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Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made of this 13th day of April, 1999, by and
between Xxxxx X. Xxxx (the "Employee"), and SILKNET SOFTWARE, INC., a Delaware
corporation located at 00 Xxxxxxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000
(the "COMPANY").
WHEREAS, the Board of Directors of the Company believes it to be to its
advantage to ensure that the Employee continues to render services to the
Company as hereinafter provided; and
WHEREAS, the Employee's managerial position requires that he be trusted
with extensive confidential information and trade secrets of the Company and
that he develop a thorough and comprehensive knowledge of all details of the
Company's business;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the mutual
covenants and obligations herein contained, the parties hereto agree as follows:
1. TITLE; POSITION AND RESPONSIBILITIES. Employee shall initially serve
as the Chairman of the Board, President and Chief Executive Officer of the
Company, and the Employee shall exercise such powers and comply with and perform
such directions and duties regarding the business and affairs of the Company as
may from time to time be vested in or given to him by the Board of Directors of
the Company and shall use diligent efforts to improve and extend the business of
the Company. The Employee shall at all times report to, and his activities shall
at all times be subject to the direction and control of the Board of Directors.
The Employee agrees to devote substantially all of his available business time,
attention and services to the discharge of such duties for the best interest of
the Company.
2. COMPENSATION: SALARY, BONUSES AND OTHER BENEFITS. During the term of
this Agreement, the Company shall pay the Employee the following compensation,
including the following annual salary, bonuses and other fringe benefits:
(A) SALARY. In consideration of the services to be rendered by the
Employee to the Company, the Company will pay to the Employee for the year
ending June 30, 2000, an annualized salary of $200,000. Such annual salary shall
be payable in conformity with the Company's customary practices for executive
compensation as such practices shall be established or modified from time to
time (but no less than monthly). Salary payments shall be subject to all
applicable federal and state withholding, payroll and other taxes, in accordance
with law. The salary for subsequent years during the term of this Agreement
shall be reviewed annually by the Board of Directors; provided, however, the
salary payable hereunder shall at no time be less than the salary set forth
above for the year ending June 30, 2000.
(B) FRINGE BENEFITS. The Employee will also be entitled to be
promptly reimbursed for all of his business-related travel, lodging and
entertainment expenses in accordance with the Company's prevailing policy for
employees. The Employee will be entitled to participate on the same basis with
all other officers and employees of the Company in the Company's standard
benefits package made generally available to all other officers and employees of
the Company, as may be adopted, modified to discontinued from time to time by
the Company.
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(C) VACATION. Employee shall be entitled to a paid vacation (taken
consecutively or in segments) of four (4) weeks during each fiscal year,
adjusted pro rata for any partial fiscal year during the term hereof. Such
vacation may be taken at such times as is reasonably prudent and consistent with
the proper and diligent performance by the Employee of his duties and
responsibilities hereunder.
(D) BONUS. For the year ending June 30, 1999, the Employee shall be
entitled to receive a bonus of not less than $50,000 and not more than
$100,000. Such bonus shall be determined by the Board of Directors, based on
goals, milestones and objectives established by the Employee and the Board of
Directors from time to time. Any bonus shall be subject to all applicable
federal and state withholding, payroll and other taxes.
3. ANNUAL PERFORMANCE REVIEW. Commencing August 1, 1999 and during the
months of August and May thereafter during the term of this Agreement, the Board
of Directors and the Employee shall in good faith review the performance by, and
the compensation payable to, the Employee for the then current year and the
proposed performance by, and compensation to, the Employee for the then
forthcoming year.
4. TERM. The term of this Agreement shall commence on the date first
above written and shall terminate on the earlier to occur of (i) June 30, 2001,
(ii) the death, physical incapacity or mental incompetence of the Employee, or
(iii) the occurrence of any of the circumstances described in Section 5 hereof
(the "EXPIRATION DATE"). After June 30, 2001, such employment may be extended
for successive twelve-month periods upon approval by the Board of Directors and
the Employee, subject to earlier termination as provided herein. Prior to June
30, 2001, the Company and the Employee agree, subject to the prior termination
of this Agreement, to discuss mutually agreeable terms of a new employment
agreement. If such terms cannot be agreed to by June 30, 2001, this Agreement
shall automatically expire on June 30, 2001.
