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EXHIBIT 10.2
SEPARATION AGREEMENT
This Separation Agreement (this "Agreement") is made and entered into as
of September 1, 2000 (the "Effective Date"), by and between SCB Computer
Technology, Inc., a Tennessee corporation (the "Company"), and Xxx X. Xxxxxx,
Xx., a resident of Tennessee ("Xxxxxx").
Introduction. Xxxxxx is a director, officer (Chairman of the Board), and
employee of the Company. The Company and Xxxxxx are parties to the Employment
Agreement dated as of November 1, 1998, as amended by the First Modification to
Employment Agreement dated as of November 1, 1999, and the Second Modification
to Employment Agreement dated as of May 5, 2000 (collectively, the "Employment
Agreement"). The parties desire and have agreed that Xxxxxx will voluntarily
resign from all his positions with the Company and its subsidiaries and other
affiliates as of the Effective Date. The parties also desire and have agreed to
make certain provisions with respect to the termination of Xxxxxx'x
relationships with the Company and his actions relative to the Company following
such termination as specified herein. In consideration of the mutual agreements,
covenants and promises contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Resignation. As of the Effective Date, Xxxxxx hereby voluntarily
resigns as a director, officer (Chairman of the Board), and employee of the
Company and from any and all other positions to which he has been elected or
appointed or in which he is serving with the Company and any of its subsidiaries
and other affiliates.
2. Termination of Employment Agreement. As of the Effective Date, the
Company and Xxxxxx hereby terminate the Employment Agreement and agree that
neither party has any further obligation to the other thereunder.
3. Base Salary. Until the Effective Date, the Company shall continue to
pay to Xxxxxx his base salary, less all applicable taxes and other withholdings,
in accordance with the Employment Agreement and the Company's payroll practices
and procedures then in effect. Taking such payment into account, Xxxxxx confirms
and agrees that the Company will have paid to him all his base salary earned
through the Effective Date, and that the Company will have no further obligation
to pay any base salary to him.
4. Vacation. On September 11, 2000, the Company shall pay $66,751.15 in
cash to Xxxxxx in lieu of the base salary payable with respect to the vacation
days that Xxxxxx has earned under the Company's vacation policy but has not
taken as of the Effective Date ($94,615.38), less all applicable taxes and other
withholdings with respect thereto ($27,864.23). Upon receipt of such payment,
Xxxxxx confirms and agrees that the Company will have paid to him the cash
equivalent of all his unused vacation as of the Effective Date, and that the
Company will have no further obligation to provide him with any vacation or
payment in lieu thereof.
5. Stock Options. Xxxxxx has non-qualified options to purchase 35,211
shares of the Company's common stock (the "Options") which were granted under
the Company's 1997 Stock Incentive Plan, as amended (the "Plan"). The Options
are vested and exercisable in accordance with the Plan. After the Effective
Date, Xxxxxx shall be entitled to exercise the Options in accordance with
Section 5(i) of the Plan, it being understood and agreed by the parties that the
termination of Xxxxxx'x employment with the Company constitutes "Early
Retirement" as defined in the Plan.
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6. KSOP Benefits. Xxxxxx shall be vested in any and all benefits under the
Company's KSOP accrued as of the Effective Date in accordance with the
provisions thereof.
7. Insurance. Until the Effective Date, the Company shall continue to
provide Xxxxxx with medical, dental, long-term disability, and life insurance
coverage under the Company's insurance plans and policies then in effect.
a. Medical and Dental Insurance. As of the Effective Date, the
Company shall provide Xxxxxx with COBRA continuation coverage under the
Company's group medical and dental insurance plans, if Xxxxxx elects such
coverage, pursuant to Section 4980B of the Internal Revenue Code in accordance
with the provisions of such plans; provided, however, that the Company shall
pay, on Xxxxxx'x behalf, the premiums for such medical and dental insurance
coverage during the period beginning on the Effective Date and ending on August
31, 2001, it being understood and agreed that Xxxxxx shall be solely responsible
for the payment of all such premiums that become due thereafter.
