EXHIBIT 10.20
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated as of December ,
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2003, is entered into by and between THE MANAGEMENT NETWORK GROUP, INC., a
Delaware corporation (the "COMPANY"), with offices at 0000 Xxxxxxx Xxxxxxxxx -
Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxx 00000, and XXXXXX XXXXX, an individual
("EMPLOYEE"), residing at 0000 X. 000xx Xxxxxxx, Xxxxxxx, Xxxxxx 00000.
RECITALS
The Company wishes to obtain the services of Employee and Employee wishes
to perform such services on the terms and conditions contained herein.
Therefore, the parties hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
effective as of December , 2003 (the "EFFECTIVE DATE"), the Company hereby
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continues to employ Employee as Chief Financial Officer of the Company to
perform the duties described in Section 4 hereof.
2. TERM. The term of this Agreement shall begin on the Effective Date and
will continue until December 31, 2005 unless extended on terms mutually agreed
upon between Employee and the Company or unless earlier terminated pursuant to
the provisions of Section 7 hereof. The period from the Effective Date until the
date of termination of employment pursuant to this Agreement is herein referred
to as the "TERM".
3. COMPENSATION.
3.1 SALARY. Subject to the adjustment provisions herein, Employee
shall be paid biweekly installments based upon an annual base salary of
$250,000. The Company may adjust Employee's base salary at any time in its
sole discretion to reflect Employee's performance; PROVIDED, HOWEVER, that
Employee's base salary shall at no time be less than the minimum base
salary set forth in the first sentence of this paragraph. Amounts paid
pursuant to this Section 3.1 are hereinafter referred to as "BASE SALARY."
3.2 BONUS. In addition to Employee's Base Salary, Employee shall be
eligible to participate in the Company's bonus pool for partners and
executive officers ("Bonus") as duly approved by the compensation committee
of the Company's Board of Directors ("Board").
3.3 OTHER COMPENSATION. As a part of Employee's compensation package,
the Chief Executive Officer of the Company shall periodically (and in any
event, annually) review Employee's compensation and consider such
modifications as may be appropriate for the Chief Financial Officer of the
Company. In connection with such review, the Chief Executive Officer may
consider extraordinary bonuses and other forms of compensation to Employee.
4. DUTIES. Employee shall, during the term hereof, be an officer of the
Company and have the title of Chief Financial Officer of the Company, and shall
perform such duties as and have such authority as are customary and usual for
such position and as may be directed by the Chief Executive Officer of the
Company unless Employee believes such duties require him to do something
unlawful, in which case Employee agrees to bring the matter to the attention of
the Company as soon as is reasonably practicable. Without limiting the
generality of the foregoing:
4.1 FULL TIME. Employee shall devote Employee's full working time,
ability and attention to the business of the Company and shall, in
accordance with the highest ethical and professional standards, seek to
maximize the financial success of the Company's business and to optimize
the goodwill and reputation of the Company within its industry and with its
customers. During the term of this Agreement, Employee agrees that he will
not become involved in the active ownership or management of any business
enterprise that will interfere with the performance of his duties
hereunder. Employee further warrants that he will not engage, directly or
indirectly, in any other business activity (whether or not pursued for
pecuniary advantage) that is or may be in conflict with, or that might
place him in a conflicting position to, that of the Company. So that the
Company may be aware of the extent of any other demands upon Employee's
time and attention, Employee shall disclose in confidence to the Company
the nature and scope of any other business activity in which he is or
becomes engaged during his employment with the Company. Employee has
disclosed to Company his involvement in the management of certain
family-owned businesses, Ultra Rev, Inc. and X. X. Xxxxxxx Company, Inc.,
and Company hereby consents to Employee's continued involvement in such
businesses, so long as such involvement does not materially affect the
ability of Employee to discharge his responsibilities to Company under this
Agreement. Employee also warrants that he is not a party to any valid or
binding agreement or legal relationship whose performance or execution
would interfere with the performance of his duties under this Agreement.
