1
EXHIBIT 99.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of May 14, 2001, by and between
XXXXXXXXXX.XXX CORPORATION, a Georgia corporation (the "Company"), and Xxxxxx
Xxxxxx ("Executive"). The terms of this Agreement will only become effective
upon a "Change in Control" (as hereinafter defined) of the Company that occurs
while Executive remains employed with the Company in his current position of
Chief Executive Officer.
WITNESSETH:
WHEREAS, the Company is engaged in the business of developing,
marketing and supporting enterprise application integration (EAI) software
products and providing services related to its products, as well as integration
outsourcing and information technology (IT) facilities management services in
the healthcare industry;
WHEREAS, the Company has determined that it is appropriate to reinforce
and encourage the continued attention and dedication of members of the Company's
management, including the Executive, to their assigned duties without
distraction in potentially disturbing circumstances arising from the possibility
of a Change in Control (as hereinafter defined) of the Company;
WHEREAS, the benefits payable by the Company to Executive as provided
herein are in part intended to ensure that Executive receives reasonable
compensation given the specific circumstances of Executive's employment history
with the Company;
WHEREAS, Executive possesses valuable knowledge and skills that will
contribute to the successful operation of the Company's business;
WHEREAS, Executive has been employed by the Company and his continued
employment after a Change in Control (as hereinafter defined) of the Company
would be a valuable asset to the Company;
WHEREAS, the Company and Executive have agreed to execute and deliver
this Agreement in consideration of, among other things, (i) the access Executive
will have to confidential or proprietary information of the Company, (ii) the
access Executive will have to confidential or proprietary information to be
acquired hereafter by the Company, and (iii) Executive's receipt of compensation
from time to time from the Company; and
WHEREAS, after a Change in Control (as hereinafter defined) of the
Company the Company desires to retain the services of Executive, and Executive
is willing to accept employment with the Company after a Change in Control (as
hereinafter defined) of the Company, subject to the terms and conditions
hereinafter set forth.
NOW, THEREFORE, intending to be legally bound, the Company agrees to
employ Executive, and Executive hereby agrees to be employed by the Company,
upon the following terms and conditions:
1
2
ARTICLE I.
EMPLOYMENT
1.01 Office. Effective immediately upon a Change in Control (as
hereinafter defined) of the Company, Executive will be employed as President and
Chief Operating Officer of the Company pursuant to this Agreement, having such
duties and responsibilities as are commensurate with such position and title.
Executive shall report to the Board of Directors of the Company, and shall also
perform such other duties unrelated to his title and position as may be mutually
agreed upon by Executive and the Company. In such capacity or capacities
Executive shall devote substantially all of his working time and efforts to the
business and affairs of the Company.
1.02 Term. Subject to the terms and provisions of Article II
hereof, Executive shall be employed by the Company for a period of three years
(the "Term"), commencing immediately upon a Change in Control (as hereinafter
defined) of the Company. For the avoidance of doubt, this Agreement shall become
effective only upon a Change in Control (as hereinafter defined), and shall
expire and be null and void if no Change in Control has occurred on or before
December 31, 2001. Subject to the terms and provisions of Article II hereof, the
Term shall automatically be extended for an additional year unless, not less
than ninety (90) days prior to the expiration of the then-current Term, either
Executive or the Company shall advise the other that the Term will not be
further extended. "Term" shall also include any extension or renewals of the
original Term.
1.03 Base Salary. After a Change in Control (as hereinafter
defined) of the Company, compensation shall be paid to Executive by the Company
at the same rate as is currently paid to Executive by the Company as of May 14,
2001, specifically a rate of $315,700 per annum (the "Base Salary"), payable
bi-weekly, subject to all applicable withholding as required by federal and
state law. The Base Salary to be paid to Executive may be adjusted upward (but
not downward) by the Board of Directors of the Company at any time based upon
Executive's contribution to the success of the Company and on such other factors
as the Board of Directors of the Company shall deem appropriate. Executive's
first annual review shall occur within one year of the Change in Control (as
hereinafter defined) of the Company, with any resulting salary increase becoming
effective the following month after the review.