b. Long-Term Disability and Term Life Insurance. As of the Effective
Date, Xxxxxx shall be entitled, but not obligated, to convert his coverage under
the Company's group long-term disability insurance plan and term life insurance
plan into an individual policy or policies at his sole expense and in accordance
with all applicable requirements. On September 11, 2000, the Company shall pay
$2,000 in cash to Xxxxxx in lieu of the premiums that the Company otherwise
would have paid on his behalf if Xxxxxx had remained covered under the Company's
group long-term disability insurance plan and group term life insurance plan
during the period beginning on the Effective Date and ending on August 31, 2001.
c. Universal Life Insurance. As of the Effective Date, if Xxxxxx so
elects and notifies the Company thereof, the Company shall transfer to Xxxxxx
all of its right, title and interest in and to the universal life insurance
policy covering Xxxxxx issued by Penn Mutual Life Insurance Company (policy no.
8513944), and Xxxxxx shall assume from the Company and perform all of its
obligations under such insurance policy (including, without limitation, the
obligation to pay the premiums therefor), it being understood and agreed that
the Company would have no further obligation under or with respect to such
insurance policy after the Effective Date.
8. Indemnification and Insurance. The Company shall indemnify Xxxxxx for
his acts and omissions as a director, officer and employee of the Company to the
full extent provided in the Company's charter and bylaws, it being understood
and agreed that such indemnification shall not be exclusive of any right that
Xxxxxx may have under the insurance policies maintained by the Company. The
Company shall maintain in effect the directors, officers and corporate liability
insurance policies existing as of the Effective Date through the end of the
policy periods stated therein.
9. Severance. The Company shall pay $650,000 in cash to Xxxxxx as
xxxxxxxxx in fifty-two (52) semi-monthly installments of $12,500, less all
applicable taxes and other withholdings, on the fifteenth (15th) and last days
of each month from September 2000 to and including October 2002, subject to
Xxxxxx'x performance of all his obligations under this Agreement (including,
without limitation, the obligations set forth in Sections 11-17 and 20-22
hereof) in accordance with the provisions hereof.
10. Benefits. Except as provided in Sections 4-9 hereof, Xxxxxx'x right to
participate in, and receive benefits under, any and all benefit plans, programs
and arrangements maintained by the
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Company by virtue of his service as a director, officer and employee of the
Company (including, without limitation, a car allowance, the reimbursement of
his club dues and expenses, and the reimbursement of his cellular telephone
charges) shall terminate as of the Effective Date. Xxxxxx confirms and agrees
that, except as provided in Sections 4-9 hereof, the Company has no further
obligation to provide any such director, officer and employee benefits to him.
11. Return of Materials. Xxxxxx confirms and agrees that he will deliver
to the Company on or before the Effective Date (a) any and all books, records,
manuals, notebooks, reports, files, lists, letters, memoranda, notes, statements
and other materials, whether prepared by him or others, and regardless of the
medium in which they are presented or stored, relating or referring in any way
to the Company or its business or affairs, and (b) any and all other property
owned or provided by the Company in connection with Xxxxxx'x service as a
director, officer and employee of the Company or otherwise, excluding the two
Company-provided cellular telephones and one Company-provided laptop computer
that are currently in Xxxxxx'x possession. On September 11, 2000, the Company
shall sell and Xxxxxx shall purchase such cellular telephones and laptop
computer, on an "as is, where is" basis and without any express or implied
warranties, and Xxxxxx shall pay $1,180 in cash to the Company as full
consideration therefor.
