EXHIBIT 10.3
Employment Agreement dated as of
May ___, 1997 by and between PC411, Inc.
(THE "COMPANY") AND XXXXXX X. XXXXXX (THE "EMPLOYEE")
The Company and the Employee agree to the Employee's employment by the
Company on the following terms:
1. EMPLOYMENT: TERM.
The Company will employ the Employee, and the Employee will work for the
Company, as its Vice President and Chief Technology Officer ("CTO"), for a term
commencing on May ___, 1997 and, unless sooner terminated in accordance with the
provisions of Section 11, terminating on June 30, 1998 (the "Initial Term").
The Initial Term shall be extended for successive one-year periods (the
"Additional Terms") unless terminated at the end of the Initial Term or any
Additional Term by either party upon ninety (90) days' prior written notice
given to the other party (the Initial Term and any Additional Terms shall be
referred to as the "Employment Period").
2. DUTIES.
During the Employment Period, the Employee shall serve as the Vice
President and CTO of the Company and perform such duties as shall, from time to
time, be reasonably delegated or assigned to the Employee by the Board of
Directors of the Company consistent with his position and abilities. Thus, the
Employee shall: (i) expend substantially all of his working time for the
Company; (ii) devote his best efforts, energy and skill to the services of the
Company and the promotion of its interests; and (iii) not take part in
activities known by Employee to be detrimental to the best interests of the
Company.
3. COMPENSATION.
3.1 In consideration for the services to be performed by the Employee for
the Company during the Employment Period, the Company shall compensate Employee
at an initial annual base salary of $96,000 ("Base Salary"), payable in
accordance with the Company's standard payroll practices. The amount of the
Base Salary shall be subject to review annually and may be increased, but not
decreased, at the Company's sole discretion.
3.2 Employee shall also be entitled to an annual incentive bonus in an
amount equal to a percentage of Base Salary, and calculated in accordance with
performance goals, to be determined annually by the Board of Directors. The
percentage of Base Salary and the performance goals for the first year of the
Employment Period shall be determined within ninety (90) days following
commencement of this Agreement.
4. BENEFITS AND REIMBURSEMENT OF EXPENSES.
4.1 Employee shall receive all benefits and fringes, if any, made
available to other employees and officers of the Company to the full extent of
Employee's eligibility, including medical, dental, life insurance and disability
insurance benefits and pension and other similar plans.
4.2 The Company shall pay directly, or reimburse the Employee for, all
reasonable and necessary expenses and disbursements incurred by him for and on
behalf of the Company in the performance of his duties under this Agreement.
For such purposes, the Employee shall submit to the Company itemized reports of
such expenses in accordance with the Company's policies.
4.3 Employee shall be entitled to paid vacations during the Employment
Period in accordance with the Company's then applicable policy for executive
employees, provided that the Employee shall not be entitled to less than four
(4) weeks paid vacation in each full contract year.
5. INVENTIONS AND PATENTS.
5.1 The services the Employee will perform in the course of employment may
include the invention of new programs, methods, processes, apparatus and
products and the development and improvement of existing programs, methods,
processes, apparatus, reports, drawings, memoranda, specimens, models, letters,
notebooks, software, firmware, program listings and documentation which will or
may be related to or used in the business of the Company and any affiliates of
the Company. The Employee will promptly and fully disclose to the Company, or
any of its designees, any and all improvements, designs, ideas, works of
authorship, copyrightable works, discoveries, trademarks, copyrights, trade
secrets, formulae, processes, techniques, know-how, and data, whether or not
patentable, made or conceived or reduced to practice or learned by Employee,
either alone or jointly with others, during the period of Employee's employment
(whether or not during normal working hours) that are related to or useful in
the actual or anticipated business of the Company or any of its affiliates, or
result from tasks assigned Employee by the Company or its affiliates, or result
from use of premises or equipment owned, leased, or contracted for by the
Company or its affiliates (all said improvements, inventions, designs, ideas,
works of authorship, copyrightable works, discoveries, trademarks, copyrights,
trade secrets, formulae, processes, techniques, know-how, data, patent
applications, continuation applications, continuation-in-part applications, file
wrapper continuation applications and divisional applications shall be
collectively hereinafter called "Inventions"). All such Inventions shall be the
sole property of the Company,
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its successors, assigns and nominees, and Employee hereby assigns to the
Company, without further compensation, all rights, title and interest in and to
such Inventions and any and all related patents, patent applications,
copyrights, copyright applications, trademarks and trade names in the United
States and elsewhere.