Employee may serve as a director of other corporations or entities with the
prior approval of the Chief Executive Officer, which approval will not be
unreasonably withheld.
4.2 REPORTING. Employee shall report to the Chief Executive Officer of
the Company.
5. EXPENSES. Subject to such rules and procedures as the Company from time
to time specifies, the Company shall reimburse Employee on a monthly basis for
reasonable business expenses necessarily incurred in the performance of Duties
under this Agreement.
6. BENEFITS. Except as otherwise set forth herein, Employee shall be
entitled to fringe benefits and paid time off as set forth below.
6.1 PARTICIPATION IN EMPLOYEE BENEFIT PLANS. Employee shall be
eligible to participate in any health, disability, and group term life
insurance plans or other perquisites and fringe benefits that the Company
extends generally from time to time to employees of the Company at the
level of Partner. These benefits described in this Section 6.1 are
collectively referred to herein as "Fringe Benefits".
6.2 PAID TIME OFF. Employee shall be eligible for Personal Time Off in
accordance with the Company's Personal Time Off policy then in effect and
applicable to Partners of the Company.
7. TERMINATION .
7.1 TERMINATION BY THE COMPANY DUE TO DEATH OR DISABILITY. In the
event of Employee's death during the Term, this Agreement and the
employment of Employee hereunder shall terminate automatically as of the
date of death, except that Sections 9, 10, 11, 12, and 13 shall survive
such termination. In the event of Employee's Disability (as hereinafter
defined) for ninety (90) consecutive calendar days or one hundred and
twenty (120) calendar days in the aggregate during any twelve (12) months
of the Term, the Company shall have the right, by written notice to
Employee, to terminate this Agreement and the employment of Employee
hereunder as of the date of such notice, except that Sections 9, 10, 11,
12, and 13 shall survive such termination. "DISABILITY" for the purposes of
this Agreement shall (A) be determined by an independent physician selected
by the Company and (B) mean Employee's physical or mental disability so as
to render Employee substantially incapable, despite reasonable
accommodations, of carrying out Employee's duties under this Agreement. In
the event of termination pursuant to this Section 7.1, the Company shall
not be under any further obligation to Employee hereunder except to
promptly pay Employee (i) salary and benefits (and Bonuses, if any) accrued
and payable up to the date of termination, (ii) reimbursement for expenses
accrued and payable under Section 5 hereof, and (iii) if the termination is
due to Disability, payment of Employee's monthly Base Salary on the last
regularly scheduled payroll of each of the 3 months immediately following
termination and payment of the premium for any COBRA benefits Employee
elects through Company for a period of six months from the date of
termination.
7.2 TERMINATION BY THE COMPANY DUE TO CAUSE. The Company shall have
the right to discharge Employee and terminate this Agreement for Cause (as
hereinafter defined) during the Term by written notice to Employee and this
Agreement shall be deemed terminated as of the date of such notice, except
that Sections 9, 10, 11, 12, and 13 shall survive such termination. For the
purpose of this Agreement, "CAUSE" shall mean, in the Company's good faith
belief:
(i) The committing of any criminal act under federal, state or
local law, where such act would be a) a felony or b) a crime involving
moral turpitude which, in the reasonable judgment of the Company, has
materially interfered or will materially interfere with the ability of
Employee to perform his duties hereunder, or has caused or will cause
material harm to the Company or its business; provided that, for
purposes of this provision, a finding of guilt and/or plea of
guilty/nolo contender (no contest) is sufficient but not necessary.
(ii) The breach of any provision of this Agreement, including,
but not limited to, by acting dishonestly or negligently regarding
Employee's performance hereunder, and Employee's failure to cure such
breach within ten (10) business days of written notice from Company.
(iii) The failure to perform Employee's duties under this
Agreement (other than for reasons related to illness, injury or
temporary disability).
(iv) The material violation of any applicable local, state or
federal law relating to discrimination or harassment.
