EXHIBIT 10.14
PERSONAL SERVICES AGREEMENT
THIS PERSONAL SERVICES AGREEMENT ("Agreement") is entered into between
UNIGRAPHIC SOLUTIONS INC. ("UGSI") and XXXX XXXXXXX ("Executive"), to be
effective the 2nd day of March, 1998 ("Effective Date").
RECITALS
WHEREAS, UGSI desires to employ Executive pursuant to the terms and
conditions and for the consideration set forth in this Agreement, and Executive
desires to enter the employ of UGSI pursuant to such terms and conditions and
for such consideration;
WHEREAS, The provisions of this Agreement are a condition of Executive's
being employed by UGSI, of Executive's having access to confidential business
and technological information, and Executive's being eligible to receive certain
benefits at UGSI. This Agreement is entered into, and is reasonably necessary,
to protect confidential information and customer relationships to which
Executive may have access, and to protect the goodwill and other business
interests of UGSI; and
WHEREAS, The provisions of this Agreement are also a condition of
Executive's agreeing to provide personal services to UGSI.
NOW, THEREFORE, in consideration of the mutual promises and covenants
agreed to herein, the receipt and sufficiency of which are hereby acknowledged,
UGSI and Executive agree as follow:
SECTION 1. EMPLOYMENT DUTIES
1.1 UGSI agrees to employ Executive, and Executive agrees to be employed
by UGSI, beginning as of the Effective Date and continuing throughout the term
as specified in paragraph 3.1 (the "Term"). Executive shall be employed in the
position of Vice President and Chief Financial Officer for UGSI. Executive
shall faithfully and diligently render such services and perform such related
duties and responsibilities as are customarily performed by a person holding
such corporate title and as otherwise may from time to time be reasonably
assigned to Executive. Executive shall comply with provisions of this Agreement
and shall at all times be subject to such UGSI policies and procedures,
including, but not limited to, the UGSI Code of Conduct, as UGSI may from time
to time establish as pertaining to Executive.
SECTION 2. COMPENSATION AND BENEFITS
2.1 For the term of this Agreement, UGSI shall pay Executive a salary of
not less than FIFTEEN THOUSAND AND 00/100 DOLLARS ($15,000.00) per month to be
paid in semi-monthly payments.
2.2 Executive shall be entitled to annual bonuses, payable as follows:
2.2.1 An unconditional and irrevocable bonus for the first year of
this Agreement of NINETY THOUSAND AND 00/100 DOLLARS ($90,000.00), to be
paid on or before the first anniversary of the Effective Date of this
Agreement.
2.2.2 Executive shall be eligible to participate in UGSI's Executive
Bonus Plan, for the first calendar year following the Effective Date.
2.2.3 All bonus payments in excess of the first year bonus specified
in paragraph 2.2.1 are contingent upon Executive's not having been
discharged for Cause (as such term is defined in paragraph 3.1) by UGSI or
Executive's not having voluntarily terminated his employment under
paragraph 3.1.2 at the time each particular payment is due.
2.3 Executive shall be eligible for a discretionary performance-based
bonus based upon the actual financial performance of UGSI in relation to the
projected approved business plan. Any bonus payable as a performance bonus
shall be in the amount, and paid at the time and in the manner, as determined by
the Oversight Committee of UGSI.
2.4 In the event that an initial public offering of the common stock of
UGSI (an "IPO") occurs on or before December 31, 1998, then UGSI agrees to grant
stock options to Executive in accordance with a stock option plan to be
maintained by UGSI. Such grant shall be for an option to purchase forty five
thousand (45,000) shares of the Class A common stock of UGSI (which is the class
of common stock which would be issued in connection with an IPO). Executive
shall become vested in such shares over a three-year period, with one-third of
the options vesting in calendar year 1999 on the vesting date as established in
the option plan under which such options are granted ("Vesting Date");
one-third of the options vesting on the Vesting Date in 2000; and the balance of
all unvested options shall vest on the Vesting Date in 2001. Any unvested
options shall be forfeited immediately upon Executive's termination of
employment for any reason other than death, termination without Cause as defined
in paragraph 3.1.3, or termination by Executive for Cause as defined in
paragraph 3.1.5, in each of which events vesting shall continue in accordance
with the vesting schedule set forth herein. For purposes of determining the
number of shares in which the Executive will vest, all numbers shall be rounded
up to the next highest whole number so that options will not vest in fractions.
Executive shall have 10 years from the Effective Date of this Agreement to
exercise his purchase option. The exercise price of the option shares awarded to
Executive shall be the price of a share of UGSI Class A Common Stock (as stated
on a registration statement on Form S-1 filed by UGSI with, and declared
effective by, the Securities and Exchange Commission) ("IPO Price").
