Exhibit 10.1
SEVERANCE AGREEMENT
This Severance Agreement
(“Agreement”), effective July 2, 2008, is between
Intervoice, Inc., a Texas corporation (“Intervoice”),
and Robert E. Ritchey (the “Executive”).
WHEREAS, the Executive has previously
served as the President and Chief Executive Officer, and presently
serves as Chief Executive Officer, of Intervoice pursuant to the
terms of an executive employment agreement (the “Employment
Agreement”) dated and effective December 1, 2004, which
was amended by the First Amendment to Employment Agreement
effective May 8, 2006 (the “First Amendment”) and
the Second Amendment to Employment Agreement effective
February 28, 2008 (the “Second Amendment”) that
modified certain terms of the Employment Agreement; and
WHEREAS, the Employment Agreement, as
amended by the First Amendment and Second Amendment (the
“Amended Employment Agreement”) expires by its terms on
August 31, 2008;
WHEREAS, upon the expiration of the
Amended Employment Agreement, the Executive will retire from
Intervoice and his employment with Intervoice and any of its
Affiliates (as defined in Paragraph 1.1 below) will then end;
and
WHEREAS, Intervoice and the Executive
now wish to enter into an agreement providing for certain severance
benefits to be provided to the Executive in exchange for a waiver
and general release and other consideration upon the ending of the
Executive’s employment pursuant to the expiration of the
Amended Employment Agreement;
NOW, THEREFORE, the parties hereto
agree as follows:
1.0
Definitions . As used in this Agreement, the following terms
have the following meanings:
1.1 “Affiliate” means any
other corporation, organization, association, partnership, sole
proprietorship, or other type of entity, whether incorporated or
unincorporated, directly or indirectly controlling or controlled by
or under direct or indirect common control with Intervoice.
1.2 “Board” means the
Board of Directors of Intervoice.
1.3 “Code” means the
Internal Revenue Code of 1986, as amended.
1.4 “General Release
Agreement” means an agreement, in the form and with the terms
as shown in Exhibit A hereto, by which the Executive releases
Intervoice and its Affiliates and all other released parties named
therein from all claims he has or may have against them.
1.5 “Section 409A”
means Section 409A of the Code and the Treasury Regulations
and other guidance thereunder.
1.6 “Separation from
Service” has the meaning determined by Intervoice in
accordance with Treasury Regulations § 1.409A-1(h).
2.0
Compensation and Obligations Upon Expiration of the Amended
Employment Agreement .
2.1 Upon the expiration of the
Amended Employment Agreement, as provided in Paragraph 3 of
the Amended Employment Agreement, the Executive will retire from
Intervoice and any of its Affiliates by whom he is then employed,
and his employment with Intervoice and any such Affiliates will
end. Intervoice and the Executive acknowledge that upon his
retirement at the expiration of the Amended Employment Agreement,
the Executive will be entitled only to the compensation and
benefits, if any, provided for under the Amended Employment
Agreement. Intervoice and the Executive understand and agree that
such compensation and benefits do not include any severance pay,
salary compensation beyond the last day of employment, or incentive
compensation other than pursuant to the terms of any applicable
incentive plans. In the event of any termination of the
Executive’s employment with Intervoice prior to the
expiration of the Amended Employment Agreement, the terms of the
Amended Employment Agreement shall control the compensation, if
any, to which the Executive is entitled.
2.2 Intervoice and the Executive
acknowledge that upon his retirement at the expiration of the
Amended Employment Agreement, the Executive will be bound by the
provisions of the Amended Employment Agreement that have
obligations continuing beyond the end of the Executive’s
employment. Such provisions include but are not limited to
Paragraph 8 (Confidential Information), Paragraph 9
(Noncompetition and Nondisparagement Obligations),
Paragraph 10 (Intellectual Property), and Paragraph 13
(Assistance in Litigation). The Executive acknowledges and
reaffirms his obligations under such provisions and any other
applicable provision of the Amended Employment Agreement.
3.0
Special Compensation and Benefits to the Executive Under this
Agreement . Upon the Executive’s satisfaction of the
terms and conditions of this Agreement, particularly including but
not limited to timely compliance with the requirements to sign and
not subsequently revoke the General Release Agreement as provided
in Paragraph 4.2 herein, Intervoice will provide to the
Executive the following special compensation and benefits:
3.1 Intervoice will make a severance
payment to the Executive in the amount of $592,500, representing
1.5 times the Executive’s current annual base salary. Such
payment shall be made in lump sum within 40 days following the
date of the Executive’s Separation from Service.