(v) The material violation of Company's policies and/or practices
applicable to those at Employee's level, including, but not limited
to, its employment policies and/or practices, including but not
limited to non-discrimination, anti-harassment and non-retaliation
policies and practices.
(vi) The taking of any action, whether intentionally or not, or
failure to act, where such action/inaction has the effect of
materially undermining or harming the Company, its management, its
business, its reputation or its customers/clients/employees.
(vii) The failure to comply with any oral or written report or
directive of the Company, which failure is not remedied within ten
(10) business days of written notice from Company regarding same.
In the event of a termination pursuant to this Section 7.2, the
Company shall not be under any further obligation to Employee hereunder,
except to promptly pay Employee (a) salary and benefits (and Bonuses, if
any) accrued and payable up to the date of termination, (b) reimbursement
for expenses accrued and payable under Section 5 hereof, and (c) any other
benefits required by applicable law (e.g. COBRA), if eligible.
7.3 TERMINATION BY THE COMPANY OTHER THAN DUE TO DEATH, DISABILITY OR
CAUSE. This Agreement and the employment of Employee hereunder may be
terminated by the Company other than due to death, Disability or Cause by
giving at least thirty (30) days prior written notice to the Employee at
any time during the Term and such termination shall be effective as of the
date of termination stated in such notice, except that Sections 9, 10, 11,
12, and 13 shall survive such termination. In the event of a termination
pursuant to this Section 7.3, the Company shall not be under any further
obligation to Employee hereunder, except to promptly pay Employee (i)
salary and benefits (and Bonuses, if any) accrued and payable up to the
date of termination, (ii) reimbursement for expenses accrued and payable
under Section 5 hereof, and (iii) Severance Benefits (as defined below)
pursuant to Section 7.4.
7.4 SEVERANCE BENEFITS. For purposes of this Agreement, "SEVERANCE
BENEFITS" shall mean (i) six (6) months of Employee's Base Salary payable
on the last regularly scheduled payroll of each of the six (6) full
calendar months following termination, and (ii) payment of the premium for
any COBRA benefits Employee elects through Company for a period of six
months from the date of termination.
7.5 TERMINATION BY EMPLOYEE. The Employee shall have the right to
terminate Employee's employment under this Agreement by giving thirty (30)
days prior written notice to the Company at any time, and such termination
shall be effective as of the date of termination stated in such notice,
except that Sections 9, 10, 11, 12, and 13 shall survive such termination.
(a) TERMINATION BY EMPLOYEE OTHER THAN FOR CONSTRUCTIVE
TERMINATION. In the event Employee terminates employment under this
Section 7.5 for other than Constructive Termination (as defined
below), the Company shall not be under any further obligation to
Employee hereunder, except to promptly pay Employee (i) salary and
benefits (and Bonuses, if any) accrued and payable up to the date of
termination, and (ii) reimbursement for expenses accrued and payable
under Section 5 hereof.
(b) TERMINATION BY EMPLOYEE FOR CONSTRUCTIVE TERMINATION.
Notwithstanding anything in this Agreement to the contrary, a
"CONSTRUCTIVE TERMINATION" will be deemed to have occurred pursuant to
this Section 7.5 if there should occur the following:
(i) a material adverse change in Employee's position causing
it to be of materially less stature or responsibility without
Employee's written consent, and such a materially adverse change
shall in all events be deemed to occur if Employee no longer
serves as Chief Financial Officer, unless Employee consents in
writing to such change;
(ii) a relocation of Employee's principal place of
employment by more than 50 miles without Employee's consent;
(iii) a breach of any provision of this Agreement by Company
and failure to cure such breach within ten (10) business days of
written notice from Employee.
In the event Employee terminates his employment due to a Constructive
Termination, the Company shall not be under any further obligation to
Employee hereunder, except to pay Employee within thirty (30) days of
such termination (i) salary and benefits (and Bonuses, if any) accrued
and payable up to the date of termination, (ii) reimbursement for
expenses accrued and payable under Section 5 hereof, and (iii)
Severance Benefits pursuant to Section 7.4.
