EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of July 26,
2000, (the "Effective Date"), by and between Rainwire Partners, Inc., a Delaware
corporation (the "Company"), and Xxxxxx X. Xxxxxxx, III ("Employee"), an
individual resident of the State of South Carolina.
W I T N E S S E T H:
WHEREAS, the Company wishes to employ Employee as the Vice President,
Business Operations and Mergers and Acquisitions ("Vice President") of the
Company; and
WHEREAS, the Company and Employee desire to enter into certain agreements
providing for Employee's continued employment with the Company, and the Company,
and Employee desire that Employee serve in an executive capacity with the
Company on the terms hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein, and for other good and valuable consideration, the
receipt, adequacy, and sufficiency of which are hereby acknowledged and
accepted, the parties hereby agrees as follows:
1. Definitions. For purposes of this Agreement, the following capitalized
terms shall have the definition set forth below:
(a) "Affiliate" shall mean any corporation, limited partnership, limited
liability company or other entity engaged in the same business as the Company or
a related business, which is controlled by or under common control with the
Company.
(b) "Business of the Company" shall mean the provision of intelligent
end-to-end web integration and communications solutions to large and
middle-market organizations.
(c) "Cause" shall mean:
(i) material act of fraud, dishonesty, misappropriation or similar act of
bad faith on the part of Employee;
(ii) a willful failure by Employee to comply with laws or regulations
relating to the Business of the Company or relating to his employment with the
Company;
(iii) material or continuing failure by Employee to perform satisfactorily
his duties for the Company (other than as a result of illness, vacation or
Disability), but only after the Company shall have given Employee written notice
specifying with particularity such failure, and Employee shall not have
corrected such lack of performance within 30 days after such notice;
(iv) a material breach of Section 7 of this Agreement;
(v) as a result of Employee's negligence or willful misconduct, Employee
shall commit any act that causes, or shall knowingly fail to take reasonable and
appropriate action to prevent, any material injury to the financial condition or
business reputation of the Company; or
(vi) indictment for a felony.
(d) "Change of Control" shall mean an acquisition of the Company by means
of a merger, consolidation, sale of stock or sale of substantially all of the
assets of the Company, where incident thereto, one or more of the following
events occur:
(i) the composition of the Board of Directors for the Company changes so
that a majority of the Board of Directors is not comprised of individuals who
were members of the Board of Directors immediately prior to such merger,
consolidation or the sale of stock or assets;
(ii) there is a reorganization (other than a mere change in identity, form
or place of organization of the Company), merger or consolidation of the Company
or any other transaction, with one or more business entities or persons as a
result of which the shareholders of the Company holding fifty percent (50%) or
more of the issued and outstanding shares of common stock of the Company acquire
a right to receive, in exchange for or upon surrender of their stock in the
Company, cash, property or securities not issued by the Company; or
(iii) there is sale of (or agreement to sell or grant of a right or option
to purchase) all or substantially all of the assets of the Company to any
business entity or person.
(e) "Confidential Information" shall mean any information which does not
rise to the level of a Trade Secret, but is valuable to the Company and provided
in confidence to Employee.
(f) "Current Market Price" shall mean the average "Closing Price" of the
Company's Common Stock for five (5) days immediately preceding any date of
reference. For the purpose of determining Current Market Price, the "Closing
Price" of the Common Stock on any business day shall be: (i) if the Common Stock
is listed or admitted for trading on any United States national securities
exchange, the last reported sale price of Common Stock on such exchange; (ii) if
the Common Stock is listed or admitted for trading on any tier of The Nasdaq
Stock Market, the last reported sale price of Common Stock on such tier; (iii)
if the Common Stock is traded in the over-the-counter market, the average of the
closing bid and asked prices for the Common Stock as quoted on the OTC Bulletin
Board; or (iv) if there is no active public market, the value shall be the fair
market value thereof, as determined in good faith by the Board of Directors of
the Corporation.
(g) "Disability" shall mean an incapacity due to physical or mental illness
or injury that is permanent in nature and prevents Employee from performing the
substantial and material duties of his employment hereunder. Any such disability
shall be deemed to be permanent in nature if such disability is expected to last
for a period of six (6) consecutive months.
(h) "Proprietary Information" shall mean collectively Trade Secrets and
Confidential Information.
