Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of the 16th day of
August 1999, by and between Sky Alland Research, Inc., d/b/a Sky Alland, a
Maryland corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx (the "Employee").
W I T N E S S E T H:
The Company desires to employ the Employee and the Employee is willing to accept
such employment with the Company on the terms and subject to the conditions and
limitations contained in this Agreement. Accordingly, in consideration of the
mutual promises and covenants contained in this Agreement, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs the Employee and the Employee
hereby accepts employment with the Company on the terms and conditions set
forth in this Agreement.
2. DUTIES. The Employee shall perform, under the direction of the Chief
Executive Officer, the duties of Chief Operating Officer for the Company.
The Employee agrees to be so employed and shall devote his best efforts
and substantially all of his business time to advance the interests of the
Company, subject to reasonable vacations compatible with his position. The
Employee shall perform his duties hereunder in compliance with all Company
policies applicable thereto.
3. EMPLOYMENT TERM. The term of the Employee's employment hereunder (the
"Employment Term") shall commence as of the date hereof and, unless
extended by the terms of this Paragraph 3 or otherwise modified by
separate agreement signed by all parties hereto, or terminated as
otherwise provided herein, shall terminate on August 16, 2000. The term of
the Employee's employment shall be renewed and extended automatically for
additional one-year periods thereafter (each, an "Extended Employment
Term"), until terminated pursuant to Paragraph 6 hereof. Paragraphs 8, 9,
and 10 shall continue in force in accordance with provisions therein and
shall survive the expiration of the Employment Term and each Extended
Employment Term.
4. COMPENSATION. During the Employment Term and each Extended Employment Term
under this Agreement, the Employee shall be paid his entire compensation
for services performed under this Agreement as follows:
a. SALARY. The Employee shall receive a salary ("Salary") paid at a
rate of $210,000.00 annually, which shall be reviewed at least
annually by the Board of Directors and adjusted by the Board of
Directors in its sole discretion. The Salary shall be paid in such
increments as are established by the Company, but in no event less
frequently than once per calendar month.
b. SIGNING BONUS. The Employee shall receive a one-time signing bonus
in the amount of $25,000. If the Employee terminates his employment
with the Company prior to August 16, 2000, he agrees to reimburse
the Company for the full amount of the signing bonus. The Employee
authorizes the Company to withhold the appropriate amount of
reimbursement from his final salary payments. If that withholding is
insufficient to make full reimbursement, the Employee agrees to
repay within 60 days of ceasing employment with the Company, any
amount still due to the Company. The Employee further agrees to pay
all reasonable costs, including reasonable legal fees, incurred by
the Company as a result of any failure to repay the signing bonus.
c. INCENTIVE COMPENSATION. With respect to the first year of
employment, the Employee shall be entitled to a cash bonus of 25% of
annual salary ($52,500 based on initial salary) if the following
conditions are met: (1) the Company meets its budgets; and (2) the
Employee meets specific individual performance objectives, set by
the Chief Executive Officer and agreed to by the Employee, by the
end of the Employee's first year of employment. The Employee's bonus
for succeeding employment years will be established based upon
mutual agreement between the Employee and the Chief Executive
Officer of the Company.
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d. STOCK OPTIONS. The Employee shall receive, in accordance with
the Company's Employee Stock Option Plan and subject to the
approval of the Board, an initial grant to purchase 110,000
shares of the Company's stock at $8.00 per share. Twenty percent
of the options will vest upon hire. The remaining options will
vest on the Employee's employment anniversary date at the rate
of 20% of the total grant per year for the next four years.
