Severance Agreement - Dell Computer Corp. and Richard N. Snyder
[DELL LETTERHEAD]
March 28, 1996
Mr. Richard N. Snyder
3800 Corum Circle
Austin, Texas 78746
Dear Dick:
This letter agreement (this "Agreement") sets forth the mutual
agreement of Dell Computer Corporation for itself and its subsidiaries
(collectively referred to as the "Company" or "Dell") and yourself regarding
your employment by and departure from employment with the Company.
1. You and Dell agree that this Agreement is entered into in
connection with the amicable termination of your employment by Dell, and that
your employment will be terminated effective March 29, 1996 (the "Termination
Effective Date"). Dell will pay your health insurance and other present
benefits through the Termination Effective Date above. After the Termination
Effective Date, you will be responsible for the payments to continue health
insurance provided under Dell's group policy.
2. You agree that you are not entitled to receive from Dell or
from any of its officers, managers, directors, employees, agents, or
representatives any form of consideration or the payment of any amount other
than what is expressly set forth in this letter. You agree that you are not
entitled to receive from Dell any payment or distribution of any other type
(whether in cash or other property), except as expressly set forth in this
Agreement. You further agree that as of the Termination Effective Date, you do
not own and do not hold any vested and exercisable rights to purchase or
otherwise acquire from the Company shares of the Company's common stock, par
value $.01 per share (the "Common Stock") or any other securities. In
connection with any transactions involving Dell's securities, you understand
and agree that you are and will be subject to all the requirements of
applicable laws, rules and regulations.
3. You agree that in connection with your employment by the
Company you received a grant of 220,000 shares of Common Stock (110,000 prior
to the two-for-one split of the Common Stock in October 1995) (the "Restricted
Stock") subject to certain vesting, transfer, and other restrictions more
fully set forth in the
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Mr. Richard N. Snyder
March 28, 1996
Page 2
agreements pursuant to which you received the Restricted Stock (the "Restricted
Stock Agreements"). Under the Restricted Stock Agreements certain restrictions
lapsed on February 27 and 28, 1996 with respect to a total of 46,142 shares of
the Restricted Stock and you hereby acknowledge that certificates representing
those shares have been delivered to you. You acknowledge and agree that, under
the terms of the Restricted Stock Agreements, your ownership of, and any and
all of the rights you may have or claim to the remaining 173,858 shares of
Restricted Stock are forfeited as of the Termination Effective Date.
4. Your vested balance in Dell's 401(k) Plan Trust and the
Company's deferred compensation plan (if any) will be available for you to
withdraw or roll over at the end of the month if your request is submitted to
the plan administrator by the 25th of the month after the Termination Effective
Date, subject to applicable laws and regulations. Any balance you may have in
Dell's Employee Stock Purchase Plan will also be available for you to withdraw
after the Termination Effective Date, in accordance with the provisions of the
Plan.
5. On the Termination Effective Date, you will resign from all
positions as a corporate officer of Dell Computer Corporation and its
subsidiaries and affiliates. You agree that upon reasonable request from the
Company's General Counsel, you will separately confirm such resignations in
writing. From and after the Termination Effective Date, you will have no
duties, obligations or responsibilities to perform any work or services for or
on behalf of the Company. You further agree that, except as otherwise
requested or permitted by the Company, you will not return to the place of
business where you were employed by the Company, you will not travel to or
visit any of the Company's business locations, and you will not call or visit
any of the Company's employees during working hours or in any way or at any
time disrupt or undertake any activity that would have a tendency to disrupt
the business endeavors of the Company or its employees. Upon the Company's
prior request or permission, you may visit the Company for the purpose of
establishing and maintaining a business relationship between your new employer,
or any person for whom you may be consulting, and the Company. You will be
free to undertake other employment after the Termination Effective Date so long
as your employment and services do not contravene any other provision of this
Agreement.
6. In addition, the Company will pay for all services provided to
you by Price Waterhouse LLP in connection with the preparation of your 1995
personal income tax return in accordance with your present entitlements to such
services.
