EMPLOYMENT AGREEMENT
Exhibit
99.1
This
Employment Agreement (the “Agreement”) is made and
entered into as of the ____ day of September, 2007, by and
between Tier Technologies, Inc., a Delaware corporation
(together with its successors and assigns, the
“Company”), and Xxxxxxx X Xxxxxx (the
“Executive”).
W
I T N E S S E T H
WHEREAS,
the Company desires to continue to employ the Executive as its Senior Vice
President, EPP and to enter into an employment agreement embodying the terms
of
such employment; and
WHEREAS,
the Executive desires to enter into this Agreement and to accept such
continued employment, subject to the terms and provisions
of this Agreement;
WHEREAS,
the parties also wish to enter into this Agreement to terminate and supersede
all prior agreements including but not limited to the Nondisclosure and
Proprietary/Confidential Information Non-Competition Agreement the Executive
executed on May 28, 2004, and any existing employment agreements;
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is mutually acknowledged, the Company and the Executive,
intending to be legally bound, agree as follows:
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1.
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Definitions.
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(a) “Base
Salary” shall mean the Executive’s base salary as determined in
accordance with Section 4 below, including any applicable
increases.
(b) “Board”
shall mean the Board of Directors of the Company.
(c) “Cause”
shall mean a finding by the Company of:
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(i)
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a
conviction of the Executive of, or a plea of guilty or nolo
contendere by the Executive to, any
felony;
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(ii)
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an
intentional violation by the Executive of federal or state securities
laws;
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(iii)
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willful
misconduct or gross negligence by the Executive that has or is reasonably
likely to have a material adverse effect on the
Company;
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(iv)
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a
failure of the Executive to perform his or her
reasonably assigned duties for the Company that has
or is reasonably likely to have a material adverse effect on the
Company;
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(v)
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a
material violation by the Executive of any material provision of
the
Company’s Business Code of Conduct (or successor policies on similar
topics) or any other applicable policies in
place;
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(vi)
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a
violation by the Executive of any provision of the Proprietary
and Confidential Information, Developments, Noncompetition and
Nonsolicitation Agreement (“NDA”) attached hereto as Exhibit A;
or
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(vii)
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fraud,
embezzlement, theft or dishonesty by the Executive against the
Company,
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provided
that no finding of Cause shall be made pursuant to subsections (ii),
(iii), (iv), (v), (vi) or (vii) hereof unless the Company has provided the
Executive with written notice in accordance with Section 21 below stating
with specificity the facts and circumstances underlying the allegations of
Cause
and the Executive has failed to cure such violation, if curable, within thirty
(30) calendar days of receipt thereof. The Board shall determine
whether a violation is curable and/or cured in its reasonable
discretion.
(d) “Change
in Control” shall occur upon:
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(i)
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any
person, entity or affiliated group becoming the beneficial owner
or owners
of more than fifty percent (50%) of the outstanding equity securities
of
the Company, or otherwise becoming entitled to vote shares representing
more than fifty percent (50%) of the undiluted total voting power
of the
Company’s then-outstanding securities eligible to vote to elect members of
the Board (the “Voting
Securities”);
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(ii)
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a
consolidation or merger (in one transaction or a series of related
transactions) of the Company pursuant to which the holders of the
Company’s equity securities immediately prior to such transaction or
series of related transactions would not be the holders immediately
after
such transaction or series of related transactions of more than fifty
percent (50%) of the Voting Securities of the entity surviving such
transaction or series of related
transactions;
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(iii)
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the
sale, lease, exchange or other transfer (in one transaction or a
series of
related transactions) of all or substantially all of the assets of
the
Company;
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(iv)
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the
dissolution or liquidation of the Company;
or
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(v)
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the
date on which (i) the Company consummates a “going private” transaction
pursuant to Section 13 and Rule 13e-3 of the Securities Exchange
Act of
1934, as amended (the “Exchange Act”), or (ii)
no longer has a class of equity security registered under the Exchange
Act.
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(e) “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to
time.
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(f) “Compensation
Committee” shall mean the Compensation Committee of the Board or
another committee of the Board that performs the functions typically associated
with a compensation committee.
