Exhibit 10.2
EMPLOYMENT AGREEMENT
AGREEMENT dated as of October 16, 2001, among SYNERGY 2000,
INC., a Delaware corporation ("Parent"), INFINITY TECHNOLOGY SOLUTIONS,
INC., a Delaware corporation (the "Company"), and XXXXXXX X. XXXXXX,
XX. ("Employee").
Company currently is engaged in the business of providing comprehensive
business and technology solutions, combining expertise in information technology
with practical consulting solutions for complex workforce issues. Employee is
experienced in general management, technology and operational services affecting
the Company.
Company desires to employ the Employee, and Employee is willing to
accept such employment, in each case, subject to the terms and conditions set
forth in this Agreement.
Accordingly, Company and Employee hereby agree as follows:
I. TERM OF EMPLOYMENT
The term of Employee's employment under this Agreement shall be for a
period of three (3) years, commencing as of effective time (the "Effective
Time") of the merger (the "Merger") among, INTER ALIA, the Company, Parent, and
Convert-Tech, Inc., a California corporation, unless earlier terminated as
provided in Article IV hereof (the "Employment Period"). Following the initial
three (3) year term, this Agreement shall be renewed automatically for
successive terms of one (1) year unless either party gives notice to the other
at least ninety (90) days prior to the expiration of any such term of its or his
intention not to renew.
II. EMPLOYMENT; DUTIES AND ACCEPTANCE
SECTION 2.01. EMPLOYMENT. Employee shall devote his full-time services,
skill and time to the affairs of the Company and the promotion of its interests.
Employee shall be the Executive Vice President of Parent and the President of
Company and shall be responsible, subject always to the direction of the
Parent's and Company's Boards of Directors, for working with Parent's and
Company's general management, business development and marketing teams. Employee
shall report to the Company's and Parent's Boards of Directors. Employee's
expenditure of reasonable amounts of time for personal, business (for services
to or for the benefit of any of Infinity Web Systems, Inc., VROOM, Inc., and
Transformation Consulting, Inc.), charitable or professional activities shall
not be deemed a breach of his undertaking to provide the required services
hereunder, subject always to the provisions of Section 5.02 hereof, provided
that such activities do not interfere materially with Employee's ability to
render such services.
SECTION 2.02. ACCEPTANCE OF EMPLOYMENT BY EMPLOYEE. Employee accepts
such employment with Company and shall render the services required by this
Agreement to be rendered by him, and hereby agrees to execute and deliver the
Company's "Confidentiality and Invention Assignment Agreement," in the form
attached hereto. The terms of that agreement require the Employee to refrain for
a period of time after employment from competing with the Company and Parent or
using or disclosing the Company's and Parent's Confidential Information (as
defined in the agreement) or any confidential information received during
Employee's prior employment in any manner which might be detrimental to or
conflict with the business interests of the Company, Parent, or its employees,
but that agreement does not prevent Employee from using Employee's general
knowledge and experience - no matter when or how gained - in any new position or
field. Further, Employee's activities in furtherance of the objectives of VROOM,
Inc. and Transformation Consulting, Inc. are expressly permitted and are
conclusively deemed not to be competitive with the activities of the Company and
Parent.
III. EMPLOYEE'S COMPENSATION
SECTION 3.01. BASE COMPENSATION. As compensation for services to be
rendered pursuant to this Agreement, Company shall pay Employee and Employee
shall accept, a base salary (the "Salary") at the annual rate of Two Hundred
Forty Thousand Dollars ($240,000), payable at the annualized rate of One Hundred
Eighty Thousand ($180,000) for the period through December 31, 2001, with the
deferred portion payable as soon as practicable subsequent to December 31, 2001;
PROVIDED, HOWEVER, that if the deferred portion is not paid on or before March
15, 2002, such amount shall be evidenced by an unsecured demand promissory note
made by Company in favor of Employee. Thereafter, Company shall pay Employee at
an annualized rate of not less than the rate paid for the immediately preceding
period, subject to annual adjustment, upwards but not downwards. The salary
shall be payable to Employee in accordance with the Company's standard payroll
policies.
SECTION 3.02. BONUS.
(a) Guaranteed Bonus. Employee shall be entitled to a guaranteed bonus
payable in cash in an amount equal to twenty-five percent (25%) of the Salary
payable pro-rata commencing with the 2001 calendar year, not later than March
15, 2002, and annually thereafter, and pro-rated in the event of commencement,
expiration or termination prior to said payment date.
(b) Performance Bonus. Employee shall be entitled to incentive
compensation, payable by the Company on a quarterly basis not later than
forty-five (45) days following the end of each calendar quarter, in an amount
equal to a percentage of the Company's actually collected revenues generated by
the Company's technology consulting operations (but expressly excluding
therefrom all revenues generated by the operations of any of the Company's
managing general agency, insurance company or third-party administration
activities), in accordance with the schedule set forth below:
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Revenues Percentage Bonus Compensation
-------- -----------------------------
Up to $10,000,000 3%
$10,000,001-$20,000,000 2%
More than $20,000,000 1%
The calculation of said quarterly performance bonus payment shall be determined
by the Company's regularly engaged certified public accountants, and shall be
subject to reconciliation on a continuing basis. At Employee's option, Employee
may elect to receive such performance bonus in Parent Common Stock or options to
purchase Parent Common Stock upon terms mutually determined by Employee and
Parent.
(c) Employee shall be entitled to such additional bonuses as may be
determined by the Company's Board of Directors.