Upon termination due to a Change of Control or Constructive Termination, for
ninety (90) days following termination, Employee agrees to provide reasonable
cooperation to the Company at the Company's expense in winding up Employee's
work for the Company and transferring that work to other individuals as
designated by the Company. Upon termination for any reason other than Death,
Disability, Change of Control or Constructive Termination, for thirty (30) days
following termination, Employee agrees to provide reasonable cooperation to the
Company at the Company's expense in winding up Employee's work for the Company
and transferring that work to other individuals as designated by the Company.
Employee also agrees reasonably to cooperate with the Company at Company's
expenses in litigation as requested by the Company; provided that, such
cooperation does not harm or conflict with Employee's interests in such
litigation, if any, and Employee is provided reasonable notice so as not to
interfere with Employee's other work or employment obligations.
To be eligible for any Severance Benefits payments under this Section 7,
Employee must (i) execute and deliver to the Company a final and complete
release in a form that is acceptable and approved by the Company after good
faith negotiation with Employee, and (ii) in the Company's good faith belief, be
in full compliance with the provisions of Sections 9 and 11 hereof at the time
of any such payment.
8. CHANGE IN CONTROL BENEFITS. Should there occur a Change in Control (as
defined below), the following provisions shall become applicable:
8.1 During the period (if any) following a Change in Control that
Employee shall continue to provide services under this Agreement, then the
terms and provisions of this Agreement shall continue in full force and
effect.
8.2 Notwithstanding any other provision of Section 7, in the event of
(a) a termination by the Company pursuant to Section 7.3 at any time within
twelve (12) months after a Change in Control, or (b) a Constructive
Termination pursuant to Section 7.5 at any time within twelve (12) months
after a Change in Control, the Company shall pay Employee within thirty
(30) days of such event (i) salary and benefits (and Bonuses, if any)
accrued and payable up to the date of such event, (ii) reimbursement for
expenses accrued and payable under Section 5 hereof, and (iii) Severance
Benefits pursuant to Section 7.4, provided that, such payment shall be made
in one lump sum as opposed to in monthly installment.
8.3 For purposes of this Section 8, a "CHANGE OF CONTROL" shall be
deemed to occur upon the earlier to occur of an event described below, the
Company entering a definitive agreement to accomplish a transaction or
event as described below, or a vote of the directors of the Company
approving a definitive agreement for such a transaction or event as
described below:
(a) the sale, lease, conveyance or other disposition of at least
fifty percent (50%) of the Company's assets as an entirety or
substantially as an entirety to any person, entity or group of persons
acting in concert other than in the ordinary course of business;
(b) any transaction or series of related transactions (as a
result of a tender offer, merger, consolidation or otherwise) that
results in any Person (as defined in Section 13(h)(8)(E) under the
Securities Exchange Act of 1934) becoming the beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of more than 50% of the aggregate voting power
of all classes of common equity of the Company, except if such Person
is (i) a subsidiary of the Company, (ii) an employee stock ownership
plan for employees of the Company or (iii) a company formed to hold
the Company's common equity securities, provided that, at the time
such company became such holding company, substantially all the
stockholders of the Company comprise such holding company's
stockholders and hold at least a majority of the voting power of such
holding company;
(c) a merger (in which the Company is not the surviving operating
entity), consolidation, liquidation or dissolution of Company or
winding up of the business of the Company.
