at the Company's expense,
for the shorter of six months following
termination or until Executive becomes
re-employed, of all group medical and dental
plan coverage in effect at the time of
termination.
"Term" - means the period commencing on the Effective
Date and expiring two years thereafter.
"Termination Notice" means a written notice which shall indicate the
specific termination provisions of this
Agreement upon which the Company relies in
effecting such termination. For purposes of this
Agreement, no such purported termination by the
Company shall be effective without Termination
Notice.
ARTICLE 2. SEVERANCE PAY
2.1 Termination with Severance Pay and Severance Benefits. The Company may at
any time terminate Executive's employment without Cause or reason, by delivery
to Executive of a Termination Notice. Subject to section 2.3, and provided
Executive is not in breach of any of his obligations hereunder, Executive shall
be entitled to Severance Pay and Severance Benefits upon execution and
effectiveness of a general release of the Company and its affiliates, if:
(i) the Company terminates Executive's employment without Cause during
the Term prior to a Change in Control; or
(ii) the Executive resigns his position for Good Reason during the Term
prior to a Change in Control; or
(iii) a Change in Control occurs during the Term and Executive is
terminated by the Company or the purchaser of its Business without Cause within
one year after the Change in Control (even if such termination is after the
expiration of the Term.); or
(iv) a Change in Control occurs within the Term and Executive resigns
his position for Good Reason within one year following a Change in Control (even
if such resignation is after expiration of the Term).
The Executive's employment shall not be deemed to have been terminated in
connection with a Change in Control through purchase of assets and/or Business
if the Executive is offered
employment by the purchaser for at the least the same equivalent total cash
compensation (base salary plus cash short term incentives). Notwithstanding the
foregoing, unless such purchaser assumes the Company's obligations under this
Agreement, the Company shall remain liable to Executive for Severance Pay and
Severance Benefits upon a subsequent termination of the Executive in accordance
with this section 2.1, within one year following the Change in Control.
2.2 Termination without Severance Pay or Severance Benefits . The Company may at
any time terminate the Executive for Cause, effective upon delivery to the
Executive of a Termination Notice. Executive shall not be entitled to Severance
Pay or Severance Benefits if the Executive dies, resigns his position for other
than Good Reason, does not accept employment described in the final paragraph of
Section 2.1, or is terminated by the Company for Cause
2.3 Forfeiture of Severance Pay and Severance Benefits. If Executive shall
breach (other than an immaterial and inadvertent breach) any obligation of
confidentiality, nondisclosure, noncompetition or nonsolicitation under this or
any other written agreement in effect between Executive and the Company or its
affiliates, then in addition to any rights the Company has under those
agreements to enjoin action and recover damages, the Company shall be released
from any further obligation to pay Severance Pay or provide Severance Benefits
to the Executive. In addition, if after the expiration of the Restricted Period
but prior to the expiration of one year following a termination of employment,
Executive shall engage in any activity described in Section 3.2 (a) through (d),
then the Company shall be released from any further obligation to pay Severance
Pay or provide Severance Benefits to the Executive.
2.4. Accord, Satisfaction, Settlement and Release. Executive agrees, for himself
and for Executive's personal and legal representatives, assigns, executors,
administrators, successors, heirs, distributees, devisees and legatees, that
payment by the Company of Severance Pay and provision of Severance Benefits to
the extent required by this Agreement shall constitute a full, final and
complete accord, satisfaction, settlement and release of any and all claims
and/or suits against, and liabilities of, the Company and its affiliates, ,
whether existing as of the Effective Date, or thereafter arising, that any of
the foregoing persons may have in connection with Executive's employment with
the Company.
2.5 No Obligation to Seek Further Employment. Executive shall not be required to
seek other employment, nor shall the amount of any Severance Payment provided
hereunder be reduced by any compensation earned by the Executive by virtue of
other employment after the date of termination of Executive's employment with
the Company except as specifically set forth in Section 2.3.
2.6 Effect on Other Contractual Rights. The provisions of this Agreement, and
any payment provided hereunder, shall not reduce any amounts otherwise payable,
or in any way diminish Executive's existing rights to COBRA benefits or vested
benefits under retirement plans of the Company, but except for stock option
matters, are provided in lieu of any other termination
benefits or severance payment obligations under any policy or practice of the
Company now or hereafter in effect..
ARTICLE 3. EXECUTIVE COVENANTS
3.1 Confidential Information. Executive acknowledges that the information,
observations and data obtained by him during the course of his employment by the
Company concerning the Business and affairs of the Company and its affiliates
(the " Company Information") are confidential and are the property of the
Company or its affiliates.. Executive hereby agrees that he shall not disclose
to any unauthorized person or use for his own account or for the account of any
third party any Company Information without the Company's written consent,
unless and then only to the extent the Westell Company Information becomes
generally known to and available for use by the public other than as a result of
Executive's acts or failure to act. Executive shall use his best efforts to
prevent the unauthorized misuse, espionage, loss or theft of the Company
Information. Executive further agrees to deliver to the Company at the
termination of his employment, or at any other time the Company may request in
writing, all memoranda, notes, plans, records, reports and other documents (and
copies thereof) relating to the Business of the Company that Executive may then
possess or have under his control.