1.04 Additional Compensation for Change in Control. After a Change
in Control (as hereinafter defined) of the Company, Executive shall be paid by
the Company a transition bonus of $973,500, payable as follows: $400,000 shall
be paid to Executive at the time of the closing of the transaction constituting
the Change in Control (as hereinafter defined) of the Company, $157,850 shall be
paid to Executive at the end of one year after the closing of the transaction
constituting the Change in Control (as hereinafter defined) of the Company,
$257,850 shall be paid to Executive at the end of two years after the closing of
the transaction constituting the Change in Control (as hereinafter defined) of
the Company, $157,850 shall be paid to Executive at the end of three years after
the closing of the transaction constituting the Change in Control (as
hereinafter defined) of the Company. All such payments shall be subject to all
applicable withholding as required by federal and state law. In addition, after
a Change in Control (as
2
3
hereinafter defined) of the Company, Executive will be granted Incentive Stock
Options to purchase 200,000 shares of the stock of XXxxx.xxx Inc. at fair market
value on the date of closing of the Change in Control, such options to be vested
and exerciseable as follows: 50,000 at the end of one year after the closing of
the transaction constituting the Change in Control (as hereinafter defined) of
the Company, and 50,000 each year at the end of the second, third and fourth
years following the closing of the transaction constituting the Change in
Control (as hereinafter defined) of the Company to be provided in equal monthly
amounts every month over those three years.
1.05 Executive Benefits. At all times during the Term, Executive
shall have the right to participate in and receive benefits under and in
accordance with the then-current provisions of all incentive, profit sharing,
retirement, stock option or purchase plans or programs (except for any such plan
in which Executive may not participate pursuant to the terms of such plan or
because of Executive's geographic location) which the Company may at any time or
from time to time have in effect for executive employees of the Company or its
subsidiaries, Executive's participation to be on a basis commensurate with other
executive employees considering their respective responsibilities and
compensation. Prior service of Executive with the Company or its subsidiaries
(including service with predecessor entities to the extent recognized under
analogous Company benefit plans) shall be counted in determining eligibility to
participate in Company plans and for purposes of vesting. Executive shall also
be entitled to be reimbursed for all reasonable expenses incurred by him in the
performance of his duties hereunder. For the period from January 1, 2001 through
the Closing Date of any Change in Control (as hereinafter defined), Executive
shall be entitled to a pro rata normal and customary bonus from Company's bonus
plan in accordance with the terms of that plan as of the date hereof. Also, the
Company will pay Executive within 30 days after the Closing Date of any Change
in Control (as hereinafter defined) for all accrued, but unpaid, vacation pay
due Executive by the Company through the Closing Date.
1.06 Principal Place of Business. The headquarters and principal
place of business of the Company is located in Marietta, Georgia. For
Executive's convenience, Executive's principal place of business during his
employment with the Company will be in Marietta, Georgia, and he will reside
within a reasonable distance thereof.
3
4
1.07. Successor to the Company. (a) The Company will require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to the
Executive, expressly, absolutely and unconditionally to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. Any failure of the Company to obtain such agreement prior to the
effectiveness of any such succession or assignment shall be a material breach of
this Agreement. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor or assign to its business and/or assets
as aforesaid, including without limitation, the Company after any Change in
Control. If at any time during the term of this Agreement the Executive is
employed by any corporation a majority of the voting securities of which is then
owned by the Company, "Company" as used in this Agreement shall in addition
include such employer. In such event, the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
this Agreement.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts are still payable to him hereunder, all
such amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or the designee
or, if there be no such designee, to the Executive's estate.
ARTICLE II.
TERMINATION
2.01 Illness, Incapacity. If, during the Term of Executive's
employment hereunder, the Board of Directors of the Company shall determine that
Executive shall be prevented from effectively performing all his duties
hereunder by reason of illness or disability, confirmed by a physician mutually
acceptable to Executive and the Company, and such failure so to perform shall
have continued for a period of not less than six (6) consecutive months, then
the Company may, by written notice to Executive, terminate Executive's
employment hereunder effective at any time after such consecutive six (6) month
period. Upon delivery to Executive of such notice, together with payment of any
salary or other compensation accrued and unpaid under Sections 1.03 and 1.04
hereof, Executive's employment and all obligations of the Company under Article
I (except any obligation for vested benefits) hereof shall forthwith terminate.
The obligations of Executive under Article III and IV hereof shall continue
notwithstanding termination of Executive's employment pursuant to this Section
2.01.
2.02 Death. If Executive dies during the Term of his employment
hereunder, Executive's employment hereunder shall terminate and all obligations
of the Company hereunder, other than any obligations with respect to the payment
of accrued, unpaid salary and other compensation and vested benefits, shall
terminate.