9. RESTRICTIONS.
9.1 NON-DISCLOSURE. During and after the Term, Employee agrees to use
best efforts and exercise utmost diligence to protect and to safeguard the
trade secrets and/or any confidential or proprietary information concerning
the Company or its business or any Affiliates of the Company (including,
without limitation, trade secrets, plans, processes, customer lists,
contracts and compilations of information, records and specifications)
which comes to Employee in the course of Employee's employment and which is
not (independent of disclosure by Employee) public knowledge or general
knowledge in the trade. Employee agrees not to disclose any of the
Company's trade secrets and/or confidential information and/or proprietary
information except as required in the course of Employee's employment with
the Company or by legal process, in which case, Employee agrees to provide
the Company with as much notice as is reasonably practicable in the event
the Company wishes to intervene to protect its rights. Employee agrees not
to use Company's trade secrets and/or confidential information and /or
proprietary information, directly or indirectly, for Employee's own benefit
or for the benefit of another. All files, records, documents, drawings,
specifications, memoranda, notes, or other documents relating to the
business of the Company, whether prepared by Employee or otherwise coming
into Employee's possession, shall be the exclusive property of the Company
and shall be delivered to the Company and not reproduced and/or retained by
Employee upon termination of Employee's employment for any reason
whatsoever or at any other time upon request of the Company.
9.2 NON-SOLICITATION. During the period of Employee's employment, and
for a period of one (1) year following the date of termination of
Employee's employment, the Employee shall not directly or indirectly, for
himself or for any third party, except as otherwise agreed to in writing by
the Company:
(a) Contact, solicit, advise, consult or do business with any
Customer (as hereinafter defined) with which Employee has had direct
contact during , and arising from, his employment by the Company, for
the purpose of causing such Customer to purchase, or otherwise obtain
products or services which are similar to or in any way compete with
the products or services sold or provided by the Company, or
(b) Induce, or attempt to induce, any Customer with which
Employee has had direct contact during the term of, and arising from,
his employment by the Company, to cancel, diminish, decrease or
curtail any business relationship, contractual or otherwise, with the
Company, or
(c) Contact, solicit, induce or attempt to induce or influence
any employee, independent contractor or agent of any Customer or
Company to terminate his or her employment, engagement or contractual
relationship with such Customer or Company, or
(d) Employ or hire any person who is employed by the Company
(whether as an employee or an independent contractor) with any
business or other entity that is engaged in the industry in which
Company is involved.
9.3 COVENANTS AGAINST COMPETITION. During the period of Employee's
employment, and for a period of one (1) year following the date of
Employee's termination of employment, the Employee shall not within the
Restricted Area (as hereinafter defined), directly or indirectly as an
employee, employer, consultant, agent, principal, partner, shareholder,
corporate officer, director or through any other kind of ownership (other
than ownership of securities of publicly held corporations of which
Employee owns less than five (5%) percent of any class of securities) or in
any other representative or individual capacity:
(a) Assist or have an interest (whether or not such interest is
active), in any person, firm, partnership, association, corporation or
business organization, entity or enterprise that is or is about to
become directly or indirectly engaged in, any business or activity
(whether such enterprise is in operation or in the planning or
development stage) that provides, sells, distributes or markets any
products or services that compete in any manner with the business
conducted by Company.
(b) Enter into the employment of or act as an independent
contractor or agent for or advisor or consultant to, any person, firm,
partnership, association, corporation or business organization, entity
or enterprise that is or is about to become directly or indirectly
engaged in, any business or activity (whether such enterprise is in
operation or in the planning or development stage) that provides,
sells, distributes or markets any products or services that compete in
any manner with the business conducted by Company.
Notwithstanding any other provisions herein, in the event of a Constructive
Termination pursuant to Section 7.5 at any time within twelve (12) months
following a Change in Control, this Section 9.3 shall not apply.
9.4 DEFINITIONS.
"CUSTOMER" shall mean any individual, corporation, partnership,
joint venture or other entity, or successors thereof, which has either
(i) purchased or contracted for services or products by or through the
Company at any time within one (1) year prior to the termination of
Employee's employment with the Company, or (ii) has been directly
solicited by the Company within six (6) months prior to the
termination of Employee's employment with the Company, regardless of
whether the Employee shall have direct contact with such individual,
corporation, partnership, joint venture or entity.
"RESTRICTED AREA" shall mean collectively Canada and the United
States of America.
"RESTRICTIONS" shall mean the terms and covenants of Sections
9.1, 9.2 and 9.3, collectively.
