EMPLOYMENT AGREEMENT
EXHIBIT
2.4
Bridgeline Software, Inc." alt="LOGO"/> Bridgeline
Software, Inc., a Delaware
corporation (the “Employer” or the
“Company”) and Xxxx X. Xxxx (the
“Employee”), in consideration of the mutual promises
made herein, agree as follows:
ARTICLE
1
TERM
OF EMPLOYMENT
Section
1.1 Specified
Period. Employer hereby employs
Employee, and Employee hereby accepts employment with Employer for the term
beginning the date executed hereunder (the “Commencement
Date”), and continuing for one year from the Commencement Date,
which term shall automatically renew for successive periods of one (1) year
each
unless either party gives written notice to the other party of its intention
not
to renew this Agreement not less than sixty (60) days prior to the end of the
applicable year. The provisions of Sections 2.3, 2.4, 2.5
and 2.6 of this Agreement shall continue in force so long as the Employee
remains employed by the Employer or any Affiliate of the Employer, whether
under
this Agreement or not, and whether as a consultant or not, and shall survive
any
termination of employment under this Agreement for the periods specified
therein, all as is more specifically provided in Section 7.10. Once this
Employment Agreement terminates then, if the Employee continues employment,
the
Employee shall become an employee at will.
Section
1.2 Employment
Term Defined. As used
herein, the phrase “employment term” refers to the entire period of employment
of Employee by Employer hereunder.
ARTICLE
2
DUTIES
AND OBLIGATIONS OF EMPLOYEE
Section
2.1 General
Duties. Employee shall serve as Executive Vice President
and General Manager for the Atlanta Business Unit (as defined below) of the
Employer and shall report directly to an executive officer of the
Employer. In such capacity, Employee shall do and perform all
services, acts or things consistent within the scope of his employment and
with
the Employee’s skill and expertise in accordance with the instructions of and
policies set by Employer’s Chief Executive Officer, or the Board of
Directors. Employee shall perform such services at 0000 Xxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000 and at 00000 Xxxxxxxx
Xxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxxxx 00000 or at such other
location within thirty (30) miles of either of said addresses as may be
designated by Employer. The Employee shall be available to make
business trips both within and outside the United States for the purpose of
meeting with and consulting with other members of the Employer’s management, as
well as with present and proposed customers and parties with whom the Employer
does business, all on such reasonable terms, bearing in mind the position of
the
Employee. For purposes hereof, “Atlanta Business Unit” shall mean the
business operations formerly of the Seller based in Atlanta, Georgia and Reston,
Virginia, which includes revenues generated from the sale and licensing of
software solutions, web application development and hosting services that are
developed and delivered by the Atlanta Business Unit.
Section
2.2 Devotion
to Employer’s Business.
(a) Employee
shall devote his best efforts and entire productive time, ability and attention
to diligently promote and improve the business of Employer during the
Term.
(b) Employee
shall not engage in any other business duties or pursuits whatsoever, or
directly or indirectly render any services of a business, commercial or
professional nature to any other person or organization, whether for
compensation or otherwise, without the prior written consent of the Employer’s
President & CEO. This Agreement shall not be interpreted to
prohibit Employee from making passive personal investments or conducting private
business affairs if those private business affairs do not materially interfere
with the services required under this Agreement.
Section
2.3 Confidential
Information; Tangible Property; Competitive
Activities.
(a) Employee
shall hold in confidence and not use or disclose to any person or entity without
the express written authorization of Employer, either during the employment
term
or any time thereafter, secret or confidential information of Employer, as
well
as secret or confidential information and materials received in confidence
from
third parties with whom Employer has a business relationship by Employee or
Employer. If any confidential information described below is sought
by legal process, Employee will promptly notify Employer and will cooperate
with
Employer in preserving its confidentiality in connection with any legal
proceeding.