12. Non-Disclosure and Non-Use of Confidential Information. Without the
prior written consent of the Company, Xxxxxx shall not, directly or indirectly,
at any time from and after the Effective Date (a) reveal, divulge or otherwise
disclose any Confidential Information (as defined herein) to any person or
entity or (b) use or make use of any Confidential Information in connection with
any activity. Notwithstanding the foregoing, Xxxxxx shall not be restricted from
disclosing Confidential Information that is required to be disclosed by
applicable law or legal process; provided, however, that if disclosure of any
Confidential Information is so required, Xxxxxx shall provide the Company with
prompt written notice of such requirement to enable the Company to seek an
appropriate protective order before any such required disclosure is made by
Xxxxxx. The parties acknowledge and agree that this Section 12 is not intended
to, and does not, alter either the Company's rights or Xxxxxx'x obligations
under any applicable law regarding trade secrets and unfair trade practices.
Xxxxxx'x obligations under this Section 12 shall not be affected by, and shall
survive, the expiration or earlier termination of this Agreement.
As used in this Agreement, the term "Confidential Information" means any
confidential or proprietary information possessed by the Company or any of its
subsidiaries or other affiliates, including, without limitation, (a) any
non-public, confidential Company compilations of supplier lists, details of
supplier contracts, customer lists, details of customer contracts, current or
anticipated customer requirements, pricing policies, price lists, market
studies, business plans, operational methods, marketing plans or strategies,
product or service development techniques or plans, computer software programs
(including object code and source code), data and documentation, database
technologies, systems, structures and architectures, inventions and ideas, past,
current and planned research and development, designs, compilations, devices,
methods, techniques, processes, financial information, business acquisition
plans or strategies, new personnel acquisition plans or strategies, and any
other information that would constitute a trade secret under the statutory law
or common law of the State of Tennessee, and (b) any information that the
Company discloses to Xxxxxx pursuant to Sections 18 and 19 hereof.
13. Non-Competition. From the Effective Date to and including October 31,
2002, Xxxxxx shall not, directly or indirectly, unless agreed to in writing in
advance by the Chief Executive Officer of the Company, (a) engage in, own or
have a proprietary or equity interest in, be employed by, or serve as a
consultant, advisor or contractor or in any other capacity for, any person or
entity engaged, in whole or in part, in the Business (as defined herein)
anywhere in the United States of
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America, except that Xxxxxx may beneficially own less than five percent (5%) of
the outstanding equity of any class of a corporation or other entity engaged in
the Business; (b) solicit any Customer (as defined herein), on behalf of Xxxxxx
or any other person or entity, to conduct any business with such Customer that
is the same as or similar to, or is otherwise competitive with, the Business or
to terminate such Customer's business relationship with the Company or any of
its subsidiaries or other affiliates; or (c) solicit any Employee (as defined
herein), on behalf of Xxxxxx or any other person or entity, to terminate his or
her employment relationship with the Company or any of its subsidiaries or other
affiliates.
As used in this Agreement, the following terms have the meanings
indicated below:
"Business" means the business of (a) advising persons and entities on
the acquisition or strategic utilization of information technology systems,
planning and designing new information technology systems, and redesigning
existing information technology systems; (b) providing network design and
management, systems support and maintenance, programming and application
software development, computer code review, data center management, and
information technology outsourcing services; (c) recruiting and training persons
with information technology skills; and (d) any other activity substantially
related to any of the foregoing activities.
"Customer" means any customer or client of the Company, any of its
subsidiaries or other affiliates, or any of its or their predecessor entities
with whom the Company, any such subsidiary or affiliate, or any such predecessor
entity conducted business at any time within two years before the Effective
Date.
"Employee" means any employee of the Company, any of its subsidiaries
or other affiliates, or any of its or their predecessor entities who was
employed by the Company, any such subsidiary or affiliate, or any such
predecessor entity at any time within one year before the Effective Date.
14. Business Referrals. From the Effective Date to and including October
31, 2002, Xxxxxx shall promptly refer to the Company, and shall not take for
himself or direct or assist in directing to any other person or entity, any and
all business opportunities known to Xxxxxx for the performance of information
technology professional staffing services, including, without limitation,
potential new professional staffing clients of the Company and potential
professional staffing projects for existing and new clients of the Company.