(g) “Date
of Termination” shall mean (i) if the Executive’s employment
is terminated by reason of his or her death, the date of his or her death,
or
(ii) if the Executive’s employment is terminated pursuant to any other
section, the prospective date specified in the written notice provided in
accordance with Section 21 below.
(h) “Disability”
shall mean, for purposes of this Agreement, the Executive’s inability to
substantially perform his or her duties and responsibilities under this
Agreement for a period of six (6) consecutive months due to a physical or
mental disability, as the term “physical or mental
disability” is defined in the Company’s long-term disability
insurance plan then in effect (or would be so found if the Executive applied
for
coverage or benefits under such plan).
(i) “Effective
Date” shall mean [Date of Execution].
(j) “Good
Reason” shall mean, without the Executive’s prior written consent,
the occurrence of any of the following events or actions,
providedthat no finding of Good Reason shall be made pursuant to
subsections (ii), (iii) or (iv) hereof unless the Executive has provided the
Company with written notice in accordance with Section 21 below within ninety
(90) days after the occurrence of such event or action stating with specificity
the facts and circumstances underlying the allegations of Good Reason and the
Company has failed to cure such violation within thirty (30) calendar days
of
receipt thereof:
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(i)
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any
reduction in the Executive’s Base
Salary;
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(ii)
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any
material diminution of the Executive’s duties, responsibilities, powers or
authorities;
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(iii)
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any
relocation of his or her principal place of employment by more than
fifty
(50) miles or requirement that the Executive relocate his or her
principal
place of residence by more than fifty (50) miles;
or
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(iv)
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a
material breach by the Company of any material provision of this
Agreement.
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(k) “Term
of Employment” shall mean the period specified in Section 2 below,
as such period may be extended.
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2.
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Term
of Employment.
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The
Company hereby continues to employ the Executive, and the Executive hereby
accepts such continued employment, for the period commencing on the Effective
Date and ending on the second anniversary of the Effective Date, subject to
earlier termination of the Term of Employment in accordance with the terms
of this Agreement. The expiration of the Term of Employment will not
constitute either a termination without Cause or a resignation for Good
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3.
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Position,
Duties and Responsibilities.
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As
of the
Effective Date, the Executive shall be employed as the Senior Vice President,
EPP of the Company or in such other reasonably
comparable position as the Chief Executive Officer of the
Company (the “Chief Executive Officer”) or the Board
may determine from time to time. In this capacity, the Executive
shall be assigned such duties and responsibilities inherent in such position
and
such other duties and responsibilities as the Chief
Executive Officer or the Board shall from time to time
reasonably assign to him or her. The Executive shall serve the
Company faithfully, conscientiously, and to the best of the Executive’s ability
and shall promote the interests and reputation of the Company. The
Executive shall devote all of the Executive’s time, attention, knowledge, energy
and skills during normal working hours, and at such other times as the
Executive’s duties may reasonably require, to the duties of the Executive’s
employment; provided, however, that the Executive may (a) serve on
civic or charitable boards or committees; or (b) with the approval of the Chief
Executive Officer or the Board, serve on corporate boards or
committees. The Executive shall report to the Chief Executive Officer
in carrying out his or her duties and responsibilities under this
Agreement. The Executive agrees to abide by the rules, regulations,
instructions, personnel practices and policies of the Company and any changes
therein that may be adopted from time to time.
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4.
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Base
Salary.
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As
of the
Effective Date, the Executive shall be paid an annualized Base Salary of Two
Hundred Thirty Seven Thousand Dollars ($237,000) for the
one-year period commencing on the Effective Date, payable in accordance with
the
regular payroll practices of the Company. The Base Salary shall be
subject to increase but not decrease thereafter. Any increase to the
Base Salary is to be determined by the Compensation Committee, in consultation
with the Chief Executive Officer.
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5.
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Incentive
Compensation Arrangements.
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During
the Term of Employment, the Executive shall be entitled to participate in any
Company incentive compensation plans, programs and/or arrangements applicable
to
senior-level executives as established and modified from time to time by the
Compensation Committee in consultation with the Chief Executive
Officer.
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6.
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Equity
Compensation Programs.