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If the IPO is not accomplished and closed by December 31, 1998, then Executive
shall have no options or other rights to purchase UGSI common stock under this
Agreement or any UGSI stock option plan, but Electronic Data Systems Corporation
("EDS") shall provide Executive with a restricted stock unit under the 1996
Incentive Plan for EDS ("IP") entitling the Executive to acquire five thousand
(5,000) shares of EDS Common Stock five years after the Effective Date. All
restricted stock units granted to Executive shall be subject to the termination,
cancellation, modification and revocation provisions as well as the standard
restrictions placed on restricted stock units pursuant to the terms of the IP.
2.5 UGSI will provide Executive with a leased car of any General Motors or
Saab family of automobiles not to exceed a manufacturer's suggested retail price
of THIRTY-EIGHT THOUSAND FIVE HUNDRED DOLLARS ($38,500). The term of the lease
shall not exceed 24 months. Executive will be entitled to select a new leased
vehicle at the end of the lease term provided that Executive remains employed
with UGSI. Executive shall be required to comply with all conditions of the
lease of the automobile as described in the lease agreement.
2.6 UGSI will reimburse Executive for certain costs approved by UGSI as
being reasonable and customary expenses incurred by Executive to relocate to
St. Louis, Missouri. Such reimbursable expenses include reasonable expenses for
searching for a new house in the St. Louis, Missouri area, reasonable temporary
living, travel expenses, sale of current residence, the shipment of household
goods, and the closing costs associated with and incurred by Executive in
obtaining a new residence in St. Louis, Missouri. Within ninety (90) days of
incurring reimbursable relocation expenses, Executive must provide UGSI with
satisfactory proof of such expenses. If the reimbursement or such reasonable
relocation expenses shall be income to Executive, then Executive shall receive
additional payment from UGSI in an amount equal to any tax liability associated
with the reimbursement of expenses.
2.7 While employed by UGSI, Executive shall be eligible to participate,
on the same basis, but not necessarily to the same extent, as other similarly
situated senior officers of UGSI in all employee benefit plans and programs,
including improvements or modifications of the same, sponsored by UGSI on the
Effective Date or thereafter. Executive shall be entitled to purchase life
insurance of up to ONE MILLION TWO HUNDRED FIFTY THOUSAND AND 00/100 DOLLARS
$1,250,000.00, which can be purchased by Executive at the group insurance
premium rates then available to UGSI.
SECTION 3. TERM AND TERMINATION
3.1 Executive's employment under this Agreement may not be terminated by
the parties except as follows:
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3.1.1 Termination and Extension. Unless extended in accordance with
the provisions of this paragraph, this Agreement shall automatically
terminate two years from the Effective Date. This Agreement shall
automatically extend for additional one-year terms unless either party
delivers to the other party, at least 60 days prior to the expiration of
the Agreement, written notice of such party's intent to terminate the
Agreement. Such notice to Executive must be delivered to Executive's
address then on record with the UGSI. Notice to UGSI must be delivered to
the then Chief Executive Officer at the designated headquarters of UGSI.
3.1.2 Executive's Voluntary Termination. Executive may terminate his
employment with UGSI at any time for any reason whatsoever, by giving sixty
(60) days' written notice to UGSI.
3.1.3 Termination With Notice. UGSI may terminate Executive's
employment at any time for any reason whatsoever by giving 60 days' written
notice to Executive.
3.1.4 Termination for Cause. UGSI may terminate Executive's
employment at any time for Cause provided that any such Cause shall remain
uncorrected for thirty (30) days following UGSI's written notice to
Executive. For purposes of this paragraph, the term "Cause" shall mean (a)
gross or habitual neglect of duties or misconduct in the performance of the
duties and services required of Executive pursuant to this Agreement; (b)
conduct of Executive which is materially detrimental to UGSI's reputation
or business operations or its ability to secure or renew future contracts;
(c) Executive's conviction of a felony or of a misdemeanor involving moral
turpitude; (d) Executive's breach of a material provision of this
Agreement; (e) continued failure or refusal of Executive to faithfully,
diligently and competently perform the usual and customary duties of his
employment; or (f) continued failure or refusal of Executive to materially
comply with the policies, standards and regulations of UGSI as from time to
time may be made known to Executive.
3.1.5 Executive's Termination for Cause. Executive may terminate his
employment with UGSI at any time for Cause. For purposes of this paragraph
3.1.5, the term "Cause" shall mean a material breach of a material
provision of this Agreement which remains uncorrected for 30 days following
written notice to UGSI by Executive of such breach.
