EXHIBIT 10.1
EMPLOYMENT AGREEMENT dated as of September 8, 2000, between OPUS360
CORPORATION, a Delaware corporation (the "Company"), and Xxxxx Xxxxxxxx (the
"Employee").
WHEREAS, the Company desires to employ the Employee as the Executive
Vice President and Chief Financial Officer of the Company; and
WHEREAS, the Employee desires to accept such employment by the
Company, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Employee hereby agree as follows:
Section 1. Employment.
The Company hereby employs the Employee, and the Employee hereby
accepts employment by the Company, upon the terms and subject to the conditions
hereinafter set forth.
Section 2. Term of Employment.
The Employee's employment hereunder shall be for the period
commencing on September 8, 2000 (the "Start Date") and ending on the day
immediately prior to the third anniversary of the Start Date (the "Base Term");
provided, however, unless earlier terminated pursuant to the provisions of
Sections 6, 7, 8 or 9 hereof, the Base Term shall be automatically renewed and
extended for successive one-year terms without further act of the parties (each,
a "Renewal Term" and together with the Base Term, collectively, the "Employment
Period"), unless either the Company or the Employee gives the other party hereto
at least 45 days prior written notice before the end of the Employment Period of
such party's intent not to renew this Agreement (each, a "Right Not To Extend").
Section 3. Duties.
The Employee shall be employed as the Executive Vice President and
Chief Financial Officer of the Company or in such other position as the Company
and the Employee shall agree in writing. The Employee shall report to the Chief
Executive Officer or the President of the Company at the Company's option (the
"Supervising Officer"). The Employee shall perform such duties and services as
are appropriate and commensurate with the Employee's position as Executive Vice
President and Chief Financial Officer of the Company and as are otherwise
consistent in stature and prestige with the position of Executive Vice President
of a corporation with similar operations as the Company, and shall perform such
additional duties and services which are similarly consistent with such position
as may reasonably be assigned to him from time to time by the Supervising
Officer. The Employee shall be based in the New York City metropolitan area.
Section 4. Time to be Devoted to Employment.
(a) Except for three weeks vacation during each 12-month period
worked (in addition to public holidays), absences due to temporary illness and
time spent as a director in respect of a directorship held by the Employee on or
prior to the Start Date, the Employee shall devote substantially all of his
business time, attention and energies to the business and affairs of the Company
during the Employment Period.
(b) During the Employment Period, the Employee shall not engage in
any other business activity which conflicts with the duties of the Employee
hereunder, whether or not such activity is pursued for gain, profit or other
pecuniary advantage; provided, however, to the extent not in conflict with this
Section 4, the Employee shall not be prohibited from (i) serving as an officer,
director, trustee or otherwise participating in purely educational, welfare,
social, charitable, religious and civic organizations, or (ii) managing personal
and family investments, in each case to the extent such activities (A) do not
interfere or conflict in any material respect with the performance of his duties
and responsibilities hereunder and (B) are conducted in accordance with the
limitations of Section 11. Except with the prior written approval of the Board
(excluding the Employee if he should be a member of the Board at the time of
such determination), which the Board may grant or withhold in its sole and
absolute discretion, the Employee, during the Employment Period, will not serve
on the board of directors or similar body of any business entity other than the
Company or any subsidiary thereof (other than with respect to any directorship
held by the Employee on or prior to the Start Date, which directorships, if any,
have been disclosed in writing by the Employee to the Company).
Section 5. Compensation; Reimbursement.
(a) During the Employment Period, the Company (or at the Company's
option, any subsidiary or affiliate thereof) shall pay to the Employee an annual
salary (the "Base Salary") of not less than $175,000, payable semi-monthly. Such
Base Salary will be reviewed at least annually and may be increased by the Board
or the Board's designee (excluding the Employee if he should be a member of the
Board at the time of such determination) in its sole discretion. Effective as of
any such increase, the Base Salary as so increased shall be considered the new
Base Salary for all purposes of this Agreement and may not thereafter be
reduced.
(b) The Employee shall be eligible to receive an annual bonus of no
less than one hundred fifty thousand dollars ($150,000) during each calendar
year of the Employment Period based upon his achievement of performance criteria
mutually agreed upon by the Employee and the Company. The performance criteria
for the first year of the Employment Period shall be satisfied in the event that
the Company achieves gross revenue of $15 million for calendar year 2000. With
respect to subsequent calendar years, it is expected that the performance
criteria will be based on increasing gross revenue targets to be agreed upon
within thirty (30) days after each anniversary of this Employment Agreement and
that such targets shall be consistent with and no higher than the performance
targets established for the
President of the Company for such calendar year.
