1
EXHIBIT 10.10
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of
September 24, 1999, between Cysive, Inc., a Delaware corporation (together with
any Subsidiary (as defined herein), the "COMPANY"), and Xxxxx X. Xxxxx
("EXECUTIVE").
The parties hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts such employment for the period beginning as of the date hereof and
ending on the third anniversary of the date hereof or upon Executive's earlier
separation pursuant to Section 1(c) hereof (the "EMPLOYMENT PERIOD"); provided,
however, that the Employment Period shall automatically be renewed for an
additional two year period commencing on the third anniversary of the date
hereof unless either the Company or the Executive gives the other at least 60
days written notice prior to the third anniversary of its desire to terminate
this Agreement.
(a) Position and Duties. During the Employment Period, Executive shall
serve as Director of Recruiting of the Company and shall have the normal duties,
responsibilities and authority of the Director of Recruiting, subject to the
power of the Chairman, the Chief Executive Officer, the Company's board of
directors (the "BOARD") or the Chief Operating Officer to expand or limit such
duties, responsibilities and authority and to override actions of the Director
of Recruiting. Executive shall report to the Chief Operating Officer and
Executive shall devote her best efforts and of her full business time and
attention to the business and affairs of the Company and its Subsidiaries.
(b) Salary, Bonus and Benefits. The Company will pay Executive a base
salary of $82,530 per annum, subject to any annual increase during the
Employment Period as determined by the Board based upon the Company's
achievements of budgetary and other objectives set by the Board (the "ANNUAL
BASE SALARY"). In addition, Executive shall be eligible to receive an annual
bonus (commencing with the Company's fiscal year ending December 31, 1999) of up
to 60% of Executive's Base Salary based upon the Company's achievement of
budgetary and other objectives set by the Board (the "BASE BONUS"). In addition,
Executive shall be eligible to receive an additional bonus as determined by the
Board and consistent with the Company's past practices if the Company achieves
budgetary and
2
other objectives in excess of those set by the Board. Executive's Annual Base
Salary for any partial year will be prorated based upon the number of days
elapsed in such year. In addition, during the Employment Period, Executive will
be entitled to such other benefits approved by the Board and made available to
the Company's senior executives, including, but not limited to, vacation time,
tuition reimbursement, reimbursement of business expenses, car allowance and
healthcare benefits.
(c) Separation. Executive's employment by the Company during the
Employment Period will continue until Executive's resignation at any time or
until Executive's disability or death or until the Board terminates Executive's
Employment at any time during the Employment Period (the "SEPARATION"). If the
Employment Period is terminated by the Executive without Good Reason, then the
termination will be effective sixty (60) days after the date of delivery of
written notice of termination. If the Employment Period is terminated by the
Board without Cause or by the Executive with Good Reason, then the termination
will be effective thirty (30) days after the date of delivery of written notice
of termination. If the Employment Period is terminated by the Board with Cause,
termination will be effective as of the date of notice of termination. If the
Employment Period is terminated by the Board with Cause or by the Executive
without Good Reason, then the Executive shall be entitled to receive her Annual
Base Salary, bonuses and all fringe benefits only through the effective date of
termination. If the Employment Period is terminated by the Board without Cause
or by the Executive with Good Reason, then the Executive shall be entitled to
receive her Annual Base Salary and all fringe benefits for one year from the
effective date of termination (such payments and fringe benefits are referred
hereinafter as the "SEVERANCE PAYMENT") payable over time in accordance with
normal payroll practices. If the Employment Period is terminated due to death,
then the Annual Base Salary and medical insurance will be continued through the
next full calendar month following the month in which the Executive died. If the
Employment Period is terminated due to Disability (as defined herein), then the
Annual Base Salary, medical insurance and disability insurance will be continued
until the last day of the six-month period following Disability; provided,
however, that such Annual Base Salary shall be reduced by the amount of any
disability income payments made to the Executive during such six-month period
from any insurance or other policies provided by the Company.
