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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made by and between
Netcal, Inc., a Georgia corporation (the "COMPANY"), and Xxxxx Xxxx, an
individual resident of the State of California (the "EMPLOYEE"), as of the 15th
day of December, 1999. Capitalized terms used herein and not otherwise defined
shall have the meaning assigned to such terms in the Purchase Agreement.
WHEREAS, the Employee has been employed by DPSC Software, Inc., a
California corporation ("SELLER"); and
WHEREAS, pursuant to an Asset Purchase Agreement dated as of December
__, 1999 (the "PURCHASE AGREEMENT"), by and among the Seller, the Company,
Netzee, Inc., a Georgia corporation ("PARENT"), and the Shareholders of the
Seller, Seller is selling substantially all of its assets to Purchaser; and
WHEREAS, following the transactions contemplated by the Purchase
Agreement, the Company will employ the Employee; and
WHEREAS, the Employee is willing to serve the Company on the terms and
conditions herein provided; and
WHEREAS, the Purchase Agreement provides that it is a condition
precedent to the obligations of the parties to the Purchase Agreement to
consummate the transactions contemplated by the Purchase Agreement that the
Company and the Employee shall have entered into this Agreement.
NOW THEREFORE, in consideration of the foregoing, and the mutual
premises and covenants and agreements contained herein and subject to the
conditions contained herein, the parties agree as follows:
ARTICLE I - EMPLOYMENT TERMS
Section 1.1 Employment. The Company shall employ the Employee, and
the Employee shall serve the Company, as its President upon the terms and
conditions set forth herein. The Employee shall report to the Parent's Chief
Executive Officer and to the Board of Directors of the Company. The Employee
shall have such authority and responsibilities consistent with his position
with DPSC Software, Inc., immediately prior to the Effective Time and as
assigned by the Chief Executive Officer of the Parent from time to time
reasonably consistent with the Employee's title and commonly incident to the
Employee's position, including executive responsibilities for the financial
condition and operating results of the Company, mergers and acquisitions
activity for the Parent and the Company and bank-level strategic relationship
development and maintenance for the Parent and the Company. The Employee shall
devote his full business time, attention, skill and efforts to the performance
of his
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duties hereunder, except during periods of illness or periods of vacation and
leaves of absence consistent with Company policy, as amended from time to time.
The Employee may serve as a director or advisor to other organizations, to
perform charitable and other community activities and to manage his personal
investments; provided, however, that such activities do not materially
interfere with the performance of his duties hereunder and are not in conflict
or competitive with, or adverse to, the interests of the Company. For purposes
of this Section 1.1, the Company acknowledges and agrees that Employee's
ownership of not more than five percent (5%) of the outstanding common stock of
a publicly-traded company shall not be deemed to violate the terms hereof.
Section 1.2 Term. Unless earlier terminated as provided herein,
the term of Employee's employment ("TERM") under this Agreement shall be for a
period beginning on the date hereof and continuing until December 31, 2000 and
shall thereafter automatically renew for additional periods of one year unless
either party provides notice of non-renewal at least 60 days prior to the
expiration of the then-current Term.
Section 1.3 Compensation and Benefits.
(a) The Company shall pay the Employee a salary at a rate of
$150,000 per annum in accordance with the salary payment practices of the
Company. In addition, the Employee shall be paid an earnout payment related to
the transactions contemplated in the Purchase Agreement of $150,000 if the
Company's net revenues for the calendar year ended December 31, 2000 equal or
exceed $5.5 million. Any earnout payment which is earned under the foregoing
shall be paid to Employee on or before April 15, 2001. The Employee's base
salary shall be adjusted by applicable cost of living increases as reported by
the federal government from year to year. The Chief Executive Officer of the
Company may recommend to the Board of Directors of the Company additional
increases in Employee's base salary or other bonus compensation if such officer
determines in his discretion that an increase or additional bonus is
appropriate.