(c) During the Employment Period and to the extent available to
senior executive officers of the Company, the Employee shall be entitled to
participate in all of the Company's benefit plans, pension and retirement plans,
life insurance, hospitalization and surgical and major medical coverages, sick
leave, vacation and holiday policies, long-term disability coverage and such
other fringe benefits enjoyed by other senior executive officers of the Company.
Notwithstanding anything to the contrary contained in this Section 5(c), at no
time during the Employment Period shall the long-term disability coverage and
life insurance benefits that the Company provides to the Employee be reduced to
a level below that being provided to the Employee as of the Start Date.
(d) The Company shall reimburse the Employee, in accordance with the
practice from time to time for other senior executive officers of the Company,
for all reasonable and necessary traveling expenses, disbursements and other
reasonable and necessary incidental expenses incurred by him for or on behalf of
the Company in the performance of his duties hereunder upon presentation by the
Employee to the Company of appropriate vouchers.
(e) Subject to approval by the Compensation Committee of the Board
of Directors of the Company, the Company shall grant the Employee, on or as soon
as practicable after the Start Date, options (the "Options") to purchase, in the
aggregate, 700,000 shares of common stock of the Company (the "Common Stock")
which is based on the fair market value of a share of Common Stock on the date
of grant. A portion of the Options shall qualify for federal income tax purposes
as "incentive stock options" (the "ISO") (the number of options that will
qualify as the ISO shall be the maximum number permitted under the terms of the
Company's 2000 Stock Option Plan), and the remainder shall not qualify for
federal tax purposes as "incentive stock options" (the "NSO"). A written option
agreement between the Company and the Employee (the "ISO Agreement") shall be
prepared and delivered by the Company to the Employee, which ISO Agreement shall
contain all of the terms and conditions of the ISO, and a written option
agreement between the Company and the Employee (the "NSO Agreement" and together
with the ISO Agreement, the "Stock Option Agreements") shall be prepared and
delivered by the Company to the Employee, which NSO Agreement shall contain all
of the terms and conditions of the NSO. Options to purchase 140,000 shares of
Common Stock shall be vested immediately upon grant and the balance of the
Options shall vest over three years, 6/36 of such balance shall vest on the six
month anniversary of the date of grant and 1/36 of such balance shall vest each
month thereafter. The Company shall at least once each year commencing in 2001
consider the Employee for future annual or other grants of stock options and
other equity awards on at least the same basis as such options and equity awards
are granted to other senior executive officers.
(f) Upon the first occurrence of a Transaction Closing Date (as
defined below) the Company shall grant to Employee an option (the "Transaction
Option") to purchase up to 300,000 shares of the Company's common stock
("Shares") pursuant to the terms of a written option agreement between the
Company and Employee substantially in the form attached to the Original
Agreement for the ISO or NSO, as applicable. Such option shall, to the extent
permitted under
applicable law, be an ISO. The right to purchase twenty percent (20%) of the
Shares represented by the Transaction Option shall be immediately vested upon
grant and the right to purchase the remaining eighty percent (80%) of such
Shares shall vest with respect to 1/6 of such Shares on the date which is six
months after the date of grant and with respect to 1/36 of such Shares each
month thereafter.
The "Transaction Closing Date" shall be the date of consummation of the
first of any of the following (each, a "Transaction") to occur:
(i) an acquisition by the Company of equity or assets of another company in a
single transaction, the aggregate purchase price of which is not less than
the greater of fifteen percent (15%) of the value of the Company's common
stock outstanding as of the Transaction Closing Date without giving effect
to the Transaction;
(ii) an investor makes an equity investment in the Company where
the aggregate purchase price of which is not less than fifteen
percent (15%) of the value of the Company's common stock
outstanding as of the Transaction Closing Date without giving
effect to the Transaction.
In the event that the grant of the Transaction Option would result
in the total number of employee stock options issued by the Company and
outstanding as of the Transaction Closing Date, stated as a percentage of the
outstanding common or common equivalent shares of stock as of the Transaction
Closing Date after giving effect to the Transaction and any other grants of
options to be issued on the Transaction Closing Date (the "Option Percentage")
exceeding 23%, Employee shall be granted as of the Transaction Closing Date an
option to purchase that number of shares that results in the Option Percentage
equaling 22.5% as of the Transaction Closing Date after giving effect to the
Transaction and the Transaction Option Grant, and the remainder of the
Transaction Option shall be granted with the same terms as are set forth above
in this paragraph (g), on the date which is ninety (90) days after the
Transaction Closing Date.