2.03 Executive Termination. Executive agrees to give the Company
ninety (90) days prior written notice of the termination of his employment with
the Company. Simultaneously with such notice, Executive shall inform the Company
in writing as to his employment plans
4
5
following the termination of his employment with the Company. In the event
Executive has terminated his employment with the Company because there has been:
(i) a material downgrading in Executive's duties or responsibilities for the
Company, (ii) a change in Executive's principal place of business to a location
not within ten (10) miles of its present location, (iii) any significant and
prolonged increase in the traveling requirements applicable to the discharge of
Executive's responsibilities, (iv) he has been removed from or not re-elected to
the Board of Directors of the Company, (v) any breach by the Company of its
duties or obligations pursuant to this Agreement which has not been cured within
thirty (30) days after notice of such breach, (vi) any failure of any successor
to the Company after a Change in Control (as defined herein) to assume the
obligations of the Company hereunder, (vii) an adverse change in any material
term or provision of this Agreement requested by the Company as a condition to
any renewal or extension of this Agreement, or (viii) any other significant
material adverse change in working conditions or responsibilities, Executive
shall be entitled to the compensation provided for in Sections 1.03 and 1.04
upon such termination.
2.04 Change in Control. For purposes of this Agreement, "Change in
Control" shall mean changes in the ownership of a corporation, changes in the
effective control of a corporation, changes in ownership of a substantial
portion of a corporation's assets and a disposition of a substantial portion of
a corporation's assets, all as defined below:
(i) A change in the ownership of a corporation occurs on
the date that any one person, or more than one person acting as a group,
acquires ownership of stock of that corporation which, together with stock held
by such person or group, represents more than fifty percent (50%) of the total
fair market value or total voting power of the stock of such corporation. An
increase in the percentage of stock owned by any one person, or persons acting
as a group, as a result of a transaction in which the corporation acquires its
stock in exchange for property will be treated as an acquisition of stock.
(ii) A change in the effective control of a corporation
occurs on the date that either: any one person, or more than one person, acting
as a group becomes the beneficial owner of stock of the corporation possessing
twenty percent (20%) or more of the total voting power of the stock of such
corporation; or a majority of members of the corporation's board of directors is
replaced during any 24 month period by directors whose appointment or election
is not endorsed by at least two-thirds (2/3) of the members of the corporation's
board of directors who were directors prior to the date of the appointment or
election of the first of such new directors.
(iii) A change in the ownership of a substantial portion of
a corporation's assets occurs on the date that any one person, or more than one
person acting as a group, acquires (or has acquired during the 12 month period
ending on the date of the most recent acquisition by such person or persons)
assets from the corporation that have a total fair market value equal to or more
than one-half (1/2) of the total fair market value of all of the assets of the
corporation immediately prior to such acquisition or acquisitions. The transfer
of assets by a corporation is not treated as a change in the ownership of such
assets if the assets are transferred: to a shareholder of the corporation
(immediately before the asset transfer) in exchange for such shareholder's
capital stock of the corporation having a fair market value approximately equal
to the
5
6
fair market value of such assets; or to an entity, fifty percent (50%) or more
of the total value or voting power of which is owned, directly or indirectly, by
the corporation.
(iv) A disposition of a substantial portion of a
corporation's assets occurs on the date that the corporation transfers assets by
sale, lease, exchange, distribution to shareholders, assignment to creditors,
foreclosure or otherwise, in a transaction or transactions not in the ordinary
course of the corporation's business (or has made such transfers during the 12
month period ending on the date of the most recent transfer of assets) that have
a total fair market value equal to or more than one-half (1/2) of the total fair
market value of all of the assets of the corporation as of the date immediately
prior to the first such transfer or transfers. The transfer of assets by a
corporation is not treated as a disposition of a substantial portion of the
corporation's assets if the assets are transferred to an entity, fifty percent
(50%) or more of the total value or voting power of which is owned, directly or
indirectly, by the corporation.
