1
EXHIBIT 10.13
XXXXXXXX.XXX SOFTWARE, INC.
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Amended and Restated
Agreement") is effective as of date set forth below ("Effective Date"), by and
between XXXXXXXX.XXX SOFTWARE, INC., a Georgia corporation ("Company"), and
Xxxxxxx Xxxxx ("Employee")(collectively, the "Parties").
WHEREAS, the Company has agreed to continue to employ Employee in
exchange for Employee's compliance with the terms of this Amended and Restated
Agreement;
WHEREAS, the Company and Employee desire to express the terms and
conditions of Employee's continued employment with the Company in this Amended
and Restated Agreement; and
WHEREAS, the Company and Employee desire to modify that certain
Employment Agreement between Employee and the Company dated June 16, 1999 (the
"Prior Agreement"), which modification shall be contemporaneous with the
Effective Date of this Amended and Restated Agreement.
For and in consideration of Employee's employment and continued
employment and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. DEFINITIONS. Defined terms used herein are defined in the recitals and
at the bottom of this Amended and Restated Agreement.
2. DUTIES. If Employee is employed in a full-time position with the
Company, Employee agrees that he will devote his full working time to the
services of Company in such capacities as Company shall direct, and he will
perform his duties faithfully, diligently and to the best of his ability.
3. OWNERSHIP. (a) All Work Product will be considered work made for hire
by Employee and owned by Company. To the extent that any Work Product may not by
operation of law be considered work made for hire or if ownership of all rights
therein will not vest exclusively in Company, Employee assigns to Company, now
or upon its creation without further consideration, the ownership of all such
Work Product. Company has the right to obtain and hold in its own name
copyrights, patents, registrations, and any other protection available in the
Work Product. Employee agrees to perform any acts as may be reasonably requested
by Company to transfer, perfect, and defend Company's ownership of the Work
Product.
(b) To the extent any materials other than Work Product are
contained in the materials Employee delivers to Company or its Customers,
Employee grants to Company an irrevocable, nonexclusive, worldwide, royalty-free
license to use and distribute (internally or externally) or authorize others to
use and distribute copies of, and prepare derivative works based upon, such
materials and derivative works thereof. Employee agrees that during his
employment, any money or other remuneration received by Employee for products or
services rendered to a Customer belong to Company if that product or service is
also offered by the Company.
4. TRADE SECRETS AND CONFIDENTIAL INFORMATION. (a) Company may disclose to
Employee certain Proprietary Information. Employee agrees that the Proprietary
Information is the exclusive property of Company (or a third party providing
such information to Company) and Company (or such third party) owns all
worldwide copyrights, trade secret rights, confidential information rights, and
all other property rights therein.
(b) Company's disclosure of the Proprietary Information to
Employee does not confer upon Employee any license, interest or rights in or to
the Proprietary Information. Except in the performance of services for Company,
Employee will hold in confidence and will not, without Company's prior written
consent, use, reproduce, distribute, transmit, reverse engineer, decompile,
disassemble, or transfer, directly or indirectly, in any form, or for any
purpose, any Proprietary Information communicated or made available by Company
to or received by Employee. Employee agrees to notify Company immediately if he
discovers any unauthorized use or disclosure of the Proprietary Information.
(c) Employee's obligations under this Agreement with regard to (i)
Trade Secrets shall remain in effect for as long as such information remains a
trade secret under applicable law, and (ii) Confidential Information shall
remain in effect during Employee's employment with Company and for three years
thereafter. These obligations will not apply to the extent that Employee
establishes that the information communicated (1) was already known to Employee,
without an obligation to keep it confidential at the time of its receipt from
Company; (2) was received by Employee in good faith from a third party lawfully
in possession thereof and having no obligation to keep such information
confidential; or (3) was publicly known at the time of its receipt by Employee
or has become publicly known other than by a breach of this Agreement or other
action by Employee.
5. CUSTOMER NON-SOLICITATION. Employee's position is a position of trust
and responsibility with access to information concerning Customers of the
Company. The relationship between the Company and each of its Customers are
valuable assets of the Company and may not be converted to Employee's own use.
During Employee's employment and the Two Year Limitation Period, Employee will
not solicit any Customer of the Company for the purpose of providing any goods
or services competitive with the Company Business. The restrictions set forth in
this Section 5 apply only to the Customers with whom Employee had Contact.
6. EMPLOYEE NON-SOLICITATION. Employee's position is a position of trust
and responsibility with access to information concerning employees of the
Company. The relationship between the Company and each of its employees
2
are valuable assets of the Company and may not be converted to Employee's own
use. During Employee's employment and the Two Year Limitation Period, Employee
will not, without the Company's express prior written consent, directly or
indirectly, solicit, recruit or induce any Company Employee to (a) terminate his
employment relationship with the Company or (b) work for any other person or
entity engaged in the Company Business.