5.2 Except as listed on Annex A attached to this Agreement, Employee will
not assert any rights to any Inventions as having been made or acquired by
Employee prior to being employed by the Company, or since then, and not
otherwise covered by the terms of this Agreement. Employee shall not be
obligated to assign any Invention that may be wholly conceived by him after
Employee leaves the employ of the Company, except that Employee is so obligated
if such Invention shall involve the utilization of confidential information or
Proprietary Information (as defined herein) obtained while in the employ of the
Company. Employee shall not be obligated to assign any Invention that relates
to or would be useful in any business or activities in which the Company or any
affiliate thereof is engaged if such Invention was conceived and reduced to
practice by Employee prior to his employment with the Company, provided that all
such Inventions are listed on the attached Annex A.
5.3 The Employee will keep and maintain adequate and current written
records of all Inventions (in the form of notes, sketches, drawings and as may
be specified by the Company), which records shall be available to and remain the
sole property of the Company at all times.
5.4 The Employee will assist the Company in obtaining and enforcing
patents, copyrights and other forms of legal protection of such Inventions in
any country. Upon request, the Employee will execute all applications,
assignments, instruments and papers and perform all acts necessary or desired by
the Company to assign all such Inventions fully and completely to the Company
and to enable the Company, its successors, assigns and nominees, to secure and
enjoy the full and exclusive benefits and advantages thereof. If the Company is
unable, after reasonable effort, to secure Employee's signature on any patent,
copyright or other analogous protection relating to an Invention, whether
because of Employee's physical or mental incapacity or for any other reason
whatsoever, Employee hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents as his agent and attorney-in-fact, to
act for and in his behalf and stead to execute and file any such application or
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent, copyright or other analogous
protection thereon with the same legal force and effect as if executed by
Employee.
5.5 Employee acknowledges that all original works of authorship which are
made by him (solely or jointly with others) within the scope of his employment
and which are protectable by copyright are being created at the instance of the
Company and are "works made for hire," as that term is defined in the United
States Copyright Act (17 USCA, Section 101). If such laws are inapplicable or
in the event that such
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works, or any part thereof, are determined by a court of competent jurisdiction
not to be a work made for hire under the United States copyright laws, this
Agreement shall operate as an irrevocable and unconditional assignment by
Employee to the Company of all of his right, title and interest (including,
without limitation all rights in and to the copyrights throughout the world,
including the right to prepare derivative works and the right to all renewals
and extensions) in the works in perpetuity.
5.6 The Employee understands that certain obligations under this Section 5
will continue after the termination of his employment with the Company and that
during the Employment Period Employee will perform his obligations under this
Section 5 without further payment of any kind, except for reimbursement of
expenses incurred at the request of the Company. The Employee further
understands that if he is not employed by the Company as an employee at the time
he is requested to perform any obligations under this Section 5, he shall
receive for such performance a reasonable per diem fee, as well as reimbursement
of any expenses incurred at the request of the Company.
6. PROPRIETARY INFORMATION.
6.1 The Employee recognizes that his relationship with the Company is one
of high trust and confidence by reason of his access to and contact with the
trade secrets and confidential and proprietary information of the Company and
any affiliates of the Company. The Employee will not at any time, either during
his employment with the Company or thereafter, disclose to others, or use for
his own benefit or the benefit of others, any Inventions or any confidential,
proprietary or secret information owned, possessed or used by the Company and
any affiliates of the Company (collectively, "Proprietary Information"). By way
of illustration, but not limitation, Proprietary Information includes trade
secrets, processes, data, know-how, marketing plans, forecasts, unpublished
financial statements, budgets, licenses, prices, costs and employee, customer
and supplier lists.
6.2 The Employee's undertakings and obligations under this Section 6 will
not apply, however, to any Proprietary Information which: (i) is or becomes in
the public domain through no action on his part, (ii) is generally disclosed to
unrelated third parties, or (iii) is approved for release by written
authorization of the Board of Directors of the Company or its designees.
6.3 Upon termination of employment with the Company or at any other time
upon request, the Employee will promptly deliver to the Company all notes,
memoranda, notebooks, drawings, records, reports, files and other documents (and
all copies or reproductions of such materials) in his possession or under his
control, whether prepared by him or others, which contain Proprietary
Information. The Employee acknowledges that this material is the sole property
of the Company.
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7. ABSENCE OF RESTRICTIONS UPON DISCLOSURE AND COMPETITION.
7.1 The Employee represents that, except as has been disclosed in writing
to the Company, he is not bound by the terms of any agreement with any previous
employers or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of his employment with the
Company or to refrain from such competing, directly or indirectly, with the
business of such previous employer or any other party.