(b) The Employee shall be entitled to participate in all
retirement, life and health insurance, disability and other similar benefit
plans or programs of the Company or the Parent now or hereafter available to
the Employee or available generally to employees of the Parent and its
subsidiaries in comparable positions; provided, however, that during any period
during the Term that the Employee is disabled, and during the 120-day period of
physical or mental infirmity leading up to the Employee's Disability, the
amount of the Employee's compensation provided under this Section 1.3 shall be
reduced by the sum of the amounts, if any, paid to the Employee for the same
period under any disability benefit or pension plan of the Company, Parent or
any of their subsidiaries; provided that, no such credit or deduction shall be
made with respect to any disability payments or benefits received by Employee
under disability policies paid for by him; or (v) is required to be disclosed
pursuant to judicial order or other appropriate judicial process.
(c) The Company shall reimburse the Employee for all reasonable
ordinary and necessary travel, seminar and other expenses related to the
Employee's duties which are incurred and accounted for in accordance with the
reimbursement practices of the Company.
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(d) Employee shall be entitled to four (4) weeks paid vacation
annually during the Term of employment by the Company hereunder.
(e) Employee shall be nominated as a member of the Board of
Directors of the Company, which shall serve as the executive management
committee for the Company. Upon termination of Employee's employment with the
Company for any reason, Employee shall be deemed to resign, automatically and
with no further action required, as a director of the Company.
ARTICLE II - COVENANTS OF EMPLOYEE
Section 2.1 Confidentiality. Employee recognizes the interest of
the Company in maintaining the confidential nature of its proprietary and other
business and commercial information. In connection therewith, Employee
covenants that during the term of his employment with the Company under this
Agreement, and for a period of two (2) years thereafter, Employee shall not,
directly or indirectly, except as authorized by the Company's Board of
Directors, publish, disclose or use for his own benefit or for the benefit of a
business or entity other than the Company or otherwise, any secret or
confidential matter, or proprietary or other information not in the public
domain that was acquired by Employee during his employment, relating to the
Company's, Parent's or any of its or their subsidiaries' businesses,
operations, customers, suppliers, products, employees, financial affairs or
industry practices, technology, know-how or intellectual property or other
similar information (the "PROPRIETARY INFORMATION"). Proprietary Information
does not include information that: (i) is filed with the SEC and which is not
subject to a request for confidential treatment made to the SEC or any other
government agency or authority; (ii) becomes generally available to the public
other than as a result of an improper disclosure by the Employee; (iii) was
available to the Employee prior to its disclosure to the Employee (provided the
Employee has no knowledge that such information was obtained, directly or
indirectly, from a source that was bound by a confidentiality agreement with or
other obligation of secrecy to the Parent, the Company, or their
representatives); (iv) becomes available to the Employee, directly or
indirectly, from a source other than the Parent, the Company, or their
representatives or employees, provided that such source is not known by the
Employee to be bound by a confidentiality agreement with or other obligation of
secrecy to the Parent, the Company or their representatives or affiliates; or
(v) is required to be disclosed pursuant to judicial order or other appropriate
judicial process.
Employee will abide by the Company's and Parent's lawful policies and
regulations, as established from time to time by the boards of directors of
Parent and/or Company, for the protection of its Proprietary Information.
Employee acknowledges that all records, files, data, documents and the like
relating to suppliers, customers, costs, prices, systems, methods, personnel,
technology and other materials relating to the Company, Parent or their
affiliated entities shall be and remain the sole property of the Company,
Parent and/or such affiliated entity and shall, upon the request of the Company
or Parent, turn over all copies of such Proprietary Information to the Company
or Parent (together with a written statement certifying as to his compliance
with the foregoing).
