EMPLOYMENT AGREEMENT
This Agreement (the “Agreement”) is entered into as of August 23, 2004 (the “Commencement Date”) by and between Xxxxxxxxxx Xxxxxxx (the “Executive”) and Smarte Solutions, Inc. (“Smarte” or “Company”) and Vincera Software, Inc. (“Vincera”)(collectively, the “Companies”).
1.
Duties and Scope of Employment.
(a)
(b)
Obligations to the Companies. During his Employment, without the prior written approval from the Companies, the Executive shall not render services in any capacity to any other person or entity and shall not act as a sole proprietor or partner of any other person or entity or as a shareholder owning more than five percent of the stock of any other corporation. The Executive shall comply with the respective Companies’ policies and rules, as they may be in effect from time to time during his Employment.
(c)
2.
Cash and Incentive Compensation.
(a)
(b)
(i)
In addition to the lapse of the Right of Repurchase as set forth above, the Right of Repurchase shall lapse as follows:
a)
In the event that the Company is subject to a Change in Control, the Right of Repurchase shall lapse as provided in the 2002 Stock Plan;
b)
In the event that the Executive is terminated for other than Cause or is subject to a Constructive Termination, the Right of Repurchase shall lapse; and
c)
In the event of the Executive’s death or Permanent Disability before the Executive’s Employment ends, the Right of Repurchase shall lapse on the date of such death or Permanent Disability.
For all purposes under this Agreement, “Constructive Termination” shall mean Executive’s voluntary resignation following (i) a change in his position with the Company that materially reduces his level of authority or responsibility, or (ii) receipt of notice that his principal workplace will be relocated more than 50 miles.
3.
Vacation and Employee Benefits. During his Employment, the Executive shall be eligible for fifteen (15) paid vacation days in accordance with the Company’s vacation policy, as it may be amended from time to time. During his Employment, the Executive shall be eligible to participate in the employee benefit plans maintained by the Company, subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee administering such plan.
4.
Board Observation. The Company shall cause Executive to be permitted to attend all meetings of the Company’s Board of Directors (the "Board") as an observer, and shall have no voting rights at such meetings. The company(ies) shall give Executive copies of all notices, minutes, consents and other material that the company(ies) provide to its/their directors, except in the event such exclusion is reasonably necessary to preserve the attorney-client privilege, to protect confidential proprietary information, or for other similar reasons. Upon reasonable notice and at a scheduled meeting of the Board of Directors or such other time, if any, as the Board of Directors may determine in its sole discretion, Executive may address the board of Directors with respect to his concerns regarding significant business issues facing the company(ies). Executive shall agree to hold in confidence and trust and not use or disclose any confidential information provided to or learned by him in connection with his rights to receive the information, with common exclusions of (i) the confidentiality obligations shall not apply to information that has become publicly known and made generally available through no wrongful act by executive; or (ii) the confidentiality obligations shall not limit disclosure of information to the extent required by a court of competent jurisdiction or other governmental authority as and to the extent required by law, so long as Executive makes commercially reasonable efforts promptly to inform the company(ies), so that the company(ies) has the opportunity to oppose the disclosure order and, at the request of the company(ies), provides reasonable assistance to the company(ies) in opposing the disclosure of such information; or (iii) other typical circumstance. The rights of Executive to receive information described herein shall terminate and be of no further force or effect upon such time as Executive is no longer employed by the company(ies). The confidentiality provisions hereof will survive any such termination.
5,
Business Expenses. During his Employment, the Executive shall be authorized to incur necessary and reasonable travel, entertainment, cell phone and other business expenses in connection with his duties hereunder. The Company shall reimburse the Executive for such expenses upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies.
6.
(a)
(b)
(c)
7.
(a)
(b)
(c)
(d)
Definition of “Cause.” For all purposes under this Agreement, “Cause” shall mean:
(i)
Any material breach of this Agreement, the Proprietary Information and Inventions Agreement between the Executive and the Company, or any other written agreement between the Executive and the Company, if such breach causes material harm to the Company;
(ii)
Any material failure to comply with the Company’s written policies or rules, as they may be in effect from time to time during the Executive’s Employment, if such failure causes material harm to the Company;
(iii)
Commission, conviction of, or a plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State; or
(iv)
the Employee, in carrying out his duties hereunder, has been guilty of willful misconduct causing material harm to the Company and, after receiving written notice to such effect, has failed to correct such neglect or misconduct within 15 days thereof.