7. You agree that by execution of this Agreement you fully,
finally, completely and generally release the Company and each of its officers,
managers, directors, control persons, employees, agents and representatives,
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Mr. Richard N. Snyder
March 28, 1996
Page 3
individually and separately, from any and all claims, actions, liabilities,
obligations, demands, and/or causes of action, of whatever kind or character,
whether known or unknown, arising from, relating to, or in any way connected
with (i) any of the foregoing persons, (ii) your employment, resignation or
termination of employment with the Company, (iii) your decision to move to or
from or accept employment in Austin, Texas, (iv) your severance of employment
with your former employer prior to accepting employment with the Company, and
(v) any act or omission that has occurred on or before the Termination
Effective Date in connection with any activity related to any of the foregoing
persons or to any activity, statements, controversy or dispute related to your
employment, resignation or termination of employment with the Company. The
foregoing release does not cover any claim, demand or cause of action you may
have to the extent that it arises out of any breach or default by the Company
under this Agreement or any other act or omission by the Company after the
Termination Effective Date relating to your employment with the Company.
8. The release set forth in Paragraph 7 above shall be construed
as broadly as possible and shall include without limitation (1) any contractual
or other claims of employment or payment you may have; (2) any claims, if any,
arising out of or in connection with the initiation, termination or existence
of your employment relationship with the Company or any service performed on
behalf of the Company; (3) any claims regarding accrued vacation, bonuses or
any other form of benefit attributable to the Company; and (4) any claims
arising under the Federal Age Discrimination in Employment Act, the Civil
Rights Act of 1964, as amended, or any other applicable federal, state or
municipal statute, ordinance or regulation. You represent that you have not
assigned to any other person any of the foregoing claims and that you have the
full right to grant this release.
9. The Company hereby fully, finally, completely and generally
releases you from any and all claims, actions, demands and/or causes of action,
of whatever kind or character, whether known or unknown, arising from, relating
to, or in any way connected with any act or omission by you that has occurred
before the Termination Effective Date in connection with your employment by the
Company. The foregoing release does not cover any claim, demand or cause of
action the Company may have to the extent that it arises out of any breach or
default by you under this Agreement or any other act or omission by you after
the Termination Effective Date relating to your employment with the Company.
10. The release set forth in Paragraph 9 above shall be construed
as broadly as possible and includes without limitation (1) any contractual
claims the Company may have; (2) any claims arising out of the initiation or
termination of your employment relationship with the Company; and (3) any
claims arising out of any act, service or omission performed or not performed
by you. The Company
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Mr. Richard N. Snyder
March 28, 1996
Page 4
represents that it has not assigned to any other person the foregoing claims
and causes of action and that it has the full right to grant the release set
forth herein.
11. You represent that, from and after the Termination Effective
Date, you will not have in your possession any documents, correspondence,
memoranda, or other tangible media which contain information of any kind
relating to the Company or its business operations. You agree that you will
not take any such documents and information from the control or premises of the
Company and that if you should find yourself in possession of same you will
return all of same to the Company immediately.
12. You acknowledge that the Company conducts business in all fifty
states of the United States and in numerous foreign nations including but not
limited to the countries of the U.K., Ireland, France, Germany, Spain,
Switzerland, Finland, Norway, Sweden, Canada, Mexico, Australia, Japan,
Malaysia, Hong Kong, the Czech Republic and Poland. You further acknowledge
and agree that in your position with the Company you have since February 1995
represented the Company as one of its most senior executives; that you have
received from the Company unique and special knowledge and training which was
not previously available to you before your employment with the Company; that
the Company possesses and utilizes at the Termination Effective Date trade
secrets not known or used by the Company's competitors, which trade secrets
give the Company an advantage over its competitors; that during your employment
with the Company you have received knowledge of and confidential information
about the Company's trade secrets including but not limited to those relating
to its production, research, marketing, service, support, pricing and sales
practices and policies; that at the Termination Effective Date the Company's
manufacturing, administrative and other premises are restricted by security
procedures put in place by the Company and that Company-hired security guards
are on duty at all times to monitor and protect the Company's premises and
information; that it would take any person or entity a significant amount of
time to enter any of the Company's markets and to achieve substantial
commercial success in such markets because the necessary understanding of any
technical data and information relating to such markets (and to their
customers, pricing, product offerings and service delivery methods) would be
difficult and costly to develop; that you were involved in organizing the
Company's sales and marketing practices and had access to the Company's sale's
data; and that unauthorized use by you of the knowledge, information, data and
trade secrets of the Company described above would seriously damage the Company
and hinder its ability to do business worldwide. The character of any
knowledge or information as a trade secret will be determined from time to time
according to the facts then prevailing and applicable law.