(g) Within 30 days after a Transaction Closing Date has occurred,
which if the Transaction is of the type defined in subparagraph (f)(i) above has
resulted in the Company having no less than $70 million in cash on its balance
sheet immediately after the Transaction Closing Date, at Employee's option, the
Company will make a loan to Employee of not in excess of $1,000,000 for purposes
of funding the payment by Employee of federal, state and local income tax
liabilities incurred as a result of an exercise of options then held by Employee
and vested as of such date, provided that such loan shall be secured by a
promissory note from Employee to the Company which shall be full recourse to
Employee and shall be further secured by a pledge of the stock purchased through
the exercise of such options; both the promissory note and pledge agreement
shall be in form and substance satisfactory to the Company.
(h) The Employee authorizes the Company to deduct from any amounts
payable to him hereunder such sums as may be required to be deducted or withheld
under the provisions of any federal, state or local law or regulation now in
effect or hereafter put into effect during the term of this Agreement,
including, without limitation, social security and income withholding taxes.
Section 6. Involuntary Termination.
(a) If the Employee is incapacitated or disabled by accident,
sickness or other cause so as to render him mentally or physically incapable of
performing the services required to be performed by him under this Agreement for
a period of 120 consecutive days or longer, or 150 days or longer during any 200
day period (such condition being herein referred to as a "Disability"), prior to
the Employee resuming the performance of his duties as contemplated herein, the
Company may terminate the employment of the Employee under this Agreement (an
"Involuntary Termination"). Until the Company or the Employee shall have
terminated the Employee's employment hereunder, the Employee shall be entitled
to receive his compensation and other benefits as set forth in this Agreement
notwithstanding any such Disability.
(b) Any determination as to whether the Employee is subject to a
physical or mental incapacity shall first be made by the Board (excluding the
Employee if he should be a member of the Board at the time of such
determination) in its good faith judgment; provided, however, if any such
determination is disputed by the Employee, the matter shall be referred to a
licensed physician practicing within New York, New York or a 100-mile radius
thereof and selected by the Board and the Employee, and the determination of
Disability made by such physician shall be final and binding on both the
Employee and the Company. The Employee represents and warrants to the Company
that, to the best of his knowledge, he does not have a Disability as of the date
hereof.
(c) If the Employee dies during the Employment Period, his
employment hereunder shall be deemed to cease as of the date of his death, and
the termination of his employment occasioned thereby shall be deemed an
Involuntary Termination.
Section 7. Termination for Cause or Without Cause.
(a) The Company may terminate the Employee's employment hereunder at
any time during the Employment Period for "Cause" (a "Termination for Cause").
Prior to, and in connection with, any Termination for Cause, (1) the Supervising
Officer of the Company or his or her designee shall give written notice to the
Employee of the specific circumstances which may constitute the basis for a
Termination for Cause, (2) the Employee shall be provided with ten (10) days to
cure the basis for a Termination with Cause (but only if such basis is capable
of cure), and (3) the Board shall have determined, in its sole discretion (so
long as not arbitrary or capricious), by a vote of not less three-fourths (3/4)
of the Board (excluding the Employee and his immediate supervisor if either
should be a member of the Board at the time of such determination) at a meeting
called and held for such purpose, after reasonable notice to the Employee and an
opportunity for the Employee, together with his counsel, to be heard before the
Board, that the Company has Cause to terminate the Employee's employment. For
purposes of this Agreement, "Cause" shall be limited to:
(i) the gross negligence or willful refusal or failure by the
Employee to attempt to substantially perform the duties described in
Section 3 (other than any failure resulting from an illness or other
similar incapacity or disability);
(ii) the Employee's conviction of, or plea of nolo contendere
to, misappropriation of funds, properties or assets of the Company, or any
other act of fraud, theft or financial dishonesty involving the Company or
its subsidiaries, or slander or libel concerning the Company or a material
tort relating to his office or employment with the Company that has a
material adverse effect on the Company;
(iii) the material breach by the Employee of the provisions of
this Agreement including, without limitation, the covenants set forth in
Sections 11 and 12 hereof;
(iv) the Employee's conviction of, or plea of nolo contendere
to, a crime constituting a felony (other than a traffic violation) or any
criminal act involving moral turpitude; or
(v) the Employee's inability to perform his duties as a result
of alcohol or drug abuse, chronic alcoholism or drug addiction.
(b) The Company may terminate the Employee's employment hereunder at
any time during the Employment Period without "Cause" by providing written
notice of such termination to the Employee (a "Termination Without Cause") at
least five days prior to such Termination Without Cause or pay in lieu of such
notice.