The
parties hereto hereby stipulate that, to the extent it is not known publicly,
the information described in this Section (herein referred to as “Confidential
Information”) is important, material and has independent economic value (actual
or potential) from not being generally known to others who could obtain economic
value from its disclosure or use and that any breach of any terms of this
Section 2.3 is a material breach of this Agreement: (i) the names,
buying habits and practices of Employer’s customers; (ii) Employer’s sales and
marketing strategy and methods and related data; (iii) the names of Employer’s
vendors and suppliers; (iv) cost of materials/services; (v) the prices Employer
obtains or has obtained or for which it sells or has sold its products or
services; (vi) development costs; (vii) compensation paid to employees or other
terms of employment; (viii) Employer’s past
and
projected sales volumes; (ix) confidential information relating to actual
products, proposed products or enhancements of existing products, including,
but
not limited to, source code, programming instructions, engineering methods
and
techniques relating to such actual or proposed products (or enhancements
thereof), logic diagrams, algorithms, development environment, software
methodologies, and technical specifications for the Employer’s web design and
content management software. Confidential Information shall also
include all information which the Employee should reasonably understand is
secret or confidential information, provided the same is clearly designated
as
confidential by marking or stamping “Confidential” or similar words on the cover
of such information, or by orally communicating such confidentiality and
confirming such confidentiality in a later written
communication. Confidential Information shall also include all
information which the Employee should reasonably understand is secret or
confidential information, if the Employee has participated in or otherwise
been
involved with the development, analysis, invention or origination of such
Confidential Information belonging to the Employer, including, without
2
limitation,
methods, know-how, formula, customer and supplier lists, personnel and financial
data, business plans, as well as product information, product plans and product
strategies. Notwithstanding the foregoing, “Confidential Information” does not
include any information which (A) is now available to the public or which
becomes available to the public, (B) is or becomes available to the Employee
from a source other than the Employer and such disclosure is not a breach of
a
confidentiality agreement with the Employer, or (C) is required to be disclosed
by any government agency or in connection with a court proceeding.
All
Confidential Information, as well as all software code, methodologies, models,
samples, tools, machinery, equipment, notes, books, correspondence, drawings
and
other written, graphical or electromagnetic records relating to any of the
products of Employer or relating to any of the Confidential Information of
Employer which Employee shall prepare, use, construct, observe, possess, or
control shall be and shall remain the sole property of Employer and shall be
returned by Employee upon termination of employment.
(b) During
his employment hereunder and for twelve (12) months thereafter, Employee
shall not, directly or indirectly, without the consent of the
Employer: (i) invest (except for the ownership of less than 3% of the
capital stock of a publicly held company), or hold a directorship or other
position of authority in any of the Employer’s Direct Competitors
(“Direct Competitors” defined as: any person or entity,
or a department or division of an entity, whereby more than 25% of the person’s
or entity’s total revenues are derived from Competitive Services
(“Competitive Services” being defined as design and
development for third parties of: Internet, Intranet and Extranet web
applications, content management or document management software, flash or
rich media development, usability engineering, e-commerce and e-learning
applications, search engine optimization solutions and Web hosting and managed
services), (ii) undertake preparation of or planning for an organization or
offering of Competitive Services, (iii) combine or collaborate with other
employees or representatives of the Employer or any third party for the purpose
of organizing, engaging in, or offering Competitive Services, or (iv) be
employed by, serve as a consultant to or otherwise provide services to (whether
as principal, partner, shareholder, member, officer, director, stockholder,
agent, joint venturer, creditor, investor or in any other capacity), or
participate in the management of a Direct Competitor or participate in any
other
business that the Employer may be engaged or has fixed, written plans to
undertake at the date of the termination of this Agreement.
(c) During
his employment
hereunder and
for twelve (12) months thereafter,
Employee shall not, directly or indirectly, without the consent
of the
Employer: contact, recruit, solicit,
induce or
employ, or attempt to contact, recruit, solicit, induce or employ, any employee,
consultant, agent, director or officer of the Employer
to terminate his
employment with, or otherwise cease
any relationship with, the Employer;
or contact, solicit, divert, take
away or accept business from, or attempt to contact, solicit, divert or take
away, any clients, customers or accounts of the Employer,
or any of the Employer’s
business with such clients, customers
or accounts which
were, directly or
indirectly, contacted,
solicited or served by Employee,
or were directly or indirectly under
his
responsibility, while Employee was
employed by the Company, or the
identity of which Employee
became aware during the term of
his
employment.
