EMPLOYMENT AGREEMENT
(Xxxxxx X. Xxxxxx)
AGREEMENT, made as of this 1st day of December 1998, by and between OAO
Technology Solutions, Inc., 0000 Xxxxxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx,
Xxxxxxxx, a Delaware corporation (the "Corporation"), and Xxxxxx X. Xxxxxx, 00
Xxxxxx Xxxxx, Xxxxxxxx, XX 00000 ("Employee").
W I T N E S S E T H :
WHEREAS, the Corporation is engaged in the business of providing
information technology infrastructure solutions through a full range of
outsourcing, enterprise resource planning, staff augmentation, and healthcare
information technology solutions;
WHEREAS, the Corporation desires to employ Employee as Executive Vice
President of Marketing and Sales Operations of the Corporation in connection
with the conduct of the business of the Corporation, and Employee desires to
accept such employment on the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending
legally to be bound, hereby agree as follows:
1. Employment. The Corporation hereby employs Employee as Executive Vice
President of Marketing and Sales Operations, and Employee hereby accepts such
employment, upon the terms and conditions hereinafter set forth.
2. Term. The Employment of Employee under this Agreement shall be on an "at
will" basis.
3. Office and Duties.
(a) During the term hereof, Employee shall serve as Executive Vice
President of Marketing and Sales Operations of the Corporation. Subject to
any restrictions set forth in the Shareholders' Agreement or in the Bylaws
of the Corporation, Employee shall perform such duties as are customary for
an Employee as Executive Vice President of Marketing and Sales Operations
of businesses in the United States similar in kind and size to the
Corporation and such other duties as may from time to time be assigned to
him by the President, the CEO or the Board of Directors of the Corporation
in keeping with his position.
(b) During the term hereof, Employee shall use his best efforts to
carry out his duties and responsibilities hereunder and devote his entire
working time to the business and affairs of the Corporation and shall not,
in any advisory or other capacity, work for any other individual, firm or
corporation without first having obtained the written consent of the
Corporation.
(c) During the term hereof, the principal place of employment of
Employee shall be the Corporation's headquarters in Greenbelt, Maryland or
such other locations as may be selected for the Corporation's facilities,
although it is understood that in connection with his duties under this
agreement, Employee will be required to travel to and perform services at
other locations.
(d) Employee represents and warrants to the Corporation that he is not
subject to, or a party to, any employment agreement, non-competition
covenant, non-disclosure agreement or other agreement, covenant,
understanding or restriction which would prohibit Employee from executing
this Agreement and performing fully his duties and responsibilities
hereunder, or which would in any manner, directly or indirectly, limit or
affect the duties and responsibilities which may now or in the future be
assigned to Employee by the Corporation.
(e) Employee agrees to cooperate at the request of the Corporation in
any efforts to obtain "key-man" life insurance on Employee's life.
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4. Compensation. As compensation for the services to be rendered hereunder
by Employee, the Corporation agrees to pay or provide to Employee:
(a) Salary. A basic salary (the "Base Salary") for such services at
the annual rate of $250,000, payable in semi-monthly installments.
(b) Bonus. Employee shall be eligible to earn an incentive bonus of up
to 100% of the base salary, subject to the achievement of certain company
and individual milestones determined annually by the Compensation Committee
of the Board of Directors.
(c) Options. Upon execution of this Agreement and subject to Board
Approval, the Corporation shall grant to Employee stock options of the
Corporation equal to 500,000 shares. Stock options will be governed by the
Corporation's 1996 Equity Compensation Plan, as amended and restated. The
option will become exercisable for the purchase of the shares in equal
increments on each of the first four (4) anniversaries of the date of
grant, and will expire on the earlier of the sixth (6th) anniversary of the
date of grant or: (i) immediately upon Employee's voluntary termination of
employment with the Corporation, (ii) immediately upon the Corporation's
discharge of Employee for cause (as defined herein); (iii) 90 days after
the Corporation discharges Employee without cause or due to Employee's
disability; and (iv) 180 days after Employee's death. The option will also
contain other customary terms and conditions which shall be reasonably
satisfactory to both parties.
