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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 1st day of October, 1998, between
ACE*COMM Corporation (the "Company") and Xxxxxx Xxxxxxxx (the "Executive").
WHEREAS, the Board of Directors of the Company has determined that it is in
the best interests of the Company and its shareholders to assure the Executive's
commitment to the Company throughout its recovery period, and, further, to
assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a corporate
reorganization or Change of Control (as defined below) of the Company, and
WHEREAS, the Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by the recovery period or by a pending or threatened corporate
reorganization or Change of Control and, therefore, it is in the best interests
of the Company and its shareholders to provide the Executive with compensation
and benefits arrangements upon termination which ensure that the compensation
and benefits expectations of the Executive will be satisfied and are competitive
with those of other corporations.
NOW, THEREFORE, in order to accomplish these objectives, and in
consideration of the promises and mutual agreements herein contained, the
Company and Executive hereby agree as follows:
1. EMPLOYMENT, DUTIES.
Subject to the provisions set forth elsewhere in this Agreement, the
Company hereby employs the Executive as its Executive Vice President and Chief
Technology Officer (or such other title as is appropriate from time to time as
is determined by the Chief Executive Officer), with such responsibilities and
authority as shall be assigned to him from time to time by the Board of
Directors or the Chief Executive Officer of the Company, provided that after a
Change of Control, the Executive's position, authority, duties and
responsibilities shall not be substantially diminished from those held,
exercised and assigned during the 120-day period immediately preceding the
Change of Control.
Initially, the Executive's duties shall include:
Duties as directed by the Chief Executive Officer from time to time,
including those set forth on Exhibit A.
The Executive's principal place of employment shall be at the Company's
main headquarters, in Gaithersburg, Maryland, subject to such travel as may be
required by his employment.
The Executive hereby agrees to remain in the employ of the Company subject
to the terms and conditions of this Agreement, for the Term of this Agreement
(defined below) and to perform his duties faithfully, loyally and to report to,
and follow the directions of, the Chief Executive Officer. During the Term, and
excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote his full business time and best efforts
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use his
best efforts to perform faithfully and efficiently such responsibilities. During
the Term it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do not materially
interfere with the performance of the Executive's responsibilities as an
employee of the Company in accordance with this Agreement.
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The Executive represents and warrants that there are no agreements or
arrangements, whether written or oral, in effect which would prevent him from
rendering exclusive services to the Company during the term hereof, and that he
has not made and will not make any commitment, agreement or arrangement, or do
any act, in conflict with this Agreement and that entering into this Agreement
will not be in violation of any other agreement.
2. TERM.
The term of the Executive's employment under this Agreement shall commence
on October 1, 1998 (the "Effective Date") and shall end on the third anniversary
of the Effective Date, unless sooner terminated, as provided herein, or renewed
by mutual agreement of the parties (the "Term").
3. COMPENSATION.
As compensation for all services to be rendered pursuant to this Agreement,
the Company shall pay the Executive, during the Term, the following:
"Base Salary" payable bi-weekly, less such amounts as shall be required to
be withheld by applicable laws and regulations. The "Base Salary" shall be
$185,000 per year, subject to consideration by the Compensation Committee
of the Board of Directors as of October 1 of each year for increases as
appropriate.
"Bonus" In addition to his Base Salary, the Executive shall be eligible to
receive with respect to each fiscal year (beginning with respect to the
1999 fiscal year), payable on October 1, 1999, 2000 and 2001, respectively,
for the prior fiscal year pursuant to a plan established for, and applied
consistently to, all executives, a bonus of (1) up to $100,000 payable in
cash or shares of Common Stock of the Company of equivalent value and (2)
an option for up to 22,000 shares of Common Stock. Such Bonus shall be
payable, based on the Company's financial performance and personal
objectives as determined by the Chief Executive Officer and the Board of
Directors.
