Exhibit 99.2
SEPARATION AGREEMENT
THIS SEPARATION AGREEMENT (the "Agreement") is made and entered into as of the
5th day of March 2003 by and between Xxxxx X. Xxxxxxxx ("Executive") and Neon
Systems Inc., a Delaware corporation having an office at 00000 Xxxxxxxxx
Xxxxxxx, Xxxxxxx, Xxxxx 00000, and its respective owners, successors, partners,
directors, officers, employees, former employees, consultants, agents and
assigns ("Employer").
R E C I T A L S
(1) Executive and Employer have entered into an Employment Agreement.
(2) Executive and Employer have mutually agreed that Executive's employment as
President and Chief Executive Officer and as a Class I Director on the Board of
Directors of the Employer and all other relations with Employer will continue
through the end of business on March 5, 2003, at which time his employment will
be terminated and shall trigger the benefits outlined in Section (3) below.
(3) Executive and Employer have agreed that upon Executive's execution of this
Agreement and the compliance by Executive of the covenants set forth herein,
Executive shall receive
a) payment of salary accrued through March 5, 2003.
b) a one-time cash payment of Two Hundred Twenty-Five Thousand and No/100
Dollars and No Cents ($225,000.00), less applicable payroll deductions,
paid on the eighth day after execution of this Agreement, provided there is
no rescission of this Agreement within seven days of execution of same;
c) extension of the permitted exercise date of Executive's 124,999 vested
options to purchase Employer's common stock at an exercise price of $5.97
(the "Vested Stock Options") from ninety (90) days after termination of
employment to March 5, 2005;
d) assignment of NEON's interest in all computer equipment and
telecommunications equipment (mobile phone and Blackberry) assigned to
Executive and provision of IT technical support for such equipment and
Executive's home network through September 30, 2003;
e) continuation of health insurance benefits through September 30, 2003;
f) reimbursement of outstanding unpaid business expenses incurred by Executive
while on Employer business through March 5, 2003, provided you submit the
necessary documentation to Employer by March 31, 2003 and provided the
documentation is in compliance with the expense policies of Employer;
g) continued coverage under Employer's Director and Officer Insurance Policy,
to the extent that the Employer has obtained such coverage and to the
extent that coverage is provided to Executive by the policy so obtained,
for any claims made against the Executive in connection with his actions
taken on behalf of the Employer in the Executive's capacity as an officer
and/or director during the term of his employment.
(4) In consideration for the additional benefits granted in Section (3) above,
Executive desires to RELEASE EMPLOYER FROM ANY AND ALL LIABILITIES AND/OR
OBLIGATIONS IN CONNECTION WITH EMPLOYEE'S EMPLOYMENT AND/OR SEPARATION OR ANY
OTHER RELATION BETWEEN EMPLOYEE AND EMPLOYER, except with regard to
post-employment payment obligations of Employer provided for in this Separation
Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, and the promises,
covenants, terms and conditions contained herein, the receipt and sufficiency of
which are forever acknowledged and confessed, the parties hereto agree as
follows:
1. Executive's employment with Employer will be terminated effective as of
close of business March 5, 2003.
2. Upon agreeing to the terms of this Agreement and indicating such agreement
by signing below, Executive shall receive the benefits stated in Section (3)
above, subject to such conditions as required therein.
3. Pursuant to the terms of the 1999 Employee Stock Option Plan or 2002 Stock
Plan and the Executive's Stock Option Agreement, Executive shall have a period
of two (2) years commencing from March 5, 2003 and ending at the close of
business on March 5, 2005 in which to exercise the Vested Stock Options.
4. Executive agrees to return to Employer any and all Employer-related
materials or documents in the possession or under the control of Executive,
whether in hard copy, computer generated format or otherwise, together with any
and all property of Employer in the possession or under the control of
Executive.
5. Executive agrees to cooperate with Employer with respect to any press
releases or other disclosure required under corporate law or federal and state
securities laws and provide an orderly transition of duties as may be requested
by the Board of Directors.
6. Executive further agrees to delete any and all computer files relating to
Employer, which files are in the possession or under the control of Executive.
Executive further agrees: (1) to keep confidential such proprietary information,
including, but not limited to all trade secrets, confidential knowledge, data or
other proprietary information pertaining to any part of the business of Employer
or of any of its employees; (2) that on or before March 15, 2003, he will
deliver to Employer all documents, data and property of any nature belonging to
or pertaining to the business of Employer; (3) that he has not taken nor will he
ask anyone else to take or deliver to anyone else any documents or data of any
description containing or pertaining to any information proprietary to Employer,
(4) that he will not contact any
prior, current, or future customers of Employer regarding Employer as a company
or any product that Employer may produce, now or in the future, (5) that he will
restrict his contact with Employer, including any and all of its employees, to
professional matters, and that any contact shall take place during regular
business hours and at the formal business address listed for Employer; provided,
however, that personal contact with social friends without complaint shall not
be deemed a violation of this covenant.
