Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made and entered into effective
this 9th day of August, 1995, by and between XXXX X. XXXXX ("Employee") and
BRITE VOICE SYSTEMS, INC., a Kansas corporation ("Brite").
WHEREAS, pursuant to an Agreement and Plan of Reorganization and Merger
dated May 24, 1995 (the "Merger Agreement"), Telecom Services Limited (U.S.),
Inc., Telecom Services Limited (West), Inc., TSL Software Services, Inc. and TSL
Management Group, Inc. (the "TSL Companies") have been merged into Brite (the
"Mergers");
WHEREAS, Employee was an executive officer and substantial shareholder of
the TSL Companies;
WHEREAS, Brite desires to engage Employee to perform services for Brite and
Employee desires to perform such services on the terms and conditions set forth
herein;
WHEREAS, Brite and each of the TSL Companies has, through the expenditure
of substantial amounts of effort and money, developed or acquired certain
confidential information and trade secrets which have become of great value in
amassing its customers, establishing its good will, and maintaining its
operations, and each such company has at all times kept its confidential
information and trade secrets confidential, and such information and secrets
have given such company a decided competitive advantage over others engaged in
the same type of business; and
WHEREAS, the parties desire to preserve and protect for Brite the good
will, trade secrets, confidential information, and other intangible assets of
Brite and each of the TSL Companies.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
covenants and obligations herein contained, the parties agree as follows:
1. EMPLOYMENT. Brite hereby employs Employee on a full-time basis to
serve as Executive Vice President of Brite in charge of Brite's TSL operating
division ("TSL") and to perform such acts and duties and furnish such services
to Brite as Brite, consistent with Employee's position as Executive Vice
President, shall, from time to time, reasonably direct and Employee shall report
directly to the Chief Executive Officer of Brite. Employee shall use his best
and diligent efforts on a full-time basis to promote the best interests of
Brite. Employee shall be required to perform his duties hereunder principally
in the New York City/Northern New
Jersey metropolitan area and shall not be required to relocate from such
metropolitan area.
2. COMPENSATION AND BENEFITS.
2.1 SALARY. From the Effective Date of this Agreement through
December 31, 1995, Employee shall be compensated at an annual rate of
$200,000, payable in accordance with Brite's customary payroll policies in
effect at the time of payment ("Base Pay"). Base Pay shall be increased to
an annual rate of $205,000 as of January 1, 1996 and shall be further
increased to an annual rate of $215,250 as of January 1, 1997.
2.2 INCENTIVE COMPENSATION.
(a) Employee shall receive annual bonus compensation pursuant to the
terms of this Section 2.2. For the period from the date of this Agreement
to December 31, 1995, Employee will receive an incentive bonus at an
annualized rate of $85,000 ("Base Bonus") if TSL meets a mutually agreed
upon financial performance target for the subject fiscal year established
during the annual budget preparation of Brite for such subject fiscal year,
which Base Bonus will be reduced on a sliding scale basis if targeted
performance is not met, to 0% of the Base Bonus if TSL fails to meet the
financial performance target by 25% or more, and increased on a sliding
scale basis, to a maximum of 200% of the Base Bonus if TSL exceeds the
financial performance target by 25% or more. The Base Bonus shall be
increased to $87,125 as of January 1, 1996 for the year ending December 31,
1996 and shall be further increased to $91,481.25 as of January 1, 1997 for
the year ending December 31, 1997.
(b) Each month during the period from the date of this Agreement
through the later of (i) December 31, 1996, and (ii) the last day of the
sixteenth month after the date of this Agreement, Employee shall be paid a
non-refundable advance in an amount equal to 1/12th of the Base Bonus for
the year in progress. Such payments shall be made on the second payroll
date of each month commencing with the first month following the execution
of this Agreement. Each such advance under this clause (b) shall be
non-refundable to Brite, regardless of TSL's financial performance during
each such year.
(c) Payments of any additional annual bonus compensation due Employee
under this Section 2.2 beyond amounts paid under Section 2.2(b) shall be
made by April 10 of each year with respect to the bonus compensation due
Employee for the immediately preceding fiscal year of Brite.