SECTION 3.03. STOCK OPTIONS. Employee shall receive options, as of
January 1 of each year commencing with January 1, 2002, to purchase seventy-five
thousand (75,000) shares of the Parent's Common Stock, at a price equal to 110%
of the closing bid price of the Parent's Common Stock on its Principal Market
determined as of the most recent trading date immediately preceding the date of
each such grant, and expiring at such time as determined by the Parent's Board
of Directors and identical to the expiration dates granted to Parent's senior
executive management. Said option grant shall be pro-rated in the event of
termination prior to January 1 of any year. "Principal Market" means the OTC
Electronic Bulletin Board or the NASDAQ SmallCap Market as appropriate. Employee
shall be entitled to such additional stock options as may be granted to him
under any Company stock option plan(s) from time to time in effect at the
Company.
SECTION 3.04. PARTICIPATION IN EMPLOYEE BENEFIT PLANS. Company shall
make available to the Employee the Company benefit program currently in effect
or as may be established from time to time by its Board of Directors for
similarly situated employees, including without limitation, any incentive
compensation plans or group benefit plans.
SECTION 3.05. KEY-MAN INSURANCE. Company shall acquire key man
insurance on the life of Employee not later than January 2002, naming the
Company as beneficiary in an amount not less than One Million Dollars
($1,000,000).
SECTION 3.06. VACATION AND SICK LEAVE PROVISIONS. Employee shall
receive not less than twenty (20) working days' vacation each year, exclusive of
legal holidays. At the option of Employee, unused vacation days may be carried
over to succeeding years or Employee shall be entitled to payment therefor at
the end of Company's fiscal year or Employee's anniversary date of employment,
whichever is mutually determined appropriate by Company and Employee. In
addition, the Employee shall be entitled to sick leave benefits during the term
of this Agreement in accordance with the customary policies applied to similarly
situated employees of the Company.
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SECTION 3.07. REIMBURSEMENT OF EXPENSES. Subject to prior approval by
the Company, Employee shall be reimbursed for reasonable expenses incurred in
connection with the business of Company upon the presentation by Employee, from
time to time, of an itemized account of and proper receipts for such
expenditures, including without limitation, an automobile lease or monthly
automobile allowance commencing as of the Effective Time of the Merger, in an
amount not less than Seven Hundred Fifty Dollars ($750) as determined after
consultation with the Company's regularly engaged certified public accountants.
SECTION 3.08. OTHER COMPENSATION. Employee shall receive such other
compensation as may from time to time be granted to Employee by Company's Board
of Directors.
SECTION 3.09. WITHHOLDING. All payments due to Employee under any
provisions of this Agreement shall be reduced by any amounts required to be
withheld by Company from time to time from such payments under applicable
Federal, state or local law or regulations then in effect.
IV. TERMINATION
SECTION 4.01. TERMINATION BY EITHER PARTY UPON NOTICE. Either party may
terminate this Agreement, with or without cause, effective upon delivery of
written notice of termination to the other party.
SECTION 4.02. TERMINATION BY COMPANY FOR CAUSE. Company may, at any
time, terminate this Agreement, for Cause. "Cause" means: (a) willful and
repeated failure to comply with the lawful directions of the Board of Directors;
(b) gross negligence or willful misconduct in the performance of Employee's
duties to the Company; (c) commission of any act of fraud against, or
misappropriation of material property belonging to the Company; or (d) action by
Employee that is materially injurious to the business or reputation of the
Company, in each case as determined in good faith by the Board of Directors,
including without limitation, action by Employee involving violation of any
criminal statute constituting a misdemeanor involving moral turpitude or a
felony, chronic alcoholism or drug addiction.
Upon termination pursuant to the provisions of this Section, Employee would be
entitled to receive only such compensation accrued and unpaid as of the
termination date.
SECTION 4.03. TERMINATION FOR DEATH AND DISABILITY. This Agreement
shall be terminated effective immediately and automatically, upon the death or
permanent disability of Employee. For purposes of this subsection, "permanent
disability" shall be deemed to have occurred if Employee is unable by reason of
illness or physical or mental disability to perform the services required under
this Agreement for a period aggregating 120 days within any period of 12
consecutive months during the Employment Period. Upon termination for death,
Employee would be entitled to receive only such compensation accrued and unpaid
as of the termination date. Under termination for permanent disability, Employee
would be entitled to receive full compensation and benefits for the initial six
(6) months following the determination of "permanent disability", and one-half
of such compensation and benefits for the next succeeding six (6) month period.
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SECTION 4.04. TERMINATION OTHER THAN FOR CAUSE. If Employee is
terminated for any reason other than as set forth in Sections 4.02 and 4.03
hereof, then Employee would be entitled to receive compensation and benefits as
follows:
(a) SEVERANCE. Two hundred percent (200%) of the annual Salary
at its then current level, payable in a lump sum or at the times such
salary would otherwise have been payable were Employee to remain
employed with Company, as determined by Employee in his sole
discretion, and acceleration of vesting of all options. If the Company
is unable to make payment entirely in cash, Company shall evidence such
obligation by an unsecured demand promissory note convertible into
shares of Parent's Common Stock on such terms as may be agreed upon by
Employee and Parent, or at Employee's option, Employee may elect to
receive said severance amount in Parent Common Stock or options to
purchase Parent Common Stock. If Employee elects to receive options to
purchase Parent Common Stock, then all such options shall be vested
immediately and Parent shall take such steps to register such
securities as promptly as practicable in a registration statement
pursuant to applicable Federal and state securities laws; and
(b) CONTINUATION OF BENEFITS. Company would maintain in full
force and effect Employee's benefit plans (or provide Employee with
alternative substantially equivalent coverage) for a period equal to
six (6) months, or as otherwise required by applicable Federal and/or
state law.