5. TERMINATION. The Employee's term of employment under this Agreement
may be earlier terminated as follows:
(A) AT THE EMPLOYEE'S OPTION: The Employee may terminate his
employment, without cause, at any time upon at least sixty (60) days' advance
written notice to the Company.
(B) AT THE ELECTION OF THE COMPANY FOR JUST CAUSE. The Company may,
immediately and unilaterally, terminate the Employee's employment hereunder for
"just cause" at any time during the term of this Agreement Termination of the
Employee's employment by the Company shall constitute a termination for "just
cause" under this Section 5(B) if such termination is for one or more of the
following causes: (i) the failure of Employee to render services to the Company
in accordance with his assigned duties consistent with this Agreement, and such
failure of performance continues for a period of more than 30 days after written
notice thereof has been provided to the Employee; (ii) willful misconduct or
gross negligence of the Employee in connection with the performance of his
assigned duties; (iii) the conviction of the Employee of a felony; (iv)
disloyalty, breach of fiduciary duty or breach of the material terms of this
Agreement; (v) the commission by Employee of an act of fraud, embezzlement or an
act of deliberate disregard of the rules or policies of the Company which
results in loss, damage or injury to the Company or adversely affects the
business activities, reputation, goodwill or image of the Company; (vi) the
unauthorized disclosure or misappropriation by Employee of any trade secret or
confidential information of the Company or any of its clients or customers,
which results in damage or injury to the Company or adversely affects the
business activities, reputation, goodwill or image of the Company or its clients
or customers; or (vii) the commission by Employee of an act which constitutes
unfair competition with the Company or which induces any employee or customer of
the Company to break a contract with the Company.
After notice of termination for just cause has been delivered to the
Employee, the Employee shall be entitled to have the grounds for termination of
employment reviewed by the Board of Directors, provided such entitlement to
review shall not serve to extend the date upon which the termination of
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employment shall become effective. In making any determination under this
Section, the Board of Directors shall act fairly and in utmost good faith and
shall give the Employee an opportunity to appear and be heard at a meeting of
the Board of Directors or any committee thereof and present evidence on his
behalf.
In the event of any such termination for "just cause," the Employee
shall be entitled to accrued and unpaid salary and vacation through the
termination date and no other payments.
(C) AT THE ELECTION OF THE COMPANY FOR REASONS OTHER THAN JUST
CAUSE. The Company may, immediately and unilaterally, terminate the Employee's
employment hereunder at any time during the term of this Agreement for other
than "just cause" by giving thirty (30) days' advance written notice to the
Employee of the Company's election to terminate. During such thirty-day period,
the Employee will be available on a full-time basis for the benefit of the
Company to assist the Company in matters relating to the transition of a new,
successor officer of the Company. In the event the Company exercises its right
to terminate the Employee under this Section 5(C), the Company agrees to pay the
Employee a severance or termination payment of twelve months' salary at the then
current rate, payable in the same manner as such salary was payable during the
term of the Employee's employment. Such severance payment shall be payable on a
monthly basis for the twelve (12) months following the Employee's termination
and shall be subject to all applicable federal and state taxes. In the event of
a termination under this Section 5(C), the Company may, at its option, retain
the Employee as a consultant on terms mutually agreed between the Company and
the Employee. All such payments made pursuant to this Section 5(C) or Section
5(D), shall be conditioned upon the receipt by the Company of a signed release
in a form acceptable to the Company's counsel releasing the Company from any and
all actions or causes of actions, suits, debts, claims, complaints, contracts,
controversies, agreements, promises, damages, judgments and demands whatsoever,
in law or in equity, whether existing or contingent, known or unknown,
pertaining to the Employee's employment by the Company or termination of such
employment.
It shall be deemed to be a constructive termination by the Company for
other than "just cause" if: (i) the Employee's responsibilities and executive
authority are reduced or diluted in any material way without the Employee's
written consent; or (ii) the Employee is relocated to another Company office or
facility to a location outside of a radius of 25 miles from the Company's
current Manchester, New Hampshire, facility and without the Employee's written
consent.