As
used
in this agreement the term “client,”“customer,”
or
“accounts” shall include: (i) any person or entity that is a client, customer or
account of the Employer on the date hereof or
3
becomes
a
client, customer or account of the Employer during the covered period; (ii)
any
person or entity that was a client, customer or account of the Employer at
anytime during the two-year period preceding the date of Employee’s termination;
and (iii) any prospective client, customer or account to whom the Employer
has
made a client-specific bona fide proposal or presentation (or similar offering
of services) within a period of 180 days preceding the date of the termination
of Employee’s employment.
(d) The
covenants of this Section 2.3 shall be construed as separate covenants covering
their subject matter in each of the separate states in the United
States in which Employer (or its Affiliates) transacts its
business. If at any time the foregoing provisions shall be deemed to
be invalid or unenforceable or are prohibited by the laws of the state or place
where they are to be enforced, by reason of being vague or unreasonable as
to
duration or place of performance, this Section shall be considered divisible
and
shall become and be immediately amended to include only such time and such
area
as shall be determined to be reasonable and enforceable by the court or other
body having jurisdiction over this Agreement; and the Employer and the Employee
expressly agree that this Section, as so amended, shall be valid and binding
as
though any invalid or unenforceable provision had not been included
herein.
(e) The
Employee represents and warrants that Employee is free to enter into this
Agreement and to perform each of the terms and covenants contained herein,
and
that doing so will not violate the terms or conditions of any agreement between
Employee and any third party.
(f) Nothing
in this Section 2.3 shall restrict the Employee from providing Competitive
Services to any organization, including but not limited to a Direct Competitor,
as an employee of or consultant to such organization in the event Employee’s
employment by Employer is terminated without cause or for good reason in
accordance with the terms of Section 5.4 hereof.
Section
2.4 Inventions
and Original Works.
(a) Subject
to Section 2.4(b) below, the Employee agrees that he will promptly make full
written disclosure to Employer, will hold in trust for the sole right and
benefit of Employer, and hereby assigns to Employer all of his right, title
and
interest in and to any and all inventions (and patent rights with respect
thereto), original works of authorship (including all copyrights with respect
thereto), developments, improvements or trade secrets which Employee may solely
or jointly conceive or develop or reduce to practice, or cause to be conceived
or developed or reduced to practice, while performing his duties under this
Agreement.
Employee
acknowledges that all original works of authorship relating to the business
of
Employer which are made by him (solely or jointly with others) within the scope
of his duties under this Agreement and which are protectable by copyrights
are
“works made for hire” as that term is defined in the United States Copyright Act
(17 U.S.C.A., Section 101), and that Employee is an employee as defined under
that Act. Employee further agrees from time to time to execute written transfers
to Employer of ownership of specific original works of authorship (and all
copyrights therein) made by Employee (solely or jointly with others) which
4
may,
despite the preceding sentence, be deemed by a court of law not to be “works
made for hire” in such form as is acceptable to Employer in its reasonable
discretion.
(b) The
parties agree that the “business of the Employer” for the purposes of this
Section 2.4 is the business of Internet, Intranet and Extranet web
applications, content management or document management software, flash or
rich media development, usability engineering, e-commerce and e-learning
applications, search engine optimization solutions and Web hosting and managed
services. Employee shall provide to Employer, and
attach hereto as Exhibit 2.4(b), a list identifying and describing in reasonable
detail all inventions (and patent rights with respect thereto), original works
of authorship (including all copyrights with respect thereto), developments,
improvements, concepts or trade secrets which Employee has solely or jointly
conceived or developed or reduced to practice, or caused to be conceived or
developed or reduced to practice to date, and other intellectual property of
the
Employee. For the avoidance of doubt, Employee will identify on
Exhibit 2.4(b) with sufficient detail any intellectual property belonging to
the
Employee prior to the date hereof, including that related to the business of
the
Employer (collectively the “Employee’s Personal Intellectual
Property”). Employer acknowledges and agrees that the provisions of
Section 2.4(a) shall not apply to Employee’s Personal Intellectual Property or
to any inventions (and patent rights with respect thereto), original works
of
authorship (including all copyrights with respect thereto), developments,
improvements, concepts or trade secrets conceived of or developed by Employee
during the term of this Agreement that is not Employer Intellectual Property
(as
defined in Section 4.15 of the Agreement and Plan of Merger among Employer,
Employee and Objectware (the “Merger Agreement”).