Further, if, during your employment with the Company there is
a Change of Control (as defined below), or if Executive elects to terminate his
employment within six months following a Change in Control, then Executive shall
be entitled to receive not less than the compensation and benefits set forth in
this Section, including the acceleration of vesting of all options. "Change of
Control" shall mean the occurrence of any of the following events:
(a) an acquisition of any voting securities (or securities
convertible or exchangeable for voting securities) of the Company (the
"Voting Securities) by any "person" (as the term "person" is used for
purposes of Section 13(d) or Section 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) immediately after which
such person has "beneficial ownership" (within the meaning of Rule
13d-3 promulgated under the Exchange Act) ("Beneficial Ownership") of
or otherwise is entitled to obtain (by virtue of any option, conversion
right, etc.) more than forty percent (40%) or more of the combined
voting power of the Company's then outstanding Voting Securities;
PROVIDED, HOWEVER, in determining whether a Change in Control has
occurred, Voting Securities that are acquired in a Non-Control
Acquisition (as hereinafter defined) shall not constitute an
acquisition that would cause a Change in Control. "Non-Control
Acquisition" shall mean an acquisition by (A) an employee benefit plan
(or a trust forming a part thereof) maintained by (1) the Company or
(2) any corporation, partnership or other person of which a majority of
its voting power or its equity securities or equity interest is owned
directly or indirectly by the Company (a "Subsidiary"), or (B) any
person in connection with a Non-Control Transaction (as hereinafter
defined);
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(b) the individuals who constitute the Board of Directors of
the Company as of the date hereof (the "Incumbent Board") cease for any
reason to constitute a majority of the Board of Directors; PROVIDED,
HOWEVER, that if the election, or nomination for election by the
Company's stockholders, of any new director was approved by a vote of
at least two-thirds of the Incumbent Board, such new director shall be
considered as a member of the Incumbent Board; provided, further, that
no individual shall be considered a member of the Incumbent Board if
such individual initially assumed office as a result of either an
actual or threatened "election contest" (as described in Rule 14a-11
promulgated under the Exchange Act) (an "Election Contest") or other
actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) approval by stockholders of the Company of: (A) a merger,
consolidation, share exchange or reorganization involving the Company,
unless (1) the stockholders of the Company, immediately before such
merger, consolidation, share exchange or reorganization, own, directly
or indirectly immediately following such merger, consolidation, share
exchange or reorganization, more than forty percent (40%) of the
combined voting power of the outstanding voting securities of the
corporation that is the successor in such merger, consolidation, share
exchange or reorganization (the "Surviving Company") in substantially
the same proportion as their ownership of the Voting Securities
immediately before such merger, consolidation, share exchange or
reorganization, (2) the individuals who were members of the Incumbent
Board immediately prior to the execution of the agreement providing for
such merger, consolidation, share exchange or reorganization constitute
at least two-thirds of the members of the board of directors of the
Surviving Company, and (3) no persons (other than the Company or any
Subsidiary, any employee benefit plan (or any trust forming a part
thereof) maintained by the Company, the Surviving Company or any
Subsidiary, or any person who, immediately prior to such merger,
consolidation, share exchange or reorganization had Beneficial
Ownership of fifteen percent (15%) or more of the then outstanding
Voting Securities) have Beneficial Ownership of fifteen percent (15%)
or more of the combined voting power of the Surviving Company's then
outstanding voting securities (a transaction described in clauses (1)
through (3) is referred to herein as "Non-Control Transaction"); (B) a
complete liquidation or dissolution of the Company; or (C) an agreement
for the sale or other disposition of all or substantially all of the
assets of the Company to any person (other than a transfer to a
Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any person (a "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
that, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by such Subject Person,
provided that if a Change in Control would occur (but for the operation of this
sentence) as a result of the acquisition of Voting Securities by the Company,
and after such share acquisition by the Company, such Subject Person becomes the
Beneficial Owner of any additional Voting Securities that increases the
percentage of the then outstanding Voting Securities Beneficially Owned by such
Subject Person, then a Change in Control shall occur.
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SECTION 4.05. EFFECT OF TERMINATION. Termination of this Agreement
shall not release or discharge either party hereto from any obligation, debt or
liability which may previously have occurred and remains to be performed upon
the date of termination. In addition, the provisions of Article V of this
Agreement shall survive such termination or expiration of the term of this
Agreement.
V. OBLIGATIONS OF EMPLOYEE
SECTION 5.01. ACCEPTANCE OF "CONFIDENTIALITY AND INVENTION ASSIGNMENT
AGREEMENT". Employee hereby agrees to execute and deliver, and to abide by, the
terms and conditions set forth in that certain "Confidentiality and Invention
Assignment Agreement" attached hereto.