(d) Insurance. The Corporation shall provide to Employee and his
family the employee contributory package of group life, health, dental and
disability insurance coverage that the Corporation makes available to its
employees. The term family shall mean the spouse of the Employee and his
dependent children who may be insured from time to time as dependents under
such policies of the Corporation.
(e) Automobile. The Corporation will provide Employee with a car
allowance not to exceed $800 per month. The allowance will be taxable to
employee. Employee shall be responsible for the payment of all insurance,
maintenance, repairs, gasoline and other reasonable and necessary costs
incident to the operation of such automobile.
(f) Other Benefits. Nothing contained herein shall be deemed to limit
or affect the right of Employee to receive additional bonuses or other
forms of additional compensation or to participate in any retirement,
disability, profit sharing, stock option, cash or stock bonus or other plan
or arrangement, or in any other benefits now or hereafter provided by the
Corporation for its employees or executives at the sole discretion of the
Board of Directors of the Corporation.
(g) Expenses. It is contemplated that, in connection with his
employment hereunder, Employee may be required to incur reasonable
business, entertainment and travel expenses. The Corporation agrees to
reimburse Employee in full for all such reasonable and necessary business,
entertainment and travel expenses incurred or expended by him in connection
with the performance of his duties hereunder; provided Employee submits to
the Corporation vouchers or expense statements satisfactorily evidencing
such expenses as may be reasonably required by the Corporation and such
expenses are in accordance with any corporate policy with respect thereto.
Such expenses shall be reimbursed 30 days after submission of any required
documentation therefor. All expenses must be approved by the President and
Chief Executive Officer of the Corporation or his designee.
(h) Vacation. Employee shall be entitled to fifteen (15) days of
Personal Leave, according to the Corporation's Employee Handbook. Such
Personal Leave may be taken at such times as is reasonably consistent with
proper performance by Employee of his duties and responsibilities
hereunder.
(i) 401K Plan. Employee will be eligible to participate in the
Corporation's 401K plan immediately through voluntary contributions, which
the Corporation will match $ .20 for each $1.00 contributed by Employee up
to the limits contained in the Corporation's plan.
5. Termination of Employment.
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(a) The Corporation may terminate this Agreement with cause
immediately upon written notice to Employee. "Termination for cause" shall
mean discharge by the Corporation on the following grounds:
(i) Employee's conviction in a court of law of any crime or offense,
which conviction makes him unfit for continuing employment, prevents him
from effective management of the Corporation or materially adversely
affects the reputation or business activities of the Corporation.
(ii) Dishonesty or willful misconduct which materially, adversely
affects the reputation or business activities of the Corporation and which
continues after written notice thereof to Employee.
(iii) Substance abuse, including abuse of alcohol or use of illegal
narcotics, and other drugs or substances, for which Employee fails to
undertake and maintain treatment after 15 days after requested by the
Corporation, or misappropriation of funds.
(a) Upon such termination for cause, Employee shall lose all right,
title and interest in and to all payments required to be made in accordance
with the provisions of this Agreement, and the Corporation shall have no
further obligation to Employee hereunder, except for compensation pursuant
to Paragraphs 4(a) and 4(d) through 4(i) to which Employee is entitled
through the date of termination, bonus compensation to which Employee is
entitled for and in respect of the preceding fiscal year if not theretofore
paid, and any benefits referred to in Paragraph 4 hereof to which Employee
has a vested right under the terms and conditions of the plan or program
pursuant to which such benefits were granted.
(b) The Corporation may terminate the Employee without cause at any
time. In the event of termination of Employee without cause, the
Corporation shall pay or provide to Employee (in addition to the salary,
bonus and other compensation to which Employee shall be entitled or shall
have earned pursuant to Paragraph 4 hereof through the date of such
termination and any benefits referred to in Paragraph 4 hereof in which
Employee has a vested right under the terms and conditions of the plan or
program pursuant to which such benefits were granted), (i) the basic salary
pursuant to the provisions of Paragraph 4(a) hereof for a period of 12
months from the effective date of such termination, payable ratably over
such 12 month period, and (ii) the health insurance coverage pursuant to
the provisions of Paragraph 4(d) hereof for a period of 12 months from the
effective date of such termination.