For purposes of the provision of this Agreement defining "Change in Control,"
(i) references to the Company in this Agreement include the Georgia corporation
known as Xxxxxxxxxx.xxx Corporation as of the date of execution of this
Agreement, and any corporation which is the legal successor to such corporation;
and (ii) the terms "person," "acting as a group" and "ownership" shall have the
meanings prescribed in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange
Act of 1934, as amended, and Rule 13d-3 promulgated thereunder; provided,
however, that in any merger, consolidation or share exchange in which less than
fifty percent (50%) of the outstanding voting securities of the Company or its
successor corporation are held by the former shareholders of the Company, the
shareholders of the other parties to the transaction shall be deemed to have
acted as a group that acquired ownership of more than fifty percent (50%) of the
outstanding voting securities of the Company, resulting in a change in ownership
under Section 2(a) above. For the avoidance of doubt, the consummation of the
Agreement and Plan of Merger and Reorganization dated May 14, 2001 by and among
the Company, XXxxx.xxx Inc. and Orbit Acquisition Corp., as such Agreement may
be amended from time to time hereafter (the "XCare Merger Agreement"), shall be
deemed a Change in Control.
2.05 Termination Payments - Taxes. The parties hereto agree that
the Termination Payments are reasonable compensation in consideration of the
Executive's adherence to the terms of Articles III and IV hereof. Neither party
shall contest the payment of such benefits as constituting an "excess parachute
payment" within the meaning of Section 280G(b)(I) of the Internal Revenue Code
of 1986, as amended (the "Code"). In the event that Executive becomes entitled
to the Termination Payments and Executive becomes subject to the tax imposed by
Section 4999 of the Code (the "Excise Tax") as a result of the Compensation
Payments and any other benefits or payments required to be taken into account
under Code Section 280G(b)(2)("Parachute Payments"), the Company shall pay to
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by Executive, after deduction of any Excise Tax on the Parachute
Payments and any Federal, state and local income tax and Excise Tax upon the
payment provided for by this paragraph, shall be equal to the Parachute Payments
determined prior to the application of this paragraph. For purposes of
determining the amount of the Parachute Payments, no payments or benefits shall
be included if, in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to Executive, such
6
7
payments or benefits (in whole or in part) do not constitute Parachute Payments,
or such payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of Section 280G(b)(4) of the Code.
The value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors. For purposes of determining
the amount of the Gross-Up-Payment, Executive shall be deemed to pay Federal
income taxes at the highest marginal rate of Federal income taxation in the
calendar year in which the Gross-Up-Payment is to be made and state and local
income taxes at the highest marginal rates of taxation in the state and locality
of Executive's residence on the date of termination, net of the maximum
reduction in Federal income taxes which could be obtained from deduction of such
state and local taxes. In the event that the Excise Tax payable by Executive is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of Executive's employment, Executive shall repay to
the Company at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to such
reduction plus interest on the amount of such repayment at the rate provided for
in Section 1274(b)(2)(B) of the Code ("Repayment Amount"). In the event that the
Excise Tax payable by Executive is determined to exceed the amount taken into
account thereunder at the time of the termination of Executive's employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest payable
with respect to such excess) at the time that the amount of such excess is
finally determined ("Additional Gross-Up"). The obligation to pay any Repayment
Amount or Additional Gross-up shall remain in effect under this Agreement for
the entire period during which the Executive remains liable for the Excise Tax,
including the period during which any applicable statute of limitation remains
open.
ARTICLE III.
EXECUTIVE'S ACKNOWLEDGMENTS
Executive recognizes and acknowledges that in the course of
Executive's employment by the Company: (a) he will be privy to certain
confidential and proprietary information which constitutes trade secrets as
defined in the Uniform Trade Secrets Act and as adopted by the various states
(the "Act"); and (b) will be privy to certain other confidential and/or
proprietary information that may not constitute trade secrets as defined in the
Act.
Executive acknowledges that the Company must protect both
above kinds of information from disclosure or misappropriation, and Executive
further acknowledges that the processes, machines, technical documentation,
computer programs, customer lists, business plans, marketing plans and
techniques, pricing data, financial data, marketing programs, customer files,
financial institution files, technical expertise and now how, and other
information and trade secrets, whether as defined in the Act or which may lie
beyond it (collectively the "Property"), which have been or will be provided to
Executive by the Company are unique, confidential and proprietary Property of
the Company and by the provision of such Property to Executive, the Company is
not conveying any ownership or other interest to Executive. Executive
acknowledges that such confidential and proprietary information derives
independent, actual, and potential commercial value from not being generally,
readily ascertainable through
7
8
independent development and is the subject of efforts by the Company that are
reasonable under the circumstances to maintain its secrecy. Property shall not
include any information that is in the public domain, so long as such
information is not in the public domain as a result of any action or inaction by
Executive which would constitute a violation of this Agreement or the Company's
policies with respect to such Property. Executive agrees to hold in trust and
confidence for the Company and to not to disclose to any third party, without
prior written consent of the Company, said Property and information, whether it
is tangible or intangible. Executive further agrees not to use any such
confidential information or trade secrets to his/her personal benefit or for the
benefit of any third party.