SECTION 5.02. COMPETITION. Without Company's prior written approval,
Employee agrees that, during the Employment Period (and as the same may be
renewed or extended) or, if Employee terminates this Agreement without a
material breach by Company, for a period of one (1) year from the date thereof,
Employee shall not, directly or indirectly, for his own account or the account
of any other person, firm or company, (i) offer or sell any products or services
which compete with the Company on the date of such expiration or termination;
(ii) induce or attempt to induce any person(s) or entities which were customers
of Company during the Employment Period or were being actively solicited at the
time of termination of the Employment Period to cease doing business or not to
commence doing business in whole or in part with Company or solicit the business
of any such customer which compete with the Company on the date of such
expiration or earlier termination that Employee would have knowledge of by
virtue of his capacity; or (iii) solicit, interfere with, or endeavor to cause
any employee or consultant of Company to leave his employment or engagement or
induce or attempt to induce any such employee or consultant to breach his
employment or engagement agreement with Company. Participation in a business
shall include, but not be limited to, serving as a director, officer, employee,
agent or other representative of or having an interest in the business as an
owner, stockholder, partner, limited partner, joint venturer, material creditor
or any other financial interest; PROVIDED, HOWEVER, that the following shall not
be in violation of this covenant: (i) the ownership by Employee of not more than
five (5) percent of the outstanding shares of stock of any such business listed
on any national stock exchange or registered under the federal securities laws
and actively traded in the over-the-counter market; and (ii) participation by
Employee in any capacity in any business, which participation has received a
specific written approval of a majority of the Board of Directors of Company.
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SECTION 5.03. RIGHTS AND REMEDIES UPON BREACH OF EMPLOYEE'S
OBLIGATIONS. Because of the unique and proprietary nature of the Company's
Confidential Information and business operations and practices, and the unique
character of Employee's services, and because any material breach of any of the
provisions of this Agreement will cause irreparable injury to Company for which
money damages would not be an adequate remedy, it is understood and agreed that
Company's remedy for a material breach by Employee of this Agreement will be
inadequate, and that, therefore, in the event of any material breach by Employee
of his obligations pursuant to the terms of this Agreement, Company shall be
entitled, upon application to any court of competent jurisdiction, to equitable
relief (including, without limitation, provisional and permanent injunctive
relief and specific performance) in order to enforce or prevent violation of
such provision or provisions. Nothing contained herein shall be construed as
prohibiting Company from pursuing any other remedies provided to it by this
Agreement or available to it at law or in equity for such breach including,
without limitation, the recovery of money damages from Employee.
SECTION 5.04. SURVIVAL OF EMPLOYEE'S OBLIGATIONS. Employee's
obligations pursuant to this Article shall survive the termination of this
Agreement.
VI. GENERAL PROVISIONS
SECTION 6.01. NOTICES. All notices, requests, consents or other
communications provided for in or to be given under this Agreement shall be in
writing, may be delivered in person, by facsimile transmission (fax), by
overnight air courier or by mail, and shall be deemed to have been duly given
and to have become effective (a) upon receipt if delivered in person or by fax,
(b) one (1) day after having been delivered to an overnight air courier or (c)
three (3) days after having been deposited in the mails as certified or
registered matter, all fees prepaid, directed to the parties or their assignees
at the following addresses (or at such other address as shall be given in
writing by a party hereto):
If to Employee: Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
If to Company: Synergy 2000, Inc.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Board of Directors.
Fax: (000) 000-0000
SECTION 6.02. ASSIGNMENT. This Agreement shall not be assigned, pledged
or transferred in any way by either party hereto. Any attempted assignment,
pledge, transfer or other disposition of this Agreement or any rights, interests
or benefits contrary to the foregoing provisions shall be null and void.
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SECTION 6.03. CONFLICTING AGREEMENTS. Employee hereby represents and
warrants to Company that his entering into this Agreement, and the obligations
and duties undertaken by him hereunder, will not conflict with, constitute a
breach of or otherwise violate the terms of any employment or other agreement to
which he is a party and that he is not required to obtain the consent of any
person, firm, corporation or other entity in order to enter into this Agreement.
SECTION 6.04. INDEMNIFICATION; INSURANCE. Company shall indemnify
Employee and hold Employee harmless from any claims, actions, charges, expenses,
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding to which Employee was or is a party or is
threatened to be made a party arising by reason of the fact that Employee is or
was an employee of Company. For purposes of this Agreement, "proceeding" shall
mean any completed, actual, pending or threatened action, suit, claim or
proceeding, whether civil, criminal, administrative or investigative (including
an action by or in the right of the Company) and whether formal or informal, in
which Employee is, was or becomes involved by reason of the fact that Employee
is or was a director, officer, employee, trustee or agent of the Company or
that, being or having been such a director, officer, employee, trustee or agent,
Employee is or was serving at the request of the Company as a director, officer,
employee, trustee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to an
employee benefit plan, whether the basis of such proceeding is alleged action
(or inaction) by Employee in an official capacity as a director, officer,
employee, trustee or agent or in any other capacity while serving as a director,
officer, employee, trustee or agent. For purposes of this Agreement, "expenses"
includes, without limitation, attorneys' fees and any expenses of establishing a
right to indemnification under this Agreement or under the laws of the State of
California. In addition, to the extent economically practicable as determined by
the Company in its sole discretion, Company shall include Employee as an
additional named insured on its insurance policies.
SECTION 6.05. NO WAIVER. No term or condition of this Agreement shall
be deemed to have been waived, nor shall any party hereto be estopped from
enforcing any provision of this Agreement, except by written instrument of the
party charged with such waiver or estoppel. Any written waiver shall not be
deemed a continuing waiver unless specifically stated, shall operate only as to
the specific term or condition waived and shall not constitute a waiver of such
term or condition for the future or as to any act other than the act
specifically waived.
SECTION 6.06. GOVERNING LAW; VENUE. This Agreement shall be governed by
and construed in accordance with the laws of the State of California. In the
event of any dispute or controversy arising under this Agreement or the
transactions contemplated herein, the parties mutually consent to the
jurisdiction of the state and federal courts located in Los Angeles, California,
and agree that any litigation may be served outside of California with the same
force and effect as if service had been made in California.
