EXHIBIT 10.17
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement"), is made and entered into
on this 19th day of September, 1998, by and between W. Xxxxx Xxxxxxx, an
individual resident of the State of Georgia (the "Employee"), and SYNTELLECT
INC., a Delaware corporation (the "Company");
W I T N E S S E T H:
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WHEREAS, the Company desires to continue to employ the Employee, and
the Employee desires to continue to be employed by the Company on the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
Section 1. Employment
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The Employee shall continue to serve as President, Call Center
Systems, of the Company and shall devote his full business time, skills and best
efforts to rendering services on behalf of the Company. In addition, the
Employee shall use his best efforts in the performance of any other reasonable
duties relating to the operation of the business of the Company as may be
assigned to him from time to time by the Chief Executive Officer or President of
the Company or by the Board of Directors of the Company. In the performance of
such duties, the Employee shall exercise such care as is customarily required by
employees undertaking similar duties for companies similar to the Company.
Section 2. Compensation; Expenses
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2.1 Salary. During the term of his employment hereunder, the
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Employee shall be paid a Base Salary by the Company for the period commencing
(i) on the date hereof and ending December 31, 1998 ("Year One") in an amount on
an annual basis equal to $185,000, and (ii) on January 1, 1999 and ending
December 31, 1999 ("Year Two") in an amount to be approved by the Board of
Directors, but in any case not to be an amount less than the Base Salary in Year
One (in any such case, the "Base Salary"). The Base Salary shall be paid to the
Employee in equal monthly installments (or more frequently if in accordance with
the Company's payment policies of general application), less all applicable
withholding taxes.
2.2 Bonus.
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(a) Amount of Bonus. In addition to the Base Salary payable to the
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Employee in each of Years One and Two, the Employee shall be entitled to receive
a bonus for each such year as the Board of Directors shall determine in its sole
and absolute discretion.
(b) Payment of Bonus. The Employee's Bonus, if any, for either of
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Years One or Two shall be payable by the Company to the Employee within 30 days
after the end of such year.
2.3 Expenses. The Employee shall be reimbursed for all reasonable
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expenses incurred by the Employee at the request and on behalf of the Company.
Section 3. Term; Termination of Agreement. The employment of the
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Employee hereunder shall commence as of the date hereof and shall continue until
the earlier of (i) December 31, 1999, or (ii) the occurrence of any of the
following events:
(a) the death or total disability of the Employee (total
disability meaning the failure of the Employee to perform his normal
required services hereunder for a period of six consecutive months during
the term hereof by reason of the Employee's mental or physical disability)
(a "Disability Termination Event");
(b) termination by the Company of the Employee's employment
hereunder, upon 10 days prior written notice to the Employee, for
"Good Cause," which shall exist upon the occurrence of any of the
following: (i) the Employee is convicted of, pleads guilty to, or
confesses to any felony or any act of fraud, misappropriation or
embezzlement, (ii) the Employee has engaged in a fraudulent act to the
material damage or prejudice of the Company or any affiliate of the
Company, (iii) the Employee illegally used controlled substances, (iv)
any material act or omission by the Employee involving malfeasance or
negligence in the performance of the Employee's duties to the Company
to the material detriment of the Company and, within thirty (30) days
after written notice from the Company of any such act or omission, the
Employee has not corrected such act or omission, (v) the entry of an
order of a court that remains in effect and is not discharged for a
period of at least sixty (60) days, which enjoins or otherwise limits
or restricts the performance by the Employee in any material way of
any of his duties to the Company under this Agreement, that relates to
any contract, agreement or commitment made by or applicable to the
Employee in favor of any former employer or any other person, or (vi)
the Employee otherwise fails to comply with the terms of this
Agreement or deviates from any written policies or directives of the
Board of Directors, in either such case to the material detriment of
the Company, and, within thirty (30) days after written notice from
the Company of such failure or deviation, the Employee has not
corrected such failure (in any such case, a "Good Cause Termination
Event");
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(c) termination by the Company of the Employee's employment
hereunder, upon ten (10) days prior written notice to the Employee,
for any reason other than as a result of a Good Cause Termination
Event or Disability Termination Event (a "No Cause Termination
Event"); or
(d) voluntary termination by the Employee of the Employee's
employment hereunder (a "Voluntary Termination Event").