Section
2.5 Maintenance
of Records. Except with respect to the Intellectual
Property for which the Employer has no rights, Employee agrees to keep and
maintain reasonable written records of all inventions, original works of
authorship, trade secrets developed or made by him (solely or jointly with
others) during the employment term. Employee also agrees to make and
maintain adequate and reasonable written records customarily maintained by
corporate managers, including, without limitation, lists and telephone numbers
of persons and companies he has contacted during his engagement by the
Employer. Immediately upon the Employer’s request and promptly upon
termination of the Employee’s engagement with the Employer, the Employee shall
deliver to the Employer all written records as described in this Section,
together with all memoranda, notes, records, reports,
photographs, drawings, plans, papers, computer storage media, Confidential
Information or other documents made or compiled by the Employee or made
available to the Employee during the course of his engagement by the Employer,
and any copies or abstracts thereof, whether or not of a secret or confidential
nature, and all of such records, memoranda or other documents shall, during
and
after the engagement of the Employee by the Employer, be
and shall be deemed to be the property of the Employer.
Section
2.6 Obtaining
Letters Patent and Copyright Registration. During the
employment term hereunder, Employee agrees to assist Employer, at Employer’s
expense, to obtain United States or foreign letters patent, and copyright
registrations (as well as any transfers of ownership thereof) covering
inventions and original works of authorship assigned hereunder to Employer.
Such
obligation shall continue beyond the termination of this Agreement for a
reasonable period of time not to exceed one (1) year subject to Employer’s
obligation to compensate Employee at such rates as may be mutually agreed upon
by the Employer and Employee at the time, but not exceeding the annualized
rate
provided for in Section 4.1 of this Agreement, and reimbursement
5
to
Employee of all expenses incurred.
If
Employer is unable for any reason whatsoever, including Employee’s mental or
physical incapacity to secure Employee’s signature to apply for or to pursue any
application for any United States of foreign letters, patent or copyright
registrations (or any document transferring ownership thereof) covering
inventions or original works or authorship assigned to Employer under this
Agreement, Employee hereby irrevocably designates and appoints Employer and
its
duly authorized officers and agents as Employee’s agent and attorney-in-fact to
act for and in his behalf and stead to execute and file any such applications
and documents and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations or
transfers thereof with the same legal force and effect as if executed by
Employee. This appointment is coupled with an interest in and to the
inventions and works of authorship and shall survive Employee’s death or
disability. Employee hereby waives and quitclaims to Employer any and
all claims of any nature whatsoever which Employee now or may hereafter have
against third parties for infringement of any patents or copyrights resulting
from or relating to any such application for letters, patent or copyright
registrations assigned hereunder to Employer.
ARTICLE
3
COMPENSATION
OF EMPLOYEE
Section
3.1 Annual
Salary. As compensation for his services hereunder,
Employee shall be paid a salary at the rate of One Hundred Fifty Thousand and
00/100 Dollars ($150,000.00) per year from the Commencement Date
(“Base Salary”). Base Salary shall be paid in equal installments not
less frequently than twice each month.
Section
3.2 Annual Bonus. The
Employee shall be eligible to be paid an annual bonus (the “Bonus”) of up to
$100,000, earned and payable quarterly in accordance with the terms set forth
on
Exhibit 3.2 attached hereto. Exhibit 3.2 shall be amended
on an annual basis by mutual agreement of the Employer and the Employee based
on
the Atlanta Business Unit’s annual operating plan as approved by Employer’s
Chief Executive Officer. Notwithstanding anything in this
Section 3.2 or Exhibit 3.2 to the contrary, Employer shall pay
the two quarterly Bonus payments of $25,000 each for the first two
completed calendar quarters after the Commencement Date irrespective of whether
the operating objectives set forth on Exhibit 3.2 are achieved for such
quarters. The Base Salary and Bonus of Employee shall be reviewed
annually and may be increased from time to time by Employer to reflect the
Employee’s performance.
Section
3.3 Tax
Withholding. Employer shall have the right to deduct or
withhold from the compensation due to Employee hereunder any and all sums
required for federal income and social security taxes and all state or local
taxes now applicable or that may be enacted and become applicable in the future,
for which withholding is required by law.