7.2 The Employee further represents that his performance of all the terms
of this Agreement and as an employee of the Company does not and will not breach
any agreement to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with the
Company, and will not disclose to the Company or induce the Company to use any
confidential or proprietary information or material belonging to any previous
employer or others.
8. COVENANT NOT TO COMPETE.
(a) Unless otherwise approved by the Board of Directors in writing, during
the period specified in subsection (b) below, the Employee shall not directly or
indirectly engage (whether for compensation or without compensation) in any
business activity, either as an individual proprietor, partner, stockholder,
officer, employee, director, consultant or in any other capacity whatsoever
(otherwise than as the holder of not more than one percent (1%) of the total
outstanding stock of a publicly held company), which competes with any business
conducted by the Company or any of its affiliates at any time during the period
of his employment with the Company.
(b) The restrictions specified in subsection (a) above shall be applicable
during the period Employee is employed by the Company and for a period of one
year thereafter.
(c) The restrictions set forth in this Section 8 are considered by the
parties to be reasonable for the purposes of protecting the business of the
Company. However, if any such restriction is found by any court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range of
activities or geographic areas as to which it may be enforceable.
(d) It shall not be considered a competitive activity within the meaning
of subsection (a) above for the Employee to be a member of the faculty or staff
of a university, college or other educational institution, and to undertake all
activities which are normally associated with such positions.
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9. COVENANT NOT TO SOLICIT EMPLOYEES.
Unless otherwise approved by the Board of Directors in writing, the
Employee shall not at any time, during or after his employment by the Company,
recruit or otherwise solicit or induce any employees of the Company or any of
its affiliates to terminate their employment with, or otherwise cease their
relationships with, the Company or any of its affiliates.
10. INJUNCTIVE RELIEF.
Employee acknowledges and agrees that, in the event he shall violate any
provisions of Sections 6 through 9, the Company will be without an adequate
remedy at law and, accordingly, will be entitled to enforce such restrictions by
temporary or permanent injunctive or mandatory relief obtained in any action or
proceeding instituted in any court of competent jurisdiction without the
necessity of proving damages and without prejudice to any other remedies which
it may have at law or in equity.
11. TERMINATION.
11.1 Employee's employment shall automatically be terminated upon the death
of the Employee or Employee's voluntarily leaving the employ of the Company and,
in addition, Employee's employment may be terminated, at the sole discretion of
the Company, and without recourse by the Employee, upon the occurrence of either
of the following events:
(a) in the event of the Employee's disability as set forth in Section
11.2 below, but only upon fourteen (14) days' prior written notice from the
Company to the Employee;
(b) in the event that the Board of Directors determines in writing
that there is cause for immediate termination, which shall mean that the
Board of Directors determines either (i) Employee has failed to perform
material duties as an employee and officer of the Company following receipt
of a written notice from the Board of Directors, which identifies the
manner in which the Employee has failed to perform duties, (ii) Employee
has failed to follow any reasonable policies or directives of the Board of
Directors after having received written notice from the Board of Directors
that the Employee is not following such policies or directions; (iii)
Employee has engaged in willful, malicious or bad faith conduct materially
detrimental to the Company; (iv) Employee has been convicted of any felony;
or (v) Employee has materially breached this Agreement.
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11.2 Employee shall be deemed disabled if, in the opinion of the Board of
Directors of the Company, as confirmed by competent medical advice, he shall
become physically or mentally unable to perform his duties for the Company and
such incapacity shall have continued for any period of ninety (90) consecutive
days.
11.3 In the event the Company terminates the Employee's employment for any
reason other than in accordance with Section 11.1 or in the event of non-renewal
of the Employment Period by the Company pursuant to Section 1, then the Company
shall pay to the Employee all amounts earned by the Employee pursuant to Section
3 together with any reimbursable amount pursuant to Section 4, plus, provided he
signs a release of all claims arising out of his employment with the Company or
termination thereof (other than his right to indemnification, which shall
survive) in such form as reasonably requested by the Company, severance pay
equal to the amount of Base Salary he would have received if he was employed for
six months after termination of the Employment Period. Such severance shall be
paid in six (6) equal monthly installments, subject to any required withholding,
beginning on the first day of the month immediately following the Employee's
execution of the aforesaid release. The Company and its affiliated entities
shall have no other obligations to the Employee.
(a) For purposes of this Section 11.3, in the event the Employee
shall resign from his employment with the Company subsequent to any
materially adverse change in his title, nature of duties or employee
benefits, such resignation shall be deemed to be a termination of
employment by the Company other than in accordance with Section 11.1.