(i) "Restricted Territory" shall mean a twenty-five (25) mile radius
surrounding the location of the office in which the Employee performs his
principal duties of the Company. Notwithstanding the foregoing, the Restricted
Territory shall mean a one hundred (100) mile radius surrounding the location of
the office in which the Employee performs his principal duties of the Company if
Employee is terminated with Cause or Employee terminates this Agreement during
the first eighteen (18) months of this Agreement.
(j) "Trade Secret" shall mean any information which derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means, by other persons who can obtain economic value
from its disclosure or use, and is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.
2. Employment. The Company hereby employs the Employee as the Vice
President of the Company on the terms stated herein, and Employee accepts such
employment with the Company on the terms stated in this Agreement. The Company
shall employ Employee for a term of three (3) years commencing on the Effective
Date, unless sooner terminated pursuant to Section 6 hereof ("Initial Term").
This Agreement shall be automatically renewed for successive one (1) year
renewal terms unless either the Company or Employee delivers to the other a
written notice of its intent not to renew the Agreement at least sixty (60) days
prior to the scheduled expiration date of this Agreement.
3. Duties. In his capacity as Vice President, Employee shall perform the
duties appropriate to such office or position, and such other duties and
responsibilities as are assigned to him from time to time by the Chief Executive
Officer of the Company. The Employee agrees that, during the term of his
employment, he will devote his full productive time to the Company and will
faithfully and diligently carry out his duties as Vice President of the Company.
Employee will report to the Chief Executive Officer of the Company and shall
comply with all of his reasonable and lawful directives.
Additionally, Employee's duties and responsibilities include, but are not
limited to, the following:
(a) Oversee business operations:
(i) Creation of Departmental expense budgets and overall fiscal
accountability;
(ii) Creation of meaningful goals, forecasts and pro forma financials;
(iii) Monitor sales, profitability and expense;
(iv) Cultivate and manage banking and institutional investor relationships;
(v) Develop financial reporting format and disseminate statements in timely
manner;
(vi) Create, implement, and manage credit policy; and
(vii) Manage cash flows.
(b) Coordinate "Public Company" requirements:
(i) Oversee SEC reporting and filing requirements;
(ii) Establish and maintain proactive shareholder relations;
(iii) Coordinate the creation and dissemination of press releases; and
(iv) Assist in the interaction with Market Makers.
(c) Develop and manage Merger & Acquisition strategy:
(i) Assist in creating candidate profile and prospecting;
(ii) Coordinate due diligence;
(iii) Participate in negotiations; and
(iv) Manage legal advisors in document preparation.
Employee agrees that during the term of his employment, he will not work
for anyone else or engage in any activity in competition with or detrimental to
the Company, provided, however, that Employee shall not be prohibited from
engaging in educational, welfare, social, religious, civic, trade and
industry-related organizations.
4. Compensation.
(a) Base Salary. The Company will pay Employee a base salary at the rate of
not less than $100,000 per annum or such higher amount as determined
semi-annually by the Compensation Committee of the Board of Directors of the
Company ("Base Salary").
Nothwithstanding the foregoing, in the event that the Board of Directors of
the Company determines in its reasonable discretion that the cash flow generated
by the business operations of the Company after payment of all salaries of
employees that are not members of the executive management team and payment of
the Company's operating expenses will not be sufficient to pay Employee's Base
Salary, Employee will receive stock options in lieu of salary. All members of
the executive management team will be treated equally unless, with approval of
the Board of Directors, a member voluntarily wishes to receive more options than
cash.
The value of the foregoing stock options will be the difference between the
Current Market Price of the Company's common stock and the exercise price of the
stock options.
(b) Bonus. As additional compensation for the performance of the services
rendered by Employee, Employee will be entitled to participate in any bonus plan
adopted by the Company for members of the executive management team.
(c) Stock Options. Employee shall be eligible to receive options to
purchase shares of common stock of the Company as determined by the Compensation
Committee of the Board of Directors in accordance with the terms of the
Company's Stock Option Plan, a copy of which is attached hereto as Exhibit A and
made a part hereof.
5. Additional Benefits.
(a) Vacation. Employee shall be entitled to vacation time as outlined in
the Company's "Team Playbook" (the Employee handbook developed by the Company,
as amended from time to time).