7. NON-COMPETITION. During the Two Year Limitation Period, Employee agrees
that, without the prior written consent of Company, Employee shall not perform
any of the duties he performed on behalf of the Company during the Two Year
Restrictive Period for any person or entity competing with the Company in the
Company Business in the Restricted Territory. The Parties agree and acknowledge
that: (i) the length of the Two Year Limitation Period and the size of the
Restricted Territory are fair and reasonable in that they are reasonably
required for the protection of Company and that the Restricted Territory is the
area in which Employee shall perform (or currently performs) services for
Company; and (ii) by having access to information concerning employees and
actual or prospective customers of Company, Employee shall obtain a competitive
advantage as to such parties.
8. WARRANTIES OF EMPLOYEE. Employee warrants that he is not presently
under any agreement that will prevent him from the performance of duties for
Company, and is not in breach of any agreement with respect to any trade secrets
or confidential information owned by any other party.
9. INJUNCTIONS. Employee agrees that certain breaches by Employee of this
Amended and Restated Agreement will result in irreparable harm to Company and
that the remedies at law for such breaches may not adequately compensate Company
for its damages. Employee agrees that in the event of any such breaches, Company
shall be entitled to an injunction in addition to any other remedies at law.
10. SEVERABILITY. Any holding that a provision of this Amended and Restated
Agreement is invalid or unenforceable by a court of competent jurisdiction shall
not affect the enforceability of any other provisions. If for any reason the
restrictions in Sections 4 through 7 are held to be invalid or unenforceable,
then such restrictions shall be interpreted or modified to include as much of
the duration and scope as will render such restrictions valid and enforceable.
11. TERM. This Amended and Restated Agreement is effective when signed by
both Parties and will remain in effect for an indefinite period of time. The
Parties agree that Employee's employment may be terminated at any time, for any
reason or for no reason, for cause or not for cause, with or without notice, by
Company or Employee. Upon any such termination, Employee shall return
immediately to Company all documents and other property of Company, together
with all copies thereof, including all Work Product and Proprietary Information,
within Employee's possession or control. The obligations of the Parties pursuant
to Section 12 hereof shall inure to the benefit of and be an obligation of any
successor to the Company.
12. CHANGE IN TITLE OR POSITION. (a) If, Without Cause, the Company (i)
changes Employee's title from Chief Executive Officer, (ii) removes Employee
from the position of Chief Executive Officer as evidenced by a resolution of the
Board of Directors of the Company (the "Board") or (iii) reduces Employee's base
salary and bonus without Employee's consent (each a "Material Change"), then the
Company agrees to either: (x) offer Employee another full-time, executive
position with the Company, (y) continue to employ Employee as Senior Advisor to
the Chairman of the Board for a period of twelve (12) months or (z) if the
Company and Employee agree that employment will be immediately terminated, pay
Employee Separation Pay (defined below) for a period of twelve (12) months. The
Company agrees that a Material Change (as set forth in items (i), (ii) or (iii)
above) shall not be interpreted as a termination of Employee's employment for
purposes of the Stock Option Grants to Employee (the "Option Grants") dated
December 30, 1994 (issued under the Complementary Solutions, Inc. Stock
Incentive Plan) and August 26, 1999 (issued under the Xxxxxxxx.xxx Software,
Inc. Stock Incentive Plan, as amended (together with the Complementary
Solutions, Inc. Stock Incentive Plan, the "Plans"). The Company further agrees
that for purposes of the Option Grants, after a Material Change Employee may
terminate his Employment with the Company and such termination shall be treated
as termination "Without Cause" as such term is defined in the Option Grants or
the Plans.
(b) If, after a Material Change, the Company employs Employee as Senior
Advisor in accordance with Section 12(a)(y) above, then immediately following
the date of the Material Change (the "Change Date"), Employee shall be paid a
monthly salary as follows: (i) in the event the Change Date is on or after
January 1, 2002, Employee's monthly salary as Senior advisor shall be equal to
the annual salary last paid or being paid to Employee as Chief Executive Officer
prior to the Change Date plus total bonuses earned by Employee as Chief
Executive Officer under the executive bonus plan applicable to Employee during
the most recent twelve (12) month period prior to the Change Date that Employee
served as Chief Executive Officer, divided by twelve (12); or (ii) in the event
the Change date is before January 1, 2002, Employee's monthly salary as Senior
advisor shall be equal to the annual salary last paid to Employee as Chief
Executive Officer prior to the Change Date divided by twelve (12), plus total
bonuses earned by Employee as Chief Executive Officer under the executive bonus
plan applicable to Employee during fiscal year 2001 divided by the total number
of months (including portions of months) that Employee served as Chief Executive
Officer in 2001. In either case, such monthly salary shall be offset by any
outstanding advances on salary or bonuses paid to Employee prior to the Change
Date. In addition, Employee shall continue to receive the health insurance and
other usual and customary benefits commensurate with the benefits that Employee
was receiving immediately prior to the Change Date. Payments pursuant to this
Section 12(b) shall commence immediately after Employee begins employment as
Senior Advisor. Employee may resign the Senior Advisor position at any time
after serving in such capacity for at least three (3) months. If Employee
resigns the Senior Advisor position prior to completing twelve (12) months as
Senior Advisor, then the Company shall pay Employee the equivalent
-2-
3
to the applicable monthly salary described in this paragraph (the "Separation
Pay") each month for the balance of the 12-month period.