Section
3.4 Incentive
Stock Options. The Employer may, at the Employer’s sole
discretion, issue Incentive Stock Options to the Employee. All stock
options granted to the Employee shall be subject to a stock option agreement,
a
stock option plan and such other restrictions as are generally
applicable to stock options issued to employees
of the Employer, as each may be amended from time to time.
6
ARTICLE
4
EMPLOYEE
BENEFITS
Section
4.1 Annual
Vacation. Employee
shall be entitled to twenty (20) business days of paid vacation during each
year
of this Agreement. Employee may be absent from his employment for vacation
at
such times as are reasonably approved by the Employer’s President and CEO.
Unused vacation shall not be carried over into the next year.
Section
4.2 Benefits. Employee
shall be eligible to participate in any and all benefit plans provided by
Employer, including health, disability and life insurance coverage, as are
provided to other Executive Vice Presidents and General Managers of
Employer.
Section
4.3 Business
Expenses. Employer shall reimburse Employee for all
appropriate expenses for travel and entertainment by Employee for legitimate
business purposes, provided that they are approved in writing by the
person to whom the Employee reports, and provided that Employee furnishes to
Employer adequate records and documentary evidence for the substantiation of
each such expenditure, as required by the Internal Revenue Code of 1986, as
amended.
ARTICLE
5
TERMINATION
OF EMPLOYMENT
Section
5.1 Termination. Employee’s
employment hereunder may be terminated by Employee or Employer as herein
provided, without further obligation or liability, except as expressly provided
in this Agreement.
Section
5.2 Resignation,
Retirement, Death or
Disability. Employee’s
employment hereunder shall be terminated at any time by Employee’s resignation,
or by Employee’s retirement, death, or his inability to perform the essential
functions of his position under this Agreement, with or without reasonable
accommodation, for a total of ninety (90) days or more in any continuous two
hundred (200) day period because of a substantial physical or mental impairment
(“Disability”). Employer shall not be liable for the payment
of Base Salary or Bonus (other than for accrued Base Salary or Bonus payments)
during any period of Disability, though benefits shall continue to
accrue.
Section
5.3 Termination
for Cause. Employee’s employment hereunder may be
terminated for Cause. “Cause” is conduct, as determined in good faith
by the Chief Executive Officer or the Board of Directors of Employer involving
one or more of the following: (i) gross misconduct by the Employee; or
(ii) the willful disregard of the rules or policies of the Company; or
(iii) the material violation of any noncompetition or nonsolicitation
covenant with, or assignment of inventions obligation to, the Company; or
(iv) the conviction of the Employee of a felony; or (v) the commission
of an act of embezzlement, fraud or breach of fiduciary duty which results
in
loss, damage or injury to the Company; or (vi) engaging in an act, omission
or
pattern of behavior which, in the reasonable opinion of the Company, impugns
the
reputation of the Company or which creates an environment materially
non-conducive to the growth and development of the Company, provided the Company
provides written notice to the Employee that such act, omission or pattern
of
behavior may be the basis for termination and the Employee
7
engages
in similar acts, omissions or behavior after receipt of such notice, or
(vi) the generation of net operating losses (as defined in accordance with
generally accepted accounting principles) by the Atlanta Business Unit for
three
(3) consecutive quarters and the underperformance of the Atlanta Business Unit
to a majority of Employer’s other business units (as measured by operating
income) during such consecutive three (3) quarter period; or (vii) the
failure of the Employee to perform in a material respect his employment
obligations as set forth in this Agreement without proper cause and the
continuation thereof during a period of 30 days within which Employee is given
an opportunity to commence rehabilitation with respect thereto, after delivery
to Employee of written notice from the Employer specifying in reasonable detail
the nature of such failure. In making such determination, the Chief
Executive Officer or the Board of Directors shall act in good faith. For
purposes of this Section, no act, or failure to act, on the Employee’s part
shall be considered “willful” unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or omission was in
the
best interest of the Employer.
Section
5.4 Termination
Without Cause; Termination for Good Reason. Employee’s
employment hereunder may be terminated without Cause upon ten (10) business
days’ notice for any reason. Employee’s employment may be terminated by Employee
at any time for Good Reason.
