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Exhibit 10.10
MANAGEMENT STOCKHOLDER EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made by and between
Forseon Corporation, a Delaware corporation (the "COMPANY"), and Xxxxx Xxxxxxx,
an individual resident of the State of California (the "EMPLOYEE"), as of the
25th day of March, 1999. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such terms in the Merger Agreement
(as defined herein).
WHEREAS, the Employee has been employed by the Company and had entered
into that certain Agreement Re: Change in Control dated March 26, 1998, with the
Company (the "PRIOR AGREEMENT"); and
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of March
25, 1999 (the "MERGER AGREEMENT"), by and among the Company, Towne Services,
Inc. ("PARENT"), TSI Acquisition One, Inc., a Georgia corporation and
wholly-owned subsidiary of Parent ("MERGER SUB"), and certain of the
stockholders of the Company, Merger Sub is to merge with and into the Company
(the "MERGER"); and
WHEREAS, following the transactions contemplated by the Merger
Agreement, the Company will be the surviving corporation of the Merger and will
employ the Employee; and
WHEREAS, the Employee is willing to terminate certain provisions of the
Prior Agreement and serve the Company on the terms and conditions herein
provided; and
WHEREAS, the Merger Agreement provides that it is a condition precedent
to the obligations of the parties to the Merger Agreement to consummate the
transactions contemplated by the Merger Agreement that the Company and the
Employee shall have entered into this Agreement, the effectiveness hereof being
expressly conditioned on consummation of the Merger.
NOW THEREFORE, in consideration of the foregoing, and the mutual
premises and covenants and agreements contained herein and subject to the
conditions contained herein, the parties agree as follows:
ARTICLE I - EMPLOYMENT TERMS
1.1 Termination of Prior Agreement. The Prior Agreement is
terminated effective as of the Closing.
1.2 Employment. The Company shall employ the Employee, and the
Employee shall serve the Company, as Senior Vice President of Finance - Forseon
Division upon the terms and conditions set forth herein. The Employee shall work
from the Company's offices in California. The Employee shall have such authority
and responsibilities consistent with his position with the Company immediately
prior to the Effective Time and as assigned by the President and Chief Operating
Officer of Parent from time to time reasonably consistent with the Employee's
title and commonly incident to the Employee's position, including those listed
on
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Exhibit A attached hereto. The Employee shall devote his full business time,
attention, skill and efforts to the performance of his duties hereunder, except
during periods of illness or periods of vacation and leaves of absence
consistent with Company policy, as amended from time to time. The Employee may
serve as a director or advisor to other organizations, to perform charitable and
other community activities and to manage his personal investments; provided,
however, that such activities do not materially interfere with the performance
of his duties hereunder and are not in conflict or competitive with, or adverse
to, the interests of the Company.
1.3 Term. Unless earlier terminated as provided herein, the
term of Employee's employment ("TERM") under this Agreement shall be for a
period of twenty-four (24) months.
1.4 Compensation and Benefits.
(a) The Company shall pay the Employee a salary at a rate of
$95,000 per annum in accordance with the salary payment practices of Company.
The Board of Directors of Company or the President and Chief Operating Officer
of Parent may increase the Employee's base salary if they determine in their
sole discretion that an increase is appropriate.
(b) The Employee shall be entitled to participate in all
retirement, life and health insurance, disability, option plans and other
similar benefit plans or programs of the Parent now or hereafter available to
the Employee or available generally to officers of the Parent in comparable
senior management positions; provided, however, that during any period during
the Term that the Employee is disabled, and during the 120-day period of
physical or mental infirmity leading up to the Employee's Disability, the amount
of the Employee's compensation provided under this Section 1.4 shall be reduced
by the sum of the amounts, if any, paid to the Employee for the same period
under any disability benefit or pension plan of the Company, Parent or any of
their subsidiaries.
(c) The Employee shall be eligible to receive bonus payments
(not more than once annually) based upon achievement of targeted levels of
performance and such other criteria as the President and Chief Operating Officer
of Parent shall determine from time to time, such bonus not to exceed 20% of
Employee's annual base salary. The determination of any bonus amount shall be
within the good faith discretion of the President and the Chief Operating
Officer of Parent. In addition, the Employee shall receive an annual performance
review from the President and Chief Operating Officer of the Parent or his
designee.