(b) The Employee shall be under no obligation to mitigate the amount
of any payment provided for under this Section 11.3 by seeking other
employment or otherwise nor shall such amount be offset by any compensation
which the Employee may receive from future employment or otherwise.
12. SERVICE AS DIRECTOR.
During the Employment Period, the Employee shall, if elected or appointed,
serve as a Director of the Company and/or any affiliate of the Company without
receipt of any additional compensation therefor unless otherwise provided by the
Board of Directors.
13. STOCK OPTIONS.
On or before the date of this Agreement, the Company shall have granted to
Employee options under the PC411, Inc. 1997 Stock Option Plan (the "1997 Plan")
to purchase 40,000 shares of the Company's common stock at $4.00 per share. All
such options will be Incentive Stock Options (as defined in the 1997 Plan)
("ISOs"). Subject to the terms and conditions of the 1997 Plan, one third of
the ISOs are
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exercisable upon the consummation of the Company's initial public offering (the
"IPO") and one third thereof are exercisable on each of the first and second
anniversaries of the IPO, provided the Employee is employed by the Company on
such dates.
14. ASSIGNMENT.
This Agreement, as it relates to the employment of the Employee, is a
personal contract and the rights and interests of the Employee hereunder may not
be sold, transferred, assigned, pledged or hypothecated. This Agreement shall
inure to the benefit of and be binding upon the Company and its successors and
assigns, including without limitation, any corporation or other entity into
which the Company is merged, irrespective of whether or not the Company is the
surviving entity of such merger, or which acquires all of the outstanding shares
of the Company's capital stock, or all of substantially all of the assets of the
Company. To the extent permitted by law, the Employee shall not have any power
of anticipation, alienation or assignment of payments contemplated hereunder,
and all rights and benefits of the Employee shall be for the sole personal
benefit of the Employee, and no other person shall acquire any right, title or
interest hereunder by reason of any sale, assignment, transfer, claim or
judgment or bankruptcy proceedings against the Employee.
15. NOTICES.
Any notice required or permitted to be given pursuant to this Agreement
shall be deemed given three (3) business days after such notice is mailed by
certified mail, return receipt requested, addressed as follows: (i) if to
Employee, at 00 Xxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxxxx, XX 00000; and (ii) if to the
Company, at PC411, Inc., 000 X.X. Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxx, Xxxxxxx
00000, Attention: Chief Financial Officer, or at such other address as either
party shall designate by written notice to the other party.
16. GOVERNING LAW.
This Agreement shall be governed by and enforced in accordance with the
laws of the State of New York. Any dispute or controversy with respect to this
Agreement, other than injunctive relief under Section 10, shall be submitted to
arbitration, in New York City, with the American Arbitration Association. The
decision of the arbitrators shall be final and binding upon the parties hereto
and may be entered in any court having jurisdiction. The prevailing party in
such arbitration proceeding shall be entitled to full reimbursement of the fees,
costs and expenses incurred therein.
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17. WAIVER.
The waiver by either party of a breach of any provision of this Agreement
shall not operate or be construed as a waiver of any subsequent breach. If any
provision of this Agreement shall be held to be invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and not in
any way affect or render invalid or unenforceable any other provisions of this
Agreement, and this Agreement shall be carried out as if such invalid or
unenforceable provision were not part of this Agreement.
18. INDEMNIFICATION.
The Employee shall be entitled to be indemnified by the Company for his
actions as an officer, director, employee, agent or fiduciary of the Company or
its affiliated entities to the fullest extent permitted by applicable law and
shall have legal fees and other expenses paid to him in advance of final
disposition of a proceeding provided he executes an undertaking to repay such
amounts if, and to the extent, required to do so by applicable law. The Company
shall cover the Employee under any directors and officers liability insurance
policy to the same extent as its other senior officers.
19. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the parties with
respect to the Employee's employment by the Company and there are no
representations, warranties or commitments except as set forth herein. This
Agreement supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether written or oral, of the parties hereto
relating to the transactions contemplated by this Agreement.
Executed as an Agreement as of May ___, 1997.
PC 411, INC.
_______________________________ ________________________________
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Vice President and
Chief Financial Officer
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ANNEX A
Employment Agreement dated as of
May ___, 1997 by and between PC411, Inc.
(THE "COMPANY") AND XXXXXX X. XXXXXX (THE "EMPLOYEE")
The Employee represents that he has indicated on this Annex all Inventions
(as defined in the Agreement) in which he owned any right or interest prior to
his employment with the Company. The Employee agrees that any present or future
Inventions not listed in this Annex are subject to assignment under the
Agreement.
Brief Description Right, Title or Interest
of Inventions and Date Acquired
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