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Mr. Richard N. Snyder
March 28, 1996
Page 5
13. Non-Competition. You agree that, for the duration of the
"Restriction Period" (which for purposes of this Agreement shall be defined to
mean the period from the Termination Effective date, through and including
March 29, 1997), without the prior written approval of the Company's Vice
President of Human Resources, you will not manage, operate, join, control or
participate in, directly or indirectly, consult on behalf of or for the benefit
of, or derive any benefit whatsoever from or be an officer, director, employee,
partner, agent or consultant of, any business or activity (a "Competitor") that
sells personal computers, computer workstations or servers directly to the end
user (the "PC Direct Channel"). You will not be in violation of this Paragraph
13 merely because you own publicly traded securities issued by a Competitor
engaged in the PC Direct Channel as long as you own less than 5% of any class
of securities then outstanding. Notwithstanding any other provision of this
Paragraph 13 to the contrary, the restrictive covenant contained in this
Paragraph 13 shall not prohibit you from obtaining employment with and being
employed by, in whatever capacity, Hewlett-Packard Company or any of its
wholly-owned subsidiaries, so long as you continue to comply with all of the
provisions of this Agreement.
14. You agree that the non-competition provision set forth in
Paragraph 13 is ancillary to this Agreement, that this Agreement is an
otherwise enforceable agreement, and that the non-competition provision is
therefore ancillary to an otherwise enforceable agreement. You further agree
that the non-competition provision contains reasonable limitations as to the
time, geographical area and scope of activity for which you are to be
restrained; that the limitations of this Agreement and your covenant not to
compete with the Company do not impose a greater restraint than is necessary to
protect the goodwill or other business interests of the Company; and that the
primary purpose of this Agreement does not obligate you to render personal
services to the Company.
15. The 46,142 Restricted Shares described in Paragraph 3, and any
amount received by you upon disposition of said shares, are subject to certain
forfeiture and repayment conditions (the "Two Year Restriction") for a period
of two years after your employment with the Company ends in accordance with the
terms of the Restricted Share Agreements. As separate consideration for the
non-competition provision set forth in Paragraph 13, the Company hereby waives
the Two Year Restriction as to the 46,142 Restricted Shares that have been
delivered to you.
16. The Company agrees to pay you, within ten (10) days after the
Termination Effective Date, a lump sum of $1,198,614.80. You agree that such
consideration, as well as the other consideration and promises set forth in
this Agreement, constitute full and adequate consideration to support this
Agreement and each of its provisions. You and the Company hereby agree as
follows:
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Mr. Richard N. Snyder
March 28, 1996
Page 6
(a) Of such lump sum amount, the amount of $798,614.80
shall be considered as further and separate consideration for the
non-competition provision set forth in Paragraph 13 and shall be subject to
normal withholding.
(b) The remaining $400,000.00 of such lump sum amount
shall be considered as further and separate consideration for your general
release of the Company for any and all claims, actions, demands and/or causes
of action arising prior to the Termination Effective Date and in connection
with your employment with the Company or the termination of such employment
(including any such claims, actions, demands or causes of action that may be
based on, or arise out of, acts or omissions, or alleged acts or omissions, of
the Company that may constitute, or be alleged to constitute, fraud, defamation
or other tortious conduct), and the Company shall not withhold from such
amount. You hereby agree to indemnify the Company for, and hold the Company
harmless against, any and all losses, claims, damages, liabilities, costs or
expenses (including attorney's fees), judgments and amounts paid in settlement
in connection with any claim, action, suit, proceeding or investigation arising
out of or pertaining to the Company's failure to withhold from the amount
described in this subparagraph (b).