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During
the Term of Employment, the Executive shall be entitled to participate in any
equity-based plans, programs or arrangements applicable to senior-level
executives as established and modified from time to time by the Chief Executive
Officer or the Board in their sole discretion, to the extent that the Executive
is eligible under (and subject to the provisions of) the plan documents
governing those programs.
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7.
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Employee
Benefit Programs.
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During
the Term of Employment, the Executive shall be entitled to participate in all
employee welfare and pension benefit plans, programs and/or arrangements
applicable to senior-level executives, to the extent that the Executive is
eligible under (and subject to the provisions of) the plan documents governing
those programs.
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8.
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Reimbursement
of Business Expenses.
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The
Company shall reimburse the Executive for all reasonable travel, entertainment
and other expenses incurred or paid by the Executive in connection with, or
related to, the performance of his or her duties, responsibilities or services
under this Agreement, upon presentation by the Executive of documentation,
expense statements, vouchers and/or such other supporting information as the
Company may request; provided, however, that the amount available
for such travel, entertainment and other expenses may be fixed in advance by
the
Chief Executive Officer or the Board.
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9.
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Perquisites.
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During
the Term of Employment, the Executive shall be entitled to participate
in
the Company’s executive fringe benefit programs (if any) applicable to the
Company’s senior-level executives in accordance with the terms and
conditions of such programs as in effect from time to time, to the
extent
that the Executive is eligible under (and subject to the provisions
of)
the plan documents governing those
programs.
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10.
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Paid
Time Off.
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The
Executive shall be entitled to twenty six (26) days of paid time off per
calendar year, prorated during the calendar year in which the Executive is
initially hired and the calendar year in which the Executive’s employment
terminates, to be taken at such times as may be approved by the Chief Executive
Officer.
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11.
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Termination
of Employment.
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(a) Termination
of Employment by the Company for Disability or Termination of Employment by
Death. Upon a termination of the Executive’s employment by the
Company for Disability or a termination of the Executive’s employment by reason
of the Executive’s death, the Executive or his or her estate and/or
beneficiaries, as the case may be, shall be entitled to the following amounts,
payable on the business day coinciding with or next following the thirtieth
(30th) calendar day following such termination, subject to the provisions of
Section 23 below and excluding the payments under clause (iv) below (which
will
be paid as premiums are due):
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(i)
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Base
Salary earned but not paid prior to the Date of Termination and any
accrued prior year bonus not paid prior to such
date;
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(ii)
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any
amounts earned, accrued or owing to the Executive but not yet paid
under
Sections 7, 8, 9 or 10 above prior to the Date of
Termination;
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(iii) one (1) times the Base Salary in effect on the Date of
Termination;
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(iv)
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payment
by the Company of the premiums for the Executive and any covered
beneficiary of the Executive’s coverage under COBRA health continuation
benefits over the twelve (12) month period immediately following
the date
of death or Disability, assuming such individual elects and remains
eligible for such coverage; and
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(v)
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such
other or additional benefits, if any, as may be provided under applicable
plans, programs and/or arrangements of the
Company.
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The
Company must provide written notice to the Executive in accordance with Section
21 below upon a termination of the Executive’s employment for
Disability.
(b) Termination
of Employment by the Company for Cause or by the Executive. Upon
a termination of the Executive’s employment by the Company for Cause or a
termination of the Executive’s employment by the Executive (except as provided
in Section 11(e)), the Executive shall be entitled to the
following:
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(i)
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Base
Salary earned but not paid prior to the Date of Termination and any
accrued prior year bonus not paid prior to such
date;
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(ii)
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any
amounts earned, accrued or owing to the Executive but not yet paid
under
Sections 7, 8, 9 or 10 above prior to the Date of Termination;
and
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(iii)
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such
other or additional benefits, if any, as may be provided under applicable
plans, programs and/or arrangements of the
Company.
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The
Executive must provide written notice to the Company in accordance with Section
21 below at least fourteen (14) calendar days prior to the actual Date of
Termination upon a termination of the Executive’s employment by the
Executive. A termination by the Company for Cause must be made as set
forth herein.