(D) TERMINATION BECAUSE OF ACQUISITION OF THE COMPANY. The
provisions of this Section shall apply if the Employee's employment is
terminated because of any decision by the Board of Directors of the Company (or
following completion of the Acquisition (as defined below) the surviving
corporation) in connection with a consolidation, merger, or sale of all, or
substantially all, of the assets or capital stock of the Company, or other
business combination in which the Company is the target in any business
combination (an "Acquisition"). In the event of the completion of an
Acquisition, if the Employee is not offered employment by the acquiring
corporation in a comparable position, at a comparable salary, or is terminated
for other than "just cause" ("just cause" as defined in Section 5(B) hereof),
then the Company or the acquiring corporation, as the case may be, shall be
obligated to pay the Employee a severance payment of twelve months' salary at
the then current monthly rate, payable in the same manner as such salary was
payable during the term of the Employee's employment, together with medical and
health insurance benefits as set forth in Section 2(B). If the Employee is
offered employment by the acquiring corporation in a comparable position, and at
a comparable salary, neither the Company nor the acquiring corporation shall be
obligated to provide the severance payment described in this Section 6(D).
Anything contained in this Section 6(D) to the contrary notwithstanding, the
Employee shall not be entitled to any severance
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or other termination benefit if the Employee has either (i) terminated such
employment voluntarily, or (ii) has been terminated by the Company or any
acquiring corporation for "just cause" pursuant to Section 5(B). In the event of
an Acquisition, if the Employee is not offered employment at the surviving
corporation (under the terms described above) or is otherwise terminated at any
time within twelve (12) months of the completion of an Acquisition for other
than "just cause," then all remaining unvested stock options held by the
Employee shall become immediately vested and exercisable upon any such
termination, such options to be exercisable for a period of six (6) months
following any effective date of termination.
6. NONCOMPETITION, CONFIDENTIALITY AND INVENTIONS AGREEMENT. In
connection with his employment by the Company pursuant to the terms of this
Agreement, the Employee shall execute the Noncompetition, Confidentiality and
Inventions Agreement attached hereto as Exhibit A, the terms and conditions of
which are incorporated herein by reference. The Noncompetition, Confidentiality
and Inventions Agreement is sometimes referred to herein as the "Ancillary
Agreement."
7. GOVERNING LAW; INJUNCTIVE RELIEF. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New
Hampshire and shall be deemed to be performable in the State of New Hampshire.
The Employee acknowledges that the breach or threatened breach of any of the
provisions of this Agreement would give rise to irreparable injury to Company
which injury would be inadequately compensable in money damages. Accordingly,
Company may seek and obtain a restraining order and/or injunction prohibiting
the breach or threatened breach of any provision, requirement or covenant of
this Agreement, in addition to and not in limitation of any other legal remedies
which may be available. The Employee further acknowledges and agrees that the
agreements set out above are necessary for the protection of Company's
legitimate goodwill and business interests and are reasonable in scope, duration
and content.
8. SEVERABILITY. In case any one or more of the provisions contained in
this Agreement or the Ancillary Agreement for any reason shall be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or the
Ancillary Agreement, but this Agreement or the Ancillary Agreement, as the case
may be, shall be construed, revised, modified and reformed to the maximum extent
possible to effect the purposes set forth herein and in the Ancillary Agreement.
9. WAIVERS AND MODIFICATIONS. This Agreement may be modified, and the
rights and remedies of any provision hereof may be waived, only in accordance
with this Section. No modification or waiver by the Company shall be effective
without the consent of the Employee and at least a majority of the Board of
Directors (excluding the Employee, if the Employee is a director) then in office
at the time of such modification or waiver. No waiver by either party of any
breach by the other party of any provision hereof shall be deemed to be a waiver
of any later or other breach thereof or as a waiver of any other provision of
this Agreement. This Agreement and the Ancillary Agreement set forth all of the
terms of the understandings between the parties with reference to the subject
matter set forth herein and may not be waived, changed, discharged or terminated
orally or by any course of dealing between the parties, but only by an
instrument in writing signed by the party against whom any waiver, change,
discharge or termination is sought.
10. ASSIGNMENT. The Employee acknowledges that the services to be
rendered by him are unique and personal in nature. Accordingly, the Employee may
not assign any of his rights or delegate any of his duties or obligations under
this Agreement. The rights and obligations of the Company under this Agreement
shall inure to the benefit of, and shall be binding upon, the successors and
assigns of the Company, including any successor to the Company's capital stock
or assets by reason of any sale of
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stock or assets, merger, sale or other form of business combination.