Executive further acknowledges that for purposes of
interpreting Articles III and IV of this Agreement, covenants and obligations of
Executive with respect to the Company apply equally with respect to its
affiliates. Executive also acknowledges that Property belongs to the Company and
agrees to return to the Company all such information and Property which is
tangible upon the termination of the Employment.
Executive acknowledges that the use, misappropriation, or
disclosure of the Property would constitute a breach of trust and could cause
irreparable injury to the Company, and it is essential to the protection of the
Company's good will and to the maintenance of the Company's competitive position
that the Property be kept secret and that Executive not disclose the Property to
others or use the property to Executive's own advantage or the advantage of
others.
Executive further recognizes and understands that his duties
at the Company may include the preparation of materials, including written or
graphic materials, and that any such materials conceived or written by him shall
be done as "work made for hire" as defined and used in the Copyright Act of
1976, 18 U.S.C. ss. 1 et. seq. In the event of publication of such materials,
Executive understands that since the work is a "work made for hire", the Company
will solely retain an down all rights in said materials, including right of
copyright, and that the Company may, at its discretion, on a case-by-case basis,
grant Executive by-line credit on such material as the Company may deem
appropriate.
ARTICLE IV.
EXECUTIVE'S COVENANTS AND AGREEMENTS
4.01 Non-Disclosure of Property. Executive agrees to hold and
safeguard the Property in trust for the Company, its successors and assigns and
agrees that he shall not, without the prior written consent of the Company,
misappropriate or disclose or make available to anyone for use outside the
Company's organization at any time, either during his employment with the
Company or subsequent to the termination of his employment with the Company for
any reason, including without limitation termination by the Company for cause or
without cause, any confidential information that constitutes trade secrets,
whether or not developed by Executive, Accept as required in the performance of
Executive's duties to the Company. Executive and the Company agree that
Executive's obligations under the above-non-disclosure provision as it relates
to
8
9
confidential information that does not constitute trade secrets shall apply for
a period of two (2) years following the termination of the Executive.
4.02 Disclosure of Works and Inventions/Assignment of Patents and
Other Rights. (a) Executive shall disclose promptly to the Company or its
nominee any and all works, inventions, discoveries and improvements authored,
conceived or made by Executive during the period of employment and related to
the business or activities of the Company, and hereby assigns and agrees to
assign all his interest therein to the Company or its nominee. Whenever
requested to do so by the Company, Executive shall execute any and all
applications, assignments or other instrument which the Company shall deem
necessary to apply for and obtain Letters Patent or Copyrights of the United
States or any foreign country or to otherwise protect the Company's interest
therein. Such obligations shall continue beyond the termination of employment
with respect to works, inventions, discoveries and improvements authored,
conceived or made by Executive during the period of employment, all shall by
binding upon Executive's assigns, executors, administrators and other legal
representatives.
(b) Executive agrees that in the event of publication by
Executive of written or graphic materials the Company will retain and own all
rights in said materials, including right or copyright.
4.03 Return of Materials. Upon the termination of Executive's
employment with the Company, Executive shall promptly deliver to the Company all
correspondence, drawings, blueprints, manuals, letters, notes, notebooks,
report, flow-charts, programs, proposal and any documents concerning the
Company's customers or concerning products or processes used by the Company and,
without limiting the foregoing, will promptly deliver to the Company any and all
other documents or materials containing or constituting Property.