Section 8. Termination for Poor or Incompetent Performance.
The Company may not terminate the Employee's employment hereunder at
any time during the first year of the Base Term for the Employee's poor or
incompetent performance of his duties or responsibilities hereunder. Thereafter,
the Company may terminate the Employee's employment hereunder at any time for
poor or incompetent performance ("Termination for Poor or Incompetent
Performance"); provided that the Board shall have determined, in its sole
discretion (so long as not arbitrary or capricious), by a vote of not less
three-fourths (3/4) of the Board (excluding the Employee and his immediate
supervisor if either should be a member of the Board at the time of such
determination) at a meeting called and held for such purpose, after reasonable
notice to the Employee and an opportunity for the Employee, together with his
counsel, to be heard before the Board, that the Employee's performance hereunder
has been poor or incompetent.
Section 9. Termination for Good Reason or by Resignation.
(a) The Employee may terminate his employment hereunder at any time
during the Employment Period for "Good Reason."
(b) For purposes of this Agreement:
(i) "Good Reason" means (A) a reduction in the title or any
material reduction in the authority, duties, responsibilities,
compensation, benefits or reporting line of the Employee from those on the
Start Date, where such reduction or material reduction is not cured within
10 days after written notice thereof by the Employee to the Company, (B) a
Change of Control, if (1) within one (1) year of such Change of Control
the employment of the Employee is terminated by the Company for any
reason, or (2) during the 30-day period commencing 6 months after a Change
of Control the Employee terminates his employment for any or no reason,
(C) a material breach by the Company of this Agreement, which breach is
incurable or otherwise not cured within 10 days after written notice
thereof by the Employee to the Company, (D) the failure of the Company to
grant the Employee the Options pursuant to the Stock Option Agreements
provided for in Section 5(e) of this Agreement, or (E) the failure of the
Company to obtain a satisfactory agreement from any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
assume and agree to perform this Agreement to the same extent that the
Company is required to perform it, in each case without the prior written
consent or waiver of the Employee.
(ii) the Employee's continued employment shall not constitute
consent to or a waiver of rights with respect to, any circumstances
constituting Good Reason hereunder.
(iii) "Change in Control" of the Company shall be deemed to
have occurred if:
(A) there shall be consummated (x) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of Common Stock would be
converted into cash, securities or other property, other than a merger of
the Company in which the holders of Common Stock immediately prior to the
merger own a majority of the common stock of the surviving corporation
immediately after the merger, or (y) any 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;
(B) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; or
(C) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than Xxx X. Xxxxxxxx, shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or
more of the outstanding Common Stock.
(c) The Employee may terminate his employment hereunder at any time
during the Employment Period without "Good Reason" by providing written notice
of such termination to the Company (a "Resignation") at least five days prior to
such Resignation.
Section 10. Effect of Termination of Employment.
(a) Termination For Cause or by Resignation. Upon the termination of
the Employee's employment hereunder pursuant to a Termination For Cause or a
Resignation, neither the Employee nor his beneficiary or estate shall have any
further rights or claims against the Company under this Agreement except to
receive:
(i) any unpaid portion of the Base Salary provided for in
Section 5(a), computed on a pro rata basis to the date of termination;
(ii) cash compensation equal to the product of (A) the number
of days of accrued vacation, if any, accumulated by the Employee to the
date of termination divided by 365 multiplied by (B) the Base Salary;
(iii) reimbursement for any expenses for which the Employee
shall not have theretofore been reimbursed as provided in Section 5(d);
(iv) any bonus from the prior calendar year which has been
earned but not yet paid; and
(v) all vested benefits under any compensation or employee
benefit plan maintained by the Company, whether funded or unfunded,
accrued through the date of termination.
(b) Involuntary Termination. Upon the termination of the Employee's
employment hereunder pursuant to an Involuntary Termination, neither the
Employee nor his beneficiary or estate shall have any further rights or claims
against the Company under this Agreement except the right:
(i) to receive the payments and benefits, if any, equal to
those provided for in Section 10(a) hereof;
(ii) to receive monthly cash severance payments in an amount
equal to one-twelfth of the cash compensation (including Base Salary and
bonus) received by the Employee during the 12-month period immediately
prior to the date of termination under this subsection (such monthly
payments, "Monthly Severance"), for a period of twelve (12) months;
(iii) to vest immediately any stock options and equity
awards granted to the Employee during the Employment Period, and all such
Options and other options shall be exercisable by the Employee for their
full remaining term; and
(iv) in the case of termination due to a Disability, to
receive all benefits pursuant to Section 5(c) above for a period of twelve
(12) months following the date of such termination.
