Exhibit 10.19
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EMPLOYMENT AGREEMENT
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By and Between
Vsource (USA) Inc
and
Xxxxxxx X. Xxxxx
Dated as of January 1/st/, 2003
This EMPLOYMENT AGREEMENT dated as of January 1/st/ 2003(the "Effective
Date"), by and between Vsource (USA) Inc, a Delaware company authorized to do
business in California (the "Company"), and Xxxxxxx X. Xxxxx ("Employee").
In consideration of Employee's continued employment by the Company, the
parties hereto agree as follows:
1. Employment. Subject to earlier termination in accordance with Sections
contained within, this Agreement shall be an at-will agreement commencing as of
the Effective Date.
a. Duties. The Company agrees to employ Employee and Employee agrees to
serve the Company, as its Chief Executive Officer, subject to the direction of
the Board of Directors of the Company (the "Board"), and to have such authority
and duties relative to the operation of the Company as may be determined by the
Board. In addition, Employee agrees, if requested by Vsource, Inc., the
Company's parent company ("VSI"), to serve as the Chairman of the Board of
Directors of VSI and Chief Executive Officer of VSI subject to the direction of
the Board of Directors of VSI, with such authority and duties relative to the
operation of VSI as may be determined by the Board of Directors of VSI.
b. Term. The initial term of this Agreement shall be from the Effective
Date hereof until June 21, 2003 (the "Initial Term"). This Agreement shall
renew automatically for additional one (1) year terms unless either party gives
notice of termination not less than 90 days prior to the end of the existing
term.
c. Best Efforts. During the term of his employment under this Agreement,
Employee shall devote his full business time, attention, skill, and efforts to
the faithful performance of his duties hereunder, and will use his best efforts
to advance the interests of the Company, the Company's parent company and any
subsidiaries thereof (the "Vsource Companies").
d. Statutory Benefits. Employee understand and agree that the differential
payments and adjustments described below as well as any other allowances or
gratuities provided by the Company under this Agreement are, at the election of
the Company, in substitution for the statutory benefits required under federal
law or California state law to compensate employees who are not entitled to
receive these contractual benefits.
2. Compensation. The Company shall pay to Employee, as consideration for the
services to be rendered by Employee hereunder, a base salary of US$262,800 per
year (the "Base Salary") to be paid on a monthly basis. Employee shall be
eligible for a target incentive bonus ("Bonus") equal to 133.3% of Employee's
Base Salary, which shall be payable upon the achievement of performance targets
to be set by the Compensation Committee (the "Compensation Committee") of the
Board of Directors of VSI. If this Agreement is renewed in accordance with
Section 1(b), then unless Employee and the Company agree otherwise, with effect
from August 1, 2003, the Base Salary shall increase to US$350,400 per year, and
the Bonus for which Employee shall be eligible shall be reduced to 100.0% of
this increased Base Salary.
3. Stock Options, Restricted Stock and Similar Types of Compensation Benefits.
Stock option grants, participation in restricted stock programs or deferred
compensation programs and other similar types of compensation plans will be
decided by the Board of Directors of VSI but in any event will be on generally
the same terms and conditions made available to other members of senior
management of the Vsource Companies.
4. Benefits. Employee is entitled to participate in the Company's programs for
medical dental, vision, and retirement coverage provided by the Company. All
claims against health services should be submitted to the relevant insurance
provider. In addition, Employee shall receive the following benefits:
a) If Employee is assigned to a location outside of the United States,
Employee will be eligible for a housing allowance, to be determined by
prevailing market rates in the city of assignment as appropriate for the
level of office held by Employee.
b) If assigned within the United States, the Company shall reimburse
Employee for all reasonable travel expenses of spouse accompanying
Employee on any Company business-related trips to the Asia Pacific
region, up to a maximum of US$6,000 per month.
c) Automobile. Employee will be provided with the use of an automobile and
driver.
d) Income Tax Preparation: An international consultant, at the Company's
expense, will advise Employee as to filing requirements with respect to
U.S. federal and state income tax and will prepare Employee's annual
U.S. federal and state tax returns.
5. Expenses. Upon presentation of proper vouchers, receipts or other proof,
Employee shall be reimbursed promptly by the Company for all reasonable travel
and other expenses incurred by Employee in connection with performing his
employment obligations hereunder.
6. Vacations. Employee shall be entitled to eight (8) weeks paid vacation per
year during the term of his employment.
