Exhibit 10.14
EMPLOYMENT AGREEMENT
AGREEMENT effective this 23rd day of Dec, 1997 (the "Effective Date"), by
and between Systems Consulting Company, Inc., with offices at 000 Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxxxx 00000 (the "Company"), and Xxxxxx St. Xxxxxxx, an
individual residing at 00 Xxxxxx Xxxx; Xxxxxxx, XX 00000 ("St. Germain").
The parties agree to the following terms of employment of St. Germain by
the Company as Chief Financial Officer.
1. Definitions.
1.1 "Annual Total Compensation" shall mean total cash compensation paid to
St. Germain under Sections 3.1 (salary) and 3.2 (bonus) in the twelve (12) month
period immediately preceding the date on which the Annual Total Compensation is
being measured.
1.2 "Business of the Company" shall mean (i) all business of the Company,
whether presently or hereafter conducted by the Company at any time during the
term of this Agreement, and (ii) any business in which the Company is
contemplating becoming involved, provided the Company has devoted substantial
resources to such business.
1.3 "Disability" shall mean the inability of St. Germain due to illness or
accident to perform the duties to be performed by him pursuant to this Agreement
for a continuing period in excess of One Hundred Eighty (180) days interrupted
by return or returns to full-time employment of not more than ten (10) days
each.
1.4 "Sale of the Company" shall mean (i) any sale of substantially all of
the assets of the Company to an unaffiliated third party; (ii) any merger,
consolidation or other transaction of the Company in which the stockholders of
the company immediately prior to such transaction do not represent a controlling
interest in the resulting company or business entity; or (iii) any sale or
issuance of stock of the Company, in a single transaction or a series of related
transactions, whereby the stockholders of the Company immediately prior to the
initial such transaction(s) do not represent a controlling interest in the
Company after such subsequent transaction(s).
2. Position and Responsibilities. During the term of his employment under this
Agreement, St. Germain agrees to undertake such activities on behalf of the
Company, in his capacity as Chief Financial Officer, as the President of the
Company may from time to time request, and St. Germain shall exercise such
powers and perform such duties in relation to the business and affairs of the
Company as may from time to time be vested in him or requested by the President
of the Company. Unless otherwise instructed by the Board of Directors of the
Company, St. Germain shall at all times report to the President of the Company.
St. Germain agrees to devote substantially all of his business time, attention
and services to the diligent, faithful and competent discharge of such duties
for the successful operation of the Company's business.
3. Salary, Bonus, Securities and Other Benefits. During the term of St.
Germain's employment under this Agreement, the Company shall pay St. Germain the
following compensation:
3.1 Salary. In consideration of the services to be rendered by St. Germain
to the Company in his capacity as Chief Financial Officer, the Company will pay
St. Germain a salary of $125,000 for the first year of this Agreement and a
minimum salary of $140,000 per year for each succeeding year of this Agreement.
Such salary shall be payable in conformity with the Company's customary
practices for executive compensation as such practices shall be established or
modified from time to time. Salary payments shall be subject to all applicable
federal and state withholding, payroll and other taxes.
3.2 Bonus. By April 30, 1998, St. Germain shall receive a bonus of $50,000
so long as sufficient finds are available to the Company. For each succeeding
year of this Agreement, St. Germain shall be eligible to receive a bonus based
upon his successfully achieving the mutually agreed upon goals and objectives
established between St. Germain and the President of the Company. If the goals
and objectives are only partially achieved, St. Germain may receive a bonus as
determined by the President of the Company.
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3.3 Stock Options. St. Germain shall be granted Incentive Stock Options as
set forth below in Section 3.3.1 pursuant to the Company's standard Incentive
Stock Option Agreement, a copy of which is attached hereto as Exhibit A. Without
limitation, St. Germain's Incentive Stock Option Agreement(s) shall provide
that, immediately upon exercise of any options, St. Germain shall become party
to the stockholders' agreement, a copy of which is attached hereto as Exhibit B.
