EXHIBIT 10.17
July 10, 2002
EMPLOYMENT AGREEMENT
THIS AGREEMENT, is effective as of agreed upon start date by and between UBICS,
INC., a Delaware Corporation (the "Company"), and Xxxxxxx X. Xxxxxxx (the
"Employee").
WITNESSETH:
WHEREAS, the Company is engaged in the business of providing information
technology services to various organizations:
WHEREAS, the Company desires to procure the services of Employee and Employee is
willing to be employed by the Company, upon the terms and subject to the
conditions hereinafter set forth:
Intending to be legally bound, the Company agrees to employ Employee, and
Employee hereby agrees to be employed by the Company, upon the following terms
and conditions:
ARTICLE I
EMPLOYMENT
1.00 Expiration. This offer will automatically expire at 8:00 a.m. EST Friday,
July 12, 2002 if the parties have not executed this agreement with signed
acceptance in total.
1.01 Office. Employee is hereby employed as Senior Vice President Sales of the
Company and to perform such duties and responsibilities as the Company's By-laws
and its Board of Directors, Chairman, or President may from time to time
designate.
1.02 Term. Subject to the terms and provisions of Article II hereof, Employee's
employment hereunder shall commence on agreed upon start date and continuing
until such time as the employment is terminated as set forth in this agreement,
and subject to such other terms and conditions as set forth in this Agreement.
1.03 Salary. A salary shall be paid to Employee by the Company during the term
of this Agreement at the rate of $175,000.00 (One-Hundred Seventy-five Thousand
Dollars) gross per annum, payable semi-monthly in accordance with the Company's
normal payroll practices (the "Salary"). The Salary may be reviewed from time to
time, such review, if any, to be determined by the Compensation Committee of the
Board of Directors, in its sole discretion.
1.04 Bonus. Employee is eligible for an annual bonus in the amount of $200,000
during the term of this Agreement. This bonus will be paid out quarterly, based
on mutually agreed upon goals and objectives. The bonus will be guaranteed at
25% for 2002, Q3 and 12.5% for 2002, Q4. The Compensation Committee of the Board
of Directors must approve all bonus amounts. See attachments A, B & C for
Executive Bonus Targets. Bonus is payable within 45 days of closing.
Extraordinary Bonus: Employee is eligible for an additional annual bonus
amount of $100,000 during the term of this Agreement. This bonus will be
paid out at the end of the calendar year, and is only applicable for
exceptional results, as previously determined by the President of the
Company and Compensation Committee. Extraordinary Bonus is payable by March
31st of the following year.
In order to be eligible for either an annual bonus or quarterly bonus, Employee
must be an Employee in good standing with the Company. Employee will not be
eligible for the payment of an annual bonus in the event (i) he is terminated
for cause due to Employee's willful misconduct, (ii) he is terminated for cause
for gross negligence, or (iii) he resigns from the Company without Good Reason
(as defined in P. 5.03 hereof). Except as otherwise provided herein, Employee is
not entitled to any bonus or other payments from the Company following any
termination of his employment hereunder.
1.05 Lost Bonus. The Company shall pay the Executive an amount equal to the Lost
Bonus in the amount of $20,000, provided that the Executive shall supply
evidence satisfactory to the Company of the amount and calculation of the Lost
Bonus. The Lost Bonus shall be payable at $10,000 within 15 days of Employee's
start date and $10,000 after 90 days of employment. This Lost Bonus is only
payable regarding previous company fails to pay employee for this amount.
1.06 Out of Pocket Expenses. Employee shall be entitled to reimbursement for his
reasonable out-of-pocket expenses incurred in performing his duties in
accordance with the general policy of Company, as it may change from time to
time, provided that Employee shall provide an itemized account together with
supporting receipts for such expenditure in accordance with the requirements set
forth in the Internal Revenue Code of 1986, as amended, and related regulations,
subject to the right of the Company at any time to place reasonable limitations
on such expenses thereafter to be incurred or reimbursed.
1.07 Employee Benefits. Subject to any limitations imposed by applicable law,
Employee shall be covered by such major medical and health insurance, pension,
profit-sharing or 401(k) plans as may be available generally to employees of the
Company and shall be entitled to receive such other benefits and perquisites as
may be determined by the Board of Directors or the Compensation Committee
thereof.
1.08 Options. Employee shall be entitled to receive options in the amount of
75,000 (Seventy-five Thousand) shares of the Company's Common Stock at an option
price of $3.22 under the Company's 1997 Stock Option Plan in accordance with the
terms of a separate Stock Option Agreement. The vesting period is 3 years.
1.09 Vacation. Employee will be entitled to Company paid holidays and six (6)
accrued sick days annually (prorated). Employee will be entitled to four (4)
weeks of vacation per calendar year. Employee shall not be entitled to receive
any payment for unused vacation or to carry over unused vacation from year to
year.