3.2 No Competition. Whether or not Executive is entitled to Severance Pay or
Severance Benefits, Executive agrees that during the Restricted Period,
Executive shall not, directly or indirectly, for himself, or for any Entity,
without the prior written consent of the Board of Directors of Conference Plus,
Inc. and the Board of Directors of Westell Technologies, Inc. through its Chief
Executive Officer (which may be given or denied in his sole discretion):
(a) engage in or Participate In the Business or any other business
that competes with, or develops or offers products or services
competitive with the Business, from Illinois or any state or
country in which the Company has Business or customers, or has
solicited customers; nor
(b) engage in or Participate In the Business or any other business
that competes with, or develops or offers products or services
competitive with the Business, from any other location
throughout the world; nor
(c) call upon, solicit, serve, or accept business, from any
customer or prospective customer (wherever located) of the
Company for the purpose of selling products or services
competitive with the Business; nor
(d) interfere with any business relationship of the Company, with
any of their customers or prospective customers or induce any
such customers or prospective customers to discontinue or
reduce their relationship with the Company.
Nothing in any provision of clauses (a) through (d) above shall be deemed to
prohibit Executive from accepting employment with a customer or supplier of the
Company which is not also a competitor of the Company,
3.3 No Solicitation. Whether or not Executive is entitled to Severance Pay or
Severance Benefits, Executive shall not, during the Restricted Period: (i)
induce or attempt to induce any person who is employed by the Company in any
capacity to leave such person's position, or in any way interfere with the
relationship between the Company and such person, or (ii) hire directly or
through another entity, in any capacity, any person who was employed by the
Company within 12 months prior to termination of Executive's employment or
during the Restricted Period, unless and until such person has been separated
from employment with the Company for at least six months.
3.4 Intellectual Property.. Executive assigns to Company all right, title, and
interest in and to any and all inventions, original works of authorship,
developments, concepts, improvements or trade secrets, whether or not patentable
or registrable under copyright or similar laws, which Executive may have solely
or jointly conceived or developed or reduced to practice, or cause to be
conceived or developed or reduced to practice, during the period of time
Executive is in the employ of Company (collectively referred to as
"Inventions"). The term "Inventions" shall not include, and this Paragraph shall
not apply to, any invention for which no equipment, supplies, facility, or trade
secret information of Company was used and which was developed entirely on
Executive's own time, unless (a) the invention relates (i) to the business of
Company, or (ii) to Company's actual or demonstrably anticipated research or
development, or (b) the invention results from any work performed by Executive
for Company. Executive further acknowledge that all original works of authorship
which are made by Executive (solely or jointly with others) within the scope of
and during the period of Executive's employment with Company and which are
protected by copyright were "works made for hire," as that term is defined in
the United States Copyright Act.
3.5 Reasonable Scope and Duration. Executive acknowledges that these
restrictions are reasonable in scope, are necessary to protect the trade secrets
and other confidential and proprietary information of the Company, that the
benefits provided hereunder are full and fair compensation for these covenants
and that these covenants do not impair Executive's ability to be employed in
other areas of his expertise and experience. Specifically, Executive
acknowledges the reasonableness of the international scope of these covenants by
reason of the international customer base and prospective customer base and
activities of the Company, the widespread domestic and international scope of
Executive's contacts created during his employment with the Company, the
domestic and international scope of Executive's responsibilities with the
Company and his access to marketing strategies of the Company. Notwithstanding
the foregoing, if any court determines that any of the terms herein are
unreasonable or unenforceable, such court may interpret, alter, amend or modify
any or all of such terms to include as much of the scope, time period and intent
as will render such restrictions enforceable, and then in such reduced form,
enforce such terms.
ARTICLE 4. ADDITIONAL PROVISIONS
4.1 Equitable Remedies. Executive agrees that any breach or violation of the
covenants contained in Articles 3 of this Agreement would cause the Company
irreparable loss and damage for which money damages would be inadequate.
Therefore the parties agree that in the event of any breach or violation or
attempted breach or violation by the Executive of the covenants contained in
Articles 3, the Company may enforce the terms of this Agreement in a suit at
equity. In connection therewith, the Company may obtain a preliminary injunction
or restraining order immediately upon the commencement of any such suit, without
notice. Employee hereby waives any requirement or entitlement to demand that the
Company post any bond in connection with such suit. Employee also agrees that
any action for an injunction or restraining order shall be without prejudice to
any other remedy, cause of action for money damages or otherwise that the
Company may have by reason of breach, violation or attempted breach or violation
of this Agreement by Executive.
4.2 Successors and Assigns.
(a) The Company may, from time to time during the Term, cause a
purchaser of the business and assets of the Company to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such assumption had taken place.
In that event, such purchaser shall become primarily liable to Executive for
payments hereunder, and the Company shall be thereafter released from any
further obligations under this Agreement.
(b) This Agreement shall inure to the benefit of and be enforceable by
the parties and their personal and legal representatives, assigns, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts remain payable hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Executive's devisee, legatee, or other designee
or, if there be no such designee, to the Executive's estate.
4.3 Notice. For purposes of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States registered mail,
return receipt requested and postage prepaid, addressed, in the case of
Executive, to his latest address in the Company records, and in the case of the
Company, to the Company's principal office, provided that all notice to the
Company shall be directed to the attention of the Board of Directors with a copy
to the Secretary of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
4.4 Waiver, Amendment and Integration. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
4.5 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, excluding conflicts of law
principles.
4.6 No Employment Contract. Nothing in this Agreement shall be deemed to
constitute a contract or guaranty of employment or alter the at-will status of
Executive's employment.
4.7 Validity. The invalidity or unenforceability of any provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
4.8 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
4.9 Interpretation. Except where otherwise set forth to the contrary, references
to Articles, sections and parties mean Articles, sections and parties to this
Agreement; The word "including" means "including without limitation;" The use of
any pronoun in the singular or masculine form shall be deemed to include the
plural, feminine or neuter forms, as appropriate.
4.10 Tax Effect. All payments and benefits provided hereunder shall be provided
net of applicable withholding.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date.
CONFERENCE PLUS INC. EXECUTIVE
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