Following a Change of Control, the Executive shall be eligible, for each fiscal
year ending during the balance of the Term, an annual bonus (the "Annual Bonus")
in cash and options at least equal to the average of the bonuses offered to the
Executive under the Company's annual bonus plan for the preceding three full
fiscal years prior to the Change of Control (the "Average Annual Bonus"). Each
such Annual Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of such Annual
Bonus.
4. OPTION GRANTS.
The Executive will be granted an option (the "Option") in substantially the
form attached hereto. To the extent that the terms of the Option evidenced in
the Option Agreement and in the Amended and Restated Omnibus Stock Plan (the
"Plan") are in any way inconsistent with the terms of this Agreement, the terms
of the Option as set forth in the Option Agreement and Plan shall supersede any
terms set forth herein with respect thereto.
5. PERQUISITES.
During the Term the Executive shall be eligible to participate in benefit
plans generally available to all employees.
In addition, the Executive shall receive the following:
- Company-paid term life insurance providing death benefits equal to two
times Base Salary
- Short-term and long-term disability insurance on substantially the terms
set forth in the policies provided through the Company to the Executive as
of the date hereof
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- Health insurance on substantially the terms set forth in the policy
currently provided through the Company to the Executive as of the date
hereof
- Participation in the Company's 401(k) Plan and Employee Stock Purchase Plan
on the terms set forth in such plans
- Education and training and professional organization membership support (2
weeks per year)
- Use of a Company car with a retail value of approximately $45,000 First
Class air travel on US flights or international flights of more than 12
hours and Business Class on shorter international flights
- Accrued annual leave up to 30 days upon termination by the Company other
than for Cause
- 10 holidays per current Company policy
After a Change of Control, the Executive shall be eligible to participate
in benefit plans at least as favorable to the Executive as were available to the
Executive at the Company within the 120 days prior to the Change of Control. In
addition, specifically, if, as a result of a Change of Control, the Executive is
asked to relocate his employment to a location more than 40 miles away from the
Executive's residence, the Executive shall be entitled to receive relocation
benefits of up to $90,000, subject to presentation of reasonable documentation.
6. TERMINATION AND COMPENSATION THEREFOR PRIOR TO A CHANGE OF CONTROL.
6.1 DEATH: If the Executive dies during the Term and prior to a Change of
Control, this Agreement shall terminate automatically as of the date of death of
the Executive. In the event of such termination, all compensation and other
benefits payable or provided hereunder shall cease as of the date of termination
(except to the extent that death benefits are then payable), and Base Salary and
all accrued benefits (if any) then payable to the Executive pursuant to the
terms of any plans or arrangements referred to in Sections 3 or 5, shall be paid
to the Executive (or to his heirs, legatees and/or personal representatives)
through the date of termination. No Bonus shall be payable with respect to the
year in which the Executive dies. Any bonus, the payment of which was deferred
pursuant to the terms of the Executive Bonus Plan, will be paid in full. The
Option will remain exercisable for up to one year from the date of death in
accordance with the terms of the Option Agreement with respect to Option Shares
that have vested as of the date of death. Unvested Option Shares will be deemed
cancelled upon the date of death.
6.2 DISABILITY: If the Company determines in good faith that the Disability
of the Executive has occurred during the Term (pursuant to the definition of
Disability set forth below), it may give to the Executive written notice of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after the date of such notice (the "Disability Effective Date"), provided
that, within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes of
this Agreement, "Disability" shall mean the Executive' incapacity due to mental
or physical illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and reasonably acceptable to the
Executive or the Executive's legal representative. In the event of such
termination, all compensation and other benefits payable or provided hereunder
shall cease as of the effective date of termination (except to the extent that
disability benefits are then payable), and Base Salary and all accrued benefits
(if any) then payable to the Executive pursuant to the terms of any plans or
arrangements referred to in Sections 3 or 5, shall be paid to the Executive (or
to his guardian or personal representatives) through the date of termination. No
Bonus shall be payable with respect to the year in which the Executive is
determined by the Board of Directors to have become disabled. The Option will
remain exercisable for up to 90 days from the effective date of termination in
accordance with the terms of the Option Agreement, with respect to Option Shares
that have vested as of the effective date of termination. Unvested Option Shares
will be deemed cancelled upon the effective date of termination.