1.10 Relocation Assistance. The Company shall reimburse the employee for his
reasonable relocation expenses, which shall include the sale of existing home,
purchase of new home in Pittsburgh, PA, and moving expenses. Relocation
assistance is available during the first fifteen months of employment. Original
receipts are required for reimbursement. Employee must be employed at the time
relocation costs are paid to be eligible for reimbursement. In addition, the
Company will provide employee with an allowance for 30 days of temporary
housing.
1.11 Taxes. UBICS will withhold any applicable federal and state taxes for
compensation paid to Employee.
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1.12 Compliance with Company Policies and Laws. In performing the duties and
responsibilities set forth in this Agreement, Employee shall use his best
efforts to comply with federal, state and local laws, and shall abide by all
policies, procedures and programs of UBICS.
1.13 Work Product. All work or services rendered under this Agreement, including
reports, papers, and other information ("Work Product"), are the exclusive
property of UBICS and all right, title and interest in such Work Product shall
vest in UBICS and shall be deemed to be work rendered under this agreement.
Employee agrees to assign all his right, title and interest in such Work Product
to UBICS and will otherwise cooperate as may be necessary to secure such rights
for UBICS. All files, lists, reports and other property relating to the business
of UBICS, whether prepared by the Employee or otherwise, shall remain the
exclusive property of UBICS and shall not be removed from the premises of UBICS
or UBICS's clients under any circumstances whatsoever without the prior written
consent of UBICS.
ARTICLE II
EMPLOYMENT AT WILL
2.01 Employment at Will. The parties agree and acknowledge that the employment
relationship created by this Agreement is at will and that either party may
terminate this agreement with or without cause. The party terminating the
agreement shall provide the other party with two-(2) months notice of the
party's intent to terminate or, in lieu of notice, two months compensation.
However, any such notice shall not in any way alter or modify the at will
employment relationship established by this agreement. All payments due to
Employee under this agreement and all outstanding advances due to UBICS by the
Employee shall be settled in full within 30 days of the date of termination.
2.02 Effect of Termination on Options. Notwithstanding anything to the contrary
set forth in any stock option plan of the Company or any Stock Option Agreement
between the Company and the Employee, in the event of termination of Employee's
employment hereunder for any reason other than for cause due to Employee's
willful misconduct, gross negligence or resignation without Good Reason, all
unexercised stock options granted to Employee shall immediately vest and shall
remain exercisable by Employee or Employee's estate for a period of one year
following such termination.
ARTICLE III
EMPLOYEE'S ACKNOWLEDGMENTS
Employee acknowledges that: (a) in the course of Employee's employment by the
Company, Employee will acquire information concerning the Company's sales, sales
volume, sales methods, sales proposals, customers and prospective customers,
identity of key personnel in the employment of the Company, amount or kind of
customer's purchases from the Company, the Company's recruiting method and
practices, computer programs, system documentation, special hardware, product
hardware, related software development, manuals, formulae, processes, methods
and other confidential or proprietary information belonging to the Company
relating to the Company's affairs (collectively referred to herein as the
"Confidential Information"); (b) the Confidential Information is the property of
the Company; (c) the use, misappropriation or disclosure of the Confidential
Information would constitute a breach of trust and could cause irreparable
damage to the Company; and (d) it is essential for the protection of the
Company's goodwill and to the maintenance of the Company's competitive position
that
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the Confidential Information be kept secret and that Employee not disclose the
Confidential Information to others or use the Confidential Information to
Employee's own advantage or the advantage of others.
Employee further acknowledges that it is essential for the proper protection of
the business of the Company that Employee be restrained from: (a) soliciting or
inducing any employee of the Company to leave the employment of the Company, (b)
from soliciting the trade of or trading with the customers of the Company for a
competitive purpose and (c) from competing against the Company for a reasonable
period of time following termination of Employee's employment by the Company.
ARTICLE IV
EMPLOYEE'S CONVENANTS AND AGREEMENTS
4.01 Nondisclosure or Utilization of Confidential Information. Employee agrees
to hold and safeguard the Confidential Information in trust for the Company and
its successors and assigns and agrees that he shall not, without the prior
written consent of the Company, misappropriate, disclose or use for any reason
or purpose, or make available to anyone for use outside the Company's
organization at any time for any reason or purpose, either during his employment
by the Company or subsequent to the termination of his employment by the Company
for any reason, any of the Confidential Information, whether or not developed by
Employee, except as required in the performance of Employee's duties to the
Company.
4.02 Prior Employment Confidentiality. Employee agrees that during the course of
his employment with Employer, he will not make use of or disclose to Employer,
any trade secret, proprietary or confidential information he may have acquired
during or as a result of his prior employment with any person or entity.