Section 4. Result of Termination.
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4.1 Termination As Result Of Voluntary Or Good Cause Termination
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Events. If the Employee's employment hereunder is terminated prior to December
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31, 1999 as a result of the occurrence of a Voluntary Termination Event or a
Good Cause Termination Event, as of the date of the termination of the
Employee's employment, the Company shall have no further obligation to pay to
the Employee any Base Salary, Bonus or any other additional benefits pursuant to
Section 5 of this Agreement except to the extent the Company is required to
provide fringe benefits following termination of employment to former employees
of the Company generally under the terms of a specific fringe benefit plan or
policy. If such termination occurs prior to the end of any pay period, the
Employee shall be entitled to receive a portion of the Base Salary for such pay
period pro rated to the date on which the Employee's employment is terminated.
4.2 Disability Termination Event. If the Employee's employment
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hereunder is terminated prior to December 31, 1999 as a result of the occurrence
of a Disability Termination Event, as of the date of the termination of the
Employee's employment hereunder, the Company shall have no further obligation to
pay the Employee any Base Salary or any other additional benefits pursuant to
Section 5 of this Agreement other than medical insurance except to the extent
the Company is required to provide fringe benefits following termination of
employment to former employees of the Company generally under the terms of a
specific fringe benefit plan or policy. The Employee shall be entitled to
receive a portion of the Bonus for the year pro rated to the date on which the
Employee's employment is terminated. If such termination occurs prior to the
end of any pay period, the Employee shall be entitled to receive a portion of
the Base Salary for such pay period pro rated to the date on which the
Employee's employment is terminated. In addition, Employee shall be entitled to
receive a payment equal to the sum of (i) the product of 12 and the amount of
the monthly premium that Employee would be charged to continue his or her
medical coverage pursuant to the continuation requirements of the Consolidated
Omnibus Budget Reconciliation Act of 1985 ("COBRA") and (ii) 46% of the amount
determined under (i) to assist Employee in paying his income taxes on such
amount.
4.3 Termination As Result Of No Cause Termination Event. If the
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Employee's employment hereunder is terminated prior to December 31, 1999 as a
result of the occurrence of a No Cause Termination Event, the Company shall pay
to the Employee as severance pay and in lieu of any other payments under this
Agreement other than as contemplated by Section 2.3
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hereof, (i) in six equal monthly installments commencing 10 days after such
termination, an amount equal to the aggregate Base Salary then in effect that
would have been payable to the Employee pursuant to this Agreement if the
Employee had remained employed by the Company for the six consecutive months
immediately following the termination of his employment and (ii) in a lump sum
payment, an amount equal to the Bonus for the year (when finally determined) pro
rated to the date on which the Employee's employment is terminated. If such
termination occurs prior to the end of any pay period, the Employee also shall
be entitled to receive a portion of the Base Salary for such pay period pro
rated to the date on which the Employee's employment is terminated. If, at the
end of the six month period referenced in clause (i) above, the Employee has not
obtained employment and is diligently searching for such employment, then the
Employee shall be entitled to receive additional monthly installments (the
"Salary Continuation Payments") in an amount equal to the aggregate monthly Base
Salary that would have been payable to the Employee if the Employee had remained
employed by the Company. Such Salary Continuation Payments shall be payable
until the earlier of (i) the date the Employee obtains other employment (any
partial month to be pro rated) or (ii) such time as Employee has received Salary
Continuation Payments for a period of six months. As of the date of the
termination of the Employee's employment, the Company shall have no further
obligation to pay any of the additional employment benefits pursuant to Section
5 of this Agreement except to the extent the Company is required to provide
fringe benefits following termination of employment to former employees of the
Company generally under the terms of a specific fringe benefit plan or policy.
In addition, Employee shall be entitled to receive a payment equal to the sum of
(i) the product of 12 and the amount of the monthly premium that Employee would
be charged to continue his or her medical coverage pursuant to the continuation
requirements of COBRA and (ii) 46% of the amount determined under (i) to assist
Employee in paying his income taxes on such amount.