9.5 ENFORCEABILITY OF AGREEMENT.
(a) REASONABLENESS OF RESTRICTIONS. Employee has carefully read
and considered the Restrictions and, having done so, agrees that the
Restrictions (including, but not limited to, the time period of
restriction and the geographical areas of restriction set forth
herein) are fair and reasonable and are reasonably required for the
protection of the interests of Company, its owners, officers,
directors and other employees. Employee has had the opportunity to
consult with an attorney prior to the execution of this Agreement, and
freely executes this Agreement either (i) following such consultation
and with the advice of his attorney, or (ii) after freely waiving such
right to consult with an attorney prior to the execution of this
Agreement.
(b) SEVERABILITY. In the event that, notwithstanding the
foregoing, any part of the Restrictions shall be held to be invalid or
unenforceable, the remaining parts thereof shall nevertheless continue
to be valid and enforceable as though the invalid or unenforceable
parts had not been included therein. Notwithstanding the foregoing, it
is the intent and agreement of Company and Employee that the
Restrictions shall be given the maximum force, effect and application
permissible under law.
(c) TIME PERIOD. In the event that a Court of competent
jurisdiction shall determine by final judgment that the scope or time
period of any of the Restrictions is too broad to be capable of
enforcement, such court is authorized to modify such covenants and to
enforce them to the full scope and extent and for the full time period
that the Court deems just and equitable.
(d) PASSIVE INTEREST. The Restrictions shall not be construed to
limit in any manner Employee's right to maintain a passive ownership
interest of less than five (5%) percent of any class of outstanding
securities in any entity, the securities of which are traded on a
national exchange, which may compete with Company, so long as Employee
shall not have the right or power to elect a member of the Board of
Directors of such entity or to otherwise control the actions of such
entity.
10. REMEDIES.
10.1 REMEDIES CUMULATIVE. Nothing herein contained is intended to
waive or diminish any rights the Company or Employee may have at law or in
equity at any time to protect and defend its legitimate property interests
including its business relationship with third parties, the foregoing
provisions being intended to be in addition to and not in derogation or
limitation of any other rights the Company or Employee may have at law or
in equity.
10.2 INJUNCTIVE RELIEF. Employee hereby acknowledges and agrees that
Company would be irreparably injured, the value of the business of Company
would be irreparably damaged and Company could not adequately be
compensated by monetary damages, if Employee were to violate the
Restrictions. Employee covenants and agrees that, if Employee shall violate
any of the Restrictions, Company specifically shall be entitled to
injunctive and other equitable relief to enjoin Employee's violations of
such Restrictions. The prevailing party in any such injunctive action shall
be entitled to reimbursement from the other party for all actual attorney
fees expended in such action.
10.3 NOTICE OF VIOLATION. In the event Company believes that Employee
is violating any of the Restrictions, Company shall so notify Employee in
writing, which notice shall describe with as much specificity as possible,
the nature of the alleged violation. Provided that Employee is in violation
of the Restrictions, if the Employee does not, within fourteen (14) days
following receipt of said notice, cease the conduct, terminate the
relationship or otherwise cure such violation, the Company shall have no
further obligation to make payments to Employee pursuant to the terms of
this Agreement following the date of receipt of such notice.
10.4 ACCOUNTING FOR PROFITS. Employee hereby covenants and agrees
that, if Employee shall violate any of the Restrictions, Company shall be
entitled to an accounting and repayment of all profits, compensation,
commissions, remunerations or benefits which Employee directly or
indirectly has realized and/or may realize as a result of, growing out of
or in connection with any such violation.