15. Standstill. From the Effective Date to and including October 31, 2002,
without the prior written consent of the Company, Xxxxxx, whether individually,
as part of a group (as defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")), or otherwise, shall not, and
shall not encourage or assist any other person or entity to, directly or
indirectly, (a) acquire, agree, offer, seek or propose to acquire, or cause to
be acquired from any person or entity the ownership (including, without
limitation, beneficial ownership as defined in Rule 13d-3 under the Exchange
Act) of any of the Company's businesses or assets, any common stock or other
voting securities issued by the Company, any bank debt, claims or other
obligations of the Company, or any rights or options to acquire ownership of any
of the foregoing; and (b) make or participate in any way in any solicitation of
proxies (as used in the rules under the Exchange Act) to vote, or seek to advise
or influence any person or entity with respect to the voting of, any voting
securities of the Company. Xxxxxx also shall promptly advise the Company of any
inquiry or proposal made to Xxxxxx with respect to any of the foregoing.
16. Stock Transfer Restriction. From the Effective Date to and including
October 31, 2002, except as expressly provided for herein or unless otherwise
consented to in writing in advance by
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the Company, Xxxxxx and his "Permitted Transferees" shall not offer, sell,
assign, transfer, pledge or otherwise dispose of, individually or in the
aggregate, more than fifty thousand (50,000) shares of the Company's common
stock during any period of thirty (30) consecutive calendar days. The provisions
of this Section 16 shall not prohibit Xxxxxx from transferring shares of the
Company's common stock to members of his immediate family, trusts for the
benefit of Xxxxxx or his immediate family, or charitable organizations qualified
under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended
(collectively, the "Permitted Transferees"), provided that the restrictions of
this Section 16 shall apply to such transferred shares in the hands of the
Permitted Transferees. Xxxxxx understands and agrees that the Company may
enforce the provisions of this Section 16 by the delivery of stop transfer
instructions to the transfer agent for the Company's common stock.
17. Cooperation by Xxxxxx.
x. Xxxxxx confirms and agrees that he has provided truthful and
complete answers to all questions asked of him by the Company and its attorneys
and accountants, and has provided to the Company and its attorneys and
accountants all relevant information known to him, relating to all matters
included in the internal investigation conducted by the audit committee of the
Company's board of directors. Xxxxxx confirms and agrees that the questions,
answers and information described in this Section 17.a, having been provided
while he was an employee of the Company, may be attorney-client privileged
information of the Company and, as such, may be subject to the Company's choice
to disclose or not disclose, in its sole discretion. If Xxxxxx is requested to
disclose any such information, Xxxxxx shall promptly notify the Company thereof
and shall not disclose any such information without the Company's prior written
consent, unless otherwise required by law or as necessary for his defense.
b. From and after the Effective Date, Xxxxxx shall cooperate fully
with the Company in connection with any and all investigations and legal
proceedings - whether instituted by the Company, any governmental authority, or
any other person or entity - relating in any way to the Company and covering any
time during the period of Xxxxxx'x employment with the Company. Without limiting
the generality of the foregoing, Xxxxxx shall (1) make himself available at
reasonable times and locations to discuss with the Company and its attorneys and
other advisors any and all matters related to such investigations and legal
proceedings; (2) provide truthful and complete answers to all questions asked of
him by the Company and its attorneys and other advisors; (3) provide to the
Company and its attorneys and other advisors all relevant information known to
him; and (4) provide any other assistance in connection with such investigations
and legal proceedings that the Company may reasonably request from time to time.
The provisions of this Section 17 shall not require Xxxxxx to disclose any
information protected by his attorney-client privilege; provided, however, that
if Xxxxxx discloses to any non-privileged person or entity any privileged
information that was not previously disclosed to the Company, Xxxxxx shall
promptly notify the Company thereof and disclose such information to the
Company.
