Severance Agreement - Shields Enterprises Inc. and Fidelis N. Umeh
AGREEMENT
AGREEMENT, dated as of June 21, 1996, among Shields Enterprises, Inc., a
Delaware corporation ("SEI"), and Fidelis N. Umeh ("Umeh").
W I T N E S S E T H:
WHEREAS, SEI and Umeh are parties to that certain Agreement, dated December
29, 1988, relative to, among other things, Umeh's employment by SEI (the
"Existing Agreement");
WHEREAS, it is contemplated that SEI will enter into an Agreement and Plan
of Reorganization (the "Reorganization Agreement") with Navigation Technologies
Corporation, a Delaware corporation ("NavTech"), NT Acquisitions Corporation, a
Delaware corporation and a wholly-owned subsidiary of NavTech ("Subsidiary"),
and T. Russell Shields pursuant to which Subsidiary will merge into SEI (the
"Merger");
WHEREAS, the Reorganization Agreement will require, as a condition to the
Merger, that, as of the effective date of the Merger, all outstanding
obligations to Umeh under the Existing Agreement will have been satisfied in
full, the Existing Agreement will have been terminated and Umeh will have
executed and delivered a written release in favor of SEI (the "Conditions");
WHEREAS, SEI and Umeh desire, among other things, to enter into this
Agreement for the purpose of satisfying the Conditions;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Termination of Existing Agreement. The Existing Agreement will
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terminate in its entirety, and be of no further force or effect whatsoever, on
the Effective Date (as such term is defined in Section 4) upon the satisfaction
or waiver of the conditions set forth in Section 4; provided, however, that
notwithstanding the foregoing, Umeh will continue to be entitled to receive from
SEI the compensation, fringe benefits, reimbursement for expenses and benefits
under the profit participation plans contemplated by
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Sections 4, 5, 6 and 7, respectively, of the Existing Agreement to the extent
not paid and satisfied through the Effective Date; and, further provided, that
Umeh's non-competition and nondisclosure covenants contained in Sections 9 and
10, respectively, of the Existing Agreement shall survive any such termination.
2. Issuance of SEI Shares. In consideration of the termination of the
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Existing Agreement, and in lieu of any and all compensation or other benefits
that would otherwise be due and owing to Umeh by SEI or any of its affiliates
pursuant to the Existing Agreement by reason of the Merger and/or termination of
Umeh's employment with SEI (including, without limitation, any amounts that
would be payable pursuant to Sections 8 and 12 of the Existing Agreement), SEI
will issue to Umeh on the Effective Date (or, if requested by written notice
from Umeh to SEI, promptly upon such earlier date as Umeh may request following
receipt by Umeh of advice from his counsel that the initial public offering of
NavTech common stock referred to in Section 4 is reasonably likely to be
completed) 657 shares of SEI common stock, resulting (after such issuance) in
there being an aggregate of 11,421 shares of SEI common stock outstanding
immediately prior to the consummation of the Merger. Notwithstanding the
foregoing, the number of shares of SEI common stock to be issued to Umeh
pursuant to this Section 2 (and, correspondingly, the number of shares of SEI
common stock to be outstanding immediately prior to the consummation of the
Merger) will be subject to increase or decrease depending upon whether the
number of shares of NavTech common stock to be issued to SEI's shareholders
pursuant to the Merger (the "Merger Shares") is more or less than 42,000,000 (as
currently constituted prior to the reverse stock split referred to in the
Reorganization Agreement and excluding, for purposes of this calculation, the
sum of (i) the number of shares of NavTech common stock owned of record and
beneficially solely by SEI immediately prior to the consummation of the Merger
plus (ii) 1,585,000 shares of NavTech common stock). The amount of such
increase or decrease in the number of shares of SEI common stock to be issued to
Umeh shall be the number of shares of SEI common stock exchangeable (at the
exchange ratio established by the Reorganization Agreement) into ten percent
(10%) of such increase or decrease in the number of Merger Shares (being
similarly calculated prior to the reverse stock split to be more or less than
42,000,000 shares). The shares of SEI common stock to be issued to Umeh
pursuant to this Section 2 are hereinafter referred to as the "Umeh Shares". In
the event that on or prior to the
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Effective Date there is any change in the capitalization of SEI or NavTech other
than as contemplated in the latest draft of the Reorganization Agreement
provided to Umeh prior to the date hereof or any other change in the
Reorganization Agreement not specifically approved in writing by Umeh, the
number of Umeh Shares shall be recalculated in a fair and equitable manner
consistent with the intent of the parties as reflected in this Agreement based
upon the present capitalization of SEI and NavTech (prior to the reverse stock
split) and the latest draft of the Reorganization Agreement provided to Umeh
prior to the date hereof.