(c) Employee may terminate this Agreement by resignation and giving
the Corporation three (3) months notice. The Corporation can waive this
notice and agree with Employee to an earlier termination date. Upon
termination by Employee, all obligations of the Corporation and Employee
under this Agreement will cease as of the date of final termination, except
Employee's obligations under Paragraphs 7 and 8 will survive.
6. Restrictive Covenants and Confidentiality; Injunctive Relief.
(a) Employee agrees, as a condition to the Corporation agreeing to
employ Employee and to the performance by the Corporation of its
obligations hereunder, particularly its obligations under Paragraph 4
hereof and, in the case where Employee is terminated by Employer without
cause, in consideration of the payment of the Base Salary in effect on
termination thereof at the times it would otherwise be paid hereunder
during the 1 year subsequent to termination, that during the term of this
Agreement and any renewals and extensions hereof and for a period of 1 year
thereafter, or such shorter period if Employer elects not to continue to
pay any Base Salary as may be required hereunder subsequent to a
termination without cause, Employee shall not, without prior written
approval of the Board of Directors of the Corporation, directly or
indirectly through any other person, firm or corporation, whether
individually or in conjunction with any other person, or as an employee,
agent, consultant, representative, partner or holder of any interest in any
other person, firm, corporation or other association:
(i) solicit, entice or induce any Customer (as defined below) to
become a client, customer, OEM, distributor or reseller of any other
person, firm or corporation with respect to products and/or services then
sold or under development by the Corporation or to cease doing business
with the Corporation, and Employee shall not approach any such person, firm
or corporation for such purpose or authorize or knowingly approve the
taking of such actions by any other person; or
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(ii) solicit, entice or induce directly or indirectly any person who
presently is or at any time during the term hereof shall be an employee of
the Corporation to become employed by any other person, firm or corporation
or to leave their employment with the Corporation, and Employee shall not
approach any such employee for such purpose; or
(iii) compete with, or encourage or assist others to compete with, or
solicit orders or otherwise participate in business transactions in
competition with, the business engaged in by the Corporation at any time
during the term of Employee's employment (unless such business shall have
been abandoned by the Corporation). The restriction contained in this
subparagraph 7(a)(iii) shall apply anywhere worldwide.
For purposes of this Paragraph 6, a Customer means any person or
entity which at the time of determination if made prior to termination of
employment, or, after termination of employment, at the time of such
termination, shall be, or shall have been within two years prior to such
time, a client, customer, OEM, distributor or reseller of the Corporation
or a bona fide prospect to become a Customer.
Nothing in the foregoing shall prohibit Employee from engaging in any
business that is not in competition with the Corporation after termination
of employment with the Corporation, or investing in the securities of any
corporation having securities listed on a national securities exchange,
provided that such investment does not exceed 5% of any class of securities
of any corporation engaged in business in competition with the Corporation,
and provided that such ownership represents a passive investment and that
neither Employee nor any group of persons including him, in any way, either
directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes
any part in its business, other than exercising his rights as a
shareholder, or seeks to do any of the foregoing.
(b) Employee acknowledges that during the term of his employment, he
will have access to confidential information of the Corporation, including
information about "Developments" (as defined in Paragraph 7 below),
business plans, costs, customers, profits, markets, sales, products, key
personnel, pricing policies, operational methods and other business affairs
and methods and other information not available to the public or in the
public domain (hereinafter referred to as "Confidential Information"). In
recognition of the foregoing, Employee covenants and agrees that, except as
required by his duties to the Corporation, Employee will keep secret all
Confidential Information of the Corporation and will not, directly or
indirectly, either during the term of his employment hereunder or at any
time thereafter while such Confidential Information remains confidential,
disclose or disseminate to anyone or make use of, for any purpose
whatsoever except for the benefit of the Company in the course of his
employment, any Confidential Information, and upon termination of his
employment, Employee will promptly deliver to the Corporation all tangible
materials and objects containing Confidential Information (including all
copies thereof, whether prepared by Employee or others) which he may
possess or have under his control. The term "Confidential Information"
shall not include any information which can be demonstrated (i) to be
generally known in the industry or to the public other than through breach
of Employee's obligations hereunder, (ii) to have been in Employee's
possession prior to his employment with the Corporation and not assigned to
the Corporation, or (iii) to have been disclosed to Employee by an
independent third party not under any obligation of confidentiality.