3.3.1 Grant. On the Effective Date, St. Germain shall be granted
Incentive Stock Options to purchase Two Thousand Five Hundred (2,500) shares of
the Company's common stock, $.01 par value per share ("Common Stock"), at a
price of $75 per share. These options shall vest as follows: 20% after one year
from the date of grant and one and two-thirds percent of the total shares
subject to the option for each completed calendar month of employment, up to a
maximum of one hundred percent of such shares.
3.3.2 Acceleration. Any and all unvested options shall immediately
vest on a Sale of the Company.
3.4 Fringe Benefits. The Company shall provide St. Germain with such
benefits, including health insurance, life insurance, disability insurance and
vacation, on the same basis as it makes such benefits available to all other
executive management-level employees.
3.5 Expenses.
3.5.1 Temporary Living Expenses. The Company will reimburse St.
Germain for reasonable temporary living expenses, including but not limited to
lodging, meals, utilities and transportation, while located in the Portland,
Maine area during the term of this Agreement, if he shall present an itemized
written account in accordance with the Company's policies.
3.5.2 Future Expenses. It is understood that St. Germain will from
time to time incur reasonable expenses in conjunction with his employment with
the Company. The Company will reimburse St. Germain for any such reasonable
expenses if he shall present an itemized written account in accordance with the
Company's policies.
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4. Inventions and Nondisclosure. In connection with his employment by the
Company pursuant to the terms of this Agreement, St. Germain shall execute the
Inventions and Nondisclosure Agreement attached hereto as Exhibit C, the terms
and conditions of which are incorporated herein by reference. As a material
inducement to the Company entering into this Agreement, St. Germain covenants
and agrees that he shall not, at any time during or following the term of this
Agreement, directly or indirectly divulge or disclose for any purpose whatsoever
any confidential information that has been obtained by or disclosed to him as a
result of his employment with the Company. St. Germain agrees that the
provisions of this Article 4 survive the termination of this Agreement.
5. Covenant Not To Compete and To Protect Confidential Information.
5.1 Confidential Information. St. Germain understands that during his
employment with Company he may become acquainted with certain trade secrets and
other confidential and proprietary information belonging to Company which may
now, or in the future, be used by it in connection with its business. Such
information includes but is not limited to methods and processes for servicing
of products, customer lists, prospect lists, pricing data, and sale of products.
St. Germain further understands that because of the confidential nature of this
relationship, he is legally bound not to use this type of information for his
own benefit nor to disclose it to third parties to compete directly or
indirectly with Company. Furthermore, he expressly agrees that he will not so
use such information for his own benefit nor disclose it to others either during
his employment by Company or after the termination of his employment with
Company or at any time after the termination of this Agreement.
5.2 Special Value of Services and Disclosure of Information. St. Germain
acknowledges that the service he is to render as an employee are of a special
and unusual character with a unique value to Company, the loss of which cannot
adequately be compensated by damages in an action at law. In view of the unique
value to Company of the services of St. Germain for which Company has contracted
hereunder, because of the confidential information to be obtained by or
disclosed to St. Germain, as hereinabove set
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forth, and as a material inducement to Company to enter into this Agreement, St.
Germain covenants and agrees to bind himself to the provisions of this Agreement
and more specifically the provisions of Articles 4 and 5 hereof.
5.3 Noncompetition. St Germain agrees that, so long as he is receiving
compensation under this Agreement (the "Non-competition period), he will not,
absent the prior written approval of the Company, and for a period of twelve
(12) months after termination of his employment, regardless of the cause of
termination or the status of this Agreement, directly or indirectly, anywhere
the Company does business, engage in any business or perform any service which
conflicts with the financial or business interests of the Company or have any
interest, whether as a proprietor, partner, employee, stockholder, principal,
agent, consultant, director, officer, or in any other capacity or manner
whatsoever, in any enterprise that shall so engage; provided, however, that St.
Germain shall not be restricted from owning not more than five percent (5%) of
the outstanding equity in any corporation whose stock is listed on a recognized
public exchange. St. Germain understands and covenants that this restriction is
potentially of a world wide geographic scope and St. Germain agrees and
covenants that this scope is reasonable in light of the nature of the Company's
business and the compensation established under this Agreement.