3. Releases. Effective as of the Effective Date, Umeh hereby releases SEI
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and its officers, directors, shareholders, employees, representatives, agents,
affiliates, successors and assigns from and against any and all claims, actions
and causes of action, known or unknown, that he may have against the released
persons under or with respect to the Existing Agreement and any transactions
contemplated thereby; provided, however, that this release shall not extend or
apply to the agreements and covenants of SEI contained in this Agreement.
Effective as of the Effective Date, SEI hereby releases Umeh from and against
any and all claims, actions, and causes of actions, known or unknown, that it
may have against Umeh under or with respect to the existing Agreement; provided,
however, that this release shall not extend or apply to the agreements and
covenants of Umeh contained in this Agreement.
4. Effective Date. As used in this Agreement, "Effective Date" means the
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date upon which the Merger is consummated in the manner contemplated by the
Merger Agreement or such earlier date that the Umeh Shares are issued to Umeh in
the manner contemplated in Section 2. In either case, the issuance of the Umeh
Shares pursuant to this Agreement shall be deemed to have occurred prior to the
consummation of the Merger, with the effect that the Umeh Shares shall be deemed
to be issued and outstanding shares of SEI common stock as of the effective time
of the Merger entitling Umeh to receive shares of NavTech common stock in
exchange for the Umeh Shares pursuant to the Merger.
Notwithstanding anything to the contrary contained herein, this Agreement
shall terminate and be of no further force or effect whatsoever (except as
provided in the immediately following paragraph) in the event that (i) the
Merger is not consummated by October 1, 1996 or (ii) an initial public offering
of NavTech
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common stock (which initial public offering is a condition to NavTech's and
SEI's obligation to consummate the Merger) shall not close immediately prior to
or concurrently with the consummation of the Merger, or shall not be ready to
close immediately following the consummation of the Merger.
Upon any termination of this Agreement, Umeh shall immediately transfer to
SEI any and all of the Umeh Shares that were issued to him prior to such
termination. Umeh agrees to immediately execute and deliver to SEI any and all
documents, instruments and agreements (including, without limitation, stock
certificates together with stock powers endorsed in blank or to SEI's order) as
may be reasonably required in order to effectuate the foregoing transfer, and
Umeh hereby appoints SEI as his agent and attorney-in-fact to execute and
deliver any and all such documents, instruments and agreements for and on his
behalf (which appointment is agreed to be irrevocable and coupled with an
interest in the Umeh Stock). Unless and until the Merger is consummated, Umeh
shall not sell, transfer, assign, pledge, hypothecate or otherwise dispose of
the Umeh Shares (except in the manner contemplated in this paragraph) and shall
keep and maintain the Umeh Shares free and clear of any and all liens, pledges,
security interests, claims and other encumbrances of any kind or nature
whatsoever. In addition, until the Merger is consummated, SEI shall be entitled
to possession of the stock certificate(s) evidencing the Umeh Shares. SEI shall
provide Umeh with copies of the stock certificate(s) evidencing the Umeh Shares
promptly upon their issuance.
5. General Provisions.
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(a) Expenses. Each party shall bear its own expenses incident to this
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Agreement and the transactions contemplated hereby, including, without
limitation, all fees of counsel, accountants and consultants.
(b) Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by messenger, by overnight courier service, by
facsimile transmission or by registered or certified mail to the
respective parties at the following addresses (or at such other address
for a party it shall have specified in a
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notice given in accordance with this Section 5(b)):
(i) if to SEI:
SEI Information Technology
212 East Ohio
2nd Floor
Chicago, Illinois 60611
Attention: Mitchell Morris
Telecopy: 312 440-8373
with a copy to:
Neal, Gerber & Eisenberg
Two North LaSalle Street
Suite 2200
Chicago, Illinois 60602
Attention: Marshall E. Eisenberg, Esq.