(b) Insurance. Employee shall receive the employee benefits such as health
insurance, life insurance and disability insurance as provided, from time to
time, to senior executives of the Company. In addition, Company hereby agrees to
purchase a term life insurance policy for Employee payable to the beneficiary
designated by Employee in the amount of $500,000.
(c) Business Expenses. Upon submission of itemized expense statements in
the manner specified by the Company, Employee shall be entitled to reimbursement
for reasonable business and travel expenses duly incurred by Employee in the
performance of his duties under this Agreement.
(d) Automobile Allowance. Company hereby agrees to continue to provide
Employee with the xxxx minivan currently used by Employee. Company agrees to
review Employee's Automobile Allowance from time to time to determine whether a
new Automobile Allowance is warranted.
(e) Working Facilities. During the term of this Agreement, the company
shall provide, at its expenses, adequate office space, furniture, equipment,
supplies and personnel (including professional, clerical, support and other
personnel) consistent with the past practices of the Company as shall be
suitable in the opinion of the Board of Directors of the Company to the
Executive's position and adequate for the Executive's use in performing his
duties and responsibilities under this Agreement.
(f) Directors' and Officers' Liability Insurance. The Executive shall be
entitled to the protection of any directors' and officers' liability insurance
policies the Company may elect to maintain generally for the benefit of its
directors and officers (to the extent the Executive is eligible for such
coverage) in an amount and with such coverage as provided to directors and
executives of the Company.
6. Termination.
(a) Termination for Cause. The Company shall have the right to terminate
this Agreement for Cause. If the Company terminates Employee's employment for
Cause, the Company shall have no further obligations hereunder accruing from and
after the date of such termination of employment of Employee by the Company.
(b) Death or Disability. This Agreement shall terminate upon Employee's
death or Disability. A "Disability" with respect to Employee shall be deemed to
occur by the Board of Directors of the Company. In the event that Employee or
his representative shall disagree with the determination of the Board of
Directors that a Disability has occurred, Employee or his representative shall
be entitled to appoint a medical doctor and the Company shall be entitled to
appoint a medical doctor and the two (2) doctors shall in turn appoint a third
medical doctor who shall examine Employee to determine the question of
Disability. The parties hereby agree that the determination of the medical
doctor appointed by the medical doctor of Employee and the medical doctor of the
Company shall be binding upon all parties to this Agreement.
(c) Termination without Cause. The Chairman of the Company's Board of
Directors shall have the right to relieve Employee of his duties hereunder for
any reason and at any time. Such termination not for cause shall be effective on
the date specified by the Board of Directors. A voluntary termination by
Employee within sixty (60) days after the Company has reduced his status,
materially reduced his responsibilities, reduced his salary in a manner not
applied to all executive officers of the Company, or termination of Employee's
employment due to Employee's death or Disability, will be deemed to be
termination by the Company without Cause.
(d) Termination Payments. In the event of the termination of Employee's
employment with the Company, Employee will be paid an amount determined as
follows:
(i) In the event of termination of Employee's employment by reason of his
death or Disability, Employee or in the case of Employee's death, Employee's
surviving spouse or other beneficiary designated by Employee during his
lifetime, or Employee's estate, as appropriate, will be entitled to payment of
his Base Salary through the date of his termination of employment and for a
period of six (6) months thereafter.
(ii) In the event of termination of Employee's employment by reason of the
Company terminating him for Cause or in the event that Employee voluntarily
terminates his employment other than as provided in Section 6(c), he will be
paid his Base Salary through the date of his termination of employment.
(iii) In the event that Employee violates Section 7 of this Agreement, the
Company's obligation to pay Employee pursuant to this Section 6 shall terminate.
(iv) In the event of termination of Employee's employment by reason of the
Company terminating him without cause and as damages therefor, Employee will be
entitled to payment of his Base Salary through the date of his termination of
employment and for a period of twelve (12) months thereafter.
(v) If Employee's employment shall be terminated by Company or Employee
within one (1) year after a Change in Control, Employee will be entitled to the
payment of his Base Salary through the date of his termination and for a period
of twelve (12) months thereafter.