18. Cooperation by the Company. From and after the Effective Date, the
Company shall provide Xxxxxx with periodic updates on any material development
relating directly to Xxxxxx that occurs in any investigation or legal proceeding
conducted by or before any governmental authority, court or stock exchange. The
provisions of this Section 18 shall not require the Company to disclose any
information that it is prohibited by law from disclosing or that is protected
from disclosure by its attorney-client privilege or any other privilege.
19. Press Releases. The Company shall announce to the public Xxxxxx'x
resignation from the Company in a press release in the form attached as Exhibit
A hereto. With respect to any
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subsequent press release that expressly mentions Xxxxxx by name or otherwise
directly relates to Xxxxxx and that is to be issued by the Company from the
Effective Date to and including October 31, 2002, the Company shall allow Xxxxxx
a reasonable opportunity (not less than twenty-four (24) hours, and not more
than forty-eight (48) hours) to review and comment on such press release before
it is issued, it being understood and agreed that the Company shall have total
control and discretion as to the contents of such press release.
20. Release by Xxxxxx. Xxxxxx, on behalf of himself and his legal
representatives, executors, administrators, distributees, legatees, heirs and
assigns, hereby fully, unconditionally, finally and forever discharges, waives
and releases the Company, each of its subsidiaries and other affiliates, and
each of its and all of their respective shareholders, partners, members,
directors, officers, managers, employees, attorneys and accountants, whether
acting in a representative or individual capacity (the Company and all such
other persons and entities are referred to collectively as the "SCB Parties")
from any and all claims, charges, costs, demands, damages, expenses (including
attorneys' and other legal fees and expenses), liabilities, losses and
obligations of any kind or nature, whether known or unknown, foreseen or
unforeseen, patent or latent, accrued or which may hereafter accrue, absolute or
contingent, or otherwise, and any and all legal actions, causes of action,
litigation, proceedings and lawsuits in respect thereof, whether in law or in
equity (all such claims, charges, demands, damages, expenses, liabilities,
losses and obligations and all such legal actions, causes of action, proceedings
and lawsuits are referred to collectively as "Liabilities"), that he had, has or
purports to have against any or all of the SCB Parties from the beginning of
time to the Effective Date, and which Liabilities directly or indirectly arise
from the termination of Xxxxxx'x employment with the Company, including, without
limitation, all Liabilities arising under (a) all salary, bonus, stock option,
incentive, vacation, insurance and other benefit plans maintained by the Company
and (b) all federal, state and local anti-discrimination, civil rights and human
rights laws, statutes, ordinances, regulations, and executive orders (including,
without limitation, Title VII of the Civil Rights Act of 1964 (as amended), the
Age Discrimination in Employment Act of 1967 (as amended), and the Americans
with Disabilities Act). The provisions of this Section 20 shall not constitute a
release, waiver or discharge by Xxxxxx of the Company from any obligation to him
under (1) this Agreement, (2) the indemnification provisions of the Company's
charter, bylaws and relevant statutes, and (3) third-party insurance policies.
21. Legal Proceedings. Xxxxxx hereby agrees not to directly or indirectly
cause, encourage, or participate in any manner in any legal action, litigation,
lawsuit or other legal proceeding against any of the SCB Parties, except (a) if
required by law, (b) if necessary to enforce this Agreement, or (c) if, but only
to the extent that, an SCB Party directly or indirectly brings any legal
proceeding against Xxxxxx, it being understood and agreed that nothing in this
Agreement shall prevent Xxxxxx from vigorously conducting his defense of any
legal proceeding brought against him.
22. Confidentiality. Except as may be required by applicable law or legal
process, Xxxxxx shall not disclose the existence or terms of this Agreement or
any matter covered herein to any person or entity other than members of his
immediate family and his attorneys and accountants. Except as may be required by
applicable law, legal process, or fiduciary duty, neither the Company nor its
directors, officers or employees shall disclose the existence or terms of this
Agreement or any matter covered herein to any person or entity other than the
Company's attorneys and accountants.