(d) The Company shall reimburse the Employee for all
reasonable ordinary and necessary travel, seminar and other expenses related to
the Employee's duties which are incurred and accounted for in accordance with
the reimbursement practices of the Company.
(e) Employee shall be entitled to four (4) weeks paid vacation
annually during the Term of employment by the Company hereunder.
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ARTICLE II - COVENANTS OF EMPLOYEE
Section 2.1 Confidentiality. Employee recognizes the interest of the
Company in maintaining the confidential nature of its proprietary and other
business and commercial information. In connection therewith, Employee covenants
that during the term of his employment with the Company under this Agreement,
and for a period of two(2) years thereafter, Employee shall not, directly or
indirectly, except as authorized by the Company's Board of Directors, publish,
disclose or use for his own benefit or for the benefit of a business or entity
other than the Company or otherwise, any secret or confidential matter, or
proprietary or other information not in the public domain that was acquired by
Employee during his employment, relating to the Company's, Parent's or any of
its or their subsidiaries' businesses, operations, customers, suppliers,
products, employees, financial affairs or industry practices, technology,
know-how or intellectual property or other similar information (the "PROPRIETARY
INFORMATION"). Proprietary Information does not include information that: (i) is
filed with the SEC and which is not subject to a request for confidential
treatment made to the SEC or any other government agency or authority; (ii)
becomes generally available to the public other than as a result of an improper
disclosure by the Employee; (iii) was available to the Employee prior to its
disclosure to the Employee (provided the Employee has no knowledge that such
information was obtained, directly or indirectly, from a source that was bound
by a confidentiality agreement with or other obligation of secrecy to the
Parent, the Company, or their representatives); or (iv) becomes available to the
Employee, directly or indirectly, from a source other than the Parent, the
Company, or their representatives or employees, provided that such source is not
known by the Employee to be bound by a confidentiality agreement with or other
obligation of secrecy to the Parent, the Company or their representatives or
affiliates.
Employee will abide by the Company's and Parent's lawful policies and
regulations, as established from time to time, for the protection of its
Proprietary Information. Employee acknowledges that all records, files, data,
documents and the like relating to suppliers, customers, costs, prices, systems,
methods, personnel, technology and other materials relating to the Company,
Parent or their affiliated entities shall be and remain the sole property of the
Company, Parent and/or such affiliated entity and shall, upon the request of the
Company or Parent, turn over all copies of such Proprietary Information to the
Company or Parent (together with a written statement certifying as to his
compliance with the foregoing).
Section 2.2 Non-Solicitation of Customers. During the Term, and for a
period of two (2) years thereafter, Employee shall not directly or indirectly,
through one or more intermediaries or otherwise, solicit or attempt to solicit
Customers, to induce or encourage them to acquire or obtain from anyone other
than the Company or Parent, service competitive with or substitute for any
Company Service. For purposes of this Section, a "CUSTOMER" refers to any person
or group of persons with whom Employee has direct material contact with regard
to selling, delivery or support of Company Services, including servicing such
person's or group's account, during the period of one(1) year preceding the date
hereof; and "COMPANY SERVICES" refers to the services that the Company
performed, offered or sold within six (6) months prior to the date hereof.
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Section 2.3 Non-Solicitation of Employees. During the Term and for a
period of two (2) years thereafter, Employee shall not, directly or indirectly,
through one or more intermediaries or otherwise, employ, induce, solicit for
employment, or assist others in employing, inducing or soliciting for employment
any individual who is, at any time during the twelve (12) month period
immediately preceding such solicitation, an employee of the Company, Parent or
any of their subsidiaries for the purpose of providing services that are the
same or similar to the types of services offered or engaged in by the Company as
of the date hereof.
Section 2.4 Trade Secrets. Employee shall not, at any time, use or
disclose any Trade Secrets (as defined under applicable law) of Company, Parent,
or any of their subsidiaries, except in fulfillment of his duties as an employee
of the Company, Parent or any affiliate thereof, for so long as the pertinent
information or data remain Trade Secrets, whether or not the Trade Secrets are
in written or tangible form.