5.4 Customers and Employees Protected. In furtherance of the foregoing and
not in limitation thereof, during the Non-competition Period, St. Germain shall
not, directly or indirectly, solicit or service in any way, on behalf of himself
or on behalf of or in conjunction with others, any customer or prospective
customer who has made purchases from or been solicited or serviced by the
Company within one (1) year prior to the termination of St. Germain's
employment. The previous sentence does not apply to any solicitation or service
not in competition with the "Business of the Company" as defined herein. During
the Non-competition Period, St. Germain will not seek to persuade any employee
of the Company, to discontinue employment with the Company or to become employed
in any business directly or indirectly competitive with the Business of the
Company.
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5.5 The Company to Have Full Benefit. If St. Germain violates the
restrictive Covenants of Article 5 and the Company brings action for injunctive
or other relief, the Company shall not, as a result of the time involved in
obtaining the relief, be deprived of the benefit of the full term of the
restrictive covenants. Accordingly, the restrictive covenant shall be deemed to
have the duration specified in Article 5, as the case may be, computed from the
date the relief is granted but reduced by the time between the period when the
restriction began to run and the date of the first violation of the covenant by
St. Germain. St. Germain further agrees that if he violates the restrictive
covenants of Article 5 and the Company brings action for injunctive or other
relief, further payments of compensation to him shall cease and the Company
shall be entitled to recover any compensation paid to St. Germain after the date
of the violation.
5.6 Partial Enforcement. If any arbitrator shall determine that the
duration or geographical limit of any restriction contained in the Article 5 is
unenforceable, it is the intention of the parties that the restrictive covenants
set forth herein shall not thereby be terminated but shall be deemed amended to
the extent required to render them valid and enforceable.
5.7 Termination Upon Cessation of Business or Bankruptcy. Article 5 shall
terminate in the event that the Company ceases to engage in business as a going
concern, other than by reason of a Sale of the Company.
5.8 Notwithstanding anything in this Agreement, St. Germain agrees that
the provisions of this Article 5 shall survive the termination of this
Agreement.
6. Remedies of the Company. As an employee of the Company, St. Germain may have
access to customer lists, client files, trade secrets, and other confidential
information of the Company. Therefore, St. Germain acknowledges that
notwithstanding the fact that to St. Germain's employment is terminable at will
upon notice as provided in Section 7.3.1, the restrictions contained in Article
5 of this Agreement and in the Inventions and Nondisclosure Agreement represent
reasonable and necessary protection of the legitimate interests of the
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Company, that any violation of these restrictions would cause substantial injury
to the Company, and that the Company would have not entered into this Agreement
with St. Germain without receiving the additional consideration offered by St.
Germain in binding himself to these restrictions. In the event of any violation
of these restrictions, the Company shall be entitled to preliminary and
permanent injunctive relief, in addition to any other remedy.
7. Term and Termination.
7.1 Term. Unless earlier terminated pursuant to its terms, and subject to
Section 9, the term of this Agreement shall be three (3) years from the
Effective Date, except as modified in Paragraph 3. Articles 4 and 5 survive the
termination of this Agreement, do not terminate upon the termination of this
Agreement, regardless of reason, and only terminate according to their express
terms, if any.
7.2 Termination by St. Germain. St. Germain may terminate this Agreement
at any time on ninety (90) days written notice to the Company, specifying the
date of termination.
7.3 Termination by the Company.
7.3.1 Without Cause, Death or Disability.
(A) This Agreement may be terminated by the Company at any
time, for any reason, on thirty (30) days written notice to St. Germain
specifying the date of termination.
(B) This Agreement shall automatically terminate upon St.
Germain's death or disability.
7.3.2 For Cause. The Company may terminate this Agreement upon the
happening of any one of the following events:
(A) Continuing inattention to, or neglect of, the duties to be
performed by St. Germain, which inattention is not the result of illness or
accident, after written notice and a reasonable opportunity to cure said
performance;
(B) Willful disloyalty to the Company;
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(C) Participation in any fraud;
(D) Imparting any confidential information in violation of
this Agreement; or
(E) Any breach of Articles 4 or 5 of this Agreement.