(c) Termination Without Cause or With Good Reason. Upon the
termination of the Employee's employment hereunder pursuant to a Termination
Without Cause or With Good Reason, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
(i) to receive the payments and benefits, if any, equal to
those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period lasting the
longer of (A) twelve (12) months, or (B) the remainder of the Base Term;
(iii) to immediately become fully vested in all of the Options
and any other stock options and equity awards granted to the Employee
during the Employment Period, and all such Options and other options shall
be exercisable by the Employee for their full remaining term; and
(iv) to receive all benefits pursuant to Section 5(c) above
for a period lasting the longer of (A) twelve (12) months from the date of
Termination Without Cause or With Good Reason, or (B) the remainder of the
Base Term; provided, however, that the Employee will not be entitled to
any such benefits in the event that the Employee becomes employed by
another entity during the period that such benefits would otherwise be
due.
(d) Termination for Poor or Incompetent Performance. Upon
termination of the Employee's employment hereunder pursuant to a Termination for
Incompetence or Non-Performance, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
(i) to receive payments and benefits, if any, equal to those
provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period of twelve (12)
months; and
(iii) to be credited with twelve (12) additional months of
employment for purposes of calculating the Employee's vested interests in
the Options and any other stock options and equity awards granted to
the Employee during the Employment Period, which options shall vest
according to their original schedule as if the Employee's employment
hereunder had continued for twelve (12) months from the date of the
Termination for Poor or Incompetent Performance, and all such Options and
other options shall be exercisable by the Employee for their full
remaining term.
(iv) to receive all benefits pursuant to Section 5(c) above
for a period of twelve (12) months following the date of such Termination
for Poor or Incompetent Performance; provided, however, that the Employee
will not be entitled to any such benefits in the event that the Employee
becomes employed by another entity during the period that such benefits
would otherwise be due.
(e) Termination Based on the Employee's Right Not To Extend. Upon
the termination of the Employee's employment hereunder pursuant to the
Employee's Right Not To Extend, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right to receive the payments and benefits, if any, equal
to those provided for in Section 10(a) hereof.
(f) Termination Based on the Company's Right Not To Extend. Upon the
termination of the Employee's employment hereunder pursuant to the Company's
Right Not To Extend, neither the Employee nor his beneficiary or estate shall
have any further rights or claims against the Company under this Agreement
except the right:
(i) to receive the payments and benefits, if any, equal to
those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period of twelve (12)
months;
(iii) to immediately become fully vested in all of the Options
and any other stock options and equity awards granted to the Employee
during the Employment Period, and all such Options and other options shall
be exercisable by the Employee for their full remaining term; and
(iv) to receive all benefits pursuant to Section 5(c) above
for a period of twelve (12) months following the date of the termination
of the Employee's employment hereunder pursuant to the Company's Right Not
To Extend; provided, however, that the Employee will not be entitled to
any such benefits in the event that the Employee becomes employed by
another entity during the period that such benefits would otherwise be
due.
(g) If the Employee's employment with the Company hereunder is
terminated pursuant to Sections 2, 6, 7, 8 or 9, the Employee shall not have the
obligation to mitigate his damages as a result of such termination.
(h) Any obligations of the Company to provide payments and benefits
to the Employee under this Section 10 are expressly conditioned on the
Employee's compliance with Sections 11 and 12 of this Employment Agreement.
(i) Except to the extent requested by the Board, upon the date of
termination, the Employee shall immediately resign all positions and
directorships with the Company and each subsidiary thereof.
Section 11. Non-Competition; Non-Solicitation.
(a) In consideration of the compensation and other benefits to be
provided to the Employee hereunder, the Employee shall not, directly or
indirectly, for any reason whatsoever other than Termination Without Cause or
Termination by Employee with Good Reason, during the Employment period and for a
period of one year following the Employee's Termination for any reason,
including without limitation Termination for Cause, Termination for Poor or
Incompetent Performance, or Employee's Resignation:
(i) engage, become involved or acquire an interest in any
Competitive Business (as hereinafter defined), whether such engagement,
interest or involvement shall be as an employee, employer, manager,
material investor, owner, consultant, lender, partner or other participant
in any Competitive Business;
(ii) assist others in engaging in any Competitive Business in
the manner described in the foregoing clause (i);
(iii) solicit or induce, or attempt to solicit or induce,
employees of, consultants to, or independent contractors of, the Company
or its subsidiaries to terminate their employment, engagement or
affiliation with the Company or in any way interfere with the relationship
between the Company or any of its subsidiaries, on the one hand, and any
such employee of, consultant to, or independent contractor of the Company
or any of its subsidiaries, on the other hand; or
(iv) knowingly employ or retain any such employee of,
consultant to, or independent contractor of the Company or any of its
subsidiaries during his or her employment, engagement or affiliation with
the Company or any of its subsidiaries for a period of three months after
the termination of such employee's, consultant's or independent
contractor's employment, engagement or affiliation with the Company or any
of its subsidiaries unless such retainer is not competitive, and does not
interfere with, the simultaneous retention of such consultant or
independent contractor by the Company.