4.04 Restrictions on Competition. Executive acknowledges that as
Chief Executive Officer, he will be a "high impact" person in the Company's
business who is in possession of selective and specialized skills, learning
abilities, supplier and customer contacts, and supplier and customer information
as a result of his relationship with the Company, and agrees that the Company
has a substantial business interest in the covenant described below. Executive
further acknowledges that he is involved at the highest level of the Company in
the development of strategy and products, and is responsible for strategic
planning, has significant and regular contact with customers and suppliers of
the Company, and that he has access to and responsibility for trade secret and
confidential information pertaining to the business of the Company, its products
and plans. In recognition of that status, Executive covenants and agrees that
during the period of Executive's employment hereunder plus a period of two years
following the termination of Executive's employment, Executive shall not, in any
location within the United States of America where Company operates or conducts
its business during the term of this Agreement or at the time of Executive's
termination, engage, directly or indirectly, whether as principal or as agent,
officer, director, employee, consultant, shareholder (other than as a
shareholder owning up to 5% of the outstanding stock of any company whose stock
is publicly traded and listed on a national securities exchange or included in
NASDAQ), alone or in association with any other person, corporation or other
entity, in any Competing Business. For
9
10
purposes of this Agreement, the term "Competing Business" shall mean a business
(other than the Company) that, directly or through a controlled subsidiary or
through an affiliate develops, markets and supports enterprise application
integration (EAI) software products and provides services related to its
products, as well as integration outsourcing and information technology (IT)
facilities management services in the healthcare industry. Notwithstanding the
foregoing, no business shall be deemed a "Competing Business" unless, within at
least one of the business's three most recently concluded fiscal years, that
business, or a division of that business, derived more than twenty percent (20%)
of its gross revenues or more than $2,000,000 in gross revenues from the
development, marketing or sale of competing products or services encompassed in
the definition of Competing Business.
4.05 Non-Solicitation of Customers and Suppliers. Executive agrees
that during his employment with the Company he shall not, directly or
indirectly, solicit the business of, or trade with, any customer, prospective
customer, supplier, or prospective supplier of the Company for any business
purpose other than for the benefit of the Company, with respect to any products
competitive with those of the Company. Executive further agrees that for two
years following termination of his employment with the Company, Executive shall
not, directly or indirectly, solicit the business of, or trade with, any
customer or supplier of the Company with respect to any products competitive
with those of the Company.
4.06 Non-Solicitation of Employees; No Hire. Executive agrees that,
during his employment with the Company and for two years following termination
of Executive's employment with the Company, Executive shall not, directly or
indirectly, solicit or induce, or attempt to solicit or induce, any employee of
the Company to leave the Company for any reason whatsoever, or hire any employee
of the Company without permission from the Company.
4.07 Acknowledgment. Executive acknowledges that he has read,
consulted with his attorney concerning, and understands, the foregoing
provisions and that such provisions are reasonable and enforceable.
ARTICLE V.
EXECUTIVE'S REPRESENTATIONS AND WARRANTIES
5.01 No Prior Agreements. Executive represents and warrants that he
is not a party to or otherwise subject to or bound by the terms of any contract,
agreement or understanding which in any manner would limit or otherwise affect
his ability to perform his obligations hereunder, including without limitation,
any contract, agreement or understanding containing terms and provisions similar
in any manner to those contained in Article IV hereof. Executive further
represents and warrants that his employment with the Company will not require
him to disclose or use any confidential information belonging to prior employers
or other persons or entities other than the Company.
5.02 Executive's Abilities. Executive acknowledges that is would
cause the Company serious and irreparable injury and cost if Executive were to
use his ability and knowledge in competition with the Company or to otherwise
breach the obligations contained in Article IV.
10
11
5.03 Remedies. In the event of a breach by Executive of the terms
of this Agreement, the Company shall be entitled, if it shall so elect, to
institute legal proceedings to obtain damages for any such breach, or to enforce
the specific performance of this Agreement by Executive and to enjoin Executive
from any further violation of this Agreement and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. Executive acknowledges, however, that the remedies at law for any breach by
him of the provisions of this Agreement may be inadequate and that the Company
shall be entitled to injunctive relief against him in the event of any breach.
ARTICLE VI.
MISCELLANEOUS
6.01 Authorization to Modify Restrictions. It is the intention of
the parties that the provisions of Article IV hereof shall be enforceable to the
fullest extent permissible under applicable law, but that the unenforceability
(or modification to conform to such law) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder thereof. If any
provision or provisions hereof shall be deemed invalid or unenforceable, either
in whole or in part, this Agreement shall be deemed amended to delete or modify,
as necessary, the offending provision or provisions and to alter the bounds
thereof in order to render it valid and enforceable.
6.02 Entire Agreement. This Agreement represents the entire
agreement of the parties with respect to the employment of Executive by the
Company and may be amended only by a writing signed by each of them.