Section 5. Additional Employment Benefits
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The Company shall provide the Employee with the following fringe
benefits:
5.1 Fringe Benefits. The Company shall provide the Employee with
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medical, dental, life insurance, disability, retirement and other fringe
benefits as the Board of Directors of the Company shall authorize from time to
time for the benefit of employees of the Company generally.
5.2 Automobile. The Company shall pay to the Employee a monthly
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allowance to reimburse the cost of leasing an automobile for use by the
Employee. The monthly allowance for leasing an automobile shall be $650.
5.3 Vacation. The Employee shall be entitled to receive vacation in
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accordance with the vacation policies of the Company.
Section 6. Confidential Information, Trade Secrets and Noncompetition
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Covenant
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6.1 Confidential Information. The Employee hereby agrees that,
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except as otherwise required in the course of his performance of any duties he
may have as an employee of the Company, during the period commencing on the date
hereof and ending on the second anniversary of the date on which the Employee's
employment is terminated:
(a) Neither the Employee nor any company or organization in
which the Employee has a direct or indirect financial interest will
directly or indirectly own, manage, operate, join, control or
participate in the ownership, management, operation or control of or
be connected in any manner with, any business conducted under any
corporate or trade name of the Company or name similar thereto without
the prior written consent of the Company; and
(b) The Employee shall hold in confidence and not directly or
indirectly disclose to anyone or use or otherwise appropriate for the
Employee's own benefit (i) any pricing information, marketing
information or sales technique of the Company, or any subsidiary of
the Company, or (ii) any other of the following confidential
information or documents of or relating to the Company or any
subsidiary of the Company: confidential records, computer software
programs, client and customer lists, terms of license or franchise
agreements, terms of contracts with clients and customers, and
planning and financial information of the Company or any subsidiary of
the Company (collectively, the "Confidential Data"). Notwithstanding
the foregoing, Confidential Data shall not include any information of
the type specified above to the extent that such materials or
information have become generally available to the public by the act
of one who has the right to disclose such information without
violating any right of the Company to which such information pertains.
The Employee hereby acknowledges and agrees that the prohibitions
against disclosure of Confidential Data recited herein are in addition
to, and not in lieu of, any rights or remedies that the Company or any
subsidiary of the Company may have pursuant to the laws of any
jurisdiction or at common law to prevent the disclosure of trade
secrets, and the enforcement by any such corporation of its rights and
remedies pursuant to this Agreement shall not be construed as a waiver
of any other rights or available remedies that it may possess in law
or equity in the absence of this Agreement.
6.2 Use of Confidential Information. The Employee represents and
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warrants to the Company that he has not knowingly or wrongfully utilized any
trade secrets or confidential information proprietary to any former employer or
other party, including, but not limited to, confidential business information of
such former employer or other party. The Employee covenants that during the
term of this Agreement he will not induce the Company to use any confidential
information that belongs to a former employer or other party.
6.3 Noncompetition
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(a) Coverage. The Company is engaged in the business of developing,
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marketing and selling (i) computer hardware, software, support services, pay-
per-view ordering services and outsourced telephony, internet and faxed-based
transactions and services for the purpose of automating certain customer service
functions, and (ii) computerized outbound telephone dialing hardware, software
and support services (these businesses, and any other businesses in which the
Company competes during the term hereof are hereafter referred to as the
"Company Business") in the United States and throughout the world addressing a
variety of vertical markets, including the financial institutions, education,
cable television, health care, newspaper, utilities and telecommunications
industries. The Employee acknowledges that the goodwill of the Company and the
business activities of the Company extend throughout the areas in which it
conducts business.