3.1.6 Termination Upon Death or Incapacity. Executive's employment
will also terminate immediately upon Executive's death or incapacity by
reason of accident, sickness, or other circumstance which renders Executive
mentally or physically incapable of performing the duties and services
required hereunder.
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3.2 The effects of termination of the employment relationship shall be as
follows:
3.2.1 Termination of Benefits. In the event of Executive's voluntary
termination of employment pursuant to paragraph 3.1.2 or the termination of
Executive's employment by UGSI for Cause pursuant to paragraph 3.1.4, UGSI
shall have no further obligation to provide Executive with any benefits
and/or payments, except as required by law or the terms of a controlling
benefit or stock plan or policy and the payment of any salary or bonus
accrued to the Termination Date.
3.2.2 Death and Disability Benefits. In the event of the termination
of the employment relationship by reason of death or incapacity under
paragraph 3.1.6, UGSI shall pay Executive his salary to the date of his
death or incapacity and the right of Executive or Executive's heirs to
compensation thereafter shall be governed by the applicable death,
disability, pension, insurance or other written benefit plans or policy.
3.2.3 Salary Continuation Under Limited Circumstances. In the event
UGSI terminates the employment of Executive with notice as set forth in
paragraph 3.1.3, or Executive terminates the employment relationship for
Cause under paragraph 3.1.5, UGSI will pay to Executive an amount equal to
one year of his salary and any bonus to which Executive might otherwise be
entitled. Any unvested UGSI stock options shall continue to vest in
accordance with the vesting schedule set forth in paragraph 2.4.
3.2.4 Employment at Will After Termination of Agreement. If, upon
the termination of this Agreement pursuant to paragraph 3.1.1, the parties
to this Agreement agree that Executive shall remain employed by UGSI, then
Executive's employment with UGSI will continue in accordance with, and
subject to, the terms and conditions of this Agreement, except that
Executive's continued employment will not be for any specific term but will
be at-will and either UGSI or Executive may terminate the employment
relationship at any time for any reason whatsoever. If UGSI then terminates
the employment of Executive pursuant to paragraph 3.1.3 or Executive
terminates the relationship for Cause pursuant to paragraph 3.1.5,
Executive shall be entitled to his salary and bonus through the date of
termination. If UGSI terminates the employment of Executive for Cause
pursuant to paragraph 3.1.4 or Executive voluntarily terminates his
employment pursuant to paragraph 3.1.2, Executive shall be entitled to his
salary through the date of termination and no bonus payments.
3.2.5 Termination Date. Executive's termination of employment shall
be effective on the date coincident with the occurrence of a terminating
event as described in this Section 3, or such other date as determined by
the Board of Directors of UGSI. The effective date of Executive's
termination of employment shall be the "Termination Date."
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SECTION 4. EXECUTIVE'S NON-COMPETITION AND NON-SOLICITATION OBLIGATIONS
4.1 Executive's Services for Exclusive Benefit of UGSI. While employed by
UGSI, Executive shall devote Executive's full business time and best efforts to
the performance of his duties and responsibilities hereunder and shall not
engage in any other employment or business venture without the prior, written
consent of an officer of UGSI.
4.2 Surviving Covenants. If Executive's employment at UGSI is terminated
by either UGSI or Executive for any reason except Executive's death, all
covenants set forth in this Section 4 shall survive such termination. While
employed by UGSI and for a period of 12 months thereafter, Executive shall not
directly or indirectly, individually or as an employee, contractor, consultant,
partner, officer, director or stockholder (other than as a holder of less than
five percent of the equity of a publicly traded company) or in any other
capacity, engage in any of the following conduct:
4.2.1 Non-Compete and Proprietary Rights. Perform duties as or for a
Competitor of UGSI (i) which are in either the industry(ies) or geographic
location(s) in which Executive performed services for UGSI in the most
recent five years of Executive's UGSI employment and which are the same or
substantially similar to the duties performed by Executive at UGSI; or (ii)
which involve the use of any Confidential Information or Innovations (as
defined in paragraph 5.8, below) which Executive has received, obtained or
acquired during, or as a consequence of, Executive's employment with UGSI;
or
4.2.2 Employment by Customer. Perform duties for any current
customer or prospective customer of UGSI with which Executive has had
business contact during the most recent five years of his employment at
UGSI.