2.3 VACATION. Employee shall be entitled to at least three weeks of
paid vacation per calendar year, to be utilized
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pursuant to the reasonable policies established and/or modified by Brite
from time to time.
2.4 OTHER BENEFITS. Employee will be entitled to a car allowance of
$600 per month and to participate in Brite's standard benefits provided to
other employees of similar responsibility with Brite as established and/or
modified by Brite from time to time, including, but not limited to, life
insurance, health insurance, and dental insurance.
2.5 BUSINESS EXPENSES. Pursuant to Brite's customary policies in
force at the time of payment, Employee shall be promptly reimbursed,
against presentation of vouchers or receipts therefor, for all reasonable
expenses properly incurred by him on Brite's behalf in the performance of
his duties hereunder.
3. TERM AND CANCELLATION.
3.1 TERM. The Employment Period shall commence on the date hereof
and shall continue until December 31, 1997, unless earlier terminated
pursuant to Section 3.2 below (the "Employment Period").
3.2 TERMINATION.
(a) The employment of Employee and the obligations of Brite under
this Agreement may be terminated by Brite at any time for "Cause".
Termination for Cause shall mean termination only for one or more of the
following reasons: (i) misappropriation of corporate funds; (ii)
conviction of a felony, any crime involving theft or dishonesty, or
conviction of a misdemeanor involving moral turpitude; (iii) willful
failure by Employee to devote substantially his full business time to
Brite; (iv) willful violation of reasonable directions of the Board of
Directors which are consistent with Employee's duties hereunder; (v) death
of Employee; (vi) Employee's inability substantially to carry out his
obligations hereunder for a period of 120 consecutive days or for a period
of 180 days during any period of 270 consecutive days by reason of a
Disability (as hereinafter defined); or (vii) material breach by Employee
of a provision of either Section 4 or Section 5 hereof. For purposes of
this Agreement, "Disability" shall mean the physical, emotional or mental
illness or incapacity of the Employee, such that in the judgment of a
physician (in the case of a physical illness) or a psychiatrist or
psychologist (in the case of a mental or emotional illness), who shall be
chosen by the Employee and be reasonably satisfactory to Brite, the
Employee shall be unable to perform his duties as Executive Vice President,
as contemplated by this Agreement.
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If Brite elects to terminate the employment of Employee for Cause, it
shall do so by giving at least five business days written notice thereof to
Employee, which notice shall set forth the effective date of termination;
provided, however, that termination of employment shall be deemed to have
occurred automatically on the date of death of Employee. If Brite seeks to
terminate the employment of Employee for Cause, based upon the occurrence
of any of the events described in clause (iii), (iv) or (vii) above, the
written notice of termination shall state the acts or omissions on the part
of Employee which constitute Cause pursuant to clause (iii), (iv) or (vii)
above, in order to give Employee a reasonable opportunity to correct such
acts or omissions within 14 days following the giving of such notice, and
if such acts or omissions are corrected within such period of time, then
the notice of termination shall not become effective. If Brite at any time
terminates this Agreement for Cause, Employee shall not be entitled to any
compensation or incidental benefits from Brite, except for such amount of
his salary, incidental benefits and non-refundable advance due to Employee
under Section 2.2 hereof, that are due and payable to him hereunder on the
date of termination.
(b) Employee shall have the option to terminate this Agreement, upon
30 days written notice to Brite, if Brite materially breaches this
Agreement, including, without limitation, Brite makes a material change in
the duties and responsibilities of Employee inconsistent with Employee's
position as Executive Vice President and his duties and responsibilities
hereunder, including a relocation of Employee from the New York
City/Northern New Jersey metropolitan area, changes in conditions of
employment which are in the aggregate material, or Brite's material failure
to support TSL's business.