4.03 Duties. Employees agrees to be a loyal employee of the Company. Employee
agrees to devote his full working time and best efforts to the performance of
his duties for the Company, to give proper time and attention to furthering the
Company's business, and to comply with all rules, regulations and instructions
established or issued by the Company. Employee further agrees that during the
term of this Agreement, Employee shall not, directly or indirectly, engage in
any business which would detract from Employee's ability to apply his full
working time and best efforts to the performance of his duties hereunder.
Employee shall not perform services for other companies without the approval of
the Company's Board of Directors. Employee also agrees that he shall not usurp
any corporate opportunities of the Company.
4.03 Return of Materials. Upon the termination of Employee's employment by the
Company for any reason, Employee shall promptly deliver to the Company all
correspondence, drawings, blueprints, manuals, letters, notes, notebooks,
reports, programs, proposals 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 Confidential Information.
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4.04 Nonsolicitation of Customers. Employee agrees that during his employment by
the Company and for three (3) years following termination of Employee's
employment with the Company for any reason, he shall not, directly or
indirectly, solicit the trade of, or trade with, any customer or prospective
customer of the Company in competition with the Company.
4.05 Nonsolicitation of Employees. Employee agrees that during his employment by
the Company and for three (3) years following termination of Employee's
employment with the Company for any reason, Employee 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 and employee
of the Company.
ARTICLE V
EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
5.01 No Prior Agreements. Employee 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.
5.02 Remedies. In the event of a breach by Employee 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 Employee and to enjoin Employee 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. Employee 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.
UBICS will provide Corporate Council to Employee in the event his immediate
employer files litigation against employee for breaching his non-compete
agreement. Services will only be provided by UBICS to cover a breach associated
with working for a competitor.
5.03 Definition of "Good Reason": The term "Good Reason" means: (i) a material
diminution by the Company of Employee's title or responsibilities, or (ii) a
material diminution by the Company in Employee's salary, benefits or incentive
or other forms of compensation, or (iii) a material change in title,
responsibilities or compensation as a result of change in contract.
ARTICLE VI
SEVERABILITY
6.01 Severability. In the event that one or more of the provisions of the
agreement shall for any reason be held to be invalid, illegal or unenforceable,
the remaining provisions of this agreement shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
provision which being valid, legal and enforceable, comes closest to the
intention of the parties underlying the invalid, illegal or unenforceable
provision.
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ARTICLE VII
MISCELLANEOUS
7.01 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.
7.02 Entire Agreement. This Agreement represents the entire agreement of the
parties and may be amended only by a writing signed by each of them.
7.03 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
7.04 Agreement Binding. The obligations of Employee under this Agreement shall
continue after the termination of his employment with the Company for any
reason, with or without cause, and shall be binding on his heirs, executors,
legal representatives and assigns and shall be binding on and inure to the
benefit of any successors and assigns of the Company.
7.05 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 section
headings of this Agreement are for convenience for reference only and shall not
affect the construction or interpretation of any of the provisions hereof.
7.06 Binding Arbitration. The parties agree that all claims, disputes and other
matters in question between them, arising out of or related to this Agreement,
and the rights, duties and obligations arising thereunder or the breach thereof,
shall be decided by common-law arbitration in Pittsburgh, Pennsylvania, in
accordance with the Rules of the American Arbitration Association then
prevailing, unless the parties mutually agree otherwise; provided however, the
Company shall have the right to obtain preliminary or permanent injunctive
relief from a court of appropriate jurisdiction while the arbitration process is
continuing, and/or after the Board of Arbitrators renders its decision on the
merits; provided further, if either party would be entitled to jurisdiction,
then in the interests in judicial economy, either party may litigate all
disputes against the other party and any third party in one action before a
court of appropriate jurisdiction. The parties agree that with regard to all
claims, disputes and remedies arising out of this Agreement, the American
Arbitration Association, and the Federal and State courts in Pittsburgh,
Pennsylvania and applicable appellate courts, shall have jurisdiction over their
persons. This provision shall not be deemed to confer exclusive subject matter
jurisdiction over such courts. This Agreement shall not be construed as a
consent to arbitrate any dispute with any person who is not party to this
Agreement.
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ARTICLE VIII
CONTINGENCY
The offer set forth above is contingent upon UBICS' receipt of satisfactory
reference checks, background check and approval from the Compensation Committee.
IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed
this agreement on the day and year set forth below.
WITNESS:
/s/ Xxxxxxx Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
7-11-02
-------------------------------------
Date
WITNESS:
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxx X. Harbarge
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Xxxxxx X. Harbarge
President and CEO
7-10-02
-------------------------------------
Date
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