(v) induce customers or vendors of the Company; or any independent
knowledge workers or other information technology professionals, or end user
organizations that have a business relationship with the Company, to alter or
terminate their business relationship with the Company or any of its
subsidiaries; provided, however, that nothing contained in this Section 11 shall
be deemed to prohibit the Employee from acquiring, directly or indirectly,
solely as a passive investment, securities of any Competitive Business traded on
any national securities exchange if the Employee is not a controlling person of,
nor a member of a group which controls such person and does not, directly or
indirectly, own 5% or more of any class of securities of such person. As used
herein, the term "Competitive Business" shall mean any business which competes
with the Company in the business of primarily providing labor resource
management services or products relating to information technology professionals
by means of business-to-business electronic commerce or any business or activity
that is substantially the same as any business or activity conducted by the
Company at any time during the Employee's employment with the Company within the
geographic area that the Company is engaged in such business or activity as of
the Start Date or upon such date that the Employee ceases to receive salary or
severance payments from the Company (including, without limitation, any
subsidiary thereof).
(b) Notwithstanding any other provision of this Agreement to the
contrary, any business activities engaged in by the Employee on behalf of, or in
connection with the Employee's employment by, or service as a director or
consultant to, any subsidiary or affiliate of the Company or in connection with
a directorship held by the Employee on or prior to the Start Date, shall not be
deemed to violate the provisions of this Agreement.
(c) The Employee is aware that the services performed by him for the
Company are of a special, unique and intellectual character and
understands that the foregoing restrictions may limit his ability to earn
a livelihood in a Competitive Business, but he nevertheless believes that
he has received and will receive sufficient consideration and other
benefits in connection with his employment to clearly justify such
restrictions which, in any event, the Employee does not believe would
prevent him from earning a living. Nothing herein contained shall prohibit
the Employee from engaging in a business that is not a Competitive
Business.
Section 12. Non-Disclosure of Information.
The Employee understands that he will have access to Confidential
Information relating to the Company and agrees that he will not, at any time
during or after the Employment Period, disclose to any person, firm, corporation
or other entity, except as required by law, any Confidential Information
concerning the business, clients or affairs of the Company or any subsidiary or
affiliate thereof, or of any person which the Company or any of its subsidiaries
is under an obligation to keep secret or confidential, for any reason or purpose
whatsoever other than in furtherance of the Employee's good faith performance of
his duties as an employee of the Company, nor shall the Employee make use of any
of such Confidential Information for his own purpose or for the benefit of any
person, firm, corporation or other business entity except the Company or any
subsidiary or affiliate thereof. For purposes of this Agreement, "Confidential
Information" shall include, without
limitation, products or services, fees, costs, pricing schedules, designs,
analyses, drawings, photographs, reports, computer software and hardware
(including operating systems, applications and program listings), customers and
clients, customer and client lists, marketing plans and related information,
sales plans and related information, operating policies and manuals, business
plans, financial records or practice management methods, inventions, devices,
new developments, methods and processes, technology or trade secrets, know-how
or techniques, whether patentable or unpatentatable and whether or not reduced
to practice, and all similar and related information in whatever form.
Section 13. Company Right to Inventions and Business Opportunities.
(a) The Employee shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all (i) discoveries, developments,
designs, improvements, inventions, formulae, processes, techniques, computer
programs, strategies, know-how and data, whether or not patentable or
registerable under patent, copyright, trademark or similar statutes, together
with all patent applications, patents, copyrights, copyright applications,
trademarks, trademark applications and any reissues thereof that may at any time
be granted for or upon any such inventions (the "Inventions") or (ii) business
opportunities relating to the actual or anticipated business of the Company or
any of its subsidiaries ("Business Opportunity"), presented to or learned by the
Employee during the period of the Employee's employment with the Company prior
to any termination of employment (whether or not during usual working hours).