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6.3 TERMINATION AT ELECTION OF THE COMPANY:
(a) FOR CAUSE: Notwithstanding any other provision of this Agreement, the
Company may terminate the Executive's employment hereunder at any time prior to
a Change of Control, effective after sufficient notice of such termination and
failure to cure, upon the occurrence of any of the following: (i) the
Executive's engaging in conduct that constitutes gross neglect or willful
misconduct in carrying out his duties under this Agreement; (ii) the Executive's
engaging in any acts or omissions involving dishonesty or that demonstrate a
lack of integrity; (iii) the Executive's making knowing material
misrepresentations to the Company that injure the business and affairs of the
Company, monetarily or otherwise; (iv) the Executive's committing a material
breach of any of his obligations under this Agreement. Such termination will be
deemed for "Cause."
In the event of termination of the Executive's employment for Cause, all
compensation and other benefits payable or provided hereunder shall cease as of
the date of termination and Base Salary and all accrued benefits (if any) then
payable to the Executive pursuant to the terms of any plans or arrangements
referred to in Sections 3 or 5, shall be paid to the Executive through the date
of termination. No Bonus shall be payable with respect to the year in which the
Executive is terminated for Cause. Any bonus, the payment of which was deferred
pursuant to the terms of the Executive Bonus Plan, will be paid in full. Upon
termination of the Executive for Cause, the Option shall terminate immediately
and no longer be exercisable.
(b) OTHER THAN FOR CAUSE: In addition to the Company's right to terminate
the Executive's employment pursuant to Sections 6.3(a), prior to a Change of
Control the Company may, for any reason or for no reason, terminate the
Executive's employment upon written notice to the Executive effective upon the
date of the notice. In the event of such termination, all compensation and other
benefits payable or provided hereunder shall cease as of the date of termination
and Base Salary and all accrued benefits (if any) then payable to the Executive
pursuant to the terms of any plans or arrangements referred to in Sections 3 or
5, shall be paid to the Executive through the date of termination. No Bonus
shall be payable with respect to the year in which the Executive is terminated
other than for Cause. Any bonus, the payment of which was deferred pursuant to
the terms of the Executive Bonus Plan, will be paid in full. As additional
compensation for such termination, the Company shall pay the Executive upon such
termination a lump sum equal to one year's Base Salary as is in effect as of
immediately prior to such termination.
If the termination occurs before October 1, 1999, 100,000 of the Option
Shares shall vest and become exercisable as of the date of termination; if the
termination occurs on or after October 1, 1999 but before October 1, 2000,
50,000 of the Option Shares shall vest and become exercisable as of the date of
termination. The Option will remain exercisable for up to 90 days from the
effective date of termination in accordance with the terms of the Option
Agreement with respect to Option Shares that have vested as of the effective
date of termination. Unvested Option Shares will be deemed cancelled upon the
effective date of termination.
6.4 TERMINATION BY THE EXECUTIVE: Notwithstanding any other provision of
this Agreement, prior to a Change of Control the Executive may terminate his
employment upon written notice of termination delivered to the Board of
Directors, effective upon the date of receipt of such notice by the Board. In
the event of such termination, all compensation and other benefits payable or
provided hereunder shall cease as of the date of termination, all accrued
benefits (if any) then payable to the Executive pursuant to the terms of any
plans or arrangements referred to in Sections 3 or 5, shall be paid to the
Executive through the date of termination and Base Salary shall be paid to the
Executive through a date that is 60 days from the date of termination. No Bonus
shall be payable with respect to the year in which such termination is
effective. Any bonus, the payment of which was deferred pursuant to the terms of
the Executive Bonus Plan, will be paid in full. Upon termination by the
Executive, the unvested portion of the Option shall terminate immediately and no
longer be exercisable; the vested portion of the Option shall remain exercisable
for 90 days and thereafter shall terminate.
