TERMINATION AGREEMENT
AGREEMENT made this 12th day of September 1997, between ARIEL
CORPORATION, a Delaware corporation, hereinafter called the "Employer," and
Xxxxxxx Xxxxxx, hereinafter called the "Employee."
WHEREAS. Employee and Employer entered into a written agreement dated
January 1, 1997 (the "Employment Agreement"); and
WHEREAS, on February 19, 1997 Employee executed a "Non-Competition,
Non-Disclosure and Non-Solicitation Agreement" which is hereinafter referred
to as the "Non-Compete Agreement"; and
WHEREAS, pursuant to the terms of the Employment Agreement, Employee
would be entitled to a payment in the amount of two (2) years base salary upon
termination of his employment; and
WHEREAS, the Employee and Employer now desire to mutually terminate the
Employment Agreement and all employment thereunder and to modify the terms and
provisions of the Non-Compete Agreement under the terms and conditions
contained herein;
NOW THEREFORE, in consideration of their mutual promises set forth
herein, the sufficiency of which is hereby acknowledged by the parties hereto,
the parties hereby agree as follows:
1. Termination of Employment and Employment Agreement. Employer and
Employee hereby mutually agree that the employment of Employee by
Employer is hereby terminated, which termination shall be effective as
of September 26, 1997 (the "Termination Date") and that the Employment
Agreement dated January 1, 1997 is hereby mutually terminated as of
the Termination Date. The termination of employment hereunder shall be
deemed to be a termination of employment "without cause" as such term
was utilized in the Employment agreement. The terms and conditions of
this Agreement shall be deemed irrevocable upon the execution hereof
by Employer and Employee, except upon the mutual agreement of both
parties.
2. Compensation to Employee. In consideration for Employee executing
this Agreement and foregoing certain rights to compensation he would
have under the Employment Agreement, Employer shall pay the
following compensation to Employee:
A. Final Payroll Period(s) from execution of this agreement
through Termination Dare. Employer will pay Employee
compensation for the Final Payroll Period or periods at his
current base pay rate, less federal and state tax withholding
and FICA taxes.
B. Vesting of Stock Options. All of the following stock options in
the Employer's Company stock (NASDAQ:ADSP) shall be deemed
currently and completely vested and immediately exercisable.
Number of 0ptions Exercise Price
============================================
75,750 $2.45
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40,000 $7.125
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C. Additional Compensation. In addition to payment for the Final
Payroll Period (2A), Employer shall also pay to Employee
nineteen months salary at the base rate specified in the
Employment Agreement. This additional compensation shall be
paid on the date or dates specified:
i. On the date hereof, payment of Eighty Thousand and no/lO0
Dollars ($80,000.00). Employee shall not perform any
services for this compensation.
ii. The Remaining Compensation is $205,000. Employee shall not
perform any services for this compensation. This sum will be
paid in two equal installments on January 2, 1998 and July
1, 1998. Employer shall pay this amount to Employee in cash.
In the event that the Employer is acquired, merged with
another company, or is a party to some other type of
business reorganization prior to July 1, 1998, then the
amount still due of the Remaining Compensation will be paid
in cash on the date of consummation of such acquisition,
merger, or reorganization.
D. Reimbursement of Business Expenses. On the termination date,
Employer will pay or have paid all outstanding business
expenses as final reimbursement to Employee. Employer warrants
that it will assume responsibility for all amounts due to third
parties insofar as such amounts are related to business
expenses incurred by Employee, and for business accounts
instantiated for the Employer by the Employee.
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3. Return of Credit Cards. Employee hereby acknowledges and represents
that he has returned to Employer all credit cards furnished for his
use. Employee hereby agrees not to use said credit cards past the
Termination Date.
4. Non-Compete Agreement. Employer and Employee agree that the terms of
the Non-Compete Agreement shall continue in full force and effect
except, (i) Section 2 thereof is hereby modified to permit Employee's
continued use of the items described in Section 7 hereof; and, (ii)
Section 3 thereof (entitled "Solicitation of Customers;
Non-Competition") is hereby DELETED in its entirety and of no force or
effect; and, (iii) Section 4 thereof ("Assignment to Company") is
modified to delete the phrase "or other relationship with the
Company".
