Exhibit 10.15
Employment Agreement, dated as of
August 19, 1998 (the "Effective Date"), by and
between Total Network Solutions, Inc., a New York
corporation (the "Employer"), and Xxxxxxx Xxxxxxxxx,
an individual (the "Employee").
In consideration of the agreements, provisions and covenants
herein contained, Employer and Employee hereby agree as follows:
1. EMPLOYMENT AND TITLE
The Employer engages and employs the Employee, and the
Employee hereby accepts engagement and employment, as Managing Director --
Business Operations, Secretary and Treasurer of the Employer. The Employee shall
devote his full professional time and efforts to the proper discharge of his
duties and responsibilities under this Agreement.
2. TERM
The Employee's employment hereunder shall, unless earlier
terminated in accordance with Section 9, be for a term of three years commencing
on the Effective Date and continuing through the third anniversary of such date
(the "Term").
3. COMPENSATION
(a) As compensation for the performance of his duties on
behalf of the Employer, the Employee shall be compensated during the Term as
follows:
(i) the Employee shall be paid a base salary of not
less than $110,000 per annum, subject to increase at the discretion of
the Compensation Committee (the "Compensation Committee") of the Board
of Directors of Employer (the "Board"); and
(ii) A nondiscretionary bonus of not less than
$120,000. In addition, the Employee shall be eligible to be
considered for a discretionary bonus as determined by the
Compensation Committee.
The Compensation Committee shall meet with the Employee as
necessary to establish such goals and performance standards as such Committee
determines are to be taken into account in determining the Employee's
discretionary bonus awards provided for above.
The Employer shall withhold all applicable federal, state and
local taxes, social security and workers' compensation contributions and such
other amounts as may be required by law or agreed upon by the parties with
respect to the compensation payable to the Employee pursuant to this section
3(a) or otherwise in connection with his employment by the Employer.
(b) The Employee will be considered annually by the
Compensation Committee for an award of stock options pursuant to the Employer's
1998 Stock Option/Stock Issuance Plan or any successor plans or programs of the
Employer.
(c) The Employer shall reimburse the Employee for all normal,
usual and necessary expenses incurred by the Employee in furtherance of the
business and affairs of the Employer, including reasonable travel and
entertainment, against receipt by the Employer of appropriate vouchers or other
evidence of the Employee's expenditures and otherwise in accordance with such
expense reimbursement policy as may from time to time be adopted by the Board.
(d) The Employee shall be entitled, during the Term, to not
less than three weeks per year of paid vacation time. The days selected for the
Employee's vacation must be mutually agreeable to the Employer and the Employee.
(e) During the Term, the Employee shall be entitled to
participate in any group insurance, hospitalization, medical, dental, health and
accident, disability or similar plan or program of Employer now existing or
established hereafter to the extent that he is eligible under the general
provisions thereof and in any other benefit programs made available to executive
officers of the Employer generally.
(f) The Employee shall continue to be entitled to receive his
salary and benefits hereunder for any period during which he is unable to
perform his duties hereunder because of ill health or Disability (as defined
below). Subject to paragraphs (d) through (f) of Section 9 below, the Employee
must be an employee of the Employer at the time that any compensation is due in
order to receive such compensation.
4. REPRESENTATIONS AND WARRANTIES BY THE EMPLOYEE AND EMPLOYER
The Employee hereby represents and warrants to the Employer as
follows:
(a) Neither the execution and delivery of this Agreement nor
the performance by the Employee of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default under (whether immediately, upon the giving of
notice or lapse of time or both) any prior employment agreement, contract, or
other instrument to which the Employee is a party or by which he is bound.
(b) The Employee has the full right, power and legal capacity
to execute and deliver this Agreement and to perform his duties and other
obligations hereunder. This Agreement constitutes the legal, valid and binding
obligation of the Employee enforceable against him in accordance with its terms.
The Employer hereby represents and warrants to the Employee as
follows:
(a) The Employer is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York, with all
requisite corporate power and authority to own its properties and conduct its
business in the manner presently contemplated.
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(b) The Employer has full power and authority to enter into
this Agreement and to incur and perform its obligations hereunder. This
Agreement constitutes the legal, valid and binding obligation of the Employer
enforceable against the Employer in accordance with its terms.