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7. Termination and Compensation therefor following a Change of Control.
7.1 DEFINITION OF CHANGE OF CONTROL: For the purpose of this Agreement, a
"Change of Control" shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 51% or
more of either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A) and
(B) of subsection (c) of this Section 7.1; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect
to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than
the Board; or
(c) Consummation of a reorganization, merger or consolidation
involving the Company or any subsidiary of the Company or sale or other
disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, either (A)(i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be or (ii) at least
a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination and (B) no
Person (excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 35% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination.
7.1 DEATH: If the Executive dies during the Term after a Change of Control,
this Agreement shall terminate automatically as of the date of death of the
Executive. In the event of such termination, all
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compensation and other benefits payable or provided hereunder shall cease as of
the date of termination (except to the extent that death benefits are then
payable), and Base Salary and all accrued benefits (if any) then payable to the
Executive pursuant to the terms of any plans or arrangements referred to in
Sections 3 or 5, shall be paid to the Executive (or to his heirs, legatees
and/or personal representatives) through the date of termination. No Bonus shall
be payable with respect to the year in which the Executive dies. The Option will
remain exercisable for up to one year from the date of death in accordance with
the terms of the Option Agreement with respect to Option Shares that have vested
as of the date of death. Unvested Option Shares will be deemed cancelled upon
the date of death.
With respect to the provision of plans or arrangements pursuant to Sections
3 or 5, these shall include, without limitation, and the Executive's estate
and/or beneficiaries shall be entitled to receive, benefits at least equal to
the benefits that would have been provided by the Company to the estate and
beneficiaries of the Executive under such plans, programs, practices and
policies relating to death benefits, if any, as in effect with respect to such
Executive and his beneficiaries at any time during the 120-day period
immediately preceding the Change of Control.
7.2 DISABILITY: If during the Term and after a Change of Control the
Company determines in good faith that the Disability of the Executive has
occurred during the Term (pursuant to the definition of Disability set forth in
Section 6.2), it may give to the Executive written notice of its intention to
terminate the Executive's employment. In such event, the Executive's employment
with the Company shall terminate effective on the 30th day after the date of
such notice (the "Disability Effective Date"), provided that, within the 30 days
after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. In the event of such termination, all
compensation and other benefits payable or provided hereunder shall cease as of
the effective date of termination (except to the extent that disability benefits
are then payable), and Base Salary and all accrued benefits (if any) then
payable to the Executive pursuant to the terms of any plans or arrangements
referred to in Sections 3 or 5, shall be paid to the Executive (or to his
guardian or personal representatives) through the date of termination. No Bonus
shall be payable with respect to the year in which the Executive is determined
by the Board of Directors to have become disabled. The Option will remain
exercisable for up to 90 days from the effective date of termination in
accordance with the terms of the Option Agreement, with respect to Option Shares
that have vested as of the effective date of termination. Unvested Option Shares
will be deemed cancelled upon the effective date of termination.
7.3 TERMINATION AT ELECTION OF THE COMPANY:
(a) FOR CAUSE: Notwithstanding any other provision of this Agreement, the
Company may terminate the Executive's employment hereunder at any time after a
Change of Control upon the occurrence of any of the following: (i) the willful
and continued failure of the Executive to perform substantially the Executive's
duties with the Company or one of its affiliates (other than any such failure
resulting from incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive by the Board or
the Chief Executive Officer of the Company which identifies the manner in which
the Board or Chief Executive officer believes that the Executive has not
substantially performed the Executive's duties, or (ii) the willful engaging by
the Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company. Following a Change of Control, only such
termination will be deemed for Cause.
The cessation of employment of the Executive shall not be deemed to be for
Cause following a Change of Control unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the Board at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.