Section 2.5 Rights to Work Product. Except as expressly provided in
this Agreement, the Company alone shall be entitled to all benefits, profits and
results arising from or incidental to Employee's Work Product (as defined
below). To the greatest extent possible, any work product, property, data,
documentation or information or materials prepared, conceived, discovered,
developed or created by Employee in connection with performing his employment
responsibilities during the term (including the term under the Prior Agreement)
("WORK PRODUCT") shall be deemed to be "work made for hire" as defined in the
Copyright Act, 17 U.S.C.A. ss. 101 et seq., as amended, and owned exclusively
and perpetually by the Company. Employee hereby unconditionally and irrevocably
transfers and assigns to the Company all intellectual property or other rights,
title and interest Employee may currently have (or in the future may have) by
operation of law or otherwise in or to any Work Product. Employee agrees to
execute and deliver to the Company any transfers, assignments, documents or
other instruments which the Company may deem necessary or appropriate to vest
complete and perpetual title and ownership of any Work Product and all
associated rights exclusively in the Company. The Company shall have the right
to adapt, change, revise, delete from, add to and/or rearrange the Work Product
or any part thereof written or created by Employee, and to combine the same with
other works to any extent, and to change or substitute the title thereof, and in
this connection Employee hereby waives the "moral rights" of authors as that
term is commonly understood throughout the world including, without limitation,
any similar rights or principles of law which Employee may now or later have by
virtue of the law of any locality, state, nation, treaty, convention or other
source. Unless otherwise specifically agreed, Employee shall not be entitled to
any compensation in addition to that provided for in Section 1 of this Agreement
for any exercise by the Company of its rights set forth in this Section 2.
Section 2.6 Reasonableness of Covenants. Employee agrees and
acknowledges that the covenants contained herein are a part of this Agreement,
are given as of the date of this Agreement and are given in consideration of his
continuing employment with the Company. Employee also acknowledges that Parent
and the Company have a legitimate present and future expectation of business
within the geographic areas presently served by the Company. Employee
acknowledges the reasonableness of the term and scope of the covenants set forth
in
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this Agreement, and agrees that he will not, in any action, suit or other
proceeding, deny the reasonableness of, or assert the unreasonableness of, the
premises, consideration or scope of the covenants set forth herein. Employee
further acknowledges that complying with the provisions contained in this
Agreement will not preclude him from engaging in a lawful profession, trade or
business, or from becoming gainfully employed in such a way as to provide a
standard of living for himself, the members of his family, and those dependent
upon him of the sort and fashion to which he and they have become accustomed and
may expect.
ARTICLE III - TERMINATION OF EMPLOYMENT
Section 3.1 Termination by Company. Employee's employment may be
terminated by the Company by giving notice during the Term of this Agreement
upon the occurrence of one or more of the following events:
(a) employee's death or disability which renders Employee incapable of
performing his duties for more than one hundred twenty (120) calendar days;
(b) for "CAUSE", which for purposes of this Agreement shall mean that
the Employee shall have:
(i) committed an act of fraud, embezzlement or theft in
connection with his duties or in the course of his employment with the Company;
(ii) inflicted material damage to the Company, Parent or their
Subsidiaries or any material asset of the Company or Parent;
(iii) intentionally or in bad faith violated this Agreement;
(iv) subject to applicable state laws, been indicted for or
convicted of a felony or any similar crime carrying a prison term of at least
one year (regardless of whether imprisonment is actually imposed);
(v) a habitual and debilitating use of alcohol or drugs; or
(vi) failed to meet performance objectives, as reasonably
determined and articulated by the Parent's President; provided, however, that in
the event of this subsection (vi) being the sole reason for a termination for
Cause, Employee shall have the cure provisions and rights provided for in
paragraph (c) hereof.
(c) In the event of a determination by the Parent's President and Chief
Operating Officer that the Employee has failed to meet performance objectives,
the Company shall furnish to the Employee in writing a notice of proposed
termination setting forth a specific statement of the deficiencies in his
performance. The Employee shall then have a period of thirty (30) days, or such
longer period as is determined by the President and Chief Operating Officer of
Parent, after the giving of such written notice of proposed termination by the
Company in which to attempt to effect a cure of the specified deficiencies. If
at the end of such period no such cure has been
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effected to the reasonable satisfaction of the President of the Parent, then the
Employee's employment may be terminated as of the end of such period. The
Company shall be obligated to provide to the Employee only one such notice of
proposed termination, and if subsequent to effecting a cure of specified
deficiencies the Employee is determined by the President and Chief Operating
Officer of Parent to have again failed to meet performance expectations, then
his employment may be terminated immediately upon the Company's giving of a
final notice of termination to the Employee.