(c) Termination
of Employment by the Company Without Cause or by the Executive With Good
Reason. Upon a termination of the Executive’s employment by the
Company without Cause or by the Executive with Good Reason, other than under
the
circumstances described in Section 11(d), the Executive shall be entitled to
the
following amounts, payable on the business day coinciding with or next following
the thirtieth (30th) calendar day following such termination, subject to the
provisions of Section 23 below and excluding the payments under clause (v)
below
(which will be paid as premiums are due):
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(i)
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Base
Salary earned but not paid prior to the Date of Termination and any
accrued prior year bonus not paid prior to such
date;
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(ii)
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any
amounts earned, accrued or owing to the Executive but not yet paid
under
Sections 7, 8, 9 or 10 above prior to the Date of
Termination;
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(iii)
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such
other or additional benefits, if any, as may be provided under applicable
plans, programs and/or arrangements of the
Company;
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(iv)
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one
(1) times the Base Salary in effect on the Date of Termination;
and
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(v)
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payment
by the Company of the premiums for the Executive’s and any covered
beneficiary’s coverage under COBRA health continuation benefits over
the twelve (12) month period immediately
following the Date of Termination, assuming such individuals elect
and
remain eligible for such coverage;
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provided
that the Executive must execute and not revoke a severance agreement
and release of claims drafted by and reasonably satisfactory to the Company
(the
“Severance Agreement”) to be eligible for the payments
in Sections 11(c)(iv) and (v) herein, which will contain a full release of
the
Company (other than for exceptions specified therein). The Company
must provide written notice to the Executive in accordance with Section 21
below
upon a termination of the Executive’s employment without Cause.
(d) Termination
of Employment by the Company after a Change in Control. Upon a
termination of the Executive’s employment by the Company without Cause within
one (1) year after a Change in Control, the Executive shall be entitled to
the
following amounts, payable on the business day coinciding with or next following
the thirtieth (30th) calendar day following such termination, subject to the
provisions of Section 23 below, and excluding the payments under clause (vii)
below (which will be paid as premiums are due):
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(i)
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Base
Salary earned but not paid prior to the Date of Termination and any
accrued prior year bonus not paid prior to such
date;
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(ii)
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any
amounts earned, accrued or owing to the Executive but not yet paid
under
Sections 7, 8, 9 or 10 above prior to the Date of
Termination;
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(iii)
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such
other or additional benefits, if any, as may be provided under applicable
plans, programs and/or arrangements of the
Company;
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(iv)
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two
(2) times the sum of (A) the Base Salary in effect on the Date of
Termination and (B) a bonus equal to the average annual bonus paid
to the
Executive (or, for the most recent year, accrued for the Executive)
for
the previous three years (or such shorter period during which the
Executive was employed) over a three-year look back
period;
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(v)
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vesting
of options granted on August 24, 2006, in accordance with the Change
of
Control provisions as described under Section 2 of the Executive’s
Incentive Stock Option Agreement;
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(vi)
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for
all other options granted to the Executive, other than those under
(v)
above, immediate vesting of options that would have vested within
eighteen
(18) months following the effective date of termination of Executive’s
employment; and
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(vii)
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payment
by the Company of the premiums for the Executive’s and any covered
beneficiary’s health insurance over the eighteen (18) month period
immediately following the Date of
Termination;
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provided
that the Executive must execute and not revoke the Severance
Agreement (with the conditions contained in the proviso to Section 11(c)) to
be
eligible for the payments in Sections 11(d)(iv) through (vii)
herein. The Company must provide written notice to the Executive in
accordance with Section 21 below upon a termination of the Executive’s
employment without Cause.
(e) Resignation
for Good Reason by the Executive due to a Change in Control. The
Executive may terminate his or her employment for Good Reason in a manner
consistent with the definition of Good Reason within one (1) year after a Change
in Control, in which event the Executive shall be entitled to the payments
in
and subject to the conditions of Section 11(d) and the provisions of Section
23. The Executive must provide written notice to the Company of a
proposed resignation for Good Reason in accordance with Section 21 below and
must actually resign under this provision no later than the six month
anniversary of the date he or she specifies as that of the adverse event or
action.
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12.
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Proprietary
and Confidential Information
Agreement.