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SECTION 6.07. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, including
the "Confidentiality and Invention Assignment Agreement" attached hereto, is
intended by the parties as a final expression of their Agreement with respect to
the terms included herein, and may not be contradicted or varied by evidence of
any prior or contemporaneous agreement. All prior negotiations, correspondence,
memoranda, and agreements, whether oral or written, are merged herein. Any
change, revision or modification of any provision of this Agreement shall not be
binding unless executed in writing and signed by a duly authorized
representative of each of the parties hereto.
SECTION 6.08. HEADINGS. Headings contained herein are for convenient
reference only; they are not a part of this Agreement and are not to affect in
any way the substance or interpretation of this Agreement.
SECTION 6.09. SURVIVAL OF PROVISIONS. In case any one or more of the
provisions or any portion of any provision contained in this Agreement
(including, without limitation, any geographical or temporal restrictions,
contained in Article V hereof) should be found to be invalid, illegal or
unenforceable in any respect, such provision or portion thereof shall be
modified or deleted in such manner so as to afford the parties the fullest
protection commensurate with making this Agreement, as modified, legal and
enforceable under applicable laws, and the validity, legality and enforceability
of any such provision shall not in any way be affected or impaired thereby, such
remaining provisions or portion of any such provision construed as severable and
independent thereof.
SECTION 6.10. ARBITRATION; ATTORNEYS' FEES. Any dispute or conflict
which arises between the parties hereto may be submitted to the American
Arbitration Association, before a single arbitrator, in accordance with its then
current Commercial Rules in Los Angeles, California, for arbitration and the
parties may, if so mutually agreed upon, be bound by the results of such
arbitration in accordance with applicable California law. If either party brings
an action for judicial review or enforcement of the arbitration proceedings,
award or decision, the prevailing party in any such action, trial or appeal
shall be entitled to its reasonable attorneys' fees to be paid by the
nonprevailing party as fixed by the court.
SECTION 6.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be considered a duplicate original.
SECTION 6.12. CONSTRUCTION. Each of the parties hereto has been
represented by counsel throughout this transaction who has carefully negotiated
the provisions hereof. The language in all parts of this Agreement shall be in
all cases construed simply according to its fair meaning and not strictly for or
against any of the parties. When the context so requires in this Agreement, the
masculine gender includes the feminine and/or the neuter, and the singular
number includes the plural.
SECTION 6.13. PARENT GUARANTEE. Parent hereby unconditionally
guarantees the payment and performance and each and every obligation of Company
hereunder.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, in the case of Company by its duly authorized officer(s) empowered so
to act, all as of the date first above written.
SYNERGY 2000 INC.,
By: /s/ Xxx Xxxxxx, Xx.
--------------------------------
Its: President
INFINITY TECHNOLOGY SOLUTIONS, INC.,
By: /s/ Xxx Xxxxxx, Xx.
--------------------------------
Its: President
/s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
[Signature of Employee]
XXXXXXX X. XXXXXX, XX.
------------------------------------
[Type or Print Name of Employee]
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CONFIDENTIALITY AND INVENTION ASSIGNMENT AGREEMENT
AGREEMENT dated as of October 16, 2001, between SYNERGY 2000,
INC., a Delaware corporation and its affiliated companies
(collectively, the "Company"), and XXXXXXX X. XXXXXX, XX. ("Employee").
In consideration of the commencement of Employee's employment and the
compensation paid to Employee, Employee acknowledges and agrees with the Company
as follows:
I. EFFECTIVENESS
This Agreement shall become effective on the earlier of (i)
commencement of Employee's employment with the Company, or (ii) the date and
time at which any Confidential Information (as defined in Section 2.01 below)
was or is first disclosed to Employee.
II. PROTECTION OF COMPANY'S CONFIDENTIAL INFORMATION
SECTION 2.01. CONFIDENTIAL INFORMATION. The Company has and will
develop, compile, and own certain proprietary techniques and confidential
information which have great value in its business (said techniques and
information being hereinafter referred to, collectively, as "Confidential
Information"). The Company has and also will have access to Confidential
Information of its Clients. ("Clients" shall mean any persons or entities for
whom the Company performs services or furnishes goods, or from whom the Company
or Employee obtains information). Confidential Information includes not only
information disclosed by the Company or its Clients to Employee in the course of
his or her employment, but also information developed or learned by Employee
during the course of his or her employment with the Company, such as Innovations
(as defined in Section 4.01 below). Confidential Information is to be broadly
defined. Confidential Information includes all information that has or could
have commercial value or other utility in the business in which the Company or
Clients are engaged or contemplate engaging. Confidential Information also
includes all information of which the unauthorized disclosure could be
detrimental to the interests of the Company or Clients, whether or not such
information is identified as Confidential Information by the Company or Clients.
By example and without limitation, Confidential Information includes all
technical and non-technical information including copyright, trade secret and
proprietary information, pricing strategies and models, know-how, processes,
algorithms, software programs, software source documents, and formulas related
to the current, future or proposed products and services of the Company, and
includes, without limitation, the Company's information concerning pricing
strategies, financial information, procurement and purchasing requirements,
business forecasts, and sales and marketing plans and information.