4.3 Impermissible Conduct Without Proper Approval. During the time of
Executive's employment with UGSI and for a period of 12 months thereafter,
without the express, prior written consent of an UGSI officer, Executive shall
not engage in any of the following conduct:
4.3.1 Hiring Away UGSI Employees. Hire, attempt to hire, or assist
any other person or entity in hiring or attempting to hire any current
employee of UGSI or any person who was an UGSI employee within the
six-month period prior to the termination of Executive's employment; or
4.3.2 Competition. Solicit, divert, or take away, in competition
with UGSI, the business or patronage of any current UGSI customer or any
prospective customer with which Executive has had business contact during
his employment at UGSI. This restriction shall not apply to any person or
entity who is no longer a customer or prospective customer at the time of
any such solicitation by Executive.
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4.4 Automatic Extension of Restrictive Period. Executive agrees that if
he acts in violation of paragraph 4.2 or paragraph 4.3 of this Agreement, the
number of days that such violation exists will be added to any period of
limitations on the specific activities.
4.5 Executive's Acknowledgment of Reasonableness of Limitations.
Executive acknowledges that the limitations set forth in Section 4 of this
Agreement, are reasonable and necessary to protect the valid business interests
and goodwill of UGSI. Executive further acknowledges that UGSI is engaged in
the business of providing information technology and related services to
customers located throughout the United States and the World, and that UGSI
actively solicits business and services customers throughout this territory.
4.6 Competitor Defined. As used in this paragraph 4, the term
"Competitor" means an individual, business or any other entity or enterprise
engaged in, or having publicly announced its intent to engage in business that
is substantially similar to UGSI's business, or the business of UGSI's parent,
subsidiaries or affiliates.
SECTION 5. UGSI'S PROPRIETARY RIGHTS AND CONFIDENTIAL INFORMATION
5.1 Prohibited Use of Confidential Information or Innovations After
Termination. If Executive's employment at UGSI is terminated by either UGSI or
Executive for any reason (including Executive's death), this Section 5 shall
survive such termination. Both during and after the term of Executive's
employment, Executive will not, directly or indirectly, use or disclose any
Confidential Information or Innovations, without the express, prior written
consent of an UGSI officer, except as may be necessary to perform Executive's
duties for the benefit of UGSI during Executive's employment with UGSI. The
restrictions set forth in this paragraph 5.1 will last throughout Executive's
employment with UGSI and for a period of 10 years following the termination of
Executive's employment, with the exception of trade secrets, trademarks,
copyrights and patents, for which the restrictions herein regarding disclosure
or use shall last in perpetuity or for such other maximum period as the law
allows.
5.2 Return of UGSI Property. Upon termination of Executive's employment,
Executive will promptly return to UGSI any UGSI hardware or software in
Executive's possession or control, and all documents, information and materials
of any nature pertaining to Executive's work with UGSI, or relating to the
business of UGSI. Furthermore, Executive will not take any software, documents
or materials or copies thereof containing Confidential Information or
Innovations.
5.3 Disclosure of Innovations. Executive will promptly disclose to UGSI,
or its designees, in writing, all Innovations that Executive, alone or jointly
with others, creates or first reduces to practice during the period of
Executive's employment with UGSI.
5.4 UGSI's Ownership of Proprietary Rights. Executive hereby assigns and
agrees to assign to UGSI, its successors and assigns, Executive's entire right,
title and interest in and to: (a) any worldwide patents, patent applications,
copyrights, trade secrets and other intellectual property rights in any
Innovations; and (b) any Moral Rights that Executive may have in or with
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respect to any Innovations. Executive also waives and agrees never to assert any
Moral Rights Executive may have in or with respect to any Innovations, even
after termination of Executive's employment with UGSI.
5.5 Protection of Proprietary Rights. Executive shall do all lawful
things to assist UGSI in obtaining and enforcing patents, copyrights, trade
secret rights, and other legal protections of UGSI's Innovations in any country.
Executive will execute any documents that UGSI may reasonably request for use in
obtaining or enforcing such patents, copyrights, trade secret rights and other
legal protections. Executive's obligations under this paragraph will continue
beyond the termination of Executive's employment with UGSI.
5.6 Use of Executive's Likeness. Executive authorizes UGSI to use, reuse,
and to reasonably grant others the right to use and reuse, without additional
compensation, Executive's name, photograph, likeness (including caricature),
voice, and biographical information, and any reproduction or simulation thereof,
in any media now known or hereafter developed, for valid business purposes of
UGSI.
5.7 Executive Acknowledgment of Reasonable Limitations. Executive
acknowledges that the limitations set forth in Section 5 of this Agreement are
reasonable and necessary to protect the valid business interests and goodwill of
UGSI. Executive further acknowledges that UGSI is in an industry in which both
the creation and use of information and innovation is critical to business
success, and that the protection of that information/innovation is a valid
interest of UGSI. Executive further acknowledges that signing this Agreement is
required for his having access to UGSI's confidential business and technological
information.