(e)
Definition of “Permanent Disability.” For all purposes under this Agreement, “Permanent Disability” shall mean Executive’s inability to perform the essential functions of his position with or without reasonable accommodation for a period of 120 consecutive days because of Executive’s physical or mental impairment.
8.
Non-Solicitation and Non-Disclosure.
(a)
Non-Solicitation. During the period commencing on the date of this Agreement and continuing until the first anniversary of the date when the Executive’s Employment terminates for any reason, the Executive shall not directly or indirectly, personally or through others, solicit or attempt to solicit (on the Executive’s own behalf or on behalf of any other person or entity) either (i) any employee of the Companies or any of the Companies’ affiliates or (ii) the business of any customer of the Companies or any of the Companies’ affiliates on whom the Executive called or with whom the Executive became acquainted during his Employment if such solicitation would cause material harm to the Company.
(b)
Non-Disclosure. The Executive has entered into a Proprietary Information and Inventions Agreement with the Company, which is incorporated herein by this reference.
9.
(a)
Companies’ Successors. This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of either of the Companies’ business and/or assets. For all purposes under this Agreement, the term “Company” shall include any successor to either of the Companies’ business and/or assets which become bound by this Agreement.
(b)
Executive’s Successors. This Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
10.
(a)
Scope of Arbitration Requirement. The parties hereby waive their rights to a trial before a judge or jury and agree to arbitrate before a neutral arbitrator any and all claims or disputes arising out of this Agreement and any and all claims arising from or relating to the Executive’s Employment, including (but not limited to) claims against any current or former employee, director or agent of either of the Companies, claims of wrongful termination, retaliation, discrimination, harassment, breach of contract, breach of the covenant of good faith and fair dealing, defamation, invasion of privacy, fraud, misrepresentation, constructive discharge or failure to provide a leave of absence, claims regarding commissions, stock options or bonuses, infliction of emotional distress or unfair business practices.
(b)
Procedure. The arbitrator’s decision shall be written and shall include the findings of fact and law that support the decision. The arbitrator’s decision shall be final and binding on both parties, except to the extent applicable law allows for judicial review of arbitration awards. The arbitrator may award any remedies that would otherwise be available to the parties if they were to bring the dispute in court. The arbitration shall be conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association; provided, however that the arbitrator shall allow the discovery that the arbitrator deems necessary for the parties to vindicate their respective claims or defenses. The arbitration shall take place in Xxxxxx County, Texas or, at the Executive’s option, the county in which the Executive primarily worked with the Company at the time when the arbitrable dispute or claim first arose.
(c)
Costs. The parties shall share the costs of arbitration equally, except that the Company shall bear the cost of the arbitrator’s fee and any other type of expense or cost that the Executive would not be required to bear if he were to bring the dispute or claim in court. Both the Company and the Executive shall be responsible for their own attorneys’ fees, and the arbitrator may not award attorneys’ fees unless a statute or contract at issue specifically authorizes such an award.
(d)
Applicability. This arbitration provision does not apply to the following: (a) workers’ compensation or unemployment insurance claims or (b) claims concerning the validity, infringement or enforceability of any trade secret, patent right, copyright or any other trade secret or intellectual property held or sought by either the Executive or the Company (whether or not arising under the Proprietary Information and Inventions Agreement between the Executive and the Company).
11.
(a)
Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Executive, mailed notices shall be addressed to him at the home addresses that he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.
(b)
Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.
(c)
Whole Agreement. No other agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This Agreement and the Proprietary Information and Inventions Agreement contain the entire understanding of the parties with respect to the subject matter hereof.
(d)
Withholding Taxes. All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law.
(e)
Choice of Law and Severability. This Agreement shall be interpreted in accordance with the laws of the State of Texas (except its provisions governing the choice of law). If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect. If any provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively, the “Law”) then that provision shall be curtailed or limited only to the minimum extent necessary to bring the provision into compliance with the Law. All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.
(f)
(g)
IN WITNESS WHEREOF, each of the parties has executed this Agreement, and in the case of the Company by its duly authorized officer, as of the day and year first above written.
/s/ XXXXXXXXXX XXXXXXX
Xxxxxxxxxx Xxxxxxx
Smarte Solutions, Inc.
By: /s/ XXXX XXXXXXXXXX
XXXX XXXXXXXXXX
Title: CEO