2. CONFIDENTIAL INFORMATION.
(a) Executive acknowledges that the Company is engaged in the business of
software engineering and it builds and implements complex and highly customized
systems supporting large scale electronic commerce
2
3
businesses (the "BUSINESS"). Executive further acknowledges that the Business
and its continued success depend upon the use and protection of a large body of
confidential and proprietary information, and that she holds a position of trust
and confidence by virtue of which she necessarily possesses, has access to and,
as a consequence of her signing this Agreement, will continue to possess and
have access to, highly valuable, confidential and proprietary information of the
Company not known to the public in general, and that it would be improper for
him to make use of this information for the benefit of himself and others. All
of such confidential and proprietary information now existing or to be developed
in the future will be referred to in this Agreement as "CONFIDENTIAL
INFORMATION." This includes, without specific limitation, information relating
to the nature and operation of the Business or any other business conducted by
the Company, the persons, firms and corporations which are customers or active
prospects of the Company during Executive's employment by the Company, the
Business' development transition and transformation plans, methodology and
methods of doing business, strategic, acquisition, marketing and expansion
plans, including plans regarding planned and potential acquisitions and sales,
financial and business plans, employee lists, numbers and location of sales
representatives, new and existing programs and services (and those under
development), prices and terms, customer service, integration processes
requirements, costs of providing service, support and equipment and equipment
maintenance costs. Confidential Information shall not include any information
that has become generally known to, and available for use by, the public other
than as a result of Executive's acts or omissions in contravention of the terms
and provisions of this Agreement.
(b) Disclosure of any Confidential Information of the Company shall not
be prohibited if such disclosure is directly pursuant to a valid and existing
order of a court or other governmental body or agency within the United States;
provided, however, that (i) Executive shall first have given prompt notice to
the Company of any such possible or prospective order (or proceeding pursuant to
which any such order may result) and (ii) Executive shall afford the Company a
reasonable opportunity to prevent or limit any such disclosure.
(c) During the Employment Period and for a period of three (3) years
thereafter, Executive will preserve and protect as confidential all of the
Confidential Information known to Executive or at any time in Executive's
possession. In addition, during the Employment Period and at all times
thereafter, Executive will not disclose to any unauthorized person or use for
her own account any of such Confidential Information without the Board's written
consent. Executive agrees to deliver to the Company at a Separation, or at any
other time the Company may request in writing, all memoranda,
3
4
notes, plans, records, reports and other documents (and copies thereof)
containing or otherwise relating to any of the Confidential Information
(including, without limitation, all acquisition prospects, lists and contact
information) which she may then possess or have under her control. Executive
acknowledges that all such memoranda, notes, plans, records, reports and other
documents are, and at all times shall be and shall remain, the property of the
Company.
(d) Executive will fully comply with any agreement reasonably required by
any of the Company's customers, both actual and potential, business partners,
suppliers or contractors with respect to the protection of the confidential and
proprietary information of such persons or entities.
3. NONCOMPETITION AND NONSOLICITATION. Executive acknowledges that in the
course of her employment with the Company, she will become familiar with the
Confidential Information concerning the Company and the Business, and that her
services will be of special, unique and extraordinary value to the Company.
Executive agrees that the Company has a protectable interest in the Confidential
Information acquired by Executive during the course of her employment with the
Company. Therefore, Executive agrees to the following:
(a) Noncompetition. So long as Executive is employed or affiliated with
the Company or any Subsidiary and for an additional two (2) years thereafter
(the "NONCOMPETE PERIOD"), she shall not, anywhere within 100 miles of any of
the Company's offices in the United States, directly or indirectly own, manage,
control, participate in, consult with, render services for, or in any manner
engage in, any business competing with the Business of the Company or any other
business in which the Company has commenced negotiations or has requested and
received information relating to the acquisition of such business within
eighteen months prior to the termination of Executive's employment with the
Company.