17. As further and separate consideration for the non-competition
provision set forth in Paragraph 13, the Company agrees to pay you on or before
April 5, 1997, a lump sum of $100,000, subject to normal withholding. You
understand and agree that your right to this lump sum payment is conditioned
upon your full and complete compliance with the remaining provisions of this
Paragraph 17. No earlier than March 29, 1997, you will execute and deliver to
the Company a sworn affidavit (the "Compliance Affidavit"), in the form
attached hereto as Exhibit A. In the Compliance Affidavit, you will attest
under oath that as of the date of the affidavit and at all times prior thereto,
you are and have been in full and complete compliance with the terms of this
Agreement. You will not be entitled to receive this lump sum payment unless
and until you have executed and delivered a true and accurate Compliance
Affidavit to the General Counsel of the Company in accordance with the terms
set forth above.
18. You and the Company both agree that the releases given in this
Agreement will not be taken as admissions of liability with respect to any
matter by you or by the Company. You and the Company further agree that no
release contained herein shall be admissible in any judicial, administrative or
other proceeding or cause of action as an admission of liability by you, by the
Company or by any persons released by this Agreement.
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Mr. Richard N. Snyder
March 28, 1996
Page 7
19. You agree that you will not, for a period of two (2) years
after the Termination Effective Date, alone or with others, directly or
indirectly, solicit or recruit for your benefit, or for the benefit of any
person or entity, the employment or other services of any person who is an
employee of the Company or who within the six month period preceding such
solicitation or recruitment has been an employee of the Company. You agree
that you will not, during this two year period, cause or facilitate (by
providing information or otherwise) the solicitation or the recruitment of such
employment or other services by or for the benefit of any person or
organization with which you may be associated.
20. In addition to the other agreements contained herein, you
agree that you will not use, publish, misappropriate or disclose in any manner,
directly or indirectly, for yourself or for the benefit of any other person or
entity, any Confidential and Proprietary Information. "Confidential and
Proprietary Information" means, without limitation, any information that you
have learned or originated during your employment with the Company, to the
extent that such information is related to the products, marketing plans, sales
plans, operating procedures, properties or financial condition, prospects or
results of operations of the Company, which information is commercially
valuable and is not publicly available to or readily ascertainable by third
parties through proper means, and any information disclosed by third parties in
confidence to the Company. Nothing in this Paragraph 20 shall prohibit you
from accepting employment with, or being employed by, any company or other
entity otherwise permissible under the terms of Paragraph 13 hereof, so long as
you comply with the provisions of this Paragraph 20. Confidential and
Proprietary Information specifically includes, without limitation, all such
information of the kinds described in subparagraphs A through G below:
A. Manufacturing and research processes currently in
use, planned or under development, including design rules, device
characteristics, process flow and manufacturing capabilities and yields.
B. Computer product, process and device strategies in
use, planned or under development, including device specifications, system
architectures, logic designs, circuit implementations and long-range plans.
C. Software products in use, planned or under
development, including operating system adaptations or enhancements, language
compilers, interpreters and translators, system design and evaluation tools,
and application and diagnostic programs.
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Mr. Richard N. Snyder
March 28, 1996
Page 8
D. Information relating to Company employees; actual and
anticipated relationships between the Company and other companies or persons;
sales levels, profit levels, pricing and other unpublished financial data; and
budget, staffing compensation, equipment and related plans.
E. Information relating to the Company's customer,
supplier and vendor relationships including performance requirements,
development and delivery schedules, device and product pricing and quantities,
and other information communicated to the Company by its customers, suppliers
and vendors.
F. Information relating to the compensation, skill and
work of the Company's employees.
G. Any Intellectual Property defined below and any
copyrightable works described below, except as publicly disclosed in patents
and other publicly available documents.
21. You agree that all discoveries, ideas, improvements or
inventions you have created, conceived, developed or discovered, alone or with
others, during your employment with the Company which relate to the Company's
business or which result from the use of the Company's equipment, supplies,
facilities or information, and which are protectable under applicable patent or
copyright laws (collectively, the "Intellectual Property"), in whatever form,
is the Company's sole and exclusive property. You hereby assign to the Company
all of your rights in any Intellectual Property. You agree that you will
assist the Company at the Company's expense in all ways in the future,
including giving evidence and executing any documents deemed helpful or
necessary by the Company, to establish, perfect and register worldwide, at the
Company's expense, the Company's title and exclusive ownership in the
Intellectual Property. You agree that you will not do anything in conflict
with the Company's rights in the Intellectual Property and that you will
cooperate fully to protect the Intellectual Property against misappropriation
or infringement.