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In the event of such termination of the Executive's employment, all
compensation and other benefits payable or provided hereunder shall cease
as of the date of termination and Base Salary and all accrued benefits (if
any) then payable to the Executive pursuant to the terms of any plans or
arrangements referred to in Sections 3 or 5, shall be paid to the Executive
through the date of termination. No Bonus shall be payable with respect to
the year in which the Executive is so terminated for Cause. Upon
termination of the Executive for Cause, the Option shall terminate
immediately and no longer be exercisable.
(b) OTHER THAN FOR CAUSE: In addition to the Company's right to terminate
the Executive's employment pursuant to Sections 7.3(a), following a Change of
Control the Company may, for any reason or for no reason, terminate the
Executive's employment upon written notice to the Executive. In the event of
such termination, all compensation and other benefits payable or provided
hereunder shall cease as of the date of termination and Base Salary and all
accrued benefits (if any) then payable to the Executive pursuant to the terms of
any plans or arrangements referred to in Sections 3 or 5, shall be paid to the
Executive through the date of termination. No Bonus shall be payable with
respect to the year in which the Executive is terminated other than for Cause.
As additional compensation for such termination, the Company shall pay the
Executive upon such termination a lump sum equal to one year's Base Salary as is
in effect as of immediately prior to such termination. In addition, any Option
Shares that are unvested as of the date of termination shall immediately vest
and become exercisable as of the effective date of termination. The Option shall
be exercisable with respect to such accelerated shares and any other Option
Shares previously vested as of the effective date of termination and shall
remain exercisable for 90 days from the effective date of termination. In
addition, the Company shall transfer to the Executive title to the Company car
Executive is using as of such date. Finally, with respect to stock options that
are held by the Executive other than the Option, options with respect to
unearned and unvested shares shall be cancelled immediately; options with
respect to shares that have been earned but are not vested (i.e. exercisable)
shall be deemed vested and shall be exercisable as of the date of termination;
and all options that are vested (i.e. exercisable) as of the date of termination
shall remain exercisable for 90 days from the date of termination.
7.4 Termination by the Executive:
(a) FOR GOOD REASON: The Executive may terminate his employment for Good
Reason at any time following a Change of Control. For purposes of this
Agreement, "Good Reason" shall mean:
(i) a substantial diminishment in the position, authority, duties and
responsibility of the Executive, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
the Executive;
(ii) any failure by the Company to comply with any of the provisions
of Sections 3 and 5 of this Agreement, other than a failure not occurring
in bad faith and which is remedied by the Company promptly after receipt of
written notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at a location
that is more than 40 miles away from his residence as of immediately prior
to the Change of Control;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section 10.6
of this Agreement.
In the event of such termination, all compensation and other benefits
payable or provided hereunder shall cease as of the date of termination and Base
Salary and all accrued benefits (if any) then
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payable to the Executive pursuant to the terms of any plans or arrangements
referred to in Sections 3 or 5, shall be paid to the Executive through the date
of termination. No Bonus shall be payable with respect to the year in which the
Executive is terminated other than for Cause. As additional compensation for
such termination, the Company shall pay the Executive upon such termination a
lump sum equal to one year's Base Salary as is in effect as of immediately prior
to such termination. In addition, any Option Shares that are unvested as of the
date of termination shall immediately vest and become exercisable as of the
effective date of termination. The Option shall be exercisable with respect to
such accelerated shares and any other Option Shares previously vested as of the
effective date of termination and shall remain exercisable for 90 days from the
effective date of termination. In addition, the Company shall transfer to the
Executive title to the Company car Executive is using as of such date. Finally,
with respect to stock options that are held by the Executive other than the
Option, options with respect to unearned and unvested shares shall be cancelled
immediately; options with respect to shares that have been earned but are not
vested (i.e. exercisable) shall be deemed vested and shall be exercisable as of
the date of termination; and all options that are vested (i.e. exercisable) as
of the date of termination shall remain exercisable for 90 days from the date of
termination.