7. Termination of Employment.
a. By the Employee. Employee's employment may be terminated by Employee,
without cause (a "Voluntary Termination") (i) during the Initial Term, at any
time during the period comprised of the last 90 days of the Initial Term, and
(ii) at any time after the Initial Term, in each case upon 90 days written
notice to the Company.
b. By the Company. Employee's employment may be terminated by the Company:
i. immediately, in the event that (1) Employee is convicted or pleads
guilty or nolo contendere to a felony or a crime of moral turpitude,
(2) the Board determines in good faith that Employee has been grossly
negligent or acted dishonestly to the material detriment of the
Company, (3) Employee willfully disobeys the instructions or mandates
of the Board and such disobedience continues after Employee is
afforded a reasonable opportunity to cure such disobedience, or (4)
the Board makes a good faith determination that Employee has engaged
in actions amounting to willful misconduct or failed to perform his
duties hereunder and such failure continues after Employee is
afforded reasonable opportunity to cure such failure (each of (1),
(2), (3) or (4), refereed to herein as a "Termination for Actual
Cause"); or
ii. immediately, in the event that Employee is indicted or otherwise
formally charged with a felony or a crime of moral turpitude, in
which case the Board may, upon three (3) days written notice, suspend
Employee's employment by the Company. Thereafter, all payments of
salary and bonuses, if any, to which Employee otherwise would be
entitled under this Agreement shall be paid into an interest bearing
escrow account. In the event that Employee shall be acquitted of such
charges or such charges shall otherwise be dismissed, Employee shall
be reinstated as an employee, and all salary and accrued bonuses paid
into escrow, plus accrued interest, shall be paid to Employee. In the
event Employee shall be convicted or pleads guilty or nolo contendere
to such charges and his employment is terminated hereunder; all
salary and accrued bonuses paid into escrow plus accrued interest,
shall be paid over to the Company, and for purposes of this
Agreement, Employee's employment shall be deemed to have terminated
as of the date of his suspension.
iii. if the Board of Directors, in its discretion, resolves to terminate
Employee's employment for any reason other than those set forth in
sub-sections b(i) or b(ii) above, upon 90 days notice to Employee.
c. Death of Employee. In the event of Employee's death during the term of
his employment, Employee's employment pursuant to this Agreement shall be
deemed to have terminated on the last day of the calendar month during which
Employee's death occurred.
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d. Disability. In the event Employee is unable to perform his normal duties
by reason of disability, then at the sole discretion of the Board, Employee's
employment pursuant to this Agreement may be treated as having been terminated
on the last day of the calendar month during which Employee shall have been
deemed disabled. For purposes of this Section, "disability" shall mean the
inability of Employee to perform his normal duties under this Agreement for a
cumulative period in excess of six (6) months within any twelve (12) month
period due to illness, injury, incapacity or other disability, either physical
or mental.
8. Severance.
a. Voluntary Termination, Termination for Actual Cause or Termination
Without Cause. In the event of Voluntary Termination, Termination for Actual
Cause or a termination by the Company of Employee's employment without cause,
the Company shall pay to Employee, in full discharge of its obligations
hereunder, Base Salary through the date specified in the applicable notice as
the termination date (the "Termination Date") of his employment; provided, that
in the case of a Voluntary Termination, if the Company permits Employee to
terminate employment on a date earlier than the Termination Date, then the
Company shall only be obligated to pay Employee's Base Salary through such
earlier date; and provided, further, that in the case of termination by the
Company of Employee's employment without cause, the Company may, at its option,
elect to pay Employee the Base Salary payable Employee through the Termination
Date, and require Employee to leave the Company's offices immediately or any
other time designated by the Company prior to the Termination Date.
b. Death or Disability. In event Employee's employment by the Company
terminates on account of Employee's death or disability, the Company shall pay
to Employee (or his estate), in full discharge of its obligations hereunder,
Employee's Base Salary through the Termination Date.
9. Non-Competition. Employee covenants and agrees that during the term of
Employee's employment with the Company and for a period (the "Non-Compete
Period") commencing on the Termination Date and ending on the date which is one
(1) year from the date of the final payment by the Company to Employee pursuant
to this Agreement, Employ will refrain from: (i) directly or indirectly (as a
director, officer, employee, manager, consultant, independent contractor,
advisor or otherwise) engaging in competition with, or owning any interest in,
performing any services for, participating in or being connected with any
business or organization which engages in competition with any of the Vsource
Companies in the United States and in the Asia-Pacific region, (ii) soliciting
directly or indirectly the patronage of any person with whom Employee has had
personal contact or dealings on behalf of any of the Vsource Companies during
the twelve (12) month period immediately preceding the Termination Date, or
(iii) directly or indirectly employing, soliciting for employment, or advising
or recommending to any other person that they employ or solicit for employment,
any employee of any of the Vsource Companies.