22. You agree that the Company is the copyright owner in all
copyrightable works of every kind and description created or developed by you,
solely or jointly with others, during the time of your employment with the
Company. If so requested at any time, and for no additional considerations,
you will execute in writing any acknowledgments or assignments or copyright
ownership of such works as may be appropriate in the opinion of the Company for
preservation of the worldwide ownership in the Company of such copyrights.
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Mr. Richard N. Snyder
March 28, 1996
Page 9
23. You agree that your obligations pursuant to Paragraphs 20 and
21 with respect to the Intellectual Property will survive the satisfaction or
completion of any other term of this Agreement and will continue for the
duration of the Restriction Period as to Paragraph 20 and in perpetuity as to
Paragraph 21 except as otherwise specified herein.
24. You acknowledge that your breach of any of the
non-competition, non-solicitation, non-disclosure or non-use provisions set
forth above will cause irreparable harm to the Company for which there may be
no adequate remedy at law and for which the ascertainment of damages would be
difficult. You therefore agree that in the event of your breach of any such
provision, in addition to and without having to prove the inadequacy of other
remedies at law, the Company shall be entitled to receive specific performance
by you of any such provision that you have breached, and the Company will
furthermore be entitled to the issuance of a court order directing full and
immediate injunctive relief against you without the Company being required to
post any bond or other security therefore. However, the provisions of this
Paragraph should not be interpreted in any way as a limitation on the Company's
right to obtain money damages against you in the event of a breach of any of
the provisions set forth above.
25. You and the Company agree to maintain in confidence the terms
of this Agreement and not to disclose the Agreement publicly or to third
parties except as may be required in compliance with the requirements of
applicable law. You and the Company further agree that after the Termination
Effective Date, except as provided in the next sentences, neither you nor any
representative of the Company will make further comment, on or off the record,
for attribution or otherwise with regard to the circumstances of your departure
except as authorized in writing in advance by the party about whom the comment
is made. In addition, you will make no comment, on or off the record, for
attribution or otherwise, during the Restriction period, about your employment
with the Company, or about the Company or an aspect of its business or
operations, without the express prior written agreement of the Company, except
as you may be required to do under oath in response to a subpoena. You agree
that in the event you breach this covenant of confidentiality and the Company
is damaged as a result of such breach, you shall be personally liable for all
damages arising from such breach, including reasonable attorneys' fees and
costs incurred by the Company in pursuing such claim against you; and the
Company agrees that in the event it breaches this covenant of confidentiality
and you are damaged as a result of such breach, the Company shall be liable for
all damages arising from such breach, including reasonable attorney's fees and
costs incurred by you in pursuing such claim against the Company.
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Mr. Richard N. Snyder
March 28, 1996
Page 10
26. This Agreement shall be interpreted in all respects by the
internal laws of the State of Texas, excluding its choice of law rules, and the
venue (location of any lawsuit) shall be solely in Travis County, Texas.
27. You are advised to consult with an attorney before executing
this Agreement. By your signature below, you acknowledge that you have had a
sufficient opportunity to thoroughly discuss the implications of this Agreement
with independent advisors of your choice prior to execution. In signing this
Agreement, you agree that you have not been induced to execute this Agreement
by any representations or agreements made by any person other than what is
expressly set forth in this Agreement. You also agree that you understand this
Agreement in full and sign it voluntarily with full knowledge of its contents.
You acknowledge that this Agreement was written in a manner that you were able
to and did understand.
28. If Agreement accurately sets forth your agreement with the
Company with respect to matters arising in connection with your employment and
any other agreement between you and the Company, please signify by your
execution of this letter where indicated below and return it to the Company by
close of business on March 29, 1996. "Execution" of the Agreement means that
you will sign it in the presence of a notary public. You hereby acknowledge
that you have had a period of at least 21 days within which to consider this
agreement and discuss it with your attorney, the original version of this
Agreement having been submitted to you and your attorney on February 29, 1996.