(vi) The termination payments due hereunder shall be in lieu of any and all
other amounts for which Company may be liable under any laws, rules or
regulations relating to the employer-employee relationship. As a condition to
receipt of the termination payments provided for hereunder, Employee or his
personal representative shall execute a general release of all claims in favor
of the Company. Except as provided in Section 6(b) above, any amounts due from
Company under this Section 6(d) shall be reduced, on a dollar for dollar basis,
by the amount of any earnings derived by Employee from employment obtained after
the termination date, and Employee agrees to provide to the Company verified
information with respect to such earnings. In the event of the termination of
employment of Employee by Company pursuant to Section 6(c) or in the event of a
Change of Control, Employee hereby agrees to utilize his best efforts to locate
new employment.
(e) Confidentiality of Cause Notice. In the event of Employee's termination
for Cause, the Company will provide Employee with prompt written notice stating
with reasonable specificity the basis for the Company's action. Employee agrees
that in the event he receives written notice of termination with Cause, Employee
shall treat the contents of said notice as privileged and Employee shall have no
action against the Company or any of its officers, agents or employees due to
the contents of said notice unless the contents are intentionally false and
malicious.
7. Covenants.
(a) Proprietary Information. Employee hereby acknowledges and agrees that
in performing services under this Agreement, he will have access to Proprietary
Information (as hereinafter defined). Employee further agrees as follows:
(i) Employee shall (A) use the Proprietary Information exclusively for the
purpose of fulfilling the obligations of this Agreement; (B) return the
Proprietary Information, and any copies thereof, in his possession or under his
control, to the Company upon request of the Company, or expiration or
termination of this Agreement for any reason; and (C) except for disclosures to
employees of the Company in the ordinary course of business, hold the
Proprietary Information in confidence and not copy, publish or disclose to
others or allow any other party to copy, publish or disclose to others in any
form, any Proprietary Information without the prior written approval of the
Chairman of the Board of the Company.
(ii) The obligations and restrictions set forth in this Section 7(a) shall
survive expiration or termination of this Agreement, for any reason, and shall
remain in full force and effect as follows:
(A) as to Trade Secrets, for an indefinite period after expiration or
termination of this Agreement it being understood that disclosure of Company
Trade Secrets shall never be permissible; and
(B) as to Confidential Information, for a period of two (2) years after
expiration or termination of this Agreement for any reason.
(iii) The confidentiality, property, and proprietary rights protections
available in this Agreement are in addition to, and not exclusive of, any and
all other corporate rights, including those provided under copyright, corporate
officer or director fiduciary duties, and trade secret and confidential
information laws. The obligations set forth in this Section 7(a) shall not apply
or shall terminate with respect to any particular portion of the Proprietary
Information which (A) was in Employee's possession, free of any obligation of
confidence, prior to his receipt from the Company, (B) Employee establishes is
already in the public domain at the time the Company communicates it to
Employee, or becomes available to the public through no breach of this Agreement
by Employee, or (C) Employee establishes is received by Employee independently
and in good faith from a third party lawfully in possession thereof and having
no obligation to keep such information confidential.
(b) Ownership of Property. Employee agrees and acknowledges that all works
of authorship and inventions, including but not limited to products, goods,
know-how, Trade Secrets and Confidential Information, and any revisions thereof,
in any form and in whatever stage of creation or development, arising out of or
resulting from, or in connection with, the services provided by Employee to the
Company under this Agreement (collectively, the "Property") are works made for
hire and shall be the sole and exclusive property of the Company. Employee
agrees to execute, when and if the need arises in the future, such documents as
the Company may reasonably request for the purpose of effectuating the rights of
the Company herein.
(c) Covenant not to Compete. Employee agrees that during his employment and
for one (1) year after the termination of his employment with the Company,
Employee will not directly or indirectly own, manage, operate, control, be
employed by, participate in or be connected in any manner with the ownership,
management, operation or control of any business or enterprise located in the
Restricted Territory that competes with the Business of the Company.
(d) Non-Solicitation of Customer. Employee covenants and agrees that during
the term of this Agreement, and for a period of eighteen (18) months thereafter,
he will not on behalf of any person, firm, corporation or entity solicit
business from customers of the Company that Employee had contact with,
solicited, or performed services for during the term that Employee worked for
the Company, including actively-sought prospective customers with whom Employee
had material contact during the two (2) year period prior to Employee's
termination, for the purpose of providing or selling products or services that
are competitive with those provided by the Company in connection with the
Business of the Company.