11. ARBITRATION. Any controversy, dispute, claim or breach arising out
of or relating to this Agreement shall be submitted for settlement to an
arbitrator agreed upon by the parties. The decision of such arbitrator shall be
final and binding on the parties. If the parties cannot agree upon an
arbitrator, the controversy, claim or breach shall be referred to the American
Arbitration Association with a request that the Association appoint an
arbitrator. Such arbitration shall be held in Concord or Manchester, New
Hampshire, in accordance with the rules and practices of the American
Arbitration Association pertaining to single-party arbitration then in effect,
and the judgment upon the award rendered shall be entered by consent in any
court having jurisdiction. The prevailing party shall be entitled to recover all
costs and expenses associated with any arbitration (including attorneys' fees);
and if no party prevails, each party shall be responsible for its own expenses.
12. INTEGRATION. This Agreement and the Ancillary Agreement set forth
all of the terms of the understandings between the parties and supersede any
other understandings, discussions or agreements among the parties with reference
to the subject matter set forth herein.
13. INTERPRETATION. The language of all parts of this Agreement shall
in all cases be construed as a whole according to its fair meaning and not
strictly for or against either of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the date first above written.
SILKNET SOFTWARE, INC. EMPLOYEE:
BY: ____________________________ _____________________________
TITLE: _________________________
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Exhibit A
SILKNET SOFTWARE, INC.
NONCOMPETITION, NONDISCLOSURE AND INVENTIONS AGREEMENT
(FOR OFFICERS AND KEY EMPLOYEES)
The undersigned, __________________________ in consideration for and as
a condition of my continued employment as an employee (the "EMPLOYEE") of
SILKNET SOFTWARE, INC. (the "COMPANY"), hereby agrees with the Company as
follows:
1. NONCOMPETITION COVENANT. During the period of employment as an
officer and/or key employee of the Company, the Employee will devote his
available business time and best efforts to promoting and advancing the business
of the Company. During the period of employment and for a period of one (1) year
after termination of such employment (for any reason whatsoever), the Employee
agrees that he will not, whether alone or as a partner, officer, director,
consultant, agent, employee or stockholder of any company or other commercial
enterprise, engage in any business or other commercial activity which is or may
be competitive with the products and services being designed, conceived,
marketed, distributed or developed by the Company at the time of termination of
such employment. The foregoing prohibition shall not prevent employment or
engagement by any company or business organization, or any division thereof, not
substantially engaged in the business of developing, designing or marketing
software that allows companies to offer personalized marketing, sales,
electronic commerce and customer support services through a Web site interface
(the "Business"), as long as the activities of any such employment or
engagement, in any capacity, does not involve work on matters directly related
to the products or services being developed, to practice, distributed or
marketed by the Company at the time of any termination of employment. The
foregoing restriction shall not prohibit Employee from owning securities of any
publicly traded company that is engaged in the Business as long as Employee does
not own at any time more than three percent (3%) of such class of equity
securities of such company.
2. NONSOLICITATION. During the period of employment by the Company and
for a period of one (1) year after termination of such employment (for any
reason), the Employee will not directly or indirectly either for himself or for
any other commercial enterprise, solicit, divert or take away or attempt to
solicit, divert or take away, any of the Company's customers, business or
prospective customers in existence at the time of termination of such
employment. For purposes of this Agreement, "prospective customers" shall
include those customers being solicited by the Company at the time of the
Employee's termination. During such employment with the Company and for a period
of one (1) year thereafter, the Employee will not solicit or discuss with any
employee of the Company the employment of such Company employee by any
commercial enterprise, other than for the benefit of the Company, nor recruit,
attempt to recruit, hire, or attempt to hire any such Company employee other
than on behalf of the Company.
3. NONDISCLOSURE OBLIGATION. The Employee will not at any time, whether
during or after the termination of employment, for any reason whatsoever (other
that to promote and advance the business of the Company), reveal to any person
or entity (both commercial and non-commercial) any of the trade secrets or
confidential business information concerning the Company: including its research
and development activities; product designs, prototypes and technical
specifications; show-how and know-how; marketing plans and strategies; pricing
and costing policies; customer and supplier lists and accounts; or nonpublic
financial information of the Company so far as they have come or may come to
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the Employee's knowledge, except as may be required in the ordinary course of
performing his duties as an employee of the Company. This restriction shall not
apply to: (i) information that may be disclosed generally or is in the public
domain through no fault of the Employee; (ii) information received from a third
party outside the Company that was disclosed without a breach of any
confidentiality obligation; (iii) information approved for release by written
authorization of the Company; or (iv) information that may be required by law or
an order of any court, agency or proceeding to be disclosed. The Employee shall
keep secret all matters of such nature entrusted to him and shall not use or
disclose any such information for the benefit of any third party in any manner
which may injure or cause loss to the Company, whether directly or indirectly.