If Employee's employment is terminated pursuant to this subparagraph
(b), Employee shall be entitled to receive, as severance, Employee's Base
Pay and Base Bonus as would otherwise have been paid through December 31,
1997 had Employee remained employed by Brite through December 31, 1997 and
TSL achieved its financial performance targets established pursuant to
Section 2.2(a), such severance to be paid in installments in the same
manner as Employee's compensation has theretofore been required to have
been paid, at the regular pay periods of Brite, less legally required
payroll deductions. For purposes of the restrictive covenants set forth in
Section 5 hereof only, Employee's employment with Brite shall be deemed to
be continuing throughout the period during which Brite makes the severance
installment payments contemplated by this subparagraph (b). In addition to
the severance payments provided for herein, Brite shall pay to Employee the
non-refundable advance due to Employee under Section 2.2 hereof,
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if any, calculated through the end of the last full month of employment
completed as of the date of termination and the incidental benefits that
are due and payable to him hereunder on the date of termination of his
employment.
(c) All obligations of Employee under Sections 4 and 5 hereof shall
continue, in accordance with their terms, in spite of any termination of
this Agreement.
4. CONFIDENTIAL INFORMATION.
4.1 ACKNOWLEDGEMENT. Employee acknowledges that:
(a) Brite's products and services are highly specialized items;
(b) the identity and particular needs of Brite's customers are not
generally known in the industries of which Brite's businesses are a part;
(c) documents and information regarding Brite's methods of
production, sales, pricing, costs, and the identity and specialized
requirements of Brite's customers, are highly confidential and constitute
trade secrets; and
(d) Brite has a legitimate need to protect the confidentiality of
Confidential Information (as hereinafter defined).
4.2 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, the term "Confidential Information" shall be defined as follows:
Information of Brite related to the conduct by Brite of its
business not otherwise publicly disclosed or publicly available
(whether or not discovered or developed by Employee) and known by
Employee as a consequence of Employee's employment with Brite.
Without limiting the generality of the foregoing, such
proprietary information shall include information not generally
known in the industry or related industries, which concerns (a)
customer lists of Brite; (b) computer programs and facilities of
Brite; (c) the identity of specialized consultants and
contractors and Confidential Information developed by them for
Brite; (d) operating and other cost data, including information
regarding salaries and benefits of employees of Brite; (e) cost
and pricing data of Brite; (f) acquisition, expansion,
marketing, financial and other business plans of Brite; (g) Brite
manuals, files, records, memoranda, plans, drawings and designs,
specifications and computer programs and
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records, whether or not legended or otherwise identified as
Confidential Information; and (h) all information which is a "trade
secret" of Brite as defined in the Uniform Trade Secrets Act as
adopted in Kansas at K.S.A. 60-3320.
Notwithstanding the foregoing, Confidential Information shall not
include information which Employee can demonstrate, or Brite agrees, (a) is
previously known on a non-confidential basis by the Employee or that later
becomes published or otherwise generally known in the industry without
breach of this Agreement by Employee; (b) is in the public domain through
no fault of the Employee; (c) is later lawfully acquired by Employee from
sources other than Brite; or (d) is, at the time of its disclosure to
Employee, known to Employee independently of any previously disclosed
Confidential Information.
4.3 NONDISCLOSURE OF CONFIDENTIAL INFORMATION. During Employee's
employment with Brite, Employee will have access to and become familiar
with Confidential Information of Brite. Employee acknowledges that such
Confidential Information is owned and shall continue to be owned solely by
Brite. During the term of Employee's employment with Brite and after
termination of such employment, Employee shall not use or divulge
Confidential Information to any person or entity other than Brite, or
persons expressly designated by Brite or as otherwise would be necessary to
disclose in the ordinary course of his employment with, and in furtherance
of, the business of Brite. Notwithstanding the foregoing, Employee may
disclose Confidential Information if and to the extent he is compelled to
do so by judicial or administrative process, or by other requirements of
law.
4.4 RETURN OF DOCUMENTS. Upon termination of Employee's employment
with Brite, all procedural manuals, guides, specifications, plans,
drawings, designs, records, lists, notebooks, diskettes, customer lists,
pricing documentation and similar documentation which is or contains
Confidential Information, including all copies thereof, in the possession
or control of Employee, whether prepared by Employee or others, shall be
forthwith, upon request by Brite, delivered by Employee to Brite.