Telecopy: 312-269-1747
(ii) if to Umeh:
Fidelis N. Umeh
1121 East 49th Street
Chicago, Illinois 60615-1907
Telecopy: 312-538-0709
with a copy to:
McDermott Will & Emery
227 W. Monroe Street
Chicago, Illinois 60606
Attention: John H. McDermott, Esq.
Telecopy: 312-984-3669
(c) Headings. The descriptive headings contained in this Agreement are for
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convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
(d) Severability. If any term or other provision of this Agreement is
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invalid, illegal or incapable of being enforced by virtue of any law or
public policy, all other
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terms and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term
or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
(e) Entire Agreement. This Agreement constitutes the entire agreement of
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the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and
oral, among the parties hereto with respect to the subject matter
hereof.
(f) Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of the parties hereto and their respective
successors and assigns.
(g) Amendment; Waiver. This Agreement may not be amended or modified
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except by an instrument in writing signed by, or on behalf of, all of
the parties hereto. Any party to this Agreement may (i) extend the
time for the performance of any of the obligations or other acts of
any other party or (ii) waive compliance with any of the agreements or
conditions of any other party contained herein. Any such extension or
waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent breach
or a subsequent waiver of the same term or condition, or a waiver of
any other term or condition, of this Agreement. The failure of any
party to assert any of its rights hereunder shall not constitute a
waiver of any of such rights.
(h) Governing Law: Arbitration: Injunctive and Other Relief. This
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Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of
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Illinois applicable to agreements made and to be performed entirely in
Illinois. Each party hereby irrevocably consents to the exclusive
jurisdiction of the federal and state courts located in Chicago,
Illinois with respect to any actions which may arise in connection
with this Agreement and are not required by this Section 5(h) to be
arbitrated. Except as provided in this Section 5(h), any controversy
or claim arising out of or relating to this Agreement, or the breach
thereof, shall be settled by arbitration administered by the American
Arbitration Association in accordance with its commercial Arbitration
Rules, and judgment on the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.
Within fifteen (15) days after the commencement of arbitration, each
party shall each select one person to act as arbitrator and the two
selected shall select a third arbitrator within ten (10) days of their
appointment. If the arbitrators so selected are unable or fail to
agree upon the third arbitrator, or if either party fails to appoint
an arbitrator, such arbitrator or arbitrators shall be selected by the
American Arbitration Association.
Each of the parties to this Agreement acknowledges that a breach of
this Agreement may cause the other party irreparable harm which may
not be adequately compensated by money damages. Therefore, in the
event of a breach or threatened breach by a party, injunctive or other
equitable relief will be available to the other party, and any
arbitrator acting pursuant to this Agreement shall have the authority
to provide such injunctive or other equitable relief. Remedies
provided herein are not exclusive.
The arbitrators shall have the authority to award such remedies or
relief that a court of the State of Illinois could order or grant in
an action governed by Illinois law, including, without limitation,
specific performance of any obligation created under this Agreement,
the issuance of an injunction, or the imposition of sanctions for
abuse or frustration of the arbitration process. The
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arbitration proceedings shall be conducted in Chicago, Illinois.
Notwithstanding the foregoing, any party may bring and pursue an
action in any Federal or State court located in Chicago, Illinois
seeking provisional relief, including a temporary restraining order or
preliminary injunction, pending an arbitration proceeding. Any
provisional relief obtained shall be discontinued once the arbitrators
have assumed jurisdiction and ordered such discontinuance.
(i) Further Action. Each of the parties hereto shall use all reasonable
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efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable
under applicable law, and execute and deliver such documents and other
papers, as may be required to carry out the provisions of this
Agreement and consummate and make effective the transactions
contemplated by this Agreement.
(j) Counterparts. This Agreement may be executed in one or more
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counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date set forth above.
SHIELDS ENTERPRISES, INC.,
a Delaware corporation
By: /s/ Mitchell Morris
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/s/ Fidelis N. Umeh
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Fidelis N. Umeh
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