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Section 2.2 Non-Solicitation of Customers. During the Term, and
for a period of two (2) years thereafter, Employee shall not directly or
indirectly, through one or more intermediaries or otherwise, solicit or attempt
to solicit Customers, to induce or encourage them to acquire or obtain from
anyone other than the Company or Parent, services competitive with, substitute
for or similar to any Company Services. For purposes of this Section, a
"CUSTOMER" refers to any person, group of persons or entity with whom Employee
has or had direct material contact with regard to selling, maintenance,
delivery or support of Company Services, including servicing such person's,
group's or entity's account, during the period of one (1) year preceding the
date hereof (it being presumed that, because of Employee's position as a senior
officer with the Company, all customers of the Company at any time during the
one (1) year period prior to the date hereof constitute Customers); and
"COMPANY SERVICES" refers to the services that the Company performed, offered
or sold within six (6) months prior to the date hereof. Related Person may, if
such Related Person reasonably believes a Company Service is no longer offered
by the Company, request a written acknowledgement by Company to the effect that
such Company Service is, in fact, no longer offered by the Company (which
acknowledgement shall not be unreasonably withheld, conditioned or delayed)
and, upon receipt of such acknowledgement from the Company, Related Person
shall not be restricted under this Section 1.2 with respect to the Company
Service (and only that Company Service) for which such written acknowledgement
by Company is made.
Section 2.3 Non-Solicitation of Employees. During the Term and for
a period of two (2) years thereafter, Employee shall not, directly or
indirectly, through one or more intermediaries or otherwise, induce, solicit
for employment, or assist others in inducing or soliciting for employment any
individual who is at any time during such period an employee of the Company,
Parent or any of their subsidiaries for the purpose of providing services that
are the same or similar to the Company.
Section 2.4 Trade Secrets. Employee shall not, at any time, use or
disclose any Trade Secrets (as defined under applicable law) of Company,
Parent, or any of their subsidiaries, except in fulfillment of his duties as an
employee of the Company, Parent or any affiliate thereof, for so long as the
pertinent information or data remain Trade Secrets, whether or not the Trade
Secrets are in written or tangible form.
Section 2.5 Rights to Work Product. Except as expressly provided
in this Agreement, the Company alone shall be entitled to all benefits, profits
and results arising from or incidental to Employee's Work Product (as defined
below). To the greatest extent possible, any work product, property, data,
documentation or information or materials prepared, conceived, discovered,
developed or created by Employee in connection with performing his employment
responsibilities during the term (including the term of employment with DPSC
Software, Inc.) ("WORK PRODUCT") shall be deemed to be "work made for hire" as
defined in the Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended, and
owned exclusively and perpetually by the Company. The Company acknowledges that
Employee shall be entitled to use his general knowledge and "know-how," subject
to the limitations and restrictions set forth in this Agreement. Employee
hereby unconditionally and irrevocably transfers and assigns to the Company all
intellectual property or other rights, title and interest Employee may
currently have (or in the future may
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have) by operation of law or otherwise in or to any Work Product. Employee
agrees to execute and deliver to the Company any transfers, assignments,
documents or other instruments which the Company may deem necessary or
appropriate to vest complete and perpetual title and ownership of any Work
Product and all associated rights exclusively in the Company. The Company shall
have the right to adapt, change, revise, delete from, add to and/or rearrange
the Work Product or any part thereof written or created by Employee, and to
combine the same with other works to any extent, and to change or substitute
the title thereof, and in this connection Employee hereby waives the "moral
rights" of authors as that term is commonly understood throughout the world
including, without limitation, any similar rights or principles of law which
Employee may now or later have by virtue of the law of any locality, state,
nation, treaty, convention or other source. Unless otherwise specifically
agreed, Employee shall not be entitled to any compensation in addition to that
provided for in Section 1 of this Agreement for any exercise by the Company of
its rights set forth in this Section 2.
Section 2.6 Reasonableness of Covenants. Employee agrees and
acknowledges that the covenants contained herein are a part of this Agreement,
are given as of the date of this Agreement and are given in consideration of
his continuing employment with the Company. Employee also acknowledges that
Parent and the Company have a legitimate present and future expectation of
business within the geographic areas presently served by the Company. Employee
acknowledges the reasonableness of the term and scope of the covenants set
forth in this Agreement, and agrees that he will not, in any action, suit or
other proceeding, deny the reasonableness of, or assert the unreasonableness
of, the premises, consideration or scope of the covenants set forth herein.