11. EMPLOYEE FOR HIRE. In addition to Employee's services, the Company
shall own forever and throughout the world (exclusively during the current and
renewed or extended term of copyright anywhere in the world and thereafter,
non-exclusively) all rights of any kind or nature now or hereafter known in and
to all of the products of Employee's services performed under this Agreement in
any capacity and any and all parts thereof, including, without limitation,
copyright, patent and all other property or proprietary rights in or to any
ideas, concepts, designs, drawings, plans, prototypes or any other similar
creative works and to the product of any or all of such services under this
Agreement (collectively, "INVENTIONS"). Employee hereby acknowledges and agrees
that for copyright purposes, Employee is performing services as the Company's
employee-for-hire; provided, however, that for purposes of this Agreement,
"Inventions" shall not include those that do not relate to the Company's current
business or research and development and were developed without use of any
Company trade secret information or Company facilities or equipment. Without
limiting the generality of the previous two sentences, Employee acknowledges and
agrees that all memoranda, notes, records and other documents made or compiled
by Employee or made available to Employee during the Term of this Agreement
concerning the Company business shall be the Company's property and shall be
delivered by Employee to the Company upon termination of this Agreement or at
any other time at the Company's request. In addition, the Employee hereby agrees
to assign to Company in writing (and take any and all other actions as shall be
reasonably requested by Company in order to carry out the intent of this
Section) any and all rights, title or interest of Employee in any such
copyrights, patents, property or proprietary rights relating to such Inventions.
12. STOCK OPTIONS. Employee has been granted the following non-qualified
stock options (the "Option" or "OPTIONS") and/or shares of restricted stock (the
"STOCK"):
------------------------------- ----------------------------------------- ------------------------------- ------------------
Grant Date Type of Grant Number of Options or Shares Xxxxx Xxxxx
Granted
------------------------------- ----------------------------------------- ------------------------------- ------------------
July 26, 1999 Non-Qualified Stock Options 250,000 $2.00
------------------------------- ----------------------------------------- ------------------------------- ------------------
July 24, 2001 Non-Qualified Stock Options 50,000 $4.86
------------------------------- ----------------------------------------- ------------------------------- ------------------
December 19, 2003 Non-Qualified Stock Options 50,000 $2.31
------------------------------- ----------------------------------------- ------------------------------- ------------------
December 19, 2003 Restricted Stock 125,000 $0.00
------------------------------- ----------------------------------------- ------------------------------- ------------------
The terms of the option grants and the restricted stock award notwithstanding:
(a) Any then remaining unvested Options shall immediately become
vested and the sale and transfer restrictions on the Stock shall
immediately lapse, in the event that (i) Xxxxxxx Xxxxxxx is no longer the
Chief Executive Officer of the Company and/or terminates employment with
the Company for reasons other than death or disability; or (ii) Employee
remains employed by the Company for the shorter of (A) six (6) months
following the occurrence of a Change in Control, or (B) upon the closing or
occurrence of an event described in Section 8.3(a), (b) or (c); or (iii) a
Change in Control occurs entitling Employee to payment of Severance
Benefits under Section 8.2; or (iv) Employee's employment is terminated by
the Company other than due to death, Disability, or Cause as provided for
in Section 7.3.
(b) In the event Employee's employment is terminated other than for
Cause or other than as addressed in Section 12(a), any vested Options as of
the date of such termination shall expire on the earlier of (i) expiration
of the Options per the applicable option grant agreement, or (ii) 120 days
following the date of termination of employment.
In the event that Employee enters into a subsequent employment agreement with
the Company, the provisions of this Section 12 shall survive and be incorporated
in such new employment agreement.
13. MISCELLANEOUS.
13.1 ASSIGNABILITY. This Agreement, including but not limited to
paragraphs 9 and 11, shall be binding upon and inure to the benefit of the
Company, its respective successors, heirs, and assigns. Except as expressly
set forth herein, this Agreement may not be assigned by Employee without
the express written consent of the Company.
13.2 INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable, then such provision shall be fully
severable, and this Agreement shall be construed and enforced as if such
illegal, invalid, or unenforceable provision had never comprised a part
hereof; and the remaining provisions hereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such
illegal, invalid, or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in terms
to such illegal, invalid, or unenforceable provision as may be possible and
still be legal, valid, or enforceable.