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The
Executive shall execute, simultaneously with the execution of this Agreement
or
otherwise upon the Company’s request, the NDA.
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13.
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Assignability;
Binding Nature.
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This
Agreement shall be binding upon and inure to the benefit of both parties and
their respective successors and assigns, including any corporation or entity
with which or into which the Company may be merged or that may succeed to its
assets or business; provided, however, that the obligations of the
Executive are personal and shall not be assigned by him or her.
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14.
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Representation.
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The
Company represents and warrants that it is fully authorized and empowered to
enter into this Agreement. The Executive states and represents that
he or she has had an opportunity to fully discuss and review the terms of this
Agreement with an attorney. The Executive further states and
represents that he or she has carefully read this Agreement, understands the
contents herein, freely and voluntarily assents to all of the terms and
conditions hereof, and signs his or her name of his or her own free
act.
In
addition, the Company agrees that, if a dispute arises that concerns this
Agreement, the Proprietary and Confidential Information Agreement, or the
Severance Agreement and the Executive is the prevailing party in the dispute,
he
or she shall be entitled to recover all of his or her reasonable attorney’s fees
and expenses incurred in connection with the dispute. For this purpose, the
Executive will be the “prevailing party” if he or she
is successful on any significant substantive issue in the action and achieves
either a judgment in his or her favor or some other affirmative
recovery.
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15.
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Entire
Agreement.
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This
Agreement contains the entire understanding and agreement between the parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written
or
oral, with respect thereto, including, without limitation, the
Employment Agreement dated May 28, 2004.
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16.
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Amendment
or Waiver.
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No
provision in this Agreement may be amended unless such amendment is agreed
to in
writing and signed by the Executive and an authorized officer of the
Company. No waiver by either party of any breach by the other party
of any condition or provision contained in this Agreement to be performed by
such other party shall be deemed a waiver of a similar or dissimilar condition
or provision at the same or any prior or subsequent time. Any waiver
must be in writing and signed by the Executive or an authorized officer of
the
Company, as the case may be.
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17.
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Withholding.
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The
Company may withhold from any amounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.
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18.
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Severability.
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In
the
event that any provision of this Agreement shall be determined by a court of
competent jurisdiction to be invalid or unenforceable for any reason, in whole
or in part, the remaining parts, terms or provisions of this Agreement shall
be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
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19.
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Survivorship.
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The
respective rights and obligations of the parties hereunder shall survive any
termination of the Executive’s employment to the extent necessary to preserve
such rights and obligations.
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20.
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Governing
Law; Jurisdiction; Dispute
Resolution.
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This
Agreement shall be governed by and construed in accordance with the laws of
the
Commonwealth of Virginia (without reference to the conflict of laws provisions
thereof). In case of any controversy or claim arising out of or
related to this Agreement or relating to the Executive’s employment (including
but not limited to claims relating to employment discrimination), except as
expressly excluded herein, each party to this Agreement agrees to give the
other
party notice of non-compliance with this Agreement and ten (10) days to
cure. Should resolution of any controversy or claim not be reached
following provision of notice and a reasonable opportunity to cure, then the
dispute shall be settled by arbitration, under the American Arbitration
Association’s National Rules for the Resolution of Employment Disputes (the
“National Rules”). A single arbitrator
shall be selected in accordance with the National
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21.
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Notices.
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All
notices shall be in writing, shall be sent to the following addresses listed
below using a reputable overnight express delivery service and shall be deemed
to be received one (1) calendar day after mailing.
If
to the
Company: 00000
Xxxxxxxxx Xxxx.
0xx
Xxxxx
Xxxxxx,
Xxxxxxxx 00000
Attention: Vice
President, Human Resources
with
a
copy to: The Chief Executive Officer
If
to the
Executive: At
his or her current or last known residential address
Any
notice of termination must include a Date of Termination in accordance with
the
relevant provisions of this Agreement.
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22.
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Headings.
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The
headings of the sections contained in this Agreement are for convenience only
and shall not be deemed to control or affect the meaning or construction of
any
provision of this Agreement.
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23.
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Compliance
with Code Section 409A.