Notwithstanding the foregoing, Confidential Information shall expressly
exclude any information that (i) was in the public domain at the time it was
communicated to the Employee; (ii) entered into the public domain subsequent to
the time it was communicated to the Employee through no fault of the Employee;
(iii) was in the Employee's possession free of any obligation of confidence at
the time it was communicated to the Employee; (iv) was developed by Employee
independently of and without reference to any information communicated to the
Employee by the Company; (v) disclosure was required by any governmental body,
was otherwise required by law, or was necessary to establish the rights of
either party under this Agreement; or (vi) was developed or conceived by
Employee if furtherance of the objectives of VROOM, Inc. or Transformation
Station, Inc.
12
SECTION 2.02. PROTECTION OF CONFIDENTIAL INFORMATION. Employee agrees
that at all times during or after his or her employment, he or she will hold in
trust, keep confidential, and not disclose to any third party or make any use of
the Confidential Information of the Company or Clients except for the benefit of
the Company or Clients and in the course of his or her employment with the
Company. Employee further agrees not to cause the transmission, removal, or
transport of Confidential Information or Innovations from the Company's
principal place of business at 00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx, 00000, or such other place of business specified by the Company,
without prior written approval of the President of the Company. Employee
acknowledges that he or she is aware that the unauthorized disclosure of
Confidential Information of the Company or its Clients may be highly prejudicial
to their interests, an invasion of privacy, and an improper disclosure of trade
secrets. Whenever the approval, designation, specification, or other act of the
President of the Company is required under this Agreement, the President may, by
written designation, authorize an agent of the Company to perform such act.
III. NO CONFLICTING RELATIONSHIPS
Except as disclosed on Schedule A to this Agreement, Employee is not
aware of any other agreements, relationships or commitments to any other person
or entity which conflict with Employee's obligations to Company under this
Agreement. Employee will not disclose to the Company, or use, or induce the
Company to use, any proprietary information or trade secrets of others. Employee
represents and warrants that he or she has returned all property and
confidential information belonging to all prior employers.
IV. ASSIGNMENT OF EMPLOYEE INNOVATIONS
SECTION 4.01. DISCLOSURE. As of the Effective Time of the Merger,
Employee shall transfer and assign to the Company all of its rights, titles and
interests in and to the eServices Product, SmartDoc, and Smart Date 2000
Products. Thereafter, Employee will promptly disclose in writing to the Company
all further discoveries, developments, designs, ideas, innovations,
improvements, inventions, formulas, processes, techniques, know-how, and data
(whether or not patentable or registerable under copyright or similar statutes)
made, conceived, reduced to practice, or learned by Employee (either alone or
jointly with others) during the period of his or her employment for those
products or others that are related to or useful in the business of the Company,
or which result from tasks assigned to Employee by the Company, or from the use
of premises owned, leased, or otherwise acquired by the Company (all of the
foregoing being hereinafter referred to, collectively, as "Innovations").
Notwithstanding the foregoing, Company acknowledges and agrees that Company
shall have no claim or interest in and to any products developed by Employee in
connection with Employee's activities on behalf of VROOM, Inc. or Transformation
Station, Inc., or that otherwise qualifies under California Labor Code Section
2870, which section is reproduced in the Written Notification to Employee
attached as Schedule C hereto.
13
SECTION 4.02. ASSIGNMENT OF INNOVATIONS. Employee acknowledges and
agrees that all such Innovations belong to and shall be the sole property of the
Company and shall be Innovations of the Company subject to the provisions of
this Agreement. Employee hereby assigns to the Company all right, title, and
interest Employee may have or may acquire in and to all Innovations. Employee
agrees to sign and deliver to the Company (either during or subsequent to his or
her employment) such other documents as the Company considers desirable to
evidence (1) the assignment of all rights of Employee, if any, in any
Innovations to the Company and/or (2) the Company's ownership of such
Innovations. Any provision in this Agreement requiring Employee to assign rights
to an Innovation does not apply to any invention that qualifies under California
Labor Code Section 2870, which section is reproduced in the Written Notification
to Employee attached as Schedule C hereto.
SECTION 4.03. POWER OF ATTORNEY. In the event the Company is unable to
secure Employee's signature on any document necessary to apply for, prosecute,
obtain, or enforce any patent, copyright, or other right or protection relating
to any Innovation, whether due to mental or physical incapacity or any other
cause, Employee hereby irrevocably designates and appoints the Company and each
of its duly authorized officers and agents as his or her agent and
attorney-in-fact, to act for and in his or her behalf and stead to execute and
file any such document and to do all other lawfully permitted acts to further
the prosecution, issuance, and enforcement of patents, copyrights, or other
right or protections with the same force and effect as if executed and delivered
by the Employee.
V. TERMINATION OF EMPLOYMENT
SECTION 5.01. DELIVERY OF DOCUMENTS AND DATA ON TERMINATION OF
EMPLOYMENT. In the event of termination (voluntary or otherwise) of Employee's
employment with the Company, Employee agrees, promptly and without request, to
deliver to and inform the Company of all documents and data pertaining to his or
her employment and the Confidential Information and Innovations of the Company
or Clients, whether prepared by Employee or otherwise coming into his or her
possession or control, and to sign Schedule B to this Agreement. Employee will
not retain any written or other tangible material containing any information
concerning or disclosing any of the Confidential Information or Innovations of
the Company or Clients. Employee recognizes that the unauthorized taking of any
of the Company's trade secrets is a crime under California Penal Code Section
499c and is punishable by imprisonment in a state prison or in a county jail for
a time not exceeding one year, or by a fine not exceeding Five Thousand Dollars
($5,000), or by both such fine and such imprisonment. Employee further
recognizes that such unauthorized taking of the Company's trade secrets could
also result in civil liability under California Civil Code Section 3426, and
that willful misappropriation may result in an award against Employee for triple
the amount of the Company's damages and the Company's attorneys' fees in
collecting such damages.