23. Acknowledgment. This Agreement includes a release and waiver of any
claims based on the Age Discrimination in Employment Act of 1967, as amended.
Xxxxxx acknowledges that his waiver of claims is knowing and voluntary, and that
he understands and agrees to the terms and conditions of this Agreement. For the
purposes of the Age Discrimination in Employment Act of
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1967 (as amended) only, Xxxxxx acknowledges that he is receiving consideration
beyond anything of value to which he is already entitled. The Company and Xxxxxx
acknowledge that Xxxxxx does not hereby release any rights or claims that may
arise after the Effective Date. Xxxxxx acknowledges that the Company has advised
him to consult with an attorney before he executes this Agreement. Xxxxxx
acknowledges that the Company has advised him that (a) he can have twenty (21)
days to consider this Agreement (the "Review Period"); (b) if he elects to
execute this Agreement prior to the expiration of the Review Period, he
voluntarily elects to forego waiting for the duration of the Review Period to
execute this Agreement; (c) he can revoke this Agreement for a period of seven
(7) days following the day that he executes this Agreement (the "Revocation
Period"); and (d) this Agreement will not become effective or enforceable until
the Revocation Period has expired. To be effective, any revocation of this
Agreement must be made in writing and delivered to the Company in accordance
with Section 24.b within the Revocation Period.
24. Miscellaneous Provisions
a. Entire Agreement. This Agreement constitutes the entire
understanding between the Company and Xxxxxx and is a complete and exclusive
statement of the terms and conditions of their agreement relating to the subject
matter hereof and supersedes any and all prior negotiations, understandings,
agreements and arrangements, whether written or oral, and whether express or
implied, between the Company and Xxxxxx with respect to the subject matter
hereof, all of which prior negotiations, understandings, agreements and
arrangements are hereby rendered null, void and of no further force or effect.
b. Notices and Other Communications. All notices and other
communications provided for in this Agreement shall be made in writing, shall be
addressed to the receiving party as set forth below, and shall be delivered
either (a) in person, in which case such notice or other communication shall be
deemed delivered upon its actual receipt, (b) by FedEx, UPS or any other
nationally recognized express delivery service, in which case such notice or
other communication shall be deemed delivered upon its actual receipt, or (c) by
the United States mail, return receipt requested, in which case such notice
shall be deemed delivered three (3) days after the same is deposited in a postal
box under the exclusive control of the United States Postal Service. For the
purposes hereof, the addresses of the parties are as follows:
Company: SCB Computer Technology, Inc.
0000 Xxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Executive Officer
With a copy to: SCB Computer Technology, Inc.
0000 Xxxxxx Xxxx-Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Chief Administrative Officer
Xxxxxx: Xxx X. Xxxxxx, Xx.
0000 Xxxxxxxxx
Xxxxxxxxxx, XX 00000
With copies to: Xxxxx X. Xxxxx, Xx.
Xxxxxx, Shelton, Dunlap, Xxxx & Ryder
Xxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000
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and
F. T. Xxxxx, Xx.
Long, Xxxxxxxx & Xxxxxx
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Any party may change its address for the purposes hereof by notifying the other
party of such change in the manner provided for herein.
c. Amendment. This Agreement may be altered, amended, modified or
changed (other than any waiver which shall be effective only if made in
accordance with Section 24.d) only by a written agreement executed by the
Company and Xxxxxx.
d. Waiver. No provision of this Agreement may be waived by any party
hereto unless such waiver is set forth in a written agreement executed by the
waiving party. The waiver of any breach of any provision of this Agreement shall
not be deemed to constitute a waiver of any other breach of the same or any
other provision of this Agreement.
e. Modification and Severability. If a court of competent jurisdiction
declares that any provision of this Agreement is illegal, invalid or
unenforceable, such provision shall be modified automatically to the extent
necessary to make such provision fully legal, valid or enforceable. If such
court does not modify any such provision as contemplated herein, but instead
declares it to be wholly illegal, invalid or unenforceable, such provision shall
be severed from this Agreement, this Agreement and the rights and obligations of
the parties hereto shall be construed as if this Agreement did not contain such
severed provision, and this Agreement otherwise shall remain in full force and
effect.