5. RESTRICTIVE COVENANTS.
5.1 NONCOMPETITION. Employee covenants and agrees that:
(a) During Employee's employment with Brite, whether during the
Employment Period or thereafter, and following the date of termination of
Employee's employment with Brite if such termination was other than
pursuant to Section 3.2(b)
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hereof, for a period of three years and, if Employee has been an employee
of Brite for less than a full year at the time of termination of
employment, a number of days equal to the difference between 365 and the
number of days elapsed from the date of this Agreement to the termination
date, Employee shall not in any manner compete with Brite with respect to
any line of business conducted by Brite during Employee's employment with
Brite ("Prohibited Business").
(b) If Employee's employment with Brite is terminated pursuant to
Section 3.2(b) above, Employee shall not in any manner compete with Brite
with respect to a Prohibited Business throughout the period during which
Brite pays Employee the severance payments provided for in Section 3.2(b)
hereof. In addition, Brite shall have the option of extending such period
of noncompetition to the fourth anniversary of the date of this Agreement,
provided, however, such agreement of Employee so not to compete is
conditioned on Brite's payment in monthly installments, and shall be
effective only for so long as Brite makes such payments, on an annualized
basis of an amount equal to the product of (I) such employee's Base Pay
plus his Base Bonus (both as in effect on December 31, 1997, as if Employee
had remained employed by Brite through such date and TSL achieved its
financial performance targets established pursuant to Section 2.2(a),
multiplied by (II) a fraction (i) the numerator of which is the difference
between $20,000,000 and the aggregate net proceeds received by Employee,
Xxxxx Xxxxx, and Xxxxxxx Xxxxxxx from sales of Brite's stock (after
deducting all taxes, fees and expenses incurred in connection with such
sales) from the closing of the Mergers to December 31, 1997, and (ii) the
denominator of which is $20,000,000.
(c) The foregoing covenants shall prevent Employee, directly or
indirectly, on Employee's own behalf or as an employee, officer, agent,
director, partner, consultant, lender, or advisor, during the period
covered by this Section 5, from forming, owning, joining, controlling,
financing, or otherwise participating in the ownership or management of, or
being otherwise affiliated with, any person or entity engaged in a
Prohibited Business during the period covered by this Section 5. During
the period covered by this Section 5, Employee shall not permit any person
or entity (other than Brite) of which Employee is a shareholder or partner
or in which Employee has an ownership interest, to engage in a Prohibited
Business. Notwithstanding any other provision herein, the parties agree
that Employee may, during the period covered by this Section 5, invest
Employee's personal, private assets as a passive investor in not more than
one percent of the total outstanding shares of any publicly traded company
engaged in a Prohibited Business, so long as Employee does not
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participate in the management or operations of the affairs of such company.
5.2 SOLICITATION OF EMPLOYEES. During the period in which the
noncompetition provision set forth in Section 5.1(a) or 5.1(b) shall be in
effect, Employee shall not, without the prior written approval of the
Chairman of the Board of Directors of Brite, directly or indirectly
solicit, any person who presently is, or at any time during the Employment
Period shall be an employee of Brite (other than secretarial and other
personnel whose duties are ministerial in nature), to become employed by
any other person, firm, or corporation in any business which is a
Prohibited Business.
5.3 SOLICITATION OF CUSTOMERS. During a four-year period following
termination of Employee's employment with Brite, regardless of the basis
for such termination, Employee shall not directly or indirectly, on behalf
of himself or any other person or entity, solicit any person, corporation,
firm, or other entity who is or was a customer of Brite during the period
of five years prior to the termination of Employee's employment for
purposes of obtaining business which would constitute a Prohibited
Business.
5.4 REASONABLENESS OF RESTRICTIONS, REFORMATION, AND SEVERABILITY.
(a) Employee has carefully read and considered the provisions of this
Section 5 and, having done so, agrees that the restrictions set forth
herein, including, but not limited to, the time period of the restriction
and the scope of the restriction, are fair and reasonable and are
reasonably required for the protection of the interests of Brite.