(e) Non-Solicitation of Employees. Employee agrees that during his
employment and for one (1) year after the termination of his employment with the
Company, Employee will not solicit or in any manner attempt to induce employees
to leave the Company's employment.
(f) Injunctive Relief. Employee acknowledges and agrees that the remedy at
law for any breach of the provisions of this Section 7 will be inadequate and
that in the event of such breach the Company will suffer irreparable damage;
accordingly, the Company shall be entitled to temporary and permanent injunctive
relief in the event of breach without the necessity of proving monetary damages.
8. Miscellaneous.
(a) Severability. In the event that any provision or portion thereof of
this Agreement is declared invalid, void or unenforceable by a court of
competent jurisdiction, the remaining provisions or portions thereof shall
nevertheless continue in full force and effect without being impaired or
invalidated in any way or to any extent. Each of the covenants set forth in
Section 7 above on the part of Employee shall be construed as an agreement
independent of any other covenant in this Agreement and independent of any other
agreement between Employee and the Company. The existence of any claim or cause
of action of Employee against the Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by the Company
of these covenants. The parties acknowledge that such covenants are reasonably
necessary in light of the nature of the Business of the Company, the current
marketplace and the extraordinary and unique position of Employee with the
Company. Such covenants are not overly broad in meaning, term or other
application for the necessary protection of the legitimate business interests of
the Company or the legitimate interest of Employee.
(b) Waiver of Breach. Failure or delay of either party to insist upon
compliance with any provision hereof shall not operate as, and is not to be
construed as, a waiver or amendment of such provision. Any express waiver of any
provision of this Agreement shall not operate and is not to be construed as a
waiver of any subsequent breach, whether occurring under similar or dissimilar
circumstances.
(c) Notice. All notices and other communications required or permitted to
be given by this Agreement shall be in writing and shall be given and shall be
deemed received upon (i) personal delivery, (ii) three(3) days after being
mailed by first class mail (postage prepaid and return receipt requested) or
(iii) the next business day after being sent by an overnight delivery service in
time for and specifying overnight delivery to the following addresses:
if to the Company, to:
Rainwire Partners, Inc.
0000 Xxxxxxxxx Xxxxxxxxxx Xxxx.
Xxxxxxxx, Xxxxxxx 00000
Attn: President
or if to Employee, to:
Xxxxxx X. Xxxxxxx, III
000 Xxxxxx Xxxx Xx.
Xxxxxxxxxxx, XX 00000
or at such other address as either party hereto shall notify the other of
in writing.
(d) Entire Agreement. This Agreement contains the entire agreement and
understanding by and between Employee and the Company with respect to the
employment of Employee, and no representations, promises, agreements or
understandings, written or oral, relating to the employment of Employee by the
Company not contained or referenced herein or therein shall be of any force or
effect.
(e) Amendment. This Agreement may be amended at any time by mutual consent
of the parties hereto, with any such amendment to be invalid unless in writing
and signed by the Company and Employee.
(f) Benefit. This Agreement, together with any amendments hereto, shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors, assigns, heirs and personal representatives, except that
the rights and benefits of either of the parties under this Agreement may not be
assigned without the prior written consent of the other party.
(g) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of South Carolina (without regard to any
conflicts of laws provisions of the laws of such state).
(h) Acknowledgement. By signing this Agreement, Employee acknowledges that
the Company has advised Employee of his right to consult with an attorney prior
to executing this Agreement; that he has the right to retain counsel of his own
choosing concerning the agreement to arbitrate or any waiver of rights or
claims; that he has read and fully understands the terms of this Agreement
and/or has had the right to have it reviewed and approved by counsel of choice,
with adequate opportunity and time for such review; and that he is fully aware
of its contents and of its legal effect. Accordingly, this Agreement shall not
be construed against any party on the grounds that the party drafted this
Agreement. Instead, this Agreement shall be interpreted as though drafted
equally by all parties.
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IN WITNESS WHEREOF, the parties have affixed their seals and executed and
delivered this Agreement as of the date first above written.
COMPANY
Rainwire Partners, Inc.
Attest: By
Name
Secretary Title
EMPLOYEE
By
Witness Xxxxxx X. Xxxxxxx, III