(c) The execution, delivery and performance by the Employer of
this Agreement does not conflict with or result in a breach or violation of or
constitute a default under (whether immediately, upon the giving of notice or
lapse of time or both) the certificate of incorporation or by-laws of the
Employer, or any agreement or instrument to which the Employer is a party or by
which the Employer or any of its properties may be bound or affected.
5. NON-COMPETITION
(a) The Employee understands and recognizes that his services
to the Employer are special and unique and agrees that, during the Term and for
a period of one year from the date of termination of his employment hereunder,
he shall not in any manner, directly or indirectly, on behalf of himself or any
person, firm, partnership, joint venture, corporation or other business entity
("Person"), enter into or engage in any business directly competitive with the
Employer's business of providing consulting services relating to the design and
implementation of computer networks, either as an individual for his own
account, or as a partner, joint venturer, employee, agent, consultant,
salesperson, officer, director or shareholder of a Person operating or intending
to operate within the area in which the Employer is, at the date of termination,
conducting its business (collectively, "Restricted Businesses"); provided,
however, that nothing herein will preclude the Employee from holding one percent
(1%) or less of the stock of any publicly traded company. This paragraph 5(a)
shall be null and void in the event the Employer fails to make any payment due
to the Employee pursuant to Section 9(d), 9(e) or 9(f) within five business days
after notice of such failure by the Employee to the Employer.
(b) During the Term and for one year thereafter, the Employee
shall not, directly or indirectly, without the prior written consent of the
Employer (i) interfere with, disrupt or attempt to disrupt (through solicitation
or otherwise) any past, present or prospective relationship, contractual or
otherwise, between the Employer and any of its licensors, licensees, clients,
customers, suppliers, employees or others, or solicit or induce for hire any of
the employees, agents, consultants or advisors of the Employer or any employee
who has left the employment of the Employer within one year of the termination
of said employee's employment with the Employer, (ii) solicit or accept
employment or be retained by any party who, at any time during the Term, was a
customer, client or supplier of the Employer or (iii) solicit or accept the
business of any customer or client or supplier of the Employer with respect to
products or services similar to those previously supplied by the Employer to
such customer or client.
6. DISCLOSURE AND ASSIGNMENT OF INVENTIONS
(a) During the Term, the Employee agrees that he will promptly
disclose to the Employer, or any persons designated by the Employer, all
improvements, inventions, designs, ideas, works of authorship, copyrightable
works, discoveries, trademarks, copyrights,
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trade secrets, formulas, processes, structures, product concepts, marketing
plans, strategies, customer lists, information about the Employer's employees
and/or Employees (including, without limitation, job performance of such
employees and/or Employees), techniques, blueprints, sketches, records, notes,
devices, drawings, know-how, data, whether or not patentable, patent
applications, continuation applications, continuation-in-part applications, file
wrapper continuation applications and divisional applications, made or conceived
or reduced to practice or learned by him, either alone or jointly with others,
during the Term (collectively, the "Inventions").
(b) Employee agrees that all Inventions shall be the sole
property of the Employer to the maximum extent permitted by applicable law and
to the extent permitted by law shall be "works made for hire" as that term is
defined in the United States Copyright Act (17 USCA, Section 101). The Employer
shall be the sole owner of all patents, copyrights, trade secret rights, and
other intellectual property or other rights in connection therewith. Employee
hereby assigns to the Employer all right, title and interest he may have or
acquire in all Inventions. Employee further agrees to assist the Employer in
every proper way (but at the Employer's expense) to obtain and from time to time
enforce patents, copyrights or other rights on said Inventions in any and all
countries, and to that end the Employee will execute all documents necessary to
(i) apply for, obtain and vest in the name of the Employer alone (unless the
Employer otherwise directs) letters patent, copyrights or other analogous
protection in any country throughout the world and when so obtained or vested to
renew and restore the same and (ii) to defend any opposition proceedings in
respect of such applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other analogous
protection.
(c) The Employee's obligation to assist the Employer in
obtaining and enforcing patents and copyrights for the Inventions in any and all
countries shall continue beyond the Term, but the Employer agrees to compensate
the Employee at a reasonable rate after the expiration of the Term for time
actually spent by the Employee at the Employer's request on such assistance.