Any termination by the Executive for Good Reason, shall be communicated by
notice of termination to the Company indicating the specific termination
provision in this Agreement relied upon, and, to the extent applicable,
reasonable detail as to the facts and circumstances claimed to provide a basis
for termination under the provision so indicated and specifying the termination
date (which date shall be not more than thirty days after the giving of such
notice).
(b) OTHER THAN FOR GOOD REASON . Notwithstanding any other provision of
this Agreement, the Executive may terminate his employment effective as of the
date of his written notice of termination delivered to the Board of Directors.
In the event of such termination, all compensation and other benefits payable or
provided hereunder shall cease as of the date of termination and Base Salary and
all accrued benefits (if any) then payable to the Executive pursuant to the
terms of any plans or arrangements referred to in Sections 3 or 5, shall be paid
to the Executive through the date of termination. No Bonus shall be payable with
respect to the year in which the Executive effects such termination. Upon such
termination by the Executive, the Option shall terminate immediately and shall
no longer be exercisable.
8. CERTAIN COVENANTS OF THE EXECUTIVE.
8.1 At all times during the Term, and following termination of this
Agreement for any reason, the Executive shall keep secret and retain in
strictest confidence, and shall not use for the benefit of himself or others
except in connection with the business and affairs of the Company, all
confidential matters relating to the business of the Company or matters relating
to this Agreement, learned by the Executive heretofore or hereafter, and shall
not disclose them to anyone outside of the Company, except (i) as required in
the course of performing his duties hereunder, (ii) with the Company's express
written consent, or (iii) to the extent that the confidential matter (a) is in
the public domain or is generally known in the industry through no unlawful act
of the Executive or (b) must be disclosed by the Executive pursuant to law.
8.2 All memoranda, notes, lists, records and other documents or papers
made or compiled by or on behalf of the Executive, or made available to the
Executive in connection with his employment are and shall be the property of the
Company and shall be delivered to the Company promptly upon termination of the
Executive's employment with the Company or at any other time upon request.
Executive will be provided reasonable access to such information for his own
legal defense.
8.3 The Executive agrees that, for a period of one year from the date
of termination of his employment under this Agreement, he will not, either
within or without the United States, directly or indirectly, as a stockholder,
partner, investor, director, officer, employee, consultant, contractor, agent or
in any other capacity, engage in any business that is in competition with the
Business of the Company. "Business" shall mean the business of providing
Operations Support System hardware and/or software for data and voice networks
operated by telecommunications providers and large enterprises, including for
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billing data collection, billing, customer care, network surveillance, alarm
processing and network traffic management. "Business" does not include any
information technology that is provided to an entity that is not in the
telecommunications Operations Support Systems market. Specifically, by way of
example, "Business" would not include technology used for educational,
government, military, retail, wholesale, banking or other markets that is not
for the purpose of telecommunications for these markets. Further, it would not
include technology for the telecommunications industry that has not been part of
the Company's activities in the last three years nor for the term of this
Agreement such as LANs, circuit switching, packet switching, cryptology, dense
wavelength division multiplexing, or the like. Provided that the foregoing shall
not prohibit the Executive from owning beneficially less than 5% of the
outstanding stock of any class of stock of a corporation the securities of which
are regularly traded or quoted on a national securities exchange. Specifically,
but without limiting the generality of the foregoing, the Executive shall not
directly or indirectly:
a) Contract with, represent, solicit business or engage in the Business to
develop, market or sell billing data collection or network management
systems or services;
b) Solicit business or in any other way interfere with or disrupt the
Company's business relationships with any persons in the Business;
c) Solicit, contract with or enter into any business dealings with,
entice or aid or cooperate with others in soliciting or enticing any
current or future employees of the Company to leave the Company and join
any other company in the Business;
d) Divulge any confidential information regarding the Company to anyone not
connected with the Company;
"Indirect" competition shall include any competition undertaken through an
entity owned in whole or in part by the Executive or any of his agents or
affiliates.