14
SECTION 5.02. OBLIGATIONS OF EMPLOYEE AFTER TERMINATION OF EMPLOYMENT.
In the event of termination (voluntary or otherwise) of Employee's employment
with the Company, Employee agrees that he or she will protect the value of the
Confidential Information and Innovations of the Company and Clients and will
prevent the misappropriation or disclosure thereof. Employee will not disclose
or use to his or her benefit (or the benefit of any third party) or to the
detriment of the Company or its Clients any Confidential Information or
Innovation. Employee further agrees that for a period of one year immediately
following termination (voluntary or otherwise) of Employee's employment with the
Company, Employee shall not interfere with the business of the Company by
inducing an employee to leave the Company's employ or by inducing a consultant
to sever the consultant's relationship with the Company.
In addition, each party hereto shall refrain thereafter from uttering
any disparaging remarks or criticisms of the other party or its officers,
directors, shareholders, employees, representatives or agents which might have
the effect of injuring such party or such officers', directors', shareholders',
employees', representatives' or agents' character, reputations, or
profitability, and such party shall be entitled in the case of each such
utterance to liquidated damages in the amount of $10,000. Each party hereto
acknowledges that the liquidated damages specified above approximate the amount
of damages which a party would sustain taking into account, from the nature of
the case, that it would be impracticable or extremely difficult to fix the
actual damages. Each party hereto acknowledges further that such damages are
reasonable under the circumstances existing at the time this Agreement is made
and that this provision for liquidated damages is valid under Section 1671 of
the California Civil Code. Each party's entitlement to liquidated damages as
provided herein is in addition to, and not in lieu of, all its other rights and
remedies available hereunder or under applicable law or in equity.
VI. GENERAL PROVISIONS
SECTION 6.01. NOTICES. All notices, demands, requests, consents,
approvals or other communications required or permitted to be given hereunder
shall be in writing and may be personally served or may be deposited in the
United States mail, registered or certified, return receipt requested, postage
prepaid, addressed as follows:
If to the Company: Synergy 2000, Inc.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention of President.
If to the Employee: Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
or at such other address as such party shall have specified most recently to the
other party by written notice. Notice mailed as provided herein shall be deemed
given on the date of delivery, as evidenced by the return receipt.
15
SECTION 6.02. GOVERNING LAW. This Agreement shall be construed under
the substantive laws of the State of California and without giving effect to
California choice-of-law or conflict-of-law principles. In the event of any
dispute or controversy arising under this Agreement or the transactions
contemplated herein, the parties mutually consent to the jurisdiction of the
state courts of California and the federal district court for the Central
District of California, and agree that any litigation may be served outside of
California with the same force and effect as if service had been made in
California.
SECTION 6.03. PARTIES IN INTEREST. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns; PROVIDED, HOWEVER, that this Agreement may not be assigned by the
Employee without the prior written consent of the Company; PROVIDED, HOWEVER,
FURTHER, that the Company shall be entitled to assign all its rights and
delegate all its duties hereunder without the consent or any act on the part of
the Employee. In case of such assignment and delegation of duties by the
Company, the Employee hereby agrees to execute any releases and other
certificates, agreements and instruments requested by the Company to effectuate
the release of the Company from any liabilities and obligations hereunder.
SECTION 6.04. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the
schedules hereto constitutes and contains the entire agreement of the parties
hereto and supersedes any and all prior negotiations, correspondence,
undertakings and agreements between the parties respecting the subject matter
hereof. This Agreement may not be amended or modified, except by written
instrument signed by the party to be bound.
SECTION 6.05. WAIVER. Neither any failure nor any delay on the part of
the Company or the Employee in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise or the exercise of any
other right, power or privilege.
SECTION 6.06. SURVIVAL OF PROVISIONS. In case any one or more of the
provisions or any portion of any provision contained in this Agreement should be
found to be invalid, illegal or unenforceable in any respect, such provision or
portion thereof shall be modified or deleted in such manner so as to afford the
parties the fullest protection commensurate with making this Agreement, as
modified, legal and enforceable under applicable laws, and the validity,
legality and enforceability of any such provision shall not in any way be
affected or impaired thereby, such remaining provisions or portion of any such
provision construed as severable and independent thereof.
SECTION 6.07. ARBITRATION; ATTORNEYS' FEES. Any dispute or conflict
which arises between the parties hereto may be submitted to the American
Arbitration Association in accordance with its then current Commercial Rules in
Los Angeles County, California, for arbitration and the parties may, if so
mutually agreed upon, be bound by the results of such arbitration in accordance
with the California Code of Civil Procedure Section 1283.05. If either party
brings an action for judicial review or enforcement of the arbitration
proceedings, award or decision, the prevailing party in any such action, trial
or appeal shall be entitled to its reasonable attorneys' fees to be paid by the
nonprevailing party as fixed by the court.
16
SECTION 6.08. EMPLOYMENT AT WILL. Employment and compensation can be
terminated, with or without cause, and with or without notice, at any time, at
the option of the Company or the Employee. No provision set forth in this
Agreement shall limit or otherwise alter the foregoing.
SECTION 6.09. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, but all of which, when taken together, shall constitute one
and the same Agreement.