5.8 Definitions. As used in this Section 5, "Confidential Information"
means all business information, technological information, intellectual
property, trade secrets and other information belonging to UGSI, its parent,
subsidiaries or affiliates or relating to UGSI's business, technology,
customers, vendors, or any other party with whom UGSI agrees to hold information
of such party in confidence, which is not generally available to the public.
Also, as used in this Section 5, "Innovations" means all developments,
improvements, designs, original works of authorship, formulas, processes,
software programs, databases and trade secrets that relate to any services,
product, systems or other business(es) of UGSI, whether or not patentable,
copyrightable or protectable as trade secrets, that Executive, alone or jointly
with others, creates or first reduces to practice during the period of
Executive's employment with UGSI. Furthermore, "Moral Rights" means any right
to claim authorship of a work of authorship, to object to or prevent the
modification of any such work of authorship, or to withdraw from circulation or
control the publication or distribution of any such work of authorship. For
purposes of all provisions in this Section 5, "UGSI" mean UGSI, its parent,
subsidiaries or affiliates.
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SECTION 6. MISCELLANEOUS
6.1 Exclusion of Property of Others. Executive will not bring to UGSI or
use in the performance of his duties any documents or materials of a former
employer that are not generally available to the public or that have not been
legally transferred to UGSI.
6.2 Agreement to Testing for Controlled Substances. Executive understands
and agrees that, from time to time, Executive may be reasonably tested to detect
the presence or absence of any illegal drugs or controlled substances and that
the results of any such tests shall be released to UGSI.
6.3 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of any other person, association, or entity which may hereafter
acquire or succeed to all or substantially all of the business or assets of UGSI
by any means whether direct or indirect, by purchase, merger, consolidation, or
otherwise, in the same manner and to the same extent that UGSI would be
obligated under this Agreement if no succession had taken place. Executive's
rights and obligations under this Agreement are personal and such rights,
benefits, and obligations of Executive shall not be voluntarily or involuntarily
assigned, alienated, or transferred by Executive, whether by operation of law or
otherwise, without the prior, written consent of an officer of UGSI.
6.4 Authorization to Deduct Amounts Owed. Upon Executive's separation from
employment, UGSI is authorized to deduct from Executive's final wages or other
monies due Executive any debts or amounts owed to UGSI by Executive.
6.5 Enforcement to Full Extent Permissible. If the scope of any provision
contained in this Agreement is too broad to permit enforcement of such provision
to its full extent, then such provision shall be enforced to the maximum extent
permitted by law, and the parties hereby consent that such provision may be
reformed or modified accordingly, and enforced as reformed or modified, in any
proceeding brought to enforce such provision.
6.6 Extraordinary Relief and Remedies. Executive understands and agrees
that UGSI would be irreparably damaged and that money damages cannot fully
compensate UGSI in the event that the provisions of Sections 4 or 5 of this
Agreement are violated, and agrees that UGSI shall be entitled (in addition to
any other remedy to which it may be entitled, at law or in equity) to an
injunction or injunctions to redress breaches of this Agreement and to
specifically enforce the terms and provisions hereof.
6.7 Severability. Each provision of this Agreement will be interpreted
in such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be prohibited by or invalid under
applicable law, such provision, to the extent of such prohibition or invalidity,
shall be deemed not to be a part of this Agreement, and shall not invalidate the
remainder of such provision or the remaining provisions of this Agreement.
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6.8 Jurisdiction. Any action or proceeding arising out of or relating to
this Agreement may be commenced in any court of competent jurisdiction in Collin
County, Texas, and shall be governed by and interpreted under the laws of Texas.
6.9 Modification or Amendment. This Agreement may not be modified or
amended except by a written instrument executed by Executive and an authorized
officer of UGSI.
IN WITNESS WHEREOF, Unigraphic Solutions Inc. and Xxxx Xxxxxxx have
executed this Personal Service Agreement to be effective as of the Effective
Date.
Agreed to this 2nd day of March, 1998 by and among:
EXECUTIVE
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Xxxx Xxxxxxx
UNIGRAPHIC SOLUTIONS INC.
Agreed To By Electronic Data
Systems Corporation for Purposes
of Paragraph 2.4 only:
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxx Xxxxxxx
------------------------------ -------------------------------------
Xxxx Xxxxxxxx, Xxxx Xxxxxxx, President
Vice President
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