3.2 If, at the time his employment
ends, the Executive participates in one or more health plans
offered by Intervoice and the Executive is eligible for and elects
to receive continued coverage under such plans in accordance with
the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) or any successor law, or pursuant to the
terms of the retiree health plan option, if applicable, Intervoice
will reimburse the Executive for 18 months, or, if shorter
than that period, the period of such actual COBRA continuation
coverage (or retiree health plan option, if applicable), the
difference between the total amount of the monthly COBRA (or
retiree health plan option, if applicable) premiums actually paid
by the Executive for such continued health plan benefits and the
total monthly amount of the premiums charged to
Severance Agreement, Page 2
active
executive employees of Intervoice for the same health insurance
coverage. Such reimbursement shall be made within the 60-day period
following the Executive’s payment of each monthly COBRA (or
retiree health plan option, if applicable) premium. Provided,
however , that Intervoice’s reimbursement obligation
under this Paragraph 3.2 shall terminate upon the earlier of
(i) the expiration of the time period(s) described above or
(ii) the date the Executive becomes eligible for health
insurance coverage under a subsequent employer’s plan without
being subject to any preexisting-condition exclusion under that
plan, which occurrence the Executive shall promptly report to
Intervoice. The Executive’s eligibility for the retiree
health plan option shall be determined solely by the terms of the
applicable Intervoice plan, except that the ending of the
Executive’s employment as set out in this Agreement shall be
considered a retirement under such plan.
3.3 Intervoice shall take action
within 10 days following execution of this Agreement to cause
those unvested options to purchase common stock in Intervoice
listed on Exhibit B hereto to become fully vested effective as
of the expiration of the Amended Employment Agreement.
3.4 Intervoice shall take action
within 10 days following execution of this Agreement to extend
the period during which the Executive may exercise those options to
purchase common stock in Intervoice listed on Exhibit B hereto
to the earlier of (i) the date on which each such stock option
would otherwise expire in the absence of the Executive’s
retirement or other termination of employment or (ii) the date
that is 18 months after the Executive’s retirement upon
the expiration of the Amended Employment Agreement.
3.5 Within 10 days after the
Executive’s Separation from Service, Intervoice will transfer
to the Executive ownership of the laptop computer and cellular
telephone that the Executive had most recently used during his
employment with Intervoice. Before, and within the 120-day period
after, such a transfer, Intervoice shall have the right, at times
and in a manner within Intervoice’s sole discretion, to
inspect the laptop computer and cellular telephone and remove any
confidential information or other Intervoice-related information in
whatever manner Intervoice believes is appropriate. Intervoice will
permit the Executive to continue to use his Intervoice e-mail
account until November 30, 2008. In using such e-mail account
after August 31, 2008, the Executive shall not make any
representations indicating that he is still an employee or officer
of Intervoice or is in any way permitted to bind Intervoice. The
Executive shall take reasonable steps to preserve the
confidentiality of Intervoice-related information in any e-mails or
otherwise located on the electronic devices described in
Paragraph 3.5.
3.6 Intervoice will pay the
Executive’s reasonable legal and out-of-pocket expenses
incurred in connection with the preparation and negotiation of this
Agreement or other draft agreements the parties have discussed in
connection with the impending expiration of the term of the Amended
Employment Agreement, up to a maximum total payment of $50,000. The
Executive will provide written notice related to such expenses to
Intervoice no later than August 31, 2008, and such payment
will be made by Intervoice after receipt of such notice and before
October 1, 2008.
4.0
Conditions to Entitlement to Special Compensation Under this
Agreement . In order to be entitled to any of the compensation
or benefits set forth in Paragraph 3, each of the following
conditions must be satisfied:
Severance Agreement, Page 3
4.1 The ending of the
Executive’s employment must result solely from the
Executive’s retirement upon expiration of the term of the
Amended Employment Agreement as set out in Paragraph 3 of the
Amended Employment Agreement and not from a termination because of
Death, Inability to Perform, Cause, Good Reason, or by either party
without Cause or Good Reason (all as defined in the Amended
Employment Agreement) prior to the expiration of the term of the
Amended Employment Agreement.
4.2 The Executive must execute a
General Release Agreement on each of the occasions and upon the
terms specified below. Intervoice advises the Executive to consult
with an attorney in connection with his decision regarding whether
to sign the General Release Agreement.
4.2.1
As a condition to the effectiveness of the actions to be taken by
Intervoice pursuant to the provisions of Paragraphs 3.3 and 3.4
above, the Executive must, by not later than the twenty-second day
after the final terms of the General Release Agreement have been
provided to him for review and consideration, sign and return the
General Release Agreement to Intervoice, and not thereafter revoke
such General Release Agreement.
4.2.2
As a prerequisite to Intervoice’s obligation to take the
actions specified in Paragraphs 3.1, 3.2, 3.5, and 3.6 above, the
Executive must within the three business da
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