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To
the
extent any payment, compensation or other benefit provided to the Executive
in
connection with his or her employment termination is determined to constitute
“nonqualified deferred compensation” within the meaning of Section 409A of the
Code and the Executive is a specified employee as defined in Section
409A(a)(2)(B)(i) as determined by Tier in accordance with its procedures, by
which determination the Executive agrees that he or she is bound, such payment,
compensation or other benefit shall not be paid before the day that is six
(6)
months plus one (1) day after the Executive’s separation from service as
determined under Section 409A (the “New Payment
Date’’). The aggregate of any payments that otherwise
would have been paid to the Executive during the period between the separation
from service and the New Payment Date shall be paid to the Executive in a lump
sum on such New Payment Date. Thereafter, any payments that remain
outstanding as of the day immediately following the New Payment Date shall
be
paid without delay over the time period originally scheduled, in accordance
with
the terms of this Agreement. In any event, the Company makes no
representations or warranty and shall have no liability to the Executive or
any
other person, other than with respect to payments made by Tier in violation
of
the provisions of this Agreement, if any provisions of or payments under this
Agreement are determined to constitute deferred compensation subject to Code
Section 409A but not to satisfy the conditions of that section.
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24.
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Counterparts.
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This
Agreement may be executed in two or more counterparts, and such counterparts
shall constitute one and the same instrument. Signatures delivered by
facsimile shall be deemed effective for all purposes to the extent permitted
under applicable law.
Signatures
on Page Following
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IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
| TIER TECHNOLOGIES, INC. | |
|
By:
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|
| Name: | |
| Title: | |
| THE EXECUTIVE | |
| Xxxxxxx X. Xxxxxx |
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EXHIBIT
A
PROPRIETARY
AND CONFIDENTIAL INFORMATION, DEVELOPMENTS, NONCOMPETITION AND NONSOLICITATION
AGREEMENT
This
Proprietary and Confidential Information, Developments, Noncompetition and
Nonsolicitation Agreement (the “Agreement”) is made by
and between Tier Technologies, Inc. (the “Company”),
and _______________ (the “Employee”).
IN
CONSIDERATION of the Employee’s employment and/or continued employment with the
Company and for other valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the Employee agrees as follows:
1. Condition
of Employment.
The
Employee acknowledges that the Employee’s employment and/or the continuance of
that employment with the Company is contingent upon the Employee’s agreement to
sign and adhere to the provisions of this Agreement. Employee is
receiving enhanced severance protection and additional benefits in connection
with executing an employment agreement and this
Agreement. The Employee further acknowledges that the
nature of the Company’s business is such that protection of its proprietary and
confidential information is critical to its business’s survival and
success. For purposes of Sections 2, 3 and 4, the
“Company” shall include Tier Technologies, Inc. and
any of its subsidiaries, corporate affiliates, and/or associated
companies.
2. Proprietary
and Confidential Information.
(a) The
Employee agrees that all information and know-how, whether or not in writing,
of
a private, secret, or confidential nature concerning the Company’s business or
financial affairs (collectively, “Proprietary
Information”) is and shall be the exclusive property
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(b) The
Employee agrees that all disks, files, documents, letters, memoranda, reports,
records, data, drawings, notebooks, program listings, or any other written,
photographic or other record containing Proprietary Information, whether
created
by the Employee or others, that come into the Employee’s custody or possession,
shall be and are the exclusive property of the Company to be used only in
the
performance of the Employee’s duties for the Company. Upon
termination or cessation of the Employee’s employment with the Company for any
reason or at the Company’s request, the Employee agrees to return to the Company
any and all materials and
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(c) The
Employee acknowledges that the Employee’s obligations with regard to Proprietary
Information set out in subsections 2(a) and 2(b) above extend to all
information, know-how, records and tangible property of customers of the
Company
or suppliers to the Company or of any third party who may have disclosed
or
entrusted the same to the Company or to the Employee in the course of the
Company’s business.
3. Developments.
(a) The
Employee will make full and prompt disclosure to the Company of all inventions,
creations, improvements, discoveries, methods, developments, software and
works
of authorship, whether patentable or not, that are created, made, conceived
or
reduced to practice by the Employee or under the Employee’s direction or jointly
with others during the Employee’s employment by the Company, whether or not
during normal working hours or on the premises of the Company (all of which
are
collectively referred to in this Agreement as
“Developments”).