(b) In the event that, notwithstanding the foregoing, any part of the
covenants set forth in this Section 5 shall be held to be invalid or
unenforceable, the remaining parts thereof shall nevertheless continue to
be valid and enforceable as though the invalid or unenforceable parts had
not been included therein. In the event that any provision of this Section
5 relating to the time period and/or scope of restrictions shall be
declared by a court of competent jurisdiction to exceed the maximum time
period, scope or geographical area as such court deems reasonable and
enforceable, said time period, scope and/or geographical areas of
restrictions shall be deemed to become and thereafter be the maximum time
period, scope and/or geographical area which such court deems reasonable
and enforceable.
(c) Any provision of this Agreement otherwise prohibited by or
unenforceable under any applicable law or public policy in any jurisdiction
which cannot be reformed in accordance
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with the provisions herein, shall, as to such jurisdiction, be ineffective
without affecting any other provision of this Agreement, or shall be deemed
to be severed or otherwise modified to conform with such law or public
policy; and the remaining provisions of this Agreement shall remain in
force, provided that the purpose of this Agreement can be effected. To the
full extent, however, that the provisions of such applicable law or public
policy may be waived, this Agreement shall be deemed to be a waiver
thereof. The parties hereto understand and agree that all the covenants
set forth herein are and shall be separately enforceable, each to the full
extent permitted by applicable law.
6. REMEDIES. It is agreed that Brite would be irreparably damaged by
reason of any violation of the provisions of this Agreement, and that any remedy
at law for a breach of the provisions of this Agreement would be inadequate.
Therefore, Brite shall be entitled to seek injunctive or other equitable relief
in a court of competent jurisdiction against Employee, Employee's agents,
employees, affiliates, partners, or other associates, for any breach or
threatened breach of this Agreement, without the necessity of proving actual
monetary loss. It is expressly understood that the remedy described in this
Section 6 shall not be the exclusive remedy of Brite for any breach of this
Agreement, and Brite shall be entitled to seek such other relief or remedy at
law or in equity to which it may be entitled as a consequence of any breach of
this Agreement.
7. CONSENT AND WAIVER BY THIRD PARTIES. Employee hereby represents and
warrants that he has obtained all necessary waivers and/or consents from third
parties so as to enable him to accept employment with Brite on the terms and
conditions set forth herein and to execute and perform this Agreement without
being in conflict with any other agreement, obligation or understanding with any
such third party.
8. BRITE SUBSIDIARIES. For purposes of this Agreement, "Brite" means
Brite Voice Systems, Inc. and its subsidiaries.
9. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties in respect of its subject matter and supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
This Agreement supersedes all employment agreements of any type between Employee
and the TSL Companies.
10. AMENDMENT; WAIVER. This Agreement may not be amended, supplemented,
canceled or discharged except by written instrument executed by the party
affected thereby. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any
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provision of this Agreement shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision.
11. BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind and inure to the benefit of any successor of Brite by
reorganization, merger or consolidation, or any assignee of all or substantially
all of Brite's business and properties. Employee's rights or obligations under
this Agreement may not be assigned by Employee, except that Employee's right to
any payments to be received hereunder shall pass to Employee's executor,
administrator or personal representative.
12. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
13. GOVERNING LAW; INTERPRETATION. This Agreement shall be construed in
accordance with, and governed for all purposes by, the laws and public policy of
the State of Kansas applicable to contracts executed and to be wholly performed
within such State.
14. ATTORNEY'S FEES. Should Brite or Employee bring an action in any
Court of competent jurisdiction to enforce any of the provisions hereof, and
prevail on any aspect of such action, then such prevailing party shall be
awarded the reasonable attorney's fees incurred by reason of such action.
15. FURTHER ASSURANCES. Each of the parties agrees to execute,
acknowledge, deliver and perform, and/or cause to be executed, acknowledged,
delivered and performed, at any time and/or from time to time, as the case may
be, all such further acts, documents, transfers, conveyances, and/or assurances
as may be necessary and/or proper to carry out the provisions and/or intent of
this Agreement.
IN WITNESS WHEREOF, this Employment Agreement has been entered into as of
the date first set forth above.
BRITE VOICE SYSTEMS, INC.
By XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx,
Executive Vice President
Xxxx X. Xxxxx
----------------------------------------
XXXX X. XXXXX
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