13.3 NOTICES. Any notices pertaining to this Agreement shall be
addressed to the parties at their addresses stated on the first page
hereof. All notices shall be in writing and shall be deemed duly given if
personally delivered or sent by registered, certified, overnight or express
mail. If sent by registered or certified mail, notice shall be deemed to
have been received and effective three days after mailing; if by overnight
or express mail, notice shall be deemed received the next business day
after being sent. Any party may change its address for notice hereunder by
giving notice of such change in the manner provided herein.
13.4 CONSTRUCTION OF AGREEMENT. This Agreement contains the entire
agreement of the parties respecting the subject matter contained herein. No
terms, conditions or warranties other than those contained herein, and no
amendments or modification of any provision hereof shall be effective
except by a written agreement signed by all of the parties hereto. This
Agreement shall not be strictly construed against either party.
13.5 WAIVER. The waiver by either party hereto of a breach of any term
or provision of this Agreement shall not operate or be construed as a
waiver of a subsequent breach of the same provision by any party or of the
breach of any other term or provision of this Agreement.
13.6 TITLES. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any
work, clause, paragraph, or provision of this Agreement.
13.7 ARBITRATION.
(a) It is understood and agreed between the parties hereto that,
except with respect to claims for workers' compensation or
unemployment compensation benefits, any and all claims, grievances,
demands, controversies, causes of action or disputes of any nature
whatsoever (including but not limited to tort and contract claims, and
claims upon any law, statute, order, or regulation) (hereinafter
"CLAIMS"), arising out of, in connection with, or in relation to (i)
this Agreement, (ii) questions of arbitrability under this Agreement,
or (iii) any relationship between Employee and the Company before, at
the time of entering, during the term of, upon or after expiration or
termination of this Agreement, shall be resolved by final, binding,
non-judicial arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association ("AAA"), which rules are
incorporated herein by reference. Such dispute resolution process
shall be confidential and shall be conducted in accordance with the
Kansas Rules of Evidence.
(b) Notwithstanding any contrary provision that may be contained
in the applicable AAA rules, the parties hereby agree that discovery
shall be permitted in connection with any arbitration pursuant to this
Agreement, in accordance with the provisions of the Kansas Code of
Civil Procedure. Neither party nor the arbitrator shall disclose the
existence, content, or results of any arbitration hereunder without
the prior written consent of all parties. Except as provided herein,
the Federal Arbitration Act shall govern the interpretation,
enforcement and all proceedings pursuant to this Section 13.7. The
Arbitrator shall apply the substantive law (and the law of remedies,
if applicable) of the State of Kansas, or federal law, or both, as
applicable. The arbitrator is without jurisdiction to apply any
different substantive law. The arbitrator shall have the authority to
entertain a motion to dismiss and/or a motion for summary judgment by
any party and shall apply the standards governing such motions under
Kansas law. The arbitrator shall render an award and a written,
reasoned opinion in support thereof. Such award may include attorneys'
fees and costs to the prevailing party. Judgment upon the award may be
entered in any court having jurisdiction thereof.
(c) Adherence to this dispute resolution process shall not limit
the Company's right to obtain any provisional remedy, including but
without limitation, injunctive or similar relief, from any court of
competent jurisdiction in the event of a breach of Section 9 of this
Agreement. This dispute resolution process shall survive the
termination of Employee's employment.
(d) By signing this Agreement, both Employee and the Company are
giving up their respective right to a jury trial.
13.8 PERSONAL COMPUTER. During the Term, the Company shall provide
Employee, at Company expense, with a portable personal computer (the
"LAPTOP") with such capabilities and capacity, and including all necessary
software, as shall be reasonably necessary to discharge Employee's duties
under this Agreement. Upon termination of Employee's employment, the
Employee shall promptly deliver to the Company any and all tangible
property of the Company, including without limitation the Laptop and any
software related thereto and the contents of any files stored therein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first set forth above.
THE COMPANY:
THE MANAGEMENT NETWORK GROUP, INC.,
a Delaware corporation
By:
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Xxxxxxx X. Xxxxxxx - Chief Executive Officer
EMPLOYEE:
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XXXXXX XXXXX