IN WITNESS WHEREOF, the Employee and in the case of the Company, by its
duly authorized officer empowered so to act, have duly executed this Agreement,
as of the date first above written.
COMPANY: SYNERGY 2000, INC.,
By: /s/ Xxx Xxxxxx, Xx.
--------------------------------
Its: President
CAUTION: THIS AGREEMENT AFFECTS YOUR RIGHTS TO INNOVATIONS YOU MAKE DURING YOUR
EMPLOYMENT, AND RESTRICTS YOUR RIGHT TO DISCLOSE OR USE THE COMPANY'S
CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO YOUR EMPLOYMENT. EMPLOYEE HAS
READ THIS AGREEMENT CAREFULLY AND UNDERSTANDS ITS TERMS. EMPLOYEE HAS COMPLETELY
FILLED OUT SCHEDULE A TO THIS AGREEMENT AND HAS RECEIVED A COPY OF THE WRITTEN
NOTIFICATION TO EMPLOYEE CONTAINING CALIFORNIA LABOR CODE SECTION 2870 ATTACHED
AS SCHEDULE C HERETO.
EMPLOYEE: /s/ Xxxxxxx X. Xxxxxx, Xx.
------------------------------------
XXXXXXX X. XXXXXX, XX.
17
SCHEDULE A
Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
As of October 16, 2001
Synergy 2000, Inc.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000 Attention of President.
Re: Employee Statement
------------------
Ladies and Gentlemen::
In connection with my employment by Synergy 2000, Inc., and its
affiliated companies (collectively, the "Company"), I hereby represent and
warrant as set forth below:
1. Confidential Information. Except for the transfer and assignment to
the Company of the following products: eServices Product, SmartDoc and Smart
Date 2000, Company agrees that I shall retain ownership in all such other
software and technology products heretofore developed by me or my affiliates,
including without limitation, VROOM, Inc. and Transformation Consulting, Inc.
2. Prior Inventions. I hereby transfer and assign to the Company all of
my rights, titles and interests in and to the eServices Product, SmartDoc and
Smart Date 2000 intellectual property. Except as set forth in the immediately
preceding sentence, I shall retain sole ownership of all other intellectual
property previously developed by me or my affiliates. Further, the Company shall
not be entitled to any right or claim to any intellectual property developed,
conceived and/or owned by any of VROOM, Inc. and Transformation Consulting, Inc.
3. Conflicting Relationships. Except as set forth below, I acknowledge
that I have no other current or prior agreements, relationships, or commitments
which conflict with my relationship with the Company under my Confidentiality
and Invention Assignment Agreement (if none, so state): __[specify conflicts]
Infinity Web Systems, Inc., VROOM, Inc., and Transformation Consulting, Inc. .
Dated: As of October 16, 2001.
/s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------
XXXXXXX X. XXXXXX, XX.
1
SCHEDULE B
XXXXXXX X. XXXXXX, XX.
0000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Synergy 2000, Inc.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000 Attention of President.
Re: Termination Certification
-------------------------
Ladies and Gentlemen:
I am writing to certify that I do not have in my possession, nor have I
failed to return, any Confidential Information or copies of such information, or
other documents or materials, equipment, or other property belonging to Synergy
2000, Inc., a Delaware corporation, and its affiliated companies (collectively,
the "Company"), or its Clients.
I further certify that I have complied with and will continue to comply
with all the terms of the Confidentiality and Invention Assignment Agreement
which I signed, including the reporting of any Innovations (as defined therein)
conceived or made by me which are covered by the Agreement.
I further agree that, in compliance with the Confidentiality and
Invention Assignment Agreement, I will preserve as confidential and not use any
or all Confidential Information, Innovations, or other information which has or
could have commercial value or other utility in the business in which the
Company or its Clients are engaged or in which they contemplate engaging. I will
not participate in the unauthorized disclosure of information that could be
detrimental to the interests of the Company or its Clients, whether or not such
information is identified as Confidential Information by the Company or its
Clients.
On termination of my employment with the Company, I will be employed by
__[name of new employer]__ in the _________________ Division and will be working
in connection with the following projects: __[generally describe the
projects]__.
Dated:
-------------------------
XXXXXXX X. XXXXXX, XX.
1
SCHEDULE C
SYNERGY 2000, INC.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
As of October 16, 2001
Xxxxxxx X. Xxxxxx, Xx.
0000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Written Notification to Employee
--------------------------------
Dear Xxxxx:
In accordance with California Labor Code Section 2872, you are hereby
notified that your Confidentiality and Invention Assignment Agreement does not
require you to assign to Synergy 2000, Inc., a Delaware corporation, and its
affiliated companies (collectively, the "Company"), any invention for which no
equipment, supplies, facilities, or trade secret information of the Company was
used and which was developed entirely on your own time, and which does not
relate to the business of the Company or to the Company's actual or demonstrably
anticipated research or development, or which does not result from any work
performed by you for the Company. You are hereby provided a copy of California
Labor Code Section 2870:
"(a) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or trade
secret information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice
of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or
(2) Result from any work performed by the employee for the
employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision (a), the
provision is against the public policy of this state and is
unenforceable."
Please acknowledge receipt of this written notification by
signing in the space indicated below.
Very truly yours,
SYNERGY 2000, INC.,
By: /s/ Xxx Xxxxxx, Xx.
--------------------------------
Its: President
ACKNOWLEDGED:
/s/ Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
[Signature]
Printed Name: Xxxxxxx X. Xxxxxx, Xx.
----------------------
Dated: As of October 16, 2001.