(b) The Employee shall promptly, without charge and at the expense
of the Company, at all times hereafter execute and deliver such applications,
assignments, descriptions and other instruments as may be reasonably necessary
or proper in the reasonable opinion of the Company to (i) vest title to and
enforce patents, copyrights, trademarks, improvements, technical information and
methods and other rights and protections relating to the Inventions and (ii) to
assign or otherwise establish such ownership of the Company in all rights in or
to such Business Opportunities, and to enable the Company to obtain and maintain
the entire right and title thereto in any and all countries; and
(c) The Employee shall render to the Company at its expense
(including a reasonable payment for the time involved in case he is not then in
its employ) all such assistance as it may reasonably require at times and
locations agreed to by the Company and the Employer in the (i) prosecution of
applications for the Inventions, in the prosecution or defense or interferences
which may be declared involving the Inventions and in any litigation in which
the Company may be involved relating to the Inventions, each including, without
limitation, the execution of assignments, consents, powers of attorney,
applications and other instruments and the giving of testimony in support
thereof or (ii) confirmation and protection of such ownership of the Company in
all rights in or to any Business Opportunities, provided, however, that such
assistance shall not interfere with the Employee's employment or business
activities.
(d) The Employee shall deliver to the Company at the termination of
the Employment Period, or upon the request of the Company, at any time, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Inventions, Business Opportunities or the business of the Company
or any of its subsidiaries, which he may then possess or have under his control,
regardless of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
Section 14. Enforcement.
It is the desire and intent of the parties hereto that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such amendment to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made; provided, however, that if any one or more of the
provisions contained in this Agreement shall be adjudicated to be invalid or
unenforceable because such provision is held to be excessively broad as to
duration, geographical scope, activity or subject, such provision shall be
deemed amended by limiting and reducing it so as to be valid and enforceable to
the maximum extent compatible with the applicable laws of such jurisdiction,
such amendment to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made.
Section 15. Excise Taxes.
To the extent that any of the payments and benefits provided for in
this Agreement or otherwise payable to the Employee constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and, but for this Section 15, would be subject to
the excise tax imposed by Section 4999 of the Code, then the Employee's benefits
under this Agreement shall be payable either (i) in full or (ii) to such lesser
amount as would result in no portion of severance payments being subject to
excise tax under Section 4999 of the Code, which ever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes and
excise tax imposed by Section 4999, results in the receipt by the Employee on an
after tax basis of the greatest amount of severance benefits provided pursuant
to this Agreement, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code. Unless the Company and
the Employee otherwise agree in writing, any determination required under this
Section shall be made in writing by an independent public accounting firm
selected by the Employee and reasonably acceptable to the Company other than
that used by the Company (the Accountants), whose determination shall be
conclusive and binding upon the Employee and the Company for all purposes. For
purposes of making the calculations required by this Section 15, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations
concerning the application of Section 280G and 4999 of the Code. The Company and
the Employee shall furnish to the Accountants such information as the
Accountants may reasonably request in order to make a determination under this
Section 15 The Company shall bear all costs the Accountants may reasonably incur
in connection with any calculations contemplated by this Section 15.
Section 16. Remedies; Survival.
(a) The Employee acknowledges and understands that the provisions of
this Agreement are of a special and unique nature, the loss of which cannot be
accurately compensated for in damages by an action at law, and that the breach
of the provisions of this Agreement would cause the Company irreparable harm. In
the event of a breach by the Employee of the provisions of Section 11, 12, or 13
hereof, the Company shall be entitled to an injunction restraining him from such
breach; provided, however, nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available for any
breach of this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of Sections 9 through 18, including this Section 16,
shall survive the expiration or other termination of this Agreement until, by
their terms, such provisions are no longer operative.
(c) It is understood and agreed that the provisions of Sections 11,
12 and 13 of this Agreement are separate and distinct from any other agreement
between the parties hereto. Accordingly, in the event of a breach of such
provisions, the breaching party shall only be held responsible for damages
arising under such provisions and not for any damages which may be claimed to
arise under or with respect to any other agreement that is not separately
breached.
Section 17. Notices.
All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given or made when (i) delivered
personally to the recipient, (ii) transmitted by facsimile or electronic mail
(with hard copy sent to the recipient by reputable overnight courier service
(charges prepaid) that same day and, in the latter case, with receipt
acknowledged by the recipient by return electronic mail) if faxed or e-mailed
before 5:00 p.m. (New York City time) on a Business Day, and otherwise on the
next Business Day (as hereinafter defined), (iii) two Business Days after being
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iv) five Business Days after being sent to the recipient by registered or
certified mail (postage prepaid and return receipt requested). The term
"Business Day" shall mean any day, other than a Saturday, Sunday or other day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close. Such notices, demands and other
communications shall be sent to the address for such recipient as set forth
below (or to such other address or to the attention of such other person as the
recipient party has specified by like notice):
(i) if to the Company, to:
Opus360 Corporation
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxxx@xxxx000.xxx
with a copy to:
Opus360 Corporation
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxxxxxx@xxxx000.xxx
(ii) and, if to the Employee, to:
Xxxxx Xxxxxxxx
000 Xxxxx Xxxx, Xxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 18. General Provisions.
(a) Binding Agreement. This Agreement shall inure to the benefit of
and be enforceable by the Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees and devisees. If the
Employee should die while any amount would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the beneficiary
designated by the Employee in a writing delivered to the Company, or if there be
no such designated beneficiary, to his estate.