5. Resignation of Office. On the Termination Date, Employee shall
resign as an officer of Employer, but shall continue to serve as a
Director and may continue after the date hereof to again seek
reelection to the Board of Directors if he desires.
6. Insurance. Employer shall continue, at its sole cost and expense, the
presently existing health insurance and dental coverage for Employee
and his family through and including December 31, 1998. In the event
that Employer cannot for any reason continue Employee and his family
on the Employer's group policy it agrees to immediately reimburse
Employee for the cost of obtaining similar coverage on a private,
individual, or family basis. On the Termination Date, Employer may
terminate any existing life insurance and group disability coverage
currently maintained for Employee. Employer agrees to execute such
additional instruments and/or documentation after the date hereof to
carry out the terms and conditions of this paragraph.
7. Continued Services, Use of Equipment, and Software License. Employee
shall after the termination date be permitted to utilize Employer's
CAD libraries for non-competitive products. For a period of six (6)
months after the Termination Date, Employee shall be permitted at no
charge to continue using Employer's voice-mail system, and to have
E-mail forwarded. Employer gives to Employee a fully-paid,
royalty-free, non-exclusive, unlimited source- and object-code license
to the software technology embodied in the "SDI," "BUG-56," and
"DSP-56 SCSI DRIVER" products. Employer agrees to execute such
additional documents and instruments that may be necessary to carry
out the provisions of this paragraph.
8. Debts. On the date hereof, Employer agrees that Employee has
discharged all outstanding debts, if any, to Employer.
9. Default. In the event that either party shall default in the
performance of this Agreement, the parties hereby agree that either
party may seek damages as may be permitted by law and/or the
enforcement of this Agreement by specific performance.
10. Amendments. This Agreement may not be modified, altered, amended,
changed, waived, or terminated, except pursuant to a writing signed
by the party to be charged herewith.
ii. Notices. Any and all notices and other correspondence required or
permitted to be given hereunder shall be in writing and shall either
be personally delivered or sent by United States certified or
registered mail, return receipt requested, with full postage prepaid
and addressed to the parties at their respective addresses set forth
(or to such other address as the parties may from time to time
designate by notice to the others given in the foregoing manner) and,
if so mailed as aforesaid, shall be deemed effectively given and
received upon mailing.
12. Entire Agreement. This writing contains the entire agreement of the
parties hereto, and no agreements, promises, covenants,
representations, warranties, or indemnities have been made or relied
upon by any of them other than those that are expressly herein set
forth.
13. Binding Effect. This agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Employer, and the
heirs, representatives, and beneficiaries of the Employee.
14. No Waiver. The failure by any party hereto to object or take
affirmative action with respect to any conduct of any other party
which is in violation of this Agreement shall not constitute, nor be
construed as, a waiver thereof, or of any future breach or
subsequent wrongful conduct.
15. Captions. All paragraph headings used herein are included for the
convenience of reference purposes only and shall be accorded no
consideration in the interpretation of the provisions, terms and
conditions hereof.
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16. Multiple Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed to be an original
hereof, but all of which, when taken together, shall constitute one
and the same instrument, and, in making proof of this Agreement, it
shall not be necessary for any party to produce or account for one
(1) such counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Termination Agreement the day and year first above written.
EMPLOYER:
Ariel Corporation, a Delaware Corporation
By: /s/ Brain Xxxxx , as
----------------------------- ----------------------------------
Title: PRESIDENT
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Witnesses
EMPLOYER:
/s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
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Witnesses
STATE OF NEW JERSEY )
COUNTY OF __________________ )
BEFORE ME personally appeared BRAIN XXXXX as PRESIDENT of Ariel
Corporation, A Delaware Corporation, to me well known and known to me to be
the person described in and who executed the foregoing instrument, and
acknowledged to and before me that he executed said instrument for the
purposes therein expressed.
STATE OF NEW JERSEY )
COUNTY OF ILLEGIBLE )
BEFORE ME personally appeared Xxxxxxx Xxxxxx, to me well known and known
to me to be the person described in and who executed the foregoing instrument,
and acknowledged to and before me that he executed said instrument for the
purposes therein expressed.
/s/ Xxxxxxx X. Xxxx
------------------------------
NOTARY PUBLIC
State of New Jersey at Large
My commission expires: 5/2/2002
XXXXXXX X. XXXX
Notary Public of New Jerseyy
My Commission Expires May 2, 2002
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