5. OTHER BENEFITS.
a. In addition to the compensation set forth in Paragraph 4, the
Company shall provide for the Employee, during the Employment
Term and each Extended Employment Term, the following benefits:
(i) payment of premiums for a medical insurance plan covering
the Employee, including hospitalization, major medical,
dental and prescriptions, and payment of the premiums for
his dependents for inclusion in such medical insurance plan,
in such amounts which the Company will pay on behalf of its
other management officials, if at all;
(ii) disability and life insurance, if any, upon the same terms
and conditions which the Company will grant to other
management officials, if at all;
(iii) the same or similar leave or absence from work on account
of personal illness as is the policy of the Company to grant
to other management officials;
(iv) such number of days of vacation per each calendar year as
the Company grants to other management officials, or such
greater number of days of vacation as may be determined in
the discretion of the Chief Executive Officer. It is the
intention of the parties that the Employee take all vacation
allotted to him within the calendar year for which the
vacation is awarded, consistent with his duties and the
demands on his time made from the ongoing operation of the
Company's business. Should the Employee not take all of the
allotted days of vacation in a given calendar year which he
is entitled to take, he will lose that vacation time and
will not be entitled either to carry over the unused
vacation to succeeding years or to receive payment in
respect of such unused vacation; and
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b. REIMBURSEMENT FOR REASONABLE BUSINESS EXPENSES. The Company shall
reimburse the Employee for reasonable ordinary and necessary expenses
incurred by him in connection with the performance of his duties
pursuant to this Agreement.
c. REIMBURSEMENT FOR RELOCATION EXPENSES. The Company shall pay the costs
of the Employee's relocation to Maryland. The Company expects the
Employee to make reasonable efforts to obtain the lowest possible cost
relocation services. The Company's payment of such expenses is
conditioned upon its approval of the relocation arrangements. The
Company will pay directly the relocation expenses that are not
considered compensation, as provided in the relevant tax law. For other
costs, the reimbursement of which will be considered compensation, the
Company will reimburse the Employee the amounts necessary to cover the
expenses as well as the income tax due on such payments. If the
Employee terminates his employment with the Company prior to August 16,
2000, he agrees to reimburse the Company for the full amount of all
relocation expense payments the Company has made, including both direct
payments to service providers and reimbursement payments to the
Employee. The Employee authorizes the Company to withhold the
appropriate amount of reimbursement from his final salary payments. If
that withholding is insufficient to make full reimbursement, the
Employee agrees to repay within 60 days of ceasing employment with the
Company, any amount still due to the Company. The Employee further
agrees to pay all reasonable costs, including reasonable legal fees,
incurred by the Company as a result of any failure to repay the
relocation cost payments.
6. TERMINATION OF EMPLOYMENT.
a. TERMINATION UPON DEATH OR DISABILITY. The Employee's employment and
this Agreement shall terminate immediately upon the Employee's death or
upon the certification by a duly licensed physician that the Employee
is mentally or physically incapable of performing his duties hereunder.
He, or his estate or heirs, as the case may be, shall be entitled to
receive his rights vested as of the date of such termination, prorated
to that date, and, in the case of termination on account of disability,
he, or his
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estate or heirs, as the case may be, shall be entitled to receive
disability benefits as provided under Paragraph 5a(ii), if any.
b. TERMINATION FOR CAUSE. At any time during the Employment Term or any
Extended Employment Term hereunder, the Company shall be entitled to
terminate the Employee's employment for Cause. Such Termination for
Cause shall be effective immediately following the delivery by the
Company to the Employee of a written notice thereof specifying the
Cause. For this purpose, "Cause" shall mean: (i) fraud or embezzlement
by the Employee in the course of employment; (ii) conviction of a
felony or of any crime involving moral turpitude; or (iii) willful
misconduct or gross negligence in the performance of his duties
hereunder. In the event of such termination, the Company shall pay the
Employee his Salary through the date of such termination plus one
week's severance for each month of employment not to exceed 24 weeks,
and the Employee on account of such termination shall automatically be
divested of any Incentive Compensation accruing or owed as of the date
of such termination.
c. TERMINATION WITHOUT CAUSE. Effective at any time from the date hereof
during the Employment Term, or at any time during any Extended
Employment Term, the Company may terminate the Employee's employment
without Cause. In the event of Termination without Cause, the Employee
shall be entitled to receive his Salary through the date of
termination, plus one week's severance for each month, or partial
month, of employment, not to exceed 24 weeks, and with a minimum of 12
weeks, and the Employee shall be entitled to any incentive compensation
earned and accrued as of the date of such termination, pro rated
through the effective date of such termination. During the period of
severance, Company shall continue to provide all benefits to the
Employee that the Employee had been entitled to prior to Termination
(defined in section 5 of this agreement), and continue to pay for such
benefits at the same rate as before. Specifically, this is to include
medical and other such benefits as is typically provided to senior
management. In addition to the severance compensation, Employee shall
be entitled to receive compensation at his standard pay rate for any
unused but accrued vacation days through the date of termination.