(b) Governing Law and Choice of Jurisdiction and Venue. THE
PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND
FULLY PERFORMED WITHIN THE STATE OF NEW YORK BY RESIDENTS OF THE STATE OF NEW
YORK. WITH RESPECT TO ANY LAWSUIT OR PROCEEDING BROUGHT WITH RESPECT TO THIS
AGREEMENT, EACH
OF THE PARTIES HERETO IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE JURISDICTION OF
THE COURTS OF THE STATE OF NEW YORK OR FEDERAL COURT OF THE UNITED STATES OF
AMERICA SITTING IN NEW YORK, (II) WAIVES ANY OBJECTION IT MAY HAVE AT ANY TIME
TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, (III) WAIVES
ANY CLAIM THAT SUCH PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, AND
(IV) FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDINGS, THAT
SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.
(c) Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
(d) Complete Agreement; Amendments; Prior Agreements. This Agreement
together with the Stock Option Agreements and the other agreements referred to
herein contain the entire agreement between the parties with respect to the
subject matter contained herein and supersede all prior agreements or
understandings written or oral between the parties with respect thereto. This
Agreement may not be amended, supplemented, canceled or discharged except by
written instrument executed by both parties hereto.
(e) Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
(f) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is not a Business Day, the time period
for giving notice or taking action shall be automatically extended to the
immediately following Business Day.
(g) Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(i) Assignment. With respect to the Employee, this Agreement is
personal in its nature and the Employee shall not assign or transfer this
Agreement or any rights or obligations hereunder. The Company may in its sole
discretion assign or otherwise transfer this Agreement and the provisions hereof
(including, without limitation, Sections 11, 12 and 13) shall inure to the
benefit of, and be binding upon, each successor of the Company, whether by
merger, consolidation, transfer of all or substantially all assets, or
otherwise.
(j) Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice-versa.
(k) Construction. Where specific language (such as the word
"including") is used to clarify by example a general statement contained herein,
such specific language shall not be deemed to modify, limit or restrict in any
manner the construction of the general statement to which it relates. The
language used in this Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party hereto. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
(l) Delivery by Facsimile. This Agreement, the agreements referred
to herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments or
supplements hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute original forms thereof and deliver
them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a defense to the
formation or enforceability of a contract and each such party forever waives any
such defense.
(m) Indemnification. The Company shall indemnify the Employee to the
fullest extent permitted by applicable law and its certificate of incorporation
and by-laws against all costs, charges and expenses incurred or sustained by the
Employee in connection with his employment with the Company, other than as a
result of actions taken by him in bad faith or due to his gross negligence. This
indemnification obligation shall survive termination of this Agreement. In
addition, during the Employment Period, the Company shall continue to maintain,
and shall cover the Employee under, its Directors and Officers Liability
Insurance and Errors and Omissions Insurance at coverage levels which are no
less than those currently in effect.
(n) Costs And Expenses of Agreement. All reasonable costs and
expenses (including fees and disbursements of counsel) incurred by the Employee
in negotiating the terms and conditions of this Agreement or any agreements
ancillary to this Agreement shall be promptly reimbursed to the Employee by the
Company together with a tax gross-up payment to cover all taxes due on such
payment upon submission of an invoice therefor.
(o) Arbitration. Prior to the commencement of any legal action to
enforce any provision of this Agreement or to resolve any dispute arising under
this Agreement, the Company and the Employee agree to notify the other for the
purpose of determining whether the parties will agree to submit any such dispute
to mediation or arbitration on mutually agreeable terms; provided, however, that
the Company does not need to notify the Employee of its intent to file a legal
action for a breach of Sections 12 or 13 hereof, nor must the Company seek to
mediate or arbitrate any such dispute. Nothing in this Section 18(o) shall
require the parties to mediate or arbitrate any disputes arising under this
Employment Agreement.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the date first above written.
OPUS360 CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Operating
Officer
/s/ Xxxxx Xxxxxxxx
----------------------------------------
XXXXX XXXXXXXX (Employee)