Employee further acknowledges that complying with the provisions contained in
this Agreement will not preclude him from engaging in a lawful profession,
trade or business, or from becoming gainfully employed in such a way as to
provide a standard of living for himself, the members of his family, and those
dependent upon him of the sort and fashion to which he and they have become
accustomed and may expect.
ARTICLE III - TERMINATION OF EMPLOYMENT
Section 3.1 Termination by Company. Employee's employment may be
terminated by the Company prior to the expiration of the then-current Term by
giving notice during the Term of this Agreement upon the occurrence of one or
more of the following events:
(a) employee's death or disability which renders Employee
incapable of performing his duties for more than one hundred twenty (120)
calendar days within any period of twelve (12) consecutive months;
(b) "FOR CAUSE", which for purposes of this Agreement shall
mean that the Employee shall have:
(i) committed an act of fraud, embezzlement or theft
in connection with his duties or in the course of his employment with the
Company;
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(ii) inflicted material damage to the Company, Parent
or their subsidiaries or any material asset of the Company or Parent;
(iii) intentionally or in bad faith violated this
Agreement;
(iv) subject to applicable state laws, been indicted
for or convicted of a felony or any similar crime carrying a prison term of at
least one year (regardless of whether imprisonment is actually imposed);
(v) a habitual and debilitating use of alcohol or
drugs; or
(vi) failed to meet performance objectives, as
reasonably determined and articulated by the Company's Chief Executive Officer
and furnished to Employee a reasonable period of time before his performance is
to be judged hereunder; provided, however, that in the event of this subsection
(vi) being the sole reason for a termination for Cause, Employee shall have the
cure provisions and rights provided for in paragraph (c) hereof.
(c) In the event of a good faith determination by the Company's
Chief Executive Officer that the Employee has failed to meet performance
objectives, the Company shall furnish to the Employee in writing a notice of
proposed termination setting forth a specific statement of the deficiencies in
his performance. The Employee shall then have a period of thirty (30) days, or
such longer period as is determined by the Company's Chief Executive Officer,
after the giving of such written notice of proposed termination by the Company
in which to attempt to effect a cure of the specified deficiencies. If at the
end of such period no such cure has been effected to the reasonable
satisfaction of the Company's Chief Executive Officer, then the Employee's
employment may be terminated as of the end of such period. The Company shall be
obligated to provide to the Employee only one such notice of proposed
termination, and if subsequent to effecting a cure of specified deficiencies
the Employee is determined by the Company's Chief Executive Officer to have
again failed to meet performance expectations, then his employment may be
terminated immediately upon the Company's giving of a final notice of
termination to the Employee.
Section 3.2 Termination Without Cause. If the Employee's
employment is terminated prior to the end of the then-current Term without
Cause, the Employee shall be entitled to his then current salary plus the
bonus, if any, to which he would be entitled pursuant to Section 1.3(a) for the
period that would remain under this Agreement if the Employee's employment was
not terminated without Cause; for purposes of the bonus calculations, the net
revenues of the Company as of the date on which termination occurs shall be
annualized for such year. Such severance amounts shall be paid to the Employee
at regular payroll intervals, except that the bonus, if any, will be paid
within 10 days following its calculation by the Chief Financial Officer of the
Company.
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ARTICLE IV - GENERAL PROVISIONS
Section 4.1 Withholding of Taxes. The Company may withhold from
any amounts payable under this Agreement all federal, state, city or other
taxes and withholdings as shall be required pursuant to any applicable law,
rule or regulation.
Section 4.2 Death or Disability of Employee. If the Employee
should die or become disabled during the term of this Agreement, the unpaid
portion of the salary hereunder shall be paid as a death benefit or disability
benefit, as the case may be, either (i) in a lump sum payment or (ii) over the
remaining term of this Agreement, at the sole option of the Company.