(c) If, after a Material Change, the Company offers Employee another
full-time, executive position with the Company in accordance with item 12(a)(x)
above and Employee does not accept such offer, the Company agrees to employ
Employee as Senior Advisor to the Chairman of the Board for a period of twelve
(12) months. In such event, all of the provisions of paragraph 12(b) above shall
apply.
(d) If, after a Material Change, the Company offers, and Employee accepts,
another full-time, executive position with the Company in accordance with item
12(a)(x) above and Employee subsequently leaves the Company's employ for any
reason whatsoever other than For Cause, then the Company agrees to either (i)
employ Employee as Senior Advisor to the Chairman of the Board for a period of
twelve (12) months or (ii) if the Company and Employee agree that employment
will be immediately terminated, pay Employee Separation Pay for a period of
twelve (12) months. In the event the Company employs Employee as Senior Advisor
pursuant to this paragraph 12(d), all of the provisions of paragraph 12(b) above
shall apply.
13. CHANGE IN CONTROL. If, after a Change In Control, Employee's employment
is terminated (i) by the Company Without Cause, or (ii) by Employee for Good
Reason, then the Company shall pay Employee Separation Pay each month for twelve
(12) months following the date of termination, unless such date of termination
occurs while Employee is serving as Senior Advisor and Employee has not yet
completed twelve (12) months as Senior Advisor then in such case the Company
shall pay Employee Separation Pay each month for the balance of the 12-month
period.
14. SEPARATION PAY. The Company's obligation to pay Separation Pay under
any provision of this Amended and Restated Agreement shall be conditioned upon
Employee's (i) execution of a Separation and Release Agreement in a form
prepared by the Company whereby Employee releases the Company from any and all
liability and claims of any kind, and (ii) compliance with the restrictive
covenants (Sections 4, 5, 6, and 7) and all post-termination obligations
contained in this Agreement. The Company's obligation to pay Separation Pay as
set forth in Sections 12 and 13 shall terminate immediately upon any breach by
Employee of any post-termination obligations to which Employee is subject.
15. MISCELLANEOUS. This Amended and Restated Agreement may not be modified
except by a writing signed by both Parties, except that it may be supplemented
by rules and regulations described in Company employee handbook and other
documents provided to Employee from time to time, and Employee agrees to follow
such rules and regulations. If this Amended and Restated Agreement conflicts
with such rules and regulations, this Amended and Restated Agreement will
control. Due to the personal nature of this Amended and Restated Agreement,
Employee may not assign his rights or obligations under this Amended and
Restated Agreement without the prior written consent of Company. This Amended
and Restated Agreement will be governed by the laws of the State of Georgia
without regard to its rules governing conflicts of law. This Amended and
Restated Agreement represents the entire understanding of the parties concerning
its subject matter and supersedes and terminates all prior communications,
agreements and understandings relating to the same, including, but not limited
to, the Prior Agreement. The Parties agree that this Amended and Restated
Agreement modifies the Prior Agreement by mutual written consent. The Parties
acknowledge and agree that the modification of the Prior Agreement by virtue of
the Parties entering into this Amended and Restated Agreement did not and will
not result in the vesting, acceleration, or triggering of any employment benefit
in Employee's favor, including, but not limited to, any vesting of stock
options, or any other right which Employee may have as a shareholder, officer,
director, employee, or under any agreement or understanding between the Parties,
including, but not limited to, the Prior Agreement or the Option Grants.
Employee releases and discharges the Company from any claim or liability,
whether known or unknown, arising out of or relating to the Prior Agreement. All
communications concerning or required by this Amended and Restated Agreement
shall be in writing and shall be deemed given when delivered to the address
listed below (as may be amended by notice), by hand, courier or express mail, or
by registered or certified United States mail, return receipt requested, postage
prepaid.
The Parties have executed this Amended and Restated Agreement effective as of
the 2nd day of March, 2001 (the "Effective Date").