(b) Nonsolicitation. During the Noncompete Period, other than individuals
employed in administrative capacities by the Company whose job skills can be
found in other individuals and who if they left the employment of the Company
would not have a material adverse effect on the Company, the Executive shall not
directly or indirectly through another entity (i) induce or attempt to induce
any employee of the Company to leave the employ of the Company, or in any way
interfere with the relationship between the Company and any employee thereof,
(ii) hire any person who was an employee of the Company within ninety (90) days
prior to the time such employee was hired by the Executive, (iii) induce or
attempt to induce any owner of a site location,
4
5
customer, supplier, licensee or other business relation of the Company to cease
doing business with the Company or in any way interfere with the relationship
between any such customer, supplier, licensee or business relation and the
Company, or (iv) directly or indirectly acquire or attempt to acquire an
interest in any business relating to the Business of the Company and with which,
to Executive's knowledge, the Company has entertained discussions or has
requested and received information relating to the acquisition of such Business
by the Company in the one-year period immediately preceding a Separation.
(c) Enforcement. If, at the time of enforcement of Section 2 or 3 of this
Agreement, a court holds that the restrictions stated herein are unreasonable
under the circumstances then existing, the parties hereto agree that the maximum
duration, scope or geographical area reasonable under such circumstances shall
be substituted for the stated period, scope or geographical area and that the
court shall be allowed to revise the restrictions contained herein to cover the
maximum duration, scope and geographical area permitted by law. Because
Executive's services are unique and because Executive has access to Confidential
Information, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this Agreement. Therefore, in the event of a breach or
threatened breach of Section 2 or Section 3 of this Agreement, the Company or
any of its successors or assigns shall, in addition to other rights and remedies
existing in its favor, be entitled to specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
of Section 2 or Section 3 from any court of competent jurisdiction.
(d) Additional Acknowledgments. Executive acknowledges that the
provisions of this Section are in consideration of: (i) employment with the
Company and (ii) additional good and valuable consideration as set forth in this
Agreement. Executive expressly agrees and acknowledges that the restrictions
contained in Sections 2 and 3 do not preclude Executive from earning a
livelihood, nor does it unreasonably impose limitations on Executive's ability
to earn a living. In addition, Executive agrees and acknowledges that the
potential harm to the Company of its non-enforcement outweighs any harm to the
Executive of its enforcement by injunction or otherwise. Executive acknowledges
that she has carefully read this Agreement and has given careful consideration
to the restraints imposed upon the Executive by this Agreement, and is in full
accord as to their necessity for the reasonable and proper protection of the
Confidential Information. Executive expressly acknowledges and agrees that each
and every restraint imposed by this Agreement is reasonable with respect to
subject matter, time period and geographical area.
5
6
(e) Executive's Representations and Warranties. Executive represents and
warrants that she has full right and authority to enter into this Agreement and
fully perform her obligations hereunder, that she is not subject to any
non-competition agreement that would prevent or restrict him in any way from
rendering the services hereunder anywhere in the world, and that her past,
present and anticipated future activities have not, and will not, infringe on
the proprietary rights of others. Executive further represents and warrants that
she is not obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency which would conflict with
her obligation to use her best efforts to promote the interests of the Company
or which would conflict with the Company's business as conducted or proposed to
be conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business as an officer, director or employee by
Executive, will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which Executive is now obligated.
4. DEFINITIONS.
"BENEFICIAL OWNER" means a beneficial owner within the meaning of Rule
13d-3 under the Exchange Act.
"CAUSE" means (i) the commission of a felony or a crime involving moral
turpitude or the intentional commission of any other act or omission involving
dishonesty or fraud with respect to the Company or any of its customers or
suppliers, (ii) conduct tending to bring the Company into substantial public
disgrace or disrepute, (iii) substantial and repeated failure to perform duties
of the office held by Executive as reasonably directed by the Board not cured
within thirty (30) business days after written notice thereof, (iv) gross
negligence or willful misconduct with respect to the Company or (v) any
intentional breach of Section 2 or 3 of this Agreement by Executive not cured
within ten (10) business days after written notice thereof from the Company. Any
election by the Company not to renew the Employment Period on the third
anniversary of the date hereof or any renewal thereof shall be deemed to be a
termination by the Company without Cause. The failure of the Company or the
Executive to achieve budgetary or other operational objectives established by
the Board of Directors shall not in and of itself constitute Cause.