Section 4.3 Notice. For purposes of this Agreement, all
communications including, without limitation, notices, consents, requests or
approvals, provided for herein shall be in writing and shall be deemed to have
been duly given when personally delivered or five (5) business days after
having been mailed by United States registered mail or certified mail, return
receipt requested, postage prepaid, addressed to the Company (to the attention
of the Chief Executive Officer of the Company) at Parent's principal office or
to Employee at his principal residence, or to such other address as any party
may have furnished to the other in writing and in accordance herewith, except
the notices of change of address shall be effective only upon receipt.
Section 4.4 Validity. It is not the intent of any party hereto to
violate any public policy of any jurisdiction in which this Agreement may be
enforced. If any provision of this Agreement or the application of any
provision hereof to any person or circumstances is held invalid, unenforceable
or otherwise illegal, the remainder of this Agreement and the application of
such provision to any other person or circumstances shall not be affected, and
the provision so held to be invalid, unenforceable or otherwise illegal shall
be reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal; provided, however, if the provision so held to be
invalid, unenforceable or otherwise illegal constituted a material inducement
to a party's execution and delivery of this Agreement, then such provision
shall not be reformed unless prior to any reformation that party agrees to be
bound by the reformation.
Section 4.5 Entire Agreement. This Agreement and the Purchase
Agreement, and the agreements referenced therein supersede any other
agreements, oral or written, between the parties with respect to the subject
matter hereof, and contains all of the agreements and understandings between
the parties with respect to the employment of Employee by the Company. Any
waiver or modification of any term of this Agreement shall be effective only if
it is set forth in a writing signed by both parties hereto.
Section 4.6 Successors and Binding Agreement.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company and any Successor of or to the Company, but shall not
otherwise be assignable or delegable by the Company. "SUCCESSOR" shall mean any
successor in interest, including, without limitation, any entity, individual or
group of persons acquiring directly or indirectly all or substantially all of
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business or assets of the Company, as the case may be, whether by sale,
merger, consolidation, reorganization or otherwise.
(b) The Company shall require any Successor to agree at the
time of becoming a Successor to perform this Agreement to the same extent as
the original parties would be required if no succession had occurred.
(c) This Agreement shall inure to the benefit of and be
enforceable by Employee's personal or legal representatives, executors,
administrators, heirs, distributee and legatees.
(d) This Agreement is personal in nature and neither of the
parties shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in this Section 4.6.
Section 4.7 Captions. The captions in this Agreement are solely
for convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.
Section 4.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same Agreement.
Section 4.9 Modification and Waiver. No provisions of this
Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by the Employee
and the Company. No waiver by any party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
Section 4.10 Governing Law; Arbitration. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of California without giving effect to the conflict of laws principles thereof.
Any controversy, claim or dispute arising out of or relating to this Agreement,
or any breach thereof, including without limitation any dispute concerning the
scope of this arbitration clause, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association. Any such arbitration
award may include an award for reasonable attorneys' fees and out-of-pocket
expenses incurred by the prevailing party. The parties indicate their
acceptance of the foregoing arbitration requirement by initialing below:
/s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxx Xxxx
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For the Company Employee
Section 4.11 Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of the other provisions hereof.
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Section 4.12 Prior Agreements Superseded. This Agreement shall not
be effective unless and until the Closing occurs. As of the Closing, this
Agreement shall replace and supersede any and all prior agreements between the
Employee and the Seller or the Company or the Parent, whether written or oral,
in their entirety and such prior agreements shall be of no further force or
effect; provided, however, that the parties acknowledge that their duties and
obligations under this Agreement are in addition to, and not in substitution
for, their duties and obligations under the Non-Solicitation, work Product and
Confidentiality Agreement of even date herewith.
Section 4.13 Execution by Facsimile. Any party may deliver an
executed copy of this Agreement and any documents contemplated hereby by
facsimile transmission to another party, and such delivery shall have the same
force and effect as any other delivery of a manually signed copy of this
Agreement or of such documents.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Employee has signed and sealed this Agreement, effective as
of the date first above written.
NETCAL, INC.
ATTEST:
By: By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Name: Xxxxxxx X. Xxxxxxxx
Title: Title: CFO and V.P.
(CORPORATE SEAL)
EMPLOYEE
/s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
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