XXXXXXXX.XXX SOFTWARE, INC. XXXXXXX X. XXXXX
By: /s/ /s/ Xxxxxxx X. Xxxxx
--------------------------------- -------------------------------------
Date: March 2, 2001 Date: March 2, 2001
------------------------------- --------------------------------
[DEFINITIONS APPEAR ON FOLLOWING PAGE.]
-3-
4
DEFINITIONS
"Change of Control" means (a) any transaction or series of transactions pursuant
to which the Company sells, transfers, leases, exchanges or disposes of
substantially all (i.e., at least eighty-five percent (85%)) of its assets for
cash or property, or for a combination of cash and property, or for other
consideration; or (b) any transaction pursuant to which persons who are not
current shareholders of the Company acquire by merger, consolidation,
reorganization, division or other business combination or transaction, or by a
purchase of an interest in the Company, an interest in the Company so that after
such transaction, the shareholders of the Company immediately prior to such
transaction no longer have a controlling (i.e., 50% or more) voting interest in
the Company.
"Company" means Xxxxxxxx.xxx Software, Inc., its parents, subsidiaries,
affiliates, and all related companies, as well as their respective officers,
directors, shareholders, employees, agents, and any other representatives.
"Company Business" means the business of developing, marketing, and selling
Internet access management and reporting software and solutions and Call
Accounting software and solutions.
"Company Employee" means any person who (i) is employed by the Company at the
time Employee's employment with the Company ends, (ii) was employed by the
Company during the last year of Employee's employment with the Company (or
during Employee's employment if employed less than a year), or (iii) is employed
by the Company at any time during the Two Year Limitation Period.
"Confidential Information" means information of the Company, to the extent not
considered a Trade Secret under applicable law, that (i) relates to the business
of the Company, (ii) possesses an element of value to the Company, (iii) is not
generally known to the Company's competitors, and (iv) would damage the Company
if disclosed. Confidential Information includes, but is not limited to, (i)
future business plans, (ii) the composition, description, schematic or design of
products, future products or equipment of the Company, (iii) communication
systems, audio systems, system designs and related documentation, (iv)
advertising or marketing plans, (v) information regarding independent
contractors, employees, clients and customers of the Company, and (vi)
information concerning the Company's financial structure and methods and
procedures of operation.
"Contact" means any interaction between Employee and a Customer which (i) takes
place in an effort to establish, maintain, and/or further a business
relationship on behalf of the Company and (ii) occurs during the last three
years of Employee's employment with the Company (or during Employee's employment
if employed less than three years).
"Customer" means any person or entity to whom the Company has sold its products
or services, or solicited to sell its products or services.
"For Cause" shall mean a termination of Employee's employment with the Company
for any of the following reasons: (i) Employee's material breach of this Amended
and Restated Agreement, (ii) any act or omission by Employee which is done with
the purpose of being injurious to the Company or the business reputation of the
Company, (iii) Employee's dishonesty, fraud, malfeasance, negligence or
misconduct, (iv) Employee's failure to follow the reasonable direction
(consistent with his duties) of the Board or any individual to whom Employee
reports, or to follow the policies, procedures, and rules of the Company, or (v)
Employee's conviction of, or Employee's entry of a plea of guilty or no contest
to, a felony or crime involving moral turpitude.
"Good Reason" means (a) the assignment of Employee, without Employee's consent,
to a principal place of work which increases Employee's commuting distance from
Employee's residence to Employee's principal place of work by fifty (50) miles
or more, (b) a substantial adverse alteration of the Employee's position,
reporting relationship or duties without Employee's consent, (c) a reduction in
Employee's base salary and bonus without Employee's consent, or (d) the material
breach by Company of this Agreement which is not cured within thirty (30) days
of receipt of written notice specifying the breach.
"Two Year Limitation Period" means the twenty-four month period beginning
immediately upon the termination of Employee's employment with Company for any
reason.
"Proprietary Information" means all Trade Secrets and Confidential Information
of Company.
"Restricted Territory" shall mean the United States.
"Trade Secrets" means information of Company constituting a trade secret within
the meaning of Section 10-1-761(4) of the Georgia Trade Secrets Act of 1990,
including all amendments hereafter adopted.
"Without Cause" shall mean a termination of Employee's employment by the Company
for any reason other than (i) Employee's death, (ii) Employee's disability which
renders Employee unable to perform the essential functions of his job with or
without reasonable accommodation or (iii) For Cause.
"Work Product" shall mean the data, materials, documentation, computer programs,
inventions (whether or not patentable), and all works of authorship, including
all worldwide rights therein under patent, copyright, trade secret, confidential
information, or other property right, created or developed in whole or in part
by Employee while performing services in furtherance of or related to the
Company Business.
-4-