6.03 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia.
6.04 Consent to Jurisdiction; Venue. Executive hereby irrevocably
submits to the personal jurisdiction of the United States District Court for the
Northern District of Georgia or the Superior Court of Xxxx County, Georgia in
any action or proceeding arising out of or relating to this Agreement that
cannot be finally resolved by arbitration pursuant to Section 6.05 hereof (and
for enforcement of any such arbitration decision), and Executive hereby
irrevocably agrees that all claims in respect of any such action or proceeding
may be heard and determined in either such court. Executive hereby irrevocably
waives any objection which he now or hereafter may have to the laying of venue
of any action or proceeding arising out of or relating to this Agreement brought
in the United States District Court for the Northern District of Georgia or the
Superior Court of Xxxx County, Georgia and any objection on the ground that any
such action or proceeding in either of such Courts has been brought in an
inconvenient forum. Nothing in this Section 6.04 shall affect the right of the
Company to bring any action or proceeding against Executive or his property in
the courts of other jurisdictions where the Executive resides or has his
principal place of business or where such property is located.
6.05 Arbitration. Unless the party seeking relief is seeking relief
not available through arbitration hereunder (see Section 6.04), any dispute
related to this Agreement shall be referred to arbitration by three arbitrators
selected from a list of arbitrators affiliated with American
11
12
Arbitration Association ("AAA") who are familiar with executive employment
matters, with one arbitrator being selected by the Company, one arbitrator being
selected by Executive, and the third arbitrator being selected jointly by the
two arbitrators selected by the Company and by Executive. The decision of a
majority of the arbitrators shall constitute the arbitral decision. The
arbitration hereunder, shall be conducted pursuant to the rules and procedures
of AAA then in effect and otherwise in such manner as the arbitrator or
arbitrators shall determine and shall be conducted in Marietta, Georgia. All
parties shall cooperate with each other to expedite the arbitration process as
much as possible so that the dispute can be resolved as quickly as possible and
with as little cost as possible. The arbitral decision shall be final, binding
and conclusive on the parties and may be entered, if necessary, in a court of
competent jurisdiction with the same force and effect as a final and binding
judgment. The arbitrators shall further be authorized to allocate or assess the
costs of arbitration, including attorneys' fees, between the respective parties.
If the arbitrators do not award costs and expenses, then each party shall bear
its own costs and expenses, including attorneys' fees, and the cost of the
arbitration shall be paid by the party whose position in the arbitration does
not prevail.
6.06 Agreement Binding. The obligations of Executive under this
Agreement shall continue after the termination of his employment with the
Company, and shall be binding on his heirs, executors, legal representatives and
assigns and shall inure to the benefit of any successors and assigns of the
Company.
6.07 Counterparts, Section Headings. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original,
but all of which together shall constitute one and the same instrument. The
second headings of this Agreement are for convenience of reference only and
shall not affect the construction or interpretation of any of the provisions
hereof.
6.08 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) hand delivered or (b) mailed, registered mail, first class
postage paid, return receipt requested, or (c) sent via overnight delivery
service or courier, delivery acknowledgment requested, or (d) via any other
delivery service with proof of delivery:
If to the Company:
Xxxxxxxxxx.xxx Corporation
0000 Xxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxxx 00000
Attention: General Counsel
If to Executive, at the address set forth on the signature
page hereof or to such other address or to such other person as either party
hereto shall have last designed by notice to the other party.
6.09 Legal Fees. In the event that (i) the Company terminates or
seeks to terminate this Agreement, Executive disputes such termination or
attempted termination, and Executive
12
13
prevails with respect to such dispute, or (ii) Executive elects to terminate his
employment hereunder pursuant to Section 2.03 hereof, the Company disputes its
obligation to pay to Executive the compensation provided for in Section 1.03 and
1.04 hereof, and Executive prevails with respect to such dispute; then, in each
such event, the Company shall pay, or reimburse to Executive, all reasonable
costs incurred by him in connection with such dispute, including, without
limitation, attorneys' fees and costs, plus interest on any delayed payment at
the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Code.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused
this Agreement to be executed the day and year first above written.
Witness: XXXXXX XXXXXX
------------------------------------ -----------------------------------
Address:
--------------------------
--------------------------
--------------------------
XXXXXXXXXX.XXX CORPORATION
By:
------------------------------------ --------------------------------
Secretary Title:
-----------------------------
13