For
purposes of this Agreement, “Good Reason” shall mean:
(a)
failure of the Employer to continue
Employee in the position of Executive Vice President and General Manager for
the
Atlanta Business Unit of the Employer; (b) material diminution in the
nature or scope of the Employee’s responsibilities, duties or authority
(provided, however, any general diminution of the business of the Employer
shall
not constitute “Good Reason”); (c) material failure of the Employer to provide
the Employee the compensation and benefits in accordance with the terms of
Articles 3 and 4 hereof; (d) change in reporting structure such that Employee
reports to any person other than an executive officer of Employer; or (e) the
requirement by the Employer that Employee relocate his principal place of
employment to a location more than thirty (30) miles from Norcross,
Georgia.
Section
5.5 Expiration. Employee’s
employment hereunder shall be terminated upon expiration of the Initial Term
or
any Succeeding Term as provided in Sections 1.1 and 1.2, unless the parties
agree that the Employee’s employment shall become “at will.”
Section
5.6 Notice
of Termination. Any termination of the Employee’s
employment by the Employer or by the Employee (other than termination by reason
of resignation, retirement, or death), shall be communicated by written Notice
of Termination to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which shall include the
specific termination provision in this Agreement relied upon, and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee’s employment under the provision so
indicated.
Section
5.7 Date
of Termination. The “Date of Termination” shall
be: (a) if the Employee’s employment is terminated by his death, the
date of her death; (b) if the Employee’s employment is terminated by reason of
Employee’s disability, thirty (30) days after Notice of Termination is given;
(c) if the Employee’s employment is terminated for Cause, the date the Notice of
8
Termination
is given or after if so specified in such Notice of Termination (including
but
not limited to the end of any cure period as specified in Section 5.3(vii)
hereof); (d) if the Employee’s employment is terminated for any other
reason, the date on which a Notice of Termination is given.
ARTICLE
6
PAYMENTS
TO EMPLOYEE UPON TERMINATION
Section
6.1 Death,
Disability or Retirement. In the
event of Employee’s retirement, death or Disability, all benefits generally
available to Employer’s employees as of the date of such an event shall be
payable to Employee or Employee’s estate, in accordance with the terms of any
plan, contract, understanding or arrangement forming the basis for such payment,
and in any case specifically including any and all accrued Base Salary and
Bonus. Employee shall be entitled to such other payments as might
arise from any other plan, contract, understanding or arrangement between
Employee or Employer at the time of any such event.
Section
6.2 Termination
for Cause or Resignation. In the event Employee is
terminated by Employer for Cause or Employee resigns (other than a Termination
by Employee for Good Reason), neither Employer nor any affiliate shall have
any
further obligation to Employee under this Agreement, except for payment to
Employee of any and all accrued Base Salary and Bonus, provision of COBRA health
care continuation and otherwise as may be expressly required by
law. No such termination of Employee’s employment for Cause or upon
Employee’s resignation shall affect Employee’s right to receive
earn-out payments pursuant to the Merger Agreement.
Section
6.3 Termination
Without Cause; Termination for Good Reason. Subject to
other provisions in this Article 6 to the contrary, upon the occurrence of
a
termination without Cause by Employer or a Termination for Good Reason by
Employee, Employer shall:
(a) Pay
to Employee any and all accrued Base Salary, vacation and Bonus (and, for
removal of doubt, any such Bonus for a fiscal quarter that has been completed
at
the time of Employee’s termination of employment shall be deemed to be accrued
for purposes of all sections of this Article 6, regardless of whether the amount
of such Bonus has been determined or payment been made as of the date of
termination of employment);
(b) (i) In
the event such termination occurs at any time prior to the completion of three
years following the Commencement Date, pay to Employee, or in the event of
Employee’s subsequent death, to Employee’s surviving spouse, or if none, to
Employee’s estate, as severance pay, $750,000; or (ii) in the event
such termination occurs at any time after the completion of three years
following the Commencement Date, pay to Employee, or in the event of Employee’s
subsequent death, to Employee’s surviving spouse, or if none, to Employee’s
estate, as severance pay, the monthly rate of Base Salary payable under this
Agreement for a period of one year plus an amount equal to the aggregate
quarterly Bonus payments paid to Employee during the four (4) calendar quarters
prior to the Date of Termination;
(c) Cause
any stock options issued to Employee which have not lapsed and which are not
otherwise exercisable to be accelerated so as to immediately be exercisable
by
Employee, and if not otherwise provided in the applicable option grant, extend
the exercise period with
9
respect
to such options to a date that is ninety (90) days following the Date of
Termination;
(d) Pay
the Employer’s portion of the COBRA health insurance continuation premium in the
same amount Employer contributed for Employee’s health insurance as of the date
of Employee’s termination through the remaining period of months of the Initial
Term or Succeeding Term but in no event fewer than six (6) months and thereafter
provide COBRA health care continuation at Employee’s cost (provided that the
Employee makes the required premium contributions); provided, however, that
Employer’s obligation to contribute its portion of the COBRA insurance
premium will cease immediately in the event Employee becomes employed
following termination. Employee agrees to notify Employer immediately
regarding such new employment; and
(e) Provide
to Employee such other payments or benefits as may be expressly required by
law.