7. CONFIDENTIALITY
The Employee agrees that at any time during or after the
Employee's employment with the Employer, the Employee will not, directly or
indirectly, without the prior written authorization of the Employer, disclose or
make accessible to any person or entity other than the Employer any confidential
information or material of the Employer or its affiliates or any information or
material received during the course of the Employee's employment from third
parties such as the Employer's customers and suppliers (collectively, the
"Material"). The Employee agrees, during the Employee's employment with the
Employer, not to take any such Material or reproductions thereof from the
Employer's or its clients' facilities, except as required in the performance of
the Employee's duties to the Employer. The Employee agrees immediately to return
all such Material and reproductions thereof in the Employee's possession to the
Employer upon request and in any event upon termination of Employee's employment
with the Employer. In the event that the Employee is required as a matter of law
or pursuant to any subpoena or other legal process to disclose any Material, the
Employee shall take all
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reasonable steps to ensure the confidential treatment of such Material and shall
promptly notify the Employer and shall use his or her best efforts to assist the
Employer in obtaining such confidential treatment.
8. EQUITABLE RELIEF
In the event that the Employee breaches any provisions of
Section 5, 6 or 7 or there is a threatened breach, then, in addition to any
other rights which the Employer may have, the Employer shall be entitled,
without the posting of a bond or other security, to injunctive relief to enforce
the restrictions contained herein. In the event that an actual proceeding is
brought in equity to enforce the provisions of Section 5, 6 or 7, the Employee
shall not urge as a defense that there is an adequate remedy at law nor shall
the Employer be prevented from seeking any other remedies which may be
available.
9. TERMINATION
(a) The Employee's employment hereunder shall begin on the
Effective Date and shall continue for the period set forth in Section 2 hereof
unless sooner terminated upon the first to occur of the following events:
(i) The death of the Employee;
(ii) The Disability (as defined below) of the
Employee;
(iii) Termination by the Board of Directors of the
Employer for just cause. Any of the following actions by the
Employee shall constitute just cause:
(A) Material breach by the Employee of Section 5
of this Agreement;
(B) So long as no Change of Control (as defined
below) has occurred, material breach by the Employee
of any provision of this Agreement other than Section
5 which is not cured by the Employee within 30 days
of written notice thereof from the Employer;
(C) negligent or, for one year after a Change of
Control, grossly negligent performance by the
Employee of his duties as Managing Director --
Business Operations, Secretary and Treasurer of the
Employer, as determined in good faith by the Board
after notice to the Employee of the alleged
negligence or gross negligence and an opportunity for
the Employee to confer with the Board;
(D) Any misconduct or omission on the part of
the Employee intended to cause harm to the Employer;
or
(E) The conviction of the Employee of any felony
or crime involving moral turpitude.
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(iv) Termination by the Employee for good reason. Any
of the following actions or omissions by the Employer shall
constitute good reason:
(A) Material breach by the Employer of any
provision of this Agreement which is not cured by the
Employer within 30 days of written notice thereof
from the Employee;
(B) Any misconduct or omission on the part of
the Employer intended to cause material harm to the
Employee;
(C) A determination by the Board to move the
headquarters of the Employer more than 30 miles from
New York City;
(D) Following a Change of Control (as defined
below), either
(I) The failure of the Employer to
provide the Employee with a position, authority or
duties at least equivalent to the most significant
position, authority or duties (other than those
relating to the Board of Directors or any committee
thereof) held by the Employee during the 120 days
ending on the date of the Change of Control; or
(II) The imposition of extraordinary
travel obligations on the Employee three times in any
six-month period. For such purpose, an "extraordinary
travel obligation" shall mean any requirement by the
Employer that the Employee travel outside the New
York City area for more than ten business days in any
30-business day period.
(b) For purposes hereof, a "Change of Control" shall be deemed
to have occurred in the event either
(i) any person or group acquires beneficial ownership
of more than 50% of the then outstanding common stock of the
Employer; or
(ii) a merger, consolidation or sale or other
disposition of all or substantially all of the assets of the
Employer (a "Business Combination") is consummated unless,
following such Business Combination, at least a majority of
the members of the Board of Directors of the surviving entity
or transferee were members of the Board of Directors of the
Employer at the time of the initial action of the Board of
Directors providing for such Business Combination.
(c) For purposes hereof, a "Disability" of the Employee shall
be deemed to have occurred in the event (i) the Employee is absent from work or
otherwise substantially unable to assume his normal duties for a period of 30
successive days or an aggregate of 60 days during any 12-month period because of
physical or mental disability, accident, illness or other cause other than
approved vacation or leave of absence or (ii) the Employee is deemed by a
licensed physician
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designated by the Employer and reasonably acceptable to the Employee to have a
permanent disability such that Employee will be unable to perform his duties
under this agreement (it being understood that the Employer shall have the right
to have the Employee examined by such physician).