f. Enforceability. This Agreement shall inure to the benefit of, and
shall be enforceable by and against, Xxxxxx and his legal representatives,
executors, administrators, distributees, legatees, heirs and permitted assigns
and the Company and its successors and assigns.
g. Breach of Covenant. If Xxxxxx breaches or threatens to breach any
provision of this Agreement, the Company shall have the right and remedy to
enjoin, preliminarily and permanently, Xxxxxx from breaching or threatening to
breach such provision and to have such provision specifically enforced by any
court of competent jurisdiction, it being understood and agreed by Xxxxxx that
any such breach or threatened breach would cause irreparable injury to the
Company and that monetary damages would not provide an adequate remedy to the
Company. The rights and remedies referred to in this Section 24.g shall be
independent of each other, shall be severally enforceable, and shall be in
addition to (and not in lieu of) any and all other rights and remedies available
to the Company at law or in equity.
h. Governing Law. This Agreement shall be governed by, construed
under, and enforced in accordance with the laws of the State of Tennessee
without regard to the conflicts-of-laws provisions thereof.
i. Multiple Counterparts. This Agreement may be executed by the
parties hereto in multiple counterparts, each of which shall constitute an
original, and all of which together shall constitute one and the same Agreement.
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j. Arbitration. Any dispute related to this Agreement between the
parties shall be resolved by arbitration in Memphis, Tennessee, pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Costs and
attorneys' fees shall be awarded to the prevailing party in any such
arbitration. Neither the agreement of the parties to arbitrate disputes as set
forth in this Section 24.j nor the pursuit of such arbitration by any party
shall prevent or hinder the Company or Xxxxxx from seeking and obtaining
injunctive relief and specific performance from a court of competent
jurisdiction as contemplated in Section 24.g hereof.
k. Notice of Breach; Opportunity to Cure. If either party breaches any
provision of this Agreement, the other party shall provide the breaching party
with written notice of such breach and an opportunity to cure such breach for a
period of ten (10) calendar days after the delivery of such notice. If the
breaching party fails to cure the breach to the satisfaction of the other party
within such period, the other party thereafter shall be entitled to pursue its
rights and remedies under this Agreement or otherwise.
This Agreement is executed and delivered by the parties hereto on and as
of the date first set forth above.
SCB COMPUTER TECHNOLOGY, INC.
By: /s/ T. Xxxxx Xxxx
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T. Xxxxx Xxxx
Chief Executive Officer
By: /s/ Xxx X. Xxxxxx, Xx.
---------------------------------------
Xxx X. Xxxxxx, Xx.
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EXHIBIT A
Contact: T. Xxxxx Xxxx Xxxx X. Xxxxxx, CPA
Chief Executive Officer Executive Vice President and
901-754-6577 Chief Financial Officer
901-754-6577
SCB COMPUTER TECHNOLOGY REPORTS FIRST QUARTER RESULTS
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XXXX X. XXXXX ELECTED CHAIRMAN OF THE BOARD
MEMPHIS, Tenn. (August 31, 2000) -- SCB Computer Technology, Inc. today
announced results for its first quarter ended July 31, 2000. Revenues for the
first quarter were $35.9 million compared with $44.0 million a year ago. Net
income for the quarter was $593,000, or $0.02 per share (diluted), compared with
$2,386,000, or $0.10 per share (diluted), in the first quarter last year. Net
income for the quarter ended July 31, 2000, included a net gain of $826,000, or
$0.03 per share (diluted), from the sale of a business unit.