You have a period of seven (7) days following your execution of this Agreement
within which to revoke it. This Agreement shall not become effective or
enforceable until the revocation period has expired. If you choose to revoke
this Agreement, all payments and benefits to you will immediately cease. If
you do not revoke the Agreement within seven (7) days from the date you sign
it, its provisions become final. If you decide to revoke this Agreement,
please contact the Company's General Counsel within seven (7) days from the
date you signed the Agreement. If Dell has not received an executed copy of
this letter, signed by you and notarized on or before close of business on
March 29, 1996, this offer will automatically terminate and expire without
further notice from Dell.
29. This Agreement constitutes the entire agreement of the parties
and supersedes all prior oral and/or written agreements with Dell concerning
the subject matter hereof or concerning your employment with Dell. This
Agreement may not be modified except by a written agreement with Dell executed
by you and an authorized officer of Dell.
30. This Agreement is binding upon and shall inure to the benefit of
the parties and their respective heirs, representatives and assigns.
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Mr. Richard N. Snyder
March 28, 1996
Page 11
If this letter accurately sets forth your agreement with respect to
the matters set forth herein, please so signify by signing this letter where
indicated below and then delivering to the Company your executed original of
this Agreement.
(SIGNATURE PAGES ATTACHED)
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Mr. Richard N. Snyder
March 28, 1996
Page 12
DELL COMPUTER CORPORATION
Date: March 28, 1996 By: /s/ THOMAS B. GREEN
------------------- -------------------------------
Thomas B. Green,
General Counsel
Sworn to and subscribed before me
on March 28, 1996
/s/ STEPHANIE J. SALMON
--------------------------------- [SEAL]
Notary Public, State of Texas
I have carefully read the foregoing Agreement. On behalf of myself,
my executor, heirs, successors and assigns, I agree to all of its terms, and to
be bound by all of its terms. I acknowledge receipt of a copy of it and the
sufficiency of the consideration and payments recited by it.
Date: March 29, 1996 /s/ RICHARD N. SNYDER
------------------- -------------------------------
Richard N. Snyder
Sworn to and subscribed before me
on March 29, 1996.
/s/ REBECCA C. SCOGGIN
--------------------------------- [SEAL]
Notary Public, State of Texas
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Mr. Richard N. Snyder
March 28, 1996
Page 13
As the spouse of Richard N. Snyder, I have carefully read the
foregoing Agreement. On behalf of myself, my executor, heirs, successors and
assigns, I agree to all of its terms, and to be bound by all of its terms, and
I understand that the term "you" as used in the letter shall also be deemed to
include me. I acknowledge receipt of a copy of it and the sufficiency of the
consideration and payments recited in it.
Date: March 29, 1996 /s/ CANDICE D. SNYDER
------------------- -------------------------------
Candice Snyder
Sworn to and subscribed before me
on March 29, 1996.
/s/ REBECCA C. SCOGGIN
--------------------------------- [SEAL]
Notary Public, State of Texas
<PAGE> 14
EXHIBIT A
COMPLIANCE AFFIDAVIT
STATE OF
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COUNTY OF
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I, RICHARD N. SNYDER, residing at 3800 Corum Circle, Austin, Texas
78746, being duly sworn, declare under oath that the following statements are
true and correct:
1. I am providing this Compliance Affidavit to and for the
benefit of Dell Computer Corporation and its subsidiaries and
affiliates (collectively, the "Company") pursuant to that certain
letter agreement (the "Agreement") between the Company and me dated
March 28, 1996, regarding matters relating to my employment with the
Company and termination thereof.
2. I hereby certify, declare and attest under oath that as of the
date of this Compliance Affidavit and at all times prior to the date
hereof, I am and have been in full and complete compliance with the
terms of the Agreement, including without limitation, the
non-competition, non-solicitation, non-disclosure and non-use
provisions contained in the Agreement, and I acknowledge and reaffirm
all of my obligations as set forth in the Agreement.
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RICHARD N. SNYDER, Affiant
SUBSCRIBED AND SWORN TO before me on the day of 199 .
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Notary Public -- State of
My Commission Expires:
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Printed Name of Notary Public