(c) Employee represents (i) that his experience and capabilities are
such that the restrictions contained herein will not prevent him from
obtaining employment or otherwise earning a living at the same general
economic benefit as reasonably required by him and (ii) that he has, prior
to the execution of this Agreement, reviewed this Agreement thoroughly with
his legal counsel.
(d) Employee acknowledges that the restrictions contained in this
Paragraph 6 are reasonable and necessary to protect the legitimate business
interests of the Corporation and that the Corporation would not have
entered into this Agreement in the absence of such restrictions. By reason
of the foregoing, Employee agrees that if he violates any of the provisions
of this Paragraph 6, the Corporation would sustain irreparable harm and,
therefore, irrevocably and unconditionally (i) agrees that in addition to
any other remedies which the Corporation may have under this Agreement or
otherwise, all of which remedies shall be cumulative, the Corporation shall
be entitled to apply to any court of competent jurisdiction for preliminary
and permanent injunctive relief and other equitable relief, (ii) that such
relief and any other claim by the Corporation pursuant hereto may be
brought in the United States District Court for the State of Delaware, or
if such court does not have subject matter jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in the State of
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Delaware; (iii) consents to the non-exclusive jurisdiction of any such
court in any such suit, action or proceeding, and (iv) waives any objection
which Employee may have to the laying of venue of any such suit, action or
proceeding in any such court. Employee also irrevocably and unconditionally
consents to the service of any process, pleadings, notices or other papers
in a manner permitted by the notice provisions hereof. In the event that
any of the provisions of this Paragraph 6 hereof should ever be adjudicated
to exceed the time, geographic, product or service, or other limitations
permitted by applicable law in any jurisdiction, then such provisions shall
be deemed reformed in such jurisdiction to the maximum time, geographic,
product or service, or other limitations permitted by applicable law.
(e) Employee agrees that the Corporation may provide a copy of this
Paragraph 6 to any business or enterprise (i) which the Employee may
directly or indirectly own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing, or control
of, or (ii) with which he may be connected with as an officer, director,
employee, partner, principal, agent, representative, consultant or
otherwise, or in connection with which he may use or permit his name to be
used; provided, however, that this provision shall not apply as to
subparagraph (a) or (b) after expiration of the time periods set forth
therein or with respect to any activities, entities or persons excluded by
the terms hereof. Employee will provide the names and addresses of any of
such persons or entities as the Corporation may from time to time
reasonably request.
(f) In the event of any breach or violation of the restriction
contained in subparagraph (a) above, the period therein specified shall
xxxxx during the time of any violation thereof and that portion remaining
at the time of commencement of any violation shall not begin to run until
such violation has been fully and finally cured.
7. Ownership of Inventions and Ideas. Employee acknowledges that the
Corporation shall be the sole owner of all the results and proceeds of
Employee's service hereunder, including but not limited to, all patents, patent
applications, patent rights, formulas, copyrights, inventions, developments,
discoveries, other improvements, data, documentation, drawings, charts, and
other written, audio and/or visual materials relating to equipment, methods,
products, processes, or programs in connection with or useful to the
Corporation's business (collectively, the "Developments") which Employee, by
himself or in conjunction with any other person, may conceive, make, acquire,
acquire knowledge of, develop or create during the term of Employee's employment
hereunder, free and clear of any claims by Employee (or any successor or
assignee of him) of any kind or character whatsoever other than Employee's right
to compensation hereunder. Employee acknowledges that all copyrightable
Developments shall be considered works made for hire under the Federal Copyright
Act. Employee hereby assigns and transfers his right, title and interest in and
to all such Developments, and agrees that he shall, at the request of the
Corporation, execute or cooperate with the Corporation in any patent
applications, execute such assignments, certificates or other instruments, and
do any and all other acts, as the Board of Directors of the Corporation from
time to time reasonably deems necessary or desirable to evidence, establish,
maintain, perfect, protect, enforce or defend the Corporation's right, title and
interest in or to any such Developments.