Section 3.2 Good Reason. For purposes of this Agreement, "GOOD REASON"
shall mean that the Employee's overall compensation is reduced or adversely
modified in any material respect or the Employee's authority or duties are
materially changed. For such purposes, the Employee's authority or duties shall
conclusively be considered to have been "materially changed" if, without the
Employee's express and voluntary written consent, there is any substantial
diminution or adverse modification in the Employee's title, status, overall
position, responsibilities, reporting relationship, general working environment
(including without limitation secretarial and staff support), or if, without the
Employee's express and voluntary written consent, the Employee's job location is
transferred to a site more than fifty (50) miles away from his place of
employment.
Section 3.3 Severance. For purposes of this Agreement, the Employee's
entitlement to severance payments upon termination of his employment shall be as
set forth below:
(a) Termination Without Cause/Resignation for Good Reason. If
the Employee's employment is terminated without Cause or if the Employee resigns
for Good Reason, the Employee shall be entitled to his then current salary and
benefits pursuant to Section 1.4(a) and 1.4(b) for the period that would remain
under this Agreement if the Employee's employment was not terminated without
Cause or if the Employee did not resign for Good Reason. Such payments shall be
paid to the Employee at regular payroll intervals. Notwithstanding the
foregoing, if following a termination of employment without Cause or a
resignation for Good Reason the Employee obtains employment with a third party
and such employment constitutes "Comparable Employment" then the severance
payments pursuant to this Section 3.3(a) shall cease. For purposes of this
Agreement, such employment shall be "COMPARABLE EMPLOYMENT" if the salary is
equal to or greater than the salary of the Employee at the time of termination
from the Company and the job responsibilities are of a similar grade and quality
to the Employee's hereunder.
(b) Termination For Cause. If the Employee's employment is
terminated for Cause pursuant to Section 3.1(b) hereof, the Employee shall not
be entitled to any severance pay unless severance pay is approved by the Board
of Directors of the Company in its sole discretion. Notwithstanding the
foregoing, the Employee shall receive such annual salary that is accrued but
unpaid up to the date of such termination for Cause.
(c) Termination for Death or Disability. If the Employee's
employment is terminated by the Employee's death or disability pursuant to
Section 3.1(a) hereof, the Company's obligations under Section 1.4(a) shall
terminate.
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ARTICLE IV - GENERAL PROVISIONS
Section 4.1 Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other taxes and
withholdings as shall be required pursuant to any applicable law, rule or
regulation.
Section 4.2 Death or Disability of Employee. If the Employee should die
or become disabled during the term of this Agreement, the unpaid portion of the
salary hereunder shall be paid as a death benefit or disability benefit, as the
case may be, either (i) in a lump sum payment or (ii) over the remaining term of
this Agreement, at the sole option of the Company.
Section 4.3 Notice. For purposes of this Agreement, all communications
including, without limitation, notices, consents, requests or approvals,
provided for herein shall be in writing and shall be deemed to have been duly
given when personally delivered or five (5) business days after having been
mailed by United States registered mail or certified mail, return receipt
requested, postage prepaid, addressed to the Company (to the attention of the
Chief Executive Officer of the Parent) at Parent's principal office or to
Employee at his principal residence, or to such other address as any party may
have furnished to the other in writing and in accordance herewith, except the
notices of change of address shall be effective only upon receipt.
Section 4.4 Validity. It is not the intent of any party hereto to
violate any public policy of any jurisdiction in which this Agreement may be
enforced. If any provision of this Agreement or the application of any provision
hereof to any person or circumstances is held invalid, unenforceable or
otherwise illegal, the remainder of this Agreement and the application of such
provision to any other person or circumstances shall not be affected, and the
provision so held to be invalid, unenforceable or otherwise illegal shall be
reformed to the extent (and only to the extent) necessary to make it valid,
enforceable and legal; provided, however, if the provision so held to be
invalid, unenforceable or otherwise illegal constituted a material inducement to
a party's execution and delivery of this Agreement, then such provision shall
not be reformed unless prior to any reformation that party agrees to be bound by
the reformation.