4. ASSIGNMENT OF INVENTIONS. The Employee expressly understands and
agrees that any and all right or interest he obtains in any designs, trade
secrets, technical specifications and technical date, know-how and show-how,
customer and vendor lists, marketing plans, pricing policies, inventions,
concepts, ideas, expressions, discoveries, improvements and patent or patent
rights which are authored, conceived, devised, developed, reduced to practice,
or otherwise obtained by him during the term of this Agreement which relate to
or arise out of his employment with the Company are expressly regarded as "works
for hire" (the "INVENTIONS"). The Employee hereby assigns to the Company the
sole and exclusive right to such Inventions. The Employee agrees that he will
promptly disclose to the Company any and all such Inventions, and that, upon
request of the Company, the Employee will execute and deliver any and all
documents or instruments and take any other action which the Company shall deem
necessary to assign to and vest completely in the Company, to perfect trademark,
copyright and patent protection with respect to, or to otherwise protect the
Company's trade secrets and proprietary interest in such Inventions. The
obligations of the Employee under this Section shall continue beyond the
termination of the Employee's employment with respect to such Inventions
conceived of, reduced to practice, or developed by the Employee during the term
of this Agreement. The Company agrees to pay any and all copyright, trademark
and patent fees and expenses or other costs incurred by the Employee for any
assistance rendered to the Company pursuant to this Section.
The Employee's obligation to assign Inventions shall not apply to any
invention about which the Employee can prove that: (i) it was developed entirely
on the Employee's own time and effort; (ii) no equipment, supplies, facility,
trade secrets or confidential information of the Company was used in its
development; (iii) it does not relate to the business of the Company or to the
Company's actual or anticipated research and development activities; and (iv) it
does not result from any work performed by the Employee for the Company.
5. ABSENCE OF CONFLICTING AGREEMENTS. The Employee understands the
Company does not desire to acquire from him any trade secrets, know-how or
confidential business information that he may have acquired from others. The
Employee represents that he is not bound by any agreement or any other existing
or previous business relationship which conflicts with or prevents the full
performance of the Employee's duties and obligations to the Company during the
course of employment.
6. REMEDIES UPON BREACH. The Employee agrees that any breach of this
Agreement by the Employee could cause irreparable damage to the Company. The
Company shall have, in addition to any and all remedies of law, the right to an
injunction or other equitable relief to prevent any violation of the Employee's
obligations hereunder.
7. MISCELLANEOUS. Any waiver by the Company of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach hereof. If one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to
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scope, activity or subject matter so as to be unenforceable at law, such
provision(s) shall be construed and reformed by the appropriate judicial body by
limiting and reducing it (or them), so as to be enforceable to the maximum
extent compatible with the applicable law as it shall then appear. The
obligations of the Employee under this Agreement shall survive the termination
of the Employee's relationship with the Company regardless of the manner of such
termination. All covenants and agreements hereunder shall inure to the benefit
of and be enforceable by the successors of the Company. This Agreement shall be
governed by, and construed in accordance with, the internal laws of the State of
New Hampshire. The Employee understands that this Agreement does not create an
obligation on the part of the Company to continue the Employee's employment with
the Company. The Employee is employed as an employee "at will."
The Employee recognizes and agrees that the enforcement of this
Agreement is necessary to ensure the preservation, protection and continuity of
the confidential business information, trade secrets and goodwill of the
Company. The Employee agrees that, due to the proprietary nature of the
Company's business, the restrictions set forth in Sections 1, 2, 3 and 4 of this
Agreement are reasonable as to duration and scope.
IN WITNESS WHEREOF, the undersigned Employee and the Company have
executed this Agreement as of this 13th day of April, 1999.
SILKNET SOFTWARE, INC. EMPLOYEE:
By:________________________ ________________________________
SIGNATURE OF EMPLOYEE
Title:_____________________ ________________________________
PRINT NAME OF EMPLOYEE