In connection with the foregoing provisions of this Section 9, Employee
represents that his experience, capabilities and circumstances are such that
the provisions of these Sections will not prevent him from earning a livelihood
and that the limitations set forth herein are reasonable and properly required
for the adequate protection of the Company.
10. Confidential Information.
a. Non-Disclosure. Employee agrees not to use other than for the benefit of
the Vsource Companies and to keep confidential, during the term of Employee's
employment with the Company and for at least two (2) years thereafter, all
information about the Vsource Companies which the Vsource Companies treat as
confidential, including, but not limited to, information about customers,
marketing plans, marketing techniques, technical information, and possible new
products or services, except that Employee will not be required to keep
particular items of information confidential after those items of information
become generally available to the public without a breach by Employee of
Employee's obligations under this Section. Employee covenants and agrees that
except in the performance of his duties hereunder, he will not, at any time,
directly or indirectly, without the
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prior written consent of the Company, use or disclose to any person any
confidential or proprietary information ("Confidential Information") obtained
or developed by him while employed by the Company relating to the business of
the Vsource Companies, except information which at the time (i) is available to
others in the business or generally known to the public other than as a result
of disclosure by him not permitted hereunder, (ii) is lawfully acquired from a
third party who is not obligated to a Vsource Company to maintain such
information in confidence or (iii) is used in any dispute or proceedings
between the parties and/or Employee is legally compelled to disclose such
information; provided, however, that prior to any such compelled disclosure,
Employee will (a) assert the privileged and confidential nature of the
Confidential Information against the third party seeking disclosure and (b)
cooperate fully with the Company or any other Vsource Company in protecting
against any such disclosure and/or obtaining a protective order narrowing the
scope of such disclosure and/or use of the Confidential Information. In the
event that such protection against disclosure is not obtained, Employee will be
entitled to disclose the Confidential Information, but only as and to the
extent necessary to legally comply with such compelled disclosure.
b. Disclosure to the Company. Employee shall disclose promptly to the
Company all new discoveries, ideas, formulae, products, methods, processes,
designs, trade secrets, copyrightable material, patentable inventions, or other
useful technical information or know-how and all improvements, modifications or
alterations of existing discoveries made, discovered, or developed by him,
either alone or in conjunction with any other person during the term of his
employment by the Company, or using the Vsource Companies' materials or
facilities, which discoveries or developments are based on, derived from, or
make use of any information directly related to the business disclosed to, or
otherwise acquired by, Employee from any of the Vsource Companies during his
employment by the Company. Employee agrees that any copyright, patent,
trademark, or other proprietary rights in any such discoveries shall be the
sole and exclusive property of the Company, and none of the Vsource Companies
need account to Employee for any revenue or profit derived therefrom. If by
operation of law or otherwise, any or all of the items set forth in Section 9,
or any component or element thereof, is considered to be the intellectual
property right of Employee, Employee hereby agrees to irrevocably assign to the
Company, its successor and assigns, ownership of all United States and
international copyrights and all other intellectual property rights available
with respect to each such element or item. Employee shall be deemed to have
granted the Company an irrevocable power of attorney to execute as Employee's
agent any and all documents (including copyright registrations) deemed
necessary by the Company to perfect the Company's intellectual properly rights
in and to each of the items set forth in this Section.
c. Trade Secrets. Employee agrees, in order to effectuate the intent of the
parties hereunder with respect to confidentiality of the trade secrets of the
Vsource Companies, to return to the Vsource Companies forthwith upon the
request of a Vsource Company or the termination of his employment or promptly
thereafter, all documents, materials, photographs, memorandums, and all copies
or reproductions hereof, or any property of a similar or different nature
containing information relating to the business or other Confidential
Information, whether such material was furnished by a Vsource Company, or
otherwise. Employee further agrees to use his best efforts and to exercise
utmost diligence to protect and guard and keep secret and confidential all
Confidential Information that shall come into his possession by reason of his
employment by the Company.
d. Company Property. Employee agrees to return to the Vsource Companies
forthwith upon the request of any Vsource Company or the termination of his
employment or promptly thereafter, all other properly belonging to the Vsource
Companies.