"CHANGE IN CONTROL" means: (A) any Person, other than any Person who was
a Beneficial Owner of the Company's securities before the IPO, becomes, after
the IPO, the beneficial owner, directly or indirectly, of securities of the
Company representing 40% or more of the combined voting power of the
6
7
Company's then outstanding securities; (B) during any two-year period,
individuals who at the beginning of such period constitute the Board (including,
for this purpose, any director who after the beginning of such period filled a
vacancy on the Board caused by the resignation, mandatory retirement, death, or
disability of a director and whose election or appointment was approved by a
vote of at least two-thirds of the directors then in office who were directors
at the beginning of such period) cease for any reason to constitute a majority
thereof; (C) notwithstanding clauses (A) or (E) of this paragraph, the Company
consummates a merger or consolidation of the Company with or into another
corporation or entity, the result of which is that the Persons who were
stockholders of the Company at the time of the execution of the agreement to
merge or consolidate own less than 80% of the total equity of the corporation or
entity surviving or resulting from the merger or consolidation or of a
corporation or entity owning, directly or indirectly, 100% of the total equity
of such surviving or resulting corporation or entity; or (D) the sale in one or
a series of transactions of all or substantially all of the assets of the
Company; (E) any Person has commenced a tender or exchange offer, or entered
into an agreement or received an option to acquire beneficial ownership of 40%
or more of the total number of voting shares of the Company, unless the Board
has made a determination that such action does not constitute and will not
constitute a material change in the Persons having control of the Company; or
(F) there is a change of control in the Company of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A promulgated under the Exchange Act, other than in circumstances specifically
covered by clauses (A) through (E) above.
"DISABILITY" means a physical or mental condition which, for a continuous
period of at least six (6) months has or will prevent the Executive from
performing her duties on a full time basis and in a professional and consistent
manner. Any dispute as to the Executive's Disability shall be referred to and
resolved by a licensed physician selected and approved by the Company and the
Executive.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended.
"GOOD REASON" means Executive's resignation within 30 days after her
discovery of any material breach of Section 1 of this Agreement by the Company
which is not cured within thirty (30) business days after written notice thereof
from Executive.
"PERSON" means an individual, a partnership, a limited liability company,
a corporation, an association, a joint stock company, a trust, a joint
7
8
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"SUBSIDIARY" means any corporation of which fifty percent (50%) or more
of the securities having ordinary voting power in electing the board of
directors are, at the time as of which any determination is being made, owned by
the Company either directly or through one or more Subsidiaries. The term
Subsidiary shall also include any joint venture arrangement between the Company
and any other entity.
5. NOTICES. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipient at the address below indicated:
If to the Company:
Cysive, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
with a copy to (which shall not constitute notice):
Xxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxx
If to the Executive:
Xxxxx X. Xxxxx
Cysive, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
8
9
6. EXISTING OPTIONS. The Company hereby undertakes to amend and
restate each option agreement executed with Executive prior to the date hereof
to provide that all such options shall vest immediately upon (A) the occurrence
of an event which constitutes a Change of Control (as defined herein) of the
Company and (B)(i) the termination of Executive's employment without Cause (as
defined herein) or (ii) termination of employment by Executive with Good Reason
(as defined herein), in either case within one (1) year of the date on which the
Change of Control takes place.
7. GENERAL PROVISIONS.
(a) Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(c) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by Executive
and the Company and their respective successors and assigns.
(e) Choice of Law. All questions concerning the construction, validity
and interpretation of this Agreement and the exhibits hereto will be governed by
and construed in accordance with the internal laws of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware.
(f) Remedies. Each of the parties to this Agreement will be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including attorney's fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy
for any breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific
9
10
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement may be amended
and waived only with the prior written consent of the Company and the Executive.
(h) Business Days. If any time period for giving notice or taking action
hereunder expires on a day which is a Saturday, Sunday or holiday in the state
in which the Company's principal place of business is located, the time period
shall be automatically extended to the business day immediately following such
Saturday, Sunday or holiday.
(i) Termination. This Agreement (except for the provisions of Sections
1(a) and 1(b)) shall survive a Separation and shall remain in full force and
effect after such Separation.
* * * * *
10
11
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Employment Agreement on the date first written above.
CYSIVE, INC.
By:
-----------------------------------
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Chief Executive Officer and
President
------------------------------------------
Xxxxx X. Xxxxx
11