(b) Covenants. In consideration of the Company's continued employment
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of the Employee pursuant to the terms of this Agreement, the Employee hereby
agrees that the Employee will not, during the period commencing on the date
hereof and ending on the first anniversary of the date on which the Employee's
employment is terminated, provided that if the Employee's employment is
terminated as a result of the occurrence of a No Cause Termination Event, such
period shall end on the first anniversary of the date on which the Employee
receives his last severance payment pursuant to Section 4.3 hereof (in either
case, the "Noncompete Period") (other than as an employee of or a consultant to
the Company), directly or indirectly:
(i) engage in, for the purpose of competing with the Company
Business in any state(s) in which the Employee anticipated working for the
Company when he entered into this Agreement and worked for the Company at
any time during the twelve (12) months prior to the termination of
Employee's employment (the "Pre-Termination Period"), any activities or
services identical or similar to any of the Employee's principal
responsibilities with the Company at any time during the Pre-Termination
Period;
(ii) call on or solicit, or attempt to call on or solicit, for
the purpose of competing with the Company Business, any client or customer,
or actively sought prospective client or customer, of the Company with whom
or which the Employee had material contact at any time during the Pre-
Termination Period; and/or
(iii) solicit or attempt to solicit, for the purpose of
enticing or encouraging the employee to leave the Company, any employee of
the Company with whom the Employee had material contact at any time during
the Pre-Termination Period.
The Employee agrees that the restrictions contained herein are reasonable and
designed to protect only the legitimate business interests of the Company.
Employee further agrees that during the course of his employment, he will
receive training from the Company and be exposed to its
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proprietary information so that the Employee would be uniquely qualified to
compete against the Company. Accordingly, the Employee acknowledges that he
could cause irreparable injury to the Company by violating these covenants.
6.4 Severability. If a judicial determination is made that any of
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the provisions of this Section 6 constitutes an unreasonable or otherwise
unenforceable restriction against the Employee, the provisions of this Section 6
shall be rendered void only to the extent that such judicial determination finds
such provisions to be unreasonable or otherwise unenforceable. In this regard,
the Company and the Employee hereby agree that any judicial authority construing
this Agreement shall be empowered to sever or modify any portion of any
geographic restriction, any prohibited business activity or any time period from
the coverage of this Section 6 and to apply the provisions of this Section 6 to
the remaining portion of the geographic restriction, the remaining business
activities or the remaining time period not so severed or modified by such
judicial authority.
6.5 Equitable Relief. The Employee acknowledges that the services to
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be rendered by the Employee hereunder are of a special character, the loss of
which cannot be compensated adequately in damages in an action at law. By
reason thereof, the Employee agrees that the Company shall be entitled, in
addition to any other remedies it may have under this Agreement or otherwise, to
injunctive and other equitable relief to prevent or curtail any breach of this
Agreement by the Employee.
Section 7. Miscellaneous
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7.1 Binding Effect. This Agreement shall inure to the benefit of and
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shall be binding upon the Employee and his executor, administrator, heirs,
personal representative and assigns, and the Company and its successors and
assigns; provided, however, that the Employee shall not be entitled to assign or
delegate any of his rights or obligations hereunder without the prior written
consent of the Company.
7.2 Governing Law. This Agreement shall be deemed to be made in, and
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in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia. No provision of this
Agreement or any related document shall be construed against or interpreted to
the disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or drafted such provision.
7.3 Headings. The section and paragraph headings contained in this
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Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
7.4 Notices. Unless otherwise agreed to in writing by the parties
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hereto, all communications provided for hereunder shall be in writing and shall
be deemed to be given when
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delivered in person or five (5) business days after being sent by first class
mail and addressed as follows:
(a) If to the Employee:
W. Xxxxx Xxxxxxx
0000 X. 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
(b) If to the Company, addressed to:
Syntellect Inc.
0000 Xxxxxxx Xxxxx Xxxxxxx
Xxxxx 000X
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
7.5 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
7.6 Entire Agreement. This Agreement is intended by the parties
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hereto to be the final expression of their agreement with respect to the subject
matter hereof and is the complete and exclusive statement of the terms thereof,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement may be modified only by a written instrument
signed by each of the parties hereto.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SYNTELLECT INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chairman and CEO
EMPLOYEE
/s/ W. Xxxxx Xxxxxxx
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Name: W. Xxxxx Xxxxxxx
Title: President, Call Center Systems
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