11. Damages. Employee acknowledges that the Company may suffer irreparable
harm, which cannot readily be measured by monetary terms, if Employee breaches
his obligations under Section 9 or any other section. Employee agrees and
acknowledges that, in the event of any such breach, the Company shall be
entitled to cancel any and all shares, and/or options or rights to purchase
shares, of its or VSI's capital stock received by the Employee and/or cancel
Employees rights to receive additional compensation pursuant to Section 2 or 3
as
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compensation for services rendered. Employee further acknowledges and agrees
that the Company may obtain injunctive or other equitable relief against
Employee to prevent or restrain such breach causing such harm; provided,
however, that where such breach involves subject matter that is susceptible of
being cured, Employee will cure such breach as promptly as practicable upon
notice of such breach to Employee. Such injunctive relief shall be in addition
to any other remedies the Company might have under this Agreement or at law.
12. Miscellaneous.
a. Notice. Any notices or other communications to Employee or to the
Company under or relating to this Agreement must be in writing and will be
deemed given when delivered in person or sent by facsimile transmission to the
Company or Employee, as the case may be, at the Company's principal offices, or
on the third day after the day on which mailed to the Company or Employee, as
the case may be, by first class mail addressed to the Company or Employee at
the Company's principal offices, except that after the term of this Agreement
terminates, any notice or other communication to Employee will be deemed given
when delivered in person or sent by facsimile transmission, or on the third day
after the day on which mailed by first class mail, to Employee at an address
specified by Employee to the Company in the manner provided in this Section
(or, if Employee does not specify an address, at the Company's principal
offices).
b. Entire Agreement; Amendment. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof and
replaces in their entirety the Employment and Non-Competition Agreement dated
as of June 22, 2001 between Employee and Vsource (CI) Ltd (formerly
XxxXxx000.xxx Ltd) and the Employment and Non-Competition Agreement dated as of
June 22, 2001 between Employee and Vsource (Asia) Ltd (formerly NetCel360 Hong
Kong Limited) (together, the "Former Agreements"), which Employee agrees are
each cancelled and terminated as of the Effective Date, except that Employee
shall be credited hereunder with all benefits that have accrued under the
Former Agreements through the Effective Date, including without limitation
vacation that has accrued and employee stock options that have been granted
under the Former Agreements. No termination, revocation, waiver, modification,
amendment or supplement to this Agreement shall be binding unless consented to
in writing by Employee and the Company.
c. Governing Law. This Agreement shall be interpreted and construed in
accordance with the laws of Delaware, USA, without giving effect to the
conflict of laws provisions thereof.
d. Interpretation. As used in this Agreement, the masculine gender shall
include the feminine or neuter gender and the plural shall include the singular
wherever appropriate. The titles of the paragraphs and sections have been
inserted as a matter of convenience of reference only and shall not control or
affect the meaning or construction of any of the terms or provisions hereof.
Nothing herein shall be construed against or more favorably toward any party by
reason of any party having drafted this Agreement or any portion hereof.
e. Severability. Any provision of this Agreement that is invalid, illegal
or unenforceable in any jurisdiction shall be automatically reformed and
construed so as to be valid, operative and enforceable to the maximum extent
permitted by law, or if no reformation is permissible, shall be ineffective to
the extent of such invalidity, illegality or unenforceability without
invalidating or rendering unenforceable the remaining provisions of this
Agreement, and any such invalidity, illegality or unenforceability shall not,
of itself, affect the validity, legality or enforceability of such provision in
any other jurisdiction.
f. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute one and the same instrument.
g. No Waiver. No failure or delay on the part of either party is exercising
any right or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power preclude any other right
or power.
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h. Previous Employer. Employee hereby represents that he is under no
obligation or agreement that would prevent him from being an employee of the
Company or adversely impact his ability to perform the expected services for
the Company. As a condition of employment, no confidential documents, computer
discs, computer stored information, or any other confidential properly of any
previous employer are to be brought on the premises or used in any way in your
employment by the Company. As a further condition of employment, Employee
agrees not to use or disclose the trade secrets or confidential information, if
any, of a previous employer in connection with Employee's services for the
Company.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as
of the date first above written.
VSOURCE (USA) INC
By: /s/
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Name: Xxxxxx X. Xxxxx
Title: Director
By: /s/
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Xxxxxxx X. Xxxxx
Nationality: US Citizen
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