Anything in this Paragraph 8 to the contrary notwithstanding, the Paragraph
shall not be construed as prohibiting or limiting the provisions of the last
subparagraph of Paragraph 6(b) hereof and the ability of the Employer to grant
the license described therein.
8. Survival. The provisions of Paragraphs 7 and 8 shall survive the
termination of this Agreement for any reason whatsoever.
9. Dispute Resolutions.
(a) If any dispute arises under this Agreement that is not settled
promptly in the ordinary course of business, Employer and Employee shall
seek to resolve any such dispute between them, first, by negotiating
promptly with each other in good faith in face-to-face negotiations.
(b) If the parties are unable to resolve the dispute between them
within 20 business days (or such period as the parties shall otherwise
agree) through these face-to-face negotiations, then the controversy or
claim shall be settled by arbitration conducted on a confidential basis,
under the U.S. Arbitration Act, if applicable, and the then current
Commercial Arbitration Rules of the American Arbitration Association (the
"Association")
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strictly in accordance with the terms of this Agreement and the substantive
law of the State of Maryland. The arbitration shall be conducted at the
Association's regional office located closest to the Corporation's
principal place of business by one arbitrator experienced in employment
matters. Judgment upon the arbitrator's award may be entered and enforced
in any court of competent jurisdiction. Neither party shall institute a
proceeding hereunder unless at least 10 days prior thereto such party shall
have given written notice to the other party of its intent to do so.
(b) Neither party shall be precluded hereby from securing equitable
remedies in courts of any jurisdiction, including, but not limited to,
temporary restraining orders and preliminary injunctions to protect its
rights and interests but shall not be sought as a means to avoid or stay
arbitration or Summary Proceeding.
11. Miscellaneous.
(a) Any notice authorized or required to be given or made by or
pursuant to this Agreement shall be made in writing and either personally
delivered or mailed by overnight express mail to the respective address of
the party to receive such notice, which address is the one designated below
the name of such party on the signature page hereof, or to such other
address as a party may specify by notice to the other parties hereto.
(b) This Agreement cancels and supersedes any and all prior agreements
and understandings between or among any or all of the parties hereto with
respect to the employment by or obligations of Employee to any thereof.
This Agreement constitutes the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of
any provision hereof shall be effective unless in writing and signed by the
parties hereto.
(c) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and
assigns of the parties hereto, except that the duties and responsibilities
of Employee hereunder are of a personal nature and shall not be assignable
or delegable in whole or in part by Employee.
(d) Employee agrees that the obligations of the Corporation hereunder
shall be limited to the Corporation only, and Employee agrees that he shall
not bring any claim or suit against any director or shareholder of the
Corporation or any other person other than the Corporation for any breach
or default by the Corporation of its obligations hereunder.
(e) If any provision of this Agreement or application thereof to
anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall not affect any other provision or application of this Agreement which
can be given effect without the invalid or unenforceable provision or
application and shall not invalidate or render unenforceable such provision
or application in any other jurisdiction.
(f) No remedy conferred upon any party by this Agreement is intended
to be exclusive of any other remedy, and each and every such remedy shall
be cumulative and shall be in addition to any other remedy given hereunder
or now or hereafter existing at law or in equity. No delay or omission by
any party in exercising any right, remedy or power hereunder or existing at
law or in equity shall be construed as a waiver thereof, and any such
right, remedy or power may be exercised by the party possessing the same
from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.
(g) This Agreement may be executed in several counterparts, each of
which is an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the
other counterparts.
(h) In the event of a lawsuit by either party to enforce any
provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable costs, expenses and attorney's fees from the other
party.
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11. Controlling Law. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Maryland.
IN WITNESS WHEREOF, Employee has hereunto set his hand and the Corporation has
caused this instrument to be duly executed as of the day and year first above
written.
Witness: Employee:
_________________________ _________________________
Attest: _________________________
_________________________ By:______________________
Title: Title:
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Schedule 4(b)
Section 4(b) Bonus. Incentive Compensation will be awarded on the basis of
achievement and be at rates no greater than
% of Base Pretax Income
--------- -------------
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Milestones:
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