(b) The
Employee agrees to assign and does hereby assign to the Company (or any person
or entity designated by the Company) all of the Employee’s right, title and
interest in and to all Developments and all related patents, patent
applications, copyrights and copyright applications. However,
this subsection 3(b) shall not apply to Developments that do not relate to
the
present or planned business or research and development of the Company and
that
are made and conceived by the Employee not during normal working hours, not
on
the Company’s premises and not using the Company’s tools, devices, equipment or
Proprietary Information. The Employee understands that, to the extent
this Agreement shall be construed in accordance with the laws of any state
that
precludes a requirement in an employee agreement to assign
15
(c) The
Employee agrees to cooperate fully with the Company, both during and after
the
Employee’s employment with the Company, with respect to the procurement,
maintenance and enforcement of copyrights, patents and other intellectual
property rights (both in the United States and foreign countries) relating
to
Developments. The Employee shall sign all papers, including, but not
limited to, copyright applications, patent applications, declarations, oaths,
formal assignments, assignments of priority rights and powers of attorney,
that
the Company may deem necessary or desirable to protect its rights and interests
in any Development. The Employee further agrees that if the Company
is unable, after reasonable effort, to secure the Employee’s signature on any
such papers, any executive officer of the Company shall be entitled to execute
any such papers as the Employee’s agent and attorney-in-fact, and the Employee
hereby irrevocably designates and appoints each executive officer of the
Company
as the Employee’s agent and attorney-in-fact to execute any such papers on the
Employee’s behalf, and to take any and all actions as the Company may deem
necessary or desirable to protect its rights and interests in any Development
under the conditions described in this sentence.
4. Noncompetition
and Nonsolicitation.
(a) While
the Employee is employed by the Company and for a period of twelve (12) months
following the termination or cessation of such employment for any reason
(the
“Restricted Period”), the Employee will not directly or indirectly:
(1)
In the geographical area where the Company does business or has done business
at
the time of the termination or cessation of the Employee’s
16
employment,
engage in any business or enterprise (whether as an owner, partner, officer,
employee, director, investor, lender, consultant, independent contractor
or
otherwise, except as the holder of not more than one percent (1%) of the
combined voting power of the outstanding stock of a publicly-held company)
that
is competitive with the Company’s business, including, but not limited to, any
business or enterprise that develops, designs, produces, markets, licenses,
sells or renders any technology, product or service competitive with any
technology, product or service, developed, designed, produced, marketed,
licensed, sold or rendered, or planned to be developed, designed, produced,
marketed, licensed, sold or rendered, by the Company while the Employee
was
employed by the Company;
(2)
Either alone or in association with others (including any organization
directly
or indirectly controlled by the Employee), (i) solicit, recruit, or induce,
or
attempt to solicit, recruit, or induce, any employee of the Company to
leave the
employ of the Company, or (ii) recruit, solicit or hire as an employee
or engage
as an independent contractor, or attempt to recruit, solicit or hire
as an
employee or engage as an independent contractor, any person who was employed
by
the Company at any time during the period of the Employee’s employment with the
Company, except for an individual whose employment with the Company ceased
at
least six (6) months earlier; or
17
(3)
Either alone or in association with others (including any organization
directly
or indirectly controlled by the Employee), solicit, divert, interfere
with,
disrupt or take away, or attempt to solicit, divert, interfere with,
disrupt or
take away, the business or patronage of any of the clients, customers
or
accounts, or prospective clients, customers or accounts, of the Company
that the
Employee contacted, solicited or served while the Company employed
the
Employee. The terms “client” and “customer” include any person, firm,
corporation, governmental department or agency, or other entity or
any parent,
subsidiary, or affiliate thereof but excludes clients and customers
who have had
no business relationship with the Company within the twelve (12) months
preceding the Employee’s proposed activity with respect to such client or
customer. To the extent that any customers or clients, as defined
herein, are governmental entities, the prohibition stated herein shall
apply
only to the specific branch, division, office, group, or other subentity
of the
government with which the Company had the
contract.