Commenting on the results, T. Xxxxx Xxxx, chief executive officer,
said, "Results for the first quarter of fiscal 2001 were ahead of our plan. We
continue to take the necessary steps to position the Company for profitable
growth by focusing our efforts on SCB's core competencies. We are experiencing
good demand for professional services, with the number of billable employees
beginning to stabilize and the average hourly billing rate showing an increase
from the third and fourth quarters of fiscal 2000. We are optimistic about the
future of our company."
SCB also announced that Xxxx X. Xxxxx has been elected to serve as its
non-executive Chairman of the Board. Xx. Xxxxx replaces Xxx X. Xxxxxx, Xx. who
has retired from all of his positions with the Company, including as a director
of SCB. These actions are effective as of September 1, 2000. Xx. Xxxxxx also
will not become a consultant to SCB as previously announced.
Xx. Xxxxx, age 58, has been a director of SCB since December 14, 1999.
He previously was a Group President of Xxxxx & Nephew plc (NYSE:SNN), a global
medical device company, from 1987 until his retirement in 1998, where his
responsibilities included all of the company's activities in North and South
America and Japan. He also was a member of the board of directors and continues
to serve as a consultant to Xxxxx & Nephew plc. Xx. Xxxxx is a director of
AdvaMed, a health industry manufacturers association; National Bank of Commerce;
and Bulab Holdings, Inc., the parent company of Xxxxxxx Laboratories, a
manufacturer of specialty industrial chemicals. He is active in several civic
organizations, including serving as a director of the Memphis Arts Council and
the Memphis/Shelby Crime Commission, a trustee of Xxxxxx College, and the
chairman of the board of trustees of Xxxxx Gallery and Gardens.
Xx. Xxxx went on to say, "It has been a distinct pleasure to have known
and worked closely with Ben for over 25 years, and to have shared the vision of
building SCB. On behalf of the employees of SCB, I want to thank him for his
many years of dedicated service and wish him the very best in the future."
-MORE-
CORPORATE XXXXXX
0000 Xxxxxx-Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, XX 00000
(000) 000-0000 (000-000-0000 Fax (000) 000-0000 xxx.xxx.xxx
11
SCBI Reports First Quarter Results
Page 2
August 31, 2000
Xx. Xxxxx said, "SCB's Board of Directors also extends its thanks and
appreciation to Ben for his leadership and efforts in bringing about this
management transition. Ben has made many contributions to the Company, and we
wish him well in his future endeavors."
Certain statements contained in this press release and related
statements by management may be deemed to be forward-looking statements. These
forward-looking statements involve a number of risks and uncertainties,
including those described in SCB's filings with the Securities and Exchange
Commission. The Company undertakes no obligation to update this forward-looking
information except as required by law.
SCB Computer Technology, Inc. is a leading provider of information
technology management and technical services to Fortune 1000 companies, state
and local governments, and other large organizations. For additional
information, visit SCB=s home page at: xxxx://xxx.xxx.xxx
SCB COMPUTER TECHNOLOGY, INC.
FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
THREE MONTHS ENDED
-------------------------------
7/31/00 7/31/99
------- -------
Revenue $ 35,946 $ 43,968
Cost of services 25,708 30,463
----------- ------------
Gross profit 10,238 13,505
SG&A expenses 9,605 8,679
----------- ------------
Income from operations 632 4,826
Total non-operating income (expense) 348 (845)
----------- ------------
Income before taxes 980 3,981
Income taxes 387 1,595
----------- ------------
Net income $ 593 $ 2,386
=========== ============
Net income per share:
Basic $ 0.02 $ 0.10
=========== ============
Diluted $ 0.02 $ 0.10
=========== ============
Weighted average of common and common
equivalent shares outstanding:
Basic 25,045,324 24,711,924
=========== ============
Diluted 25,045,324 24,762,648
=========== ============
SELECTED BALANCE SHEET HIGHLIGHTS
7/31/00 7/31/99
------- -------
Current assets $ 51,389 $ 59,101
Total assets $ 124,533 $ 146,824
Long-term debt $ 15,735 $ 44,084
Shareholders' equity $ 48,165 $ 56,944
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