Section 4.5 Entire Agreement. This Agreement and the Merger Agreement,
and the agreements referenced therein supersede any other agreements, oral or
written, between the parties with respect to the subject matter hereof, and
contains all of the agreements and understandings between the parties with
respect to the employment of Employee by the Company. Any waiver or modification
of any term of this Agreement shall be effective only if it is set forth in a
writing signed by both parties hereto.
Section 4.6 Successors and Binding Agreement.
(a) This Agreement shall be binding upon and inure to the
benefit of the Company and any Successor of or to the Company, but shall not
otherwise be assignable or delegable by the Company. "SUCCESSOR" shall mean any
successor in interest, including, without
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limitation, any entity, individual or group of persons acquiring directly or
indirectly all or substantially all of the business or assets of the Company, as
the case may be, whether by sale, merger, consolidation, reorganization or
otherwise.
(b) The Company shall require any Successor to agree at the
time of becoming a Successor to perform this Agreement to the same extent as the
original parties would be required if no succession had occurred.
(c) This Agreement shall inure to the benefit of and be
enforceable by Employee's personal or legal representatives, executors,
administrators, heirs, distributee and legatees.
(d) This Agreement is personal in nature and neither of the
parties shall, without the consent of the other, assign, transfer or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in this Section 4.6.
Section 4.7 Captions. The captions in this Agreement are solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
Section 4.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.
Section 4.9 Modification and Waiver. No provisions of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Employee and the Company. No
waiver by any party hereto at any time of any breach by the other party hereto
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
Section 4.10 Governing Law; Arbitration. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of California without giving effect to the conflict of laws principles thereof.
Any controversy, claim or dispute arising out of or relating to this Agreement,
or any breach thereof, including without limitation any dispute concerning the
scope of this arbitration clause, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association. The parties indicate
their acceptance of the foregoing arbitration requirement by initialing below:
/s/ Xxx Xxxx /s/ Xxxxx Xxxxxxx
-------------------------- ---------------------------
For the Company Name:
Section 4.11 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof.
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Section 4.12 Prior Agreement Superseded; Release of Claims
(a) This Agreement shall not be effective unless and until the Closing
occurs. As of the Closing, this Agreement shall replace and supersede the Prior
Agreement and all other prior agreements between Employee and the Company,
whether written or oral, in their entirety and the Prior Agreement all such
other prior agreements shall be of no further force or effect.
(b) As part of the agreements set forth herein and to induce Parent to
enter into the Merger, to the fullest extent permitted by law, the Employee
hereby fully and forever releases, remises, acquits, and discharges the Company,
Parent and their past, present and future subsidiaries, officers, directors,
employees, shareholders, attorneys, agents, successors, assigns, representatives
and other affiliates (collectively, the "COMPANY RELEASEES"), of and from all
claims (as defined by Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code, as
amended), debts, demands, actions, causes of action, suits, accounts, damages
and liabilities of every name and nature (except for salary, reimbursement of
expenses, and related sums in the total amount of $___________), which the
Employee represents are due and owing to the Employee), both in law and in
equity, whether known or unknown (collectively, the "RELEASED CLAIMS"), that the
Employee now has, ever had or may, at any time, claim to have had against any of
the Company Releasees, that are based on any event or omission occurring on or
prior to the date of this Agreement. Employee represents and warrants to the
Company Releasees that it has not voluntarily or involuntarily assigned or
suffered any transfer of any of the Released Claims to any other person or
entity, and it agrees to indemnify and hold harmless the Company Releasees from
and against any loss, damage, liability, cost and expense (including, but not
limited to, attorneys' fees incurred in connection therewith or in connection
with enforcing this indemnity) asserted against, imposed on or incurred by any
Company Releasee by reason of any of such Released Claims which were effectively
or purportedly assigned or transferred by the Employee. To the fullest extent
permitted by law, Employee hereby waives the benefits of California Civil Code
ss.1542 and any other applicable statute or regulation governing general
releases or creditors' rights.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Employee has signed and sealed this Agreement, effective as
of the date first above written.
FORSEON CORPORATION
ATTEST:
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxx Xxxx
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Name: Xxxxxxx Xxxxxx Name: Xxx Xxxx
Title: Vice President Title: President and Chief Executive
Client Services Officer
(CORPORATE SEAL)
EMPLOYEE
/s/ Xxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxxx
EXHIBIT A
DESCRIPTION OF RESPONSIBILITIES
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