ARTICLE
7
GENERAL
PROVISIONS
Section
7.1 Notices. Any
notices to be given hereunder by either party to the other shall be in writing
and may be transmitted by personal delivery or by mail, first class, postage
prepaid, or by electronic facsimile or email transmission (with verification
of
receipt). Mailed notices shall be addressed to the parties at their
respective addresses set forth herein. Each party may change that
address by written notice in accordance with this section. Notices delivered
personally shall be deemed communicated as of the date of actual receipt. Mailed
notices shall be deemed communicated as of one day after the date of
mailing.
Section
7.2 Governing
Law; Jurisdiction. This Agreement shall be governed by,
construed and interpreted in accordance with the laws of the Commonwealth of
Massachusetts, without regard to its principles of conflicts of
laws. Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement or any of the transactions
contemplated hereby, shall be brought against any of the parties in the courts
of the Commonwealth of Massachusetts, and each of the parties irrevocably
submits to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding, waives any objection to
venue laid therein, agrees that all claims in respect of any action or
proceeding shall be heard and determined only in any such court and agrees
not
to bring any action or proceeding arising out of or relating to this Agreement
or any transaction contemplated hereby in any other court. Process in
any action or proceeding referred to in the preceding sentence may be served
on
any party anywhere in the world.
Section
7.3 Attorney’s
Fees and Costs. If either party commences any action at
law or in equity against the other to enforce the terms of this Agreement and
prevails in such action, the losing party shall reimburse the prevailing party
its reasonable attorneys’ fees, costs and necessary disbursements in addition to
any other relief to which such prevailing party may be entitled. This
provision shall be construed as applicable to the entire contract.
Section
7.4 Entire
Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with respect
to the subject matter contained herein and contains all of the covenants and
agreements between the parties with respect to that
10
subject
matter. Each party to this Agreement acknowledges that no representations,
inducements, promises or agreements, orally or otherwise, have been made by
any
party, or anyone acting on behalf of any party, which are not embodied herein,
and that no other agreement, statement or promise not contained in this
Agreement shall be valid or binding on either party.
Section
7.5 Modification. Any
modification of this Agreement will be effective only if it is in writing and
signed by the Employee and properly authorized by Employer’s Board of Directors
and signed by an officer of Employer.
Section
7.6 Effect
of Waiver. The failure of either party to insist on
strict compliance with any of the terms, covenants or conditions of this
Agreement by the other party shall not be deemed a waiver of that term, covenant
or condition, nor shall any waiver or relinquishment of any right or power
at
any one time or times be deemed a waiver or relinquishment of that right or
power for all or any other times.
Section
7.7 Partial
Invalidity. If any provision in this Agreement is held
by a court of competent jurisdiction to be invalid, void or unenforceable,
the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
Section
7.8 Assignment. The
rights and obligations of the parties hereto shall inure to the benefit of,
and
shall be binding upon, the successors and assigns of each of them; provided,
however, that the Employee shall not, during the continuance of this Agreement,
assign this Agreement without the previous written consent of the Employer,
and
provided, further, that nothing contained in this Agreement shall restrict
or
limit the Employer in any manner whatsoever from assigning any or all of its
rights, benefits or obligations under this Agreement to any successor
corporation or entity or to any affiliate of the Employer without the necessity
of obtaining the consent of the Employee. “Affiliate” as used throughout this
Agreement means any person or entity which directly or indirectly controls,
or
is controlled by, or is under common control with, the Employer.