8. Compensation upon termination.
8.1 Pursuant to Sections 7.2, 7.3.1(B) and Sections 7.3.2. If this
Agreement is terminated after the first year of the Agreement, then upon
termination of this Agreement by St. Germain pursuant to Section 7.2, or
termination of this Agreement by the Company pursuant to Sections 7.3.2, St.
Germain shall be entitled to any salary accrued to him as of the date of
termination pursuant to Section 3.1, and to a pro-rated bonus, pursuant to
Section 3.2, for the portion of the then-current fiscal year during which St.
Germain performed services hereunder. The Company's good faith determination of
amounts due under this Section shall be final and binding, subject to
arbitration under Paragraph 11.
8.2 Pursuant to Section 7.3.1(A). If this Agreement is terminated by the
Company pursuant to Section 7.3.1(A), St. Germain shall be entitled to severance
equal to his Annual Total Compensation at the time of termination determined
pursuant to Section 3.1 payable in twelve equal monthly installments beginning
with the first of the month following said termination. St. Germain shall also
be entitled to receive one additional year of vesting of any previously granted
options under Article 3.
8.3 St. Germain's Obligations Upon Termination. Upon termination of St.
Germain's employment by Company or at any other time at Company's request, St.
Germain shall promptly deliver to Company all files, correspondence, letters,
notes, notebooks, reports, drawings, formulas, computer programs, and any other
similar documents, memoranda, customer lists, phone lists, or "Rolodex" type
materials and any copies thereof relating in any way to Company's business and
any way obtained by St. Germain, directly or indirectly, during his employment
by Company which are in St. Germain's possession or under the
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control of St. Germain. St. Germain shall not make or retain any copies of the
foregoing upon termination and shall so represent to Company in writing at
termination of his employment.
9. Sale of the Company. In the event that St. Germain is terminated by the
Company without cause and within six (6) months of such termination, the Company
is sold to or merged with another Company, then all of St. Germain's unvested
options shall become immediately vested at the time of such sale or merger.
10. Consent and Waiver by Third Parties. St. Germain hereby represents and
warrants that he has obtained all necessary waivers and/or consents from third
parties as to enable him to accept employment with the Company on the terms and
conditions set forth herein and to execute and perform this Agreement without
being in conflict with any other agreement, obligation or understanding with any
such third party. St. Germain represents that he is not bound by any agreement
or any other existing or previous business relationship that conflicts with, or
may conflict with, the performance of his obligations hereunder or prevent the
full performance of his duties and obligations hereunder.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Maine and shall be deemed to
be performed in Maine. Any dispute under this agreement shall be settled by
binding arbitration to be held in Portland, Maine pursuant to the then
prevailing Commercial Arbitration Rules of the American Arbitration Association.
12. Severability. In case any one or more of the provisions contained in this
Agreement or the other agreements executed in connection herewith for any reason
shall be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement or such other agreements, but this
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Agreement or the such other agreements, as the case may be, shall be construed
as if such invalid, illegal or unenforceable provisions had never been contained
herein or therein.
13. Waivers and Modifications. This Agreement may be modified, and the rights,
remedies and obligations contained in any provision hereof may be waived, only
in accordance with this Section 13. No waiver by either party of any breach by
the other or any provision hereof shall be deemed to be a waiver of any later or
other breach thereof or as a waiver of any other provision of this Agreement.
This Agreement and any Exhibit sets forth all of the terms of the understandings
between the parties with reference to the subject matter set forth herein and
may not be waived, changed, discharged orally or by any course of dealing
between the parties, but only by an instrument in writing signed by the party
against whom any waiver, change, discharge or termination is sought.
14. Assignment. St. Germain acknowledges that the services to be rendered by him
are unique and personal in nature. Accordingly, St. Germain may not assign any
of his rights or delegate any of his duties or obligations under this Agreement.
The rights and obligations of the Company under this Agreement shall inure to
the benefit of, and shall be binding upon, the successors and assigns of the
Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written as an instrument under seal.
SYSTEMS CONSULTING COMPANY, INC.
By: /s/ Xxxx Xxxxx /s/ Xxxxxx St. Germain
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Xxxxxx St. Xxxxxxx
Title:
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