7. Executive and his heirs, administrators, executors, successors and assigns
DO HEREBY RELEASE, ACQUIT AND FOREVER DISCHARGE EMPLOYER AND ITS OFFICERS,
DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS AND REPRESENTATIVES, AND ALL PERSONS
AND BUSINESS ENTITIES RELATED IN ANY WAY THERETO FROM ANY AND ALL PAST OR
PRESENT CLAIMS, DEMANDS, OBLIGATIONS, DAMAGES, CAUSES OF ACTIONS, SUITS, LOSSES
OF SERVICES, EXPENSES AND COMPENSATION OF ANY KIND OR NATURE, PRESENTLY KNOWN OR
UNKNOWN, that Executive may have had at any time or have as of the date of this
Agreement or which might subsequently accrue, arise from or out of, or be in any
manner connected with, directly or indirectly, Executive's employment with
and/or separation from Employer or any other relation with Employer, including
but not limited to any claim arising under or relating to Title VII of the Civil
Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the
Age Discrimination in Employment Act, the Texas Commission on Human Rights Act,
the Equal Pay Act, the Fair Labor Standards Act, the Texas Pay Day Act, the
Employee Retirement Income Security Act, the Texas Worker's Compensation Act,
Section 451.001 of the Texas Labor Code, the Americans with Disabilities Act,
and any and all possible statutory and/or common law claims whether arising
under any federal or state statutes, regulations, or the common law (contract,
tort or other) of any jurisdiction whether or not specifically alleged or
articulated herein, but specifically including all economic loss, infliction of
emotional distress, slander, libel, invasion of privacy, wrongful discharge,
mental anguish, negligent training or supervision, negligence, conspiracy and/or
any other alleged unlawful or wrongful conduct, except nothing in this Agreement
shall alter any of the Executive's post-employment obligations, promises or
covenants contained in the Employment Agreement which are expressly made to
extend beyond the term of the Employment Agreement including, without
limitation, confidentiality of information and Executive's covenants not to
compete, nor shall anything in this Agreement extinguish the right of Employer
to bring action, either in law or in equity, for breach of such post-employment
obligations. All of Employer's obligations under the Employment Agreement will
have been totally fulfilled with the termination of employment to be made in
accordance with this agreement.
8. Executive agrees that the terms of this agreement are confidential and
Executive shall not discuss or disclose the terms hereof with or to anyone.
Executive further agrees not to directly or indirectly make or cause to be made
any statement to the media, or any other public statement, criticizing or
disparaging Employer, or commenting on the operations or business reputation of
Employer.
9. Executive hereby acknowledges and agrees that the releases set forth above
are general releases and he further expressly waives and assumes the risk of any
and all claims for damages which exist as of the date but of which he does not
know or suspect to exist, whether through ignorance, oversight, error,
negligence or otherwise, and which, if known, would materially affect
Executive's decision to enter into this Agreement. He further agrees that he has
accepted payment specified herein as a complete
compromise of matters involving disputed issues of law and fact and that he
assumes the risk that the facts or law may be otherwise than he believes. It is
understood and agreed by the parties that this settlement is a compromise of all
doubtful and disputed claims, and the payments are not to be construed as an
admission of liability on the part of the Employer, by whom liability is
expressly denied.
10. If any provision of this Separation Agreement shall be held invalid or
unenforceable, or if any provision of this Separation Agreement is held invalid
or unenforceable with respect to particular circumstances, the balance of the
Agreement shall remain in full force and effect in its other provisions and in
all other circumstances.
11. Executive acknowledges that he has fully informed himself of the terms,
contents, conditions and effects of the Separation Agreement. Executive
acknowledges that: he was given this Agreement on or before March 5, 2003; that
he has been informed that if he is over 40 years of age he may accept the offer
stated herein at anytime prior to March 5, 2003; that he is over the age of
eighteen (18) years old, of sound mind and otherwise competent to execute this
Agreement; and that he is entering into this agreement knowingly and voluntarily
and without undue influence or pressure and in full knowledge of his rights
under the statutes and laws set forth in Section 6 hereof. Further, you
acknowledge that you have been afforded a full and fair opportunity to review
and consider this Agreement. Executive also acknowledges that he has been
informed that if he is over 40 years of age he may revoke the acceptance of this
Agreement within seven (7) days of the execution of this Agreement. This
Agreement shall become effective and enforceable immediately upon the expiration
of the revocation period.
12. This agreement shall be construed and interpreted in accordance with laws
of the State of Texas. In the event that Employer fails to make the payment
called for in Section (3) of this Agreement, then Executive may, at his option,
void the Agreement and take whatever action he deems appropriate or xxx for
specific performance of the Agreement. Similarly, in the event that employee
breaches the terms of this Agreement or voids this Agreement, then Employer may
similarly act.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands effective as
of March 5, 2003.
EXECUTIVE: EMPLOYER:
NEON Systems Inc.,
A Delaware Corporation
Name: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxxxx Xxxxx X. Xxxxxx, Chief Financial
Officer