This Section 8.3 shall not be enforceable in the event that the Company
owes under the terms of this Agreement (e.g. in the event of termination by the
Company without Cause), and fails to pay, to the Executive amounts due the
Executive under the terms of this Agreement.
8.4 If the Executive breaches, or threatens to breach, any of the
provisions of Section 8 (the "Restrictive Covenants"), the Company shall have,
in addition to its right immediately to terminate this Agreement for Cause, the
right and remedy (which right and remedy shall be independent of others and
severally enforceable, and which shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in equity)
to seek an injunction or other equitable relief to prevent any such breach or
continuing breach, including having the Restrictive Covenants specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach will cause irreparable injury
to the Company and that money damages will not provide adequate remedy to the
Company.
8.5 SEVERABILITY OF COVENANTS: The Executive acknowledges and agrees that
the Restrictive Covenants are reasonable and valid in all respects. If any court
determines that any of the Restrictive Covenants or any part thereof, is invalid
or unenforceable, the remainder of the Restrictive Covenants shall not thereby
be affected and shall be given full effect, without regard to the invalid
portions. The parties agree that such court shall be empowered to substitute, to
the extent enforceable, provisions similar hereto or other provisions so as to
provide to the Company, to the fullest extent possible under applicable law, the
benefits intended by this Agreement. The validity, legality or enforceability of
this Agreement shall not be affected by any such modification.
8.6 ENFORCEABILITY IN JURISDICTIONS: The parties intend to and hereby
confer jurisdiction to enforce the Restrictive Covenants upon the courts of
Maryland.
10
9. [INTENTIONALLY DELETED]
10. OTHER PROVISIONS.
10.1 NOTICES: Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage paid, and shall be deemed given when so
delivered personally, telegraphed, telexed, sent by facsimile transmission or,
if mailed, four days after the date of mailing, as follows:
(i) if to the Company, to:
ACE*COMM Corporation
000 Xxxxxx Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Chairman of the Board
(ii) if to the Executive, to:
(intentionally omitted)
Any party may notice given in accordance with this Section to the other
parties designate another address or person for receipt of notices hereunder.
10.2 ENTIRE AGREEMENT: This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, written or oral, with respect thereto.
10.3 PERSONNEL POLICY MANUAL: All terms and conditions applicable to all
employees of the Company contained in the ACE*COMM Employee Handbook as the same
shall be in force from time to time, shall apply to the employment of the
Executive except to the extent that they conflict with the specific terms and
conditions of this Agreement, in which event the terms and conditions of this
Agreement shall prevail.
10.4 WAIVERS AND AMENDMENTS: This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the Executive and the
Chairman of the Board of the Company (each, in such capacity, a party) or, in
the case of a waiver, by the party waiving compliance. No delay on the part of
any party in exercising any right, power or privilege hereunder, nor any single
or partial exercise of any right, power or privilege hereunder, preclude any
other further exercise thereof or the exercise of any other right, power or
privilege hereunder.
10.5 GOVERNING LAW; NO OTHER AGREEMENTS: This Agreement has been negotiated
and is to be performed in the State of Maryland, and shall be governed and
construed in accordance with the laws of the State of Maryland applicable to
agreements made and to be performed entirely within such State. This Agreement
supersedes, as of its effective date, any other oral or written agreement
between the parties with respect to the subject matter hereof.
10.6 SUCCESSORS.
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(a) This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to assume expressly 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 had taken place. As used in this
Agreement, "Company" shall mean the Company as defined in this Agreement and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
10.7 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
10.8 TAXES: The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, the parties have executed or caused to be executed this
Agreement on the date first above written.
ACE*COMM Corporation
By:
--------------------------------------
Xxxxxx Xxxxxxx
Chairman of the Board
--------------------------------------
Xxxxxx Xxxxxxxx