(d) Upon termination by Employer pursuant to either
subparagraphs (i), (ii) or (iii) of paragraph (a) above or by Employee other
than pursuant to subparagraph (iv) of paragraph (a) above, the Employee (or his
estate in the event of termination pursuant to subparagraph (i)), shall be
entitled to receive the Employee's base salary accrued but unpaid as of the date
of termination.
(e) Upon termination by the Employer (other than within one
year following a Change of Control) for any reason other than as set forth in
subparagraphs (i), (ii) or (iii) of paragraph (a) above or by the Employee for
any reason set forth in clause (A), (B) or (C) of subparagraph (iv) of paragraph
(a) above, then the Employer shall continue to pay the Employee, for one year
following such termination, at a per annum rate of $230,000 in accordance with
the Employer's normal payroll practices. Any stock options granted to the
Employee shall become immediately vested in full upon such termination.
(f) Upon termination by the Employer (other than as set forth
in subparagraph (i), (ii) or (iii) of paragraph (a) above) within one year
following a Change of Control or by the Employee pursuant to clause (D) of
subparagraph (iv) of paragraph (a) above within one year following a Change of
Control, then the Employer shall pay the Employee, as the Employee's sole
damages for such termination, a lump sum payment equal to $230,000. In addition,
any stock options granted to the Employee shall thereupon become immediately
vested.
(g) It shall be a condition to the Employee's right to receive
the benefits provided for in paragraphs (d) through (f) above that the Employee
shall have delivered to the Employer a general release (excluding Employee's
rights pursuant to this agreement, any benefit plans of the Company explicitly
providing benefits subsequent to termination, rights under COBRA and rights
under stock option or comparable agreements) dated as of the date of termination
of the Employee's employment hereunder.
10. NOTICES
Any notice or other communication under this Agreement shall
be in writing and shall be deemed to have been given: when delivered personally
against receipt therefor; one (1) day after being sent by Federal Express or
similar overnight delivery; or three (3) days after being mailed registered or
certified mail, postage prepaid, return receipt requested, to either party at
the address set forth below, or to such other address as such party shall give
by notice hereunder to the other party.
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If to Employer:
Total Network Solutions, Inc.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Att: Xxxx Xxxxxxxx
If to Employee:
Xxxxxxx Xxxxxxxxx
00 Xxxx 00xx Xxxxxx, Xxx. 0X
Xxx Xxxx, Xxx Xxxx 00000
11. SEVERABILITY OF PROVISIONS
If any provision of this Agreement shall be declared by a
court of competent jurisdiction to be invalid, illegal or incapable of being
enforced in whole or in part, the remaining conditions and provisions or
portions thereof shall nevertheless remain in full force and effect and
enforceable to the extent they are valid, legal and enforceable, and no
provision shall be deemed dependent upon any other covenant or provision unless
so expressed herein.
12. ENTIRE AGREEMENT; MODIFICATION
This Agreement contains the entire agreement of the parties
relating to the subject matter hereof and supersede in their entirety any prior
employment agreements entered into between the parties, and the parties hereto
have made no agreements, representations or warranties relating to the subject
matter of this Agreement which are not set forth herein. No modification of this
Agreement shall be valid unless made in writing and signed by the parties
hereto.
13. BINDING EFFECT
The rights, benefits, duties and obligations under this
Agreement shall inure to, and be binding upon, the Employer, its successors and
assigns, and upon the Employee and his legal representatives. This Agreement
constitutes a personal service agreement, and the performance of the Employee's
obligations hereunder may not be transferred or assigned by the Employee.
14. NON-WAIVER
The failure of either party to insist upon the strict
performance of any of the terms, conditions and provisions of this Agreement
shall not be construed as a waiver or relinquishment of future compliance
therewith, and said terms, conditions and provisions shall remain in full force
and effect. No waiver of any term or condition of this Agreement on the part of
either party shall be effective for any purpose whatsoever unless such waiver is
in writing and signed by such party.
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15. GOVERNING LAW
This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York without regard
to principles of conflict of laws.
16. HEADINGS
The headings of paragraphs are inserted for convenience and
shall not affect any interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
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Xxxxxxx Xxxxxxxxx
TOTAL NETWORK SOLUTIONS, INC.
By: __________________________
Name:
Title:
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