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7. DISCOVERIES. The Employee will promptly disclose to the Company each
improvement, discovery, development, idea, and invention, whether
patentable or not, directly or indirectly relating to the business or
products of the Company, made or conceived, in whole or in part, by the
Employee while employed by the Company (whether or not during Company
working hours) if such improvement, discovery, development, idea, or
invention directly or indirectly then results from or was suggested by
such employment, in whole or in part. Each such improvement, discovery,
development, idea, and invention shall be the sole and exclusive
property of, and is hereby assigned to, the Company.
8. COMPETITION. For the period of one year following the last day of his
employment, or for the entire period during which Employee receives
salary or severance compensation under this Agreement, whichever period
is longer, the Employee will not, without prior written consent of the
Company, solicit or engage directly or indirectly in any business or
activity, whether as an employee, officer, director, shareholder,
partner, member, independent contractor, consultant, advisor, owner, or
in any other capacity, including, but not limited to, any capacity
calling for the making of any investment or rendition of personal
services or acts of management, operation, or control, that is
competitive with the Company Business within the geographic area in
which any such Company Business is now being conducted by the Company.
The parties agree that the Company Business is currently being
conducted in the United States and Canada. For purposes of this
Agreement, the term "Company Business" shall mean the business of
providing integrated customer management services, including, but not
limited to, outsourced telephone and Internet marketing and customer
service, enhanced by computerized database management and analysis.
9. CONFIDENTIALITY. The Employee agrees not to divulge, furnish or make
accessible to any person or entity, and to keep strictly and absolutely
confidential during the initial Employment Term, each Extended
Employment Term, if any, and forever thereafter, any confidential or
secret aspect of the business of the Company or any related company,
including, but not limited to, the finances, trade secrets, customers,
customer lists, suppliers, supplier lists, sales or distribution agents
and representatives, sales or
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distribution agent and representative lists, methods, arts or
processes, and the business plans and marketing strategies of the
Company. All records, files, drawings, documents, models, equipment,
computer software and the like relating to the business of the Company
which the Employee shall prepare or use or come into contact with shall
remain the sole property of the Company.
10. INJUNCTIVE RELIEF. The Employee acknowledges that his compliance with
his agreements in Paragraphs 8 and 9 is necessary to protect the
goodwill and other proprietary interests of the Company. The Employee
acknowledges that a breach of his agreements in Paragraphs 8 or 9 will
result in irreparable and continuing damage to the Company and the
business of the Company for which there will be no adequate remedy at
law, and agrees that, in the event of any breach of the aforesaid
agreements, the Company and its successors and assigns shall be
entitled to injunctive relief and to such other and further relief as
may be proper.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the Employee's employment by the Company and
supersedes any prior agreements between them, whether oral or written.
12. AMENDMENTS. Any amendment to this Agreement shall be made in writing
and signed by both parties hereto.
13. ENFORCEABILITY. If any provision of this Agreement shall be found by a
court with proper jurisdiction to be invalid or unenforceable, in whole
or in part, then such provision shall be deemed to be modified,
narrowed, or restricted only to the limited extent and in the manner
necessary to render the same valid and enforceable, as the case may
require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been
originally incorporated herein as so modified, narrowed, or restricted.
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall be
assignable to the
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successors of the business of the Company. This Agreement is personal
to the Employee and may not be assigned by him.
15. WAIVERS. A waiver by one party of any breach of or failure to comply
with any provision of this Agreement by the other party shall not be
construed as a waiver of any other provision, or a waiver of a breach
of any other provision, of this Agreement.
16. NOTICES. Unless otherwise notified in writing to the contrary, any
notice required or permitted by the terms hereof shall be effectively
delivered for all purposes if delivered personally, upon delivery, or
if mailed, upon deposit in the United States mail, registered or
certified, postage prepaid, and if directed to the Company at its
principal business office and in the case of the Employee, to his
address appearing on the records of the Company, or to such other
address as he may designate in writing to the Company.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto to be
effective on the date first above written.
Sky Alland Research, Inc.
d/b/a Sky Alland
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxxxxx
Chief Executive Officer Employee
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