(b) If
any court of competent jurisdiction finds any restriction set forth in this
Section 4 to be unenforceable because the restriction extends for too long
a period of time or over too great a range of activities or in too broad
a
geographic area, it shall be interpreted to extend only over the maximum
period
of time, range of activities or geographic area as to which it may be
enforceable.
18
(c) The
Employee agrees to provide a copy of this Agreement to all persons and entities
with whom the Employee seeks to be hired or do business before accepting
employment or engagement with any of them.
(d) If
the Employee violates the provisions of this Section 4, the Employee shall
continue to be held by the restrictions set forth in this Section 4 until
a
period equal to the period of restriction has expired without any
violation.
5. Other
Agreements.
The
Employee hereby represents that, except as the Employee has disclosed in
writing
to the Company, the Employee is not bound by the terms of any agreement with
any
previous employer or other party to refrain from using or disclosing any
trade
secret or confidential or proprietary information in the course of the
Employee’s employment with the Company, to refrain from competing, directly or
indirectly, with the business of such previous employer or other party, or
to
refrain from soliciting employees, customers or suppliers of such previous
employer or other party. The Employee further represents that the
Employee’s performance of all of the terms of this Agreement and the performance
of the Employee’s duties as an employee of the Company do not and will not
breach any agreement to keep in confidence proprietary information, knowledge
or
data acquired by the Employee in confidence or in trust prior to the Employee’s
employment with the Company. The Employee also represents that the
Employee will not disclose to the Company or induce the Company to use any
confidential or proprietary information or material belonging to any previous
employer or others.
6. United
States Government Obligations.
The
Employee acknowledges that the Company from time to time may have agreements
with other persons or with the United States Government, or agencies thereof,
that impose
19
7. Not
An Employment Contract.
The
Employee acknowledges that this Agreement does not constitute a contract
of
employment and does not imply that the Company will continue the Employee’s
employment for any period of time.
8. General
Provisions.
(a) No
Conflict. The Employee represents that the execution and
performance by him/her of this Agreement does not and will not conflict with
or
breach the terms of any other agreement by which the Employee is
bound.
(b) Acknowledgements
and Equitable Remedies. The Employee acknowledges that the
restrictions contained in this Agreement are necessary for the protection
of the
business and goodwill of the Company and considers the restrictions to be
reasonable for such purpose. The Employee agrees that any breach or
threatened breach of this Agreement will cause the Company substantial and
irrevocable damage that is difficult to measure. Therefore, in the
event of any such breach or threatened breach, the Employee agrees that the
Company, in addition to such other remedies that may be available, shall
have
the right to seek specific performance and injunctive relief without posting
a
bond. The Employee hereby waives the adequacy of a remedy at law as a
defense to such relief.
(c) Entire
Agreement. This Agreement supersedes all prior agreements,
written or oral, between the Company and the Employee relating to the subject
matter of this Agreement,
20
(d) Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect or impair the validity or enforceability of any other provision of
this
Agreement.
(e) Waiver. No
delay or omission by the Company in exercising any right under this Agreement
will operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion is effective only in that
instance and will not be construed as a bar to or waiver of any right on
any
other occasion.
(f) Successors
and Assigns. This Agreement shall be binding upon and inure to
the benefit of both parties and their respective successors and assigns,
including any corporation or entity with which or into which the Company
may be
merged or that may succeed to all or substantially all of its assets or
business; provided, however, that the obligations of the Employee
are personal and shall not be assigned by the Employee.
(g) Governing
Law, Forum and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia
without regard to conflicts of law provisions. The dispute resolution
provisions of Section 20 of the Employee’s employment agreement with the
Company dated as of ____________ __, 2007 (the
21
(h) Captions. The
captions of the sections of this Agreement are for convenience of reference
only
and in no way define, limit or affect the scope or substance of any section
of
this Agreement.
THE
EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS CAREFULLY READ THIS AGREEMENT AND
UNDERSTANDS AND AGREES TO ALL OF THE PROVISIONS IN THIS AGREEMENT.
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TIER
TECHNOLOGIES, INC.
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Date:
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By:
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(print
name and title)
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Date:
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