Section
7.9 Specific
Performance. If there is any violation of the
Employee’s obligations herein contained, the Employer, or any of its Affiliates,
shall have the right to specific performance in addition to any other remedy
which may be available at law or at equity.
Section
7.10 Survival
of Sections. The provisions of Sections 2.3, 2.4, 2.5
and 2.6 shall continue in force so long as the Employee remains employed by
the
Employer or any Affiliate of the Employer, whether under this Agreement or
not,
and whether as a consultant or not, and shall survive any termination of
employment under this Agreement for the periods specified therein.
Notwithstanding the foregoing, the provision of Sections 2.5 shall survive
for
only three years following any termination of employment under this
Agreement.
Section
7.11 Injunctive
Relief/Acknowledgement. Employee
understands and acknowledges that the Employer’s proprietary information,
inventions and good will are of a special, unique, unusual, extraordinary
character which gives them a peculiar value, the loss of which cannot be
reasonably compensated by damages in an action at law. Employee
understands and acknowledges that, in addition to any and all other rights
or
remedies that the Employer may possess, Employer shall be entitled to injunctive
and other equitable relief, without posting a bond, to prevent a breach or
threatened breach of this Agreement (and/or any provision thereof) by
Employee. In the event that a
11
court
of
appropriate jurisdiction awards the Company injunctive or other equitable relief
due to Employee’s breach of the terms of this Agreement, Employee agrees that
the time periods provided in Article 2.3 of this Agreement shall be tolled
for
the period during which Employee is in breach of the Agreement, and shall resume
once Employee complies with such injunctive or other equitable
relief.
[Remainder
of page intentionally left blank]
12
IN
WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized officers as an instrument under seal at Norcross, Georgia on this
5th
day of July, 2007.
|
Employer:
|
Employee: |
|
By:
/s/Xxxxxx X. Xxxxxx
Xxxxxx
X. Xxxxxx
President
&
CEO
|
/s/Xxxx
X. Xxxx
Xxxx X. Xxxx
|
|
Address:
|
Address:
6170 Xxxxx
Farm
Drive,
Norcross,
Georgia
30092
|
|
|
|
|
[Xxxx
Employment Agreement]
13
EXHIBIT
2.4(b)
Employee’s
Personal Intellectual Property
None.
14
EXHIBIT
3.2
Xxxx
Xxxx, Incentive Bonus Computation
|
1.
|
One-half
($12,500) of the Bonus shall be based upon the achievement of quarterly
gross profit objectives set forth
below:
|
|
Quarter
Ending
|
Gross
Profit Objectives for Atlanta Business Unit
|
|
September
30, 2007
|
$560,000*
|
|
December
31, 2007
|
$570,000*
|
|
March
31, 2008
|
$580,000
|
|
June
30, 2008
|
$590,000
|
|
2.
|
One-half
($12,500) of the Bonus shall be based upon the achievement of quarterly
operating income objectives set forth
below:
|
|
Quarter
Ending
|
Operating
Income Objectives for Atlanta Business Unit
|
|
September
30, 2007
|
$250,000*
|
|
December
31, 2007
|
$260,000*
|
|
March
31, 2008
|
$270,000
|
|
June
30, 2008
|
$280,000
|
*
Bonus to be paid irrespective of whether Objectives have been
satisfied.
“Gross
Profit” shall be calculated in accordance with generally accepted accounting
principles consistently applied (“GAAP”).
“Operating
Income” shall be calculated in accordance with GAAP, having taken into account
deductions for corporate, general, administrative and marketing expenses
allocated to the Atlanta Business Unit on the same basis as all other operating
units of the Employer; provided, however, that such expenses cannot exceed
twelve percent (12%) of the Atlanta Business Unit’s gross
revenues.
|
3.
|
All
Bonus payments shall be made on or before the 45th
day after
the end of each fiscal quarter during the term of this
Agreement.
|
15
