EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into by DA
CONSULTING GROUP, INC., a Texas corporation formerly known as DA International,
Inc. (hereinafter the "Company") and XXXX XXXXXXXX (hereinafter the "Employee").
In consideration of the mutual promises set forth below and other good and
valuable consideration, the receipt and sufficiency of which the parties
acknowledge, the Company and Employee agree as follows:
1. EMPLOYMENT. The Company employs Employee and Employee accepts
employment on the terms and conditions set forth in this Agreement.
2. NATURE OF EMPLOYMENT. Employee shall serve as Executive Vice
President - Human Resources or any other office as may be assigned to him from
time to time by the Chief Operating Officer or Board of Directors of the Company
and have such responsibilities and authority consistent with such positions as
may from time to time be reasonably assigned by the Company; provided, however,
that Employee shall report to the Chief Operating Officer of the Company.
Employee shall devote his full time and attention and best efforts to perform
successfully his duties and advance the Company's interests. Employee shall
abide by Company policies, procedures, and practices as they may exist and be in
force from time to time.
3. COMPENSATION.
(a) Salary. Effective January 1, 1998, compensation for Employee's
services under this Agreement initially shall be One Hundred Forty-Four Thousand
Dollars ($144,000) per year, payable in equal monthly installments in arrears.
The Employee's salary shall be reviewed annually by the Company's Board of
Directors (or the Committee thereof charged with establishing executive
compensation) by January 1 of each year and may be increased in the Board's (or
such Committee's) discretion based on Employee's performance, provided that such
salary for any year shall not be reduced below the salary for the immediately
preceding year.
(b) Benefits. Employee may participate in any medical, dental,
disability, life insurance, 401(k) plan, and other employee benefit plans and
programs which may be made available from time to time to other Company
employees at Employee's level; provided, however, that Employee's participation
in such benefit plans and programs is subject to the applicable terms,
conditions, and eligibility requirements of those plans and programs, some of
which are within the plan administrator's discretion, as they may exist from
time to time.
(c) Performance Bonus. Employee shall be entitled to an annual
performance bonus up to an amount determined by the Company which shall be based
on goals set by the Company and communicated to Employee by January 31 of the
calendar year for which the bonus
is potentially payable. The bonus opportunity for 1998 is Fifty-six Thousand
Dollars ($56,000). Unless otherwise agreed to in writing between the parties,
the applicable bonus period for periods beginning after 1998 shall be the
calendar year. In no event shall the total amount of Employee's bonus
opportunity for any calendar year beginning after 1998 be less than the annual
amount of the bonus opportunity for the immediately preceding year. The annual
performance bonus shall be paid in a lump sum amount on or before March 31 of
the calendar year following the calendar year for which the bonus was earned.
(d) Reimbursement of Expenses. The Company shall reimburse Employee
for all expenses reasonably incurred by him on behalf of the Company. In
addition, the Company shall reimburse Employee for all expenses incurred by him
for his membership and participation in professional associations, continuing
education, and maintenance of professional licenses.
4. TERM OF EMPLOYMENT. Subject to Section 5 (Termination) below:
(a) The original term of employment under this Agreement shall be for
one (1) year beginning January 1, 1998 and terminating December 31, 1998.
(b) Upon the expiration of the original or any renewal term of
employment, Employee's employment shall be automatically renewed for an
additional one (1) year period.
5. TERMINATION.
(a) Termination Upon Death or Permanent Disability. In the event that
Employee dies, this Agreement shall terminate upon the Employee's death. If the
Employee becomes physically or mentally disabled and thereby unable to perform
his duties hereunder for a period of more than ninety (90) consecutive days or
for more than one hundred twenty (120) days, in the aggregate, during any three
hundred sixty-five (365) day period, the Company may terminate this Agreement.
In the event of termination upon death or disability, the Employee, or his
legal representatives, shall be entitled to be paid his salary and performance
bonus earned pro rata to the date of termination.
(b) Termination by the Company for Cause. The Company may terminate
Employee's employment for "Cause." For purposes of this Agreement, Cause shall
mean: (i) any act of fraud, misappropriation, unlawfulness or dishonesty
committed by Employee in connection with his employment and relating to the
Company's business which is materially detrimental to the Company's interests;
(ii) Employee's gross negligence in performing his job duties which is
materially detrimental to the Company's business; (iii) Employee's material
breach of this Agreement or any Employee Non-Disclosure, Assignment of
Developments and Non-Solicitation Agreement then in force between the parties;
or (iv) Employee's conviction of a felony involving moral turpitude. Employee
shall be given thirty (30) days' written notice stating the specific reason for
termination and shall be given an opportunity to cure said stated reason during
the thirty (30) day period. In the event of termination for Cause, the
Company's obligation to compensate
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Employee ceases on the termination date except as to the salary and the unpaid
performance bonus, if any, for the calendar year preceding the calendar year in
which the termination date occurs.
(c) Termination by the Company Without Cause. This Agreement may be
terminated by the Company without Cause upon ninety (90) days' written notice
thereof given to Employee. Upon the delivery of notice of such termination, the
Company may, in its discretion, and notwithstanding any other provision of this
Agreement to the contrary, limit Employee's continuing responsibilities and
access to confidential information, provided that the effective date of
termination shall be a mutually-agreed date, but not earlier than the 90th day
following the Company's delivery of such notice. In the event of termination by
the Company without Cause, (i) the Company shall, at the election of Employee,
either (A) continue to pay Employee his then effective salary hereunder for
twelve (12) months, following the effective date of termination of employment,
including 50% of any bonus paid to Employee with respect to the calendar year
immediately preceding termination, and continue for such period to provide other
benefits as provided for hereunder on the same basis as in effect before the
effective date of termination of employment, to the extent permitted by the
terms of the benefit plans or arrangements pursuant to which such benefits are
provided, provided that the Company shall pay the cost of providing such
benefits for such period (determined, in the case of group health benefits,
based on the applicable plan's "COBRA cost") to the extent that such benefits
cannot be provided to Employee under the terms of the benefit plans or
arrangements pursuant to which such benefits are otherwise provided, or (B) pay
Employee, (1) within fifteen (15) days of termination, a lump sum payment equal
to fifty percent (50%) of Employee's salary and the cost of providing benefits
(determined, in the case of group health benefits, based on the applicable
plan's "COBRA cost") hereunder for twelve (12) months, including 50% of any
bonus paid or payable to Employee with respect to the calendar year immediately
preceding termination, and (2) the remaining fifty percent (50%) of the amount
specified in the immediately preceding subsection (1) in three (3) equal monthly
installments, with such installment payments beginning the month after the month
in which payment of the lump sum occurs, and (ii) all outstanding stock options
held by Employee shall become fully vested and exercisable.
(d) Voluntary Termination by Employee for Good Reason. Employee may
at any time voluntarily terminate this Agreement for "Good Reason" upon thirty
(30) days' prior written notice to the Company. For purposes of this Agreement,
Good Reason shall mean the occurrence of any of the following events: (i) a
change materially adverse to the Employee in the Employee's status, title,
position, or responsibilities; (ii) the insolvency or the filing of a petition
for bankruptcy of the Company; (iii) the failure of the Company to obtain an
agreement, satisfactory to the Employee, from any successor or assign of the
Company to assume and agree to perform this Agreement; or (iv) any material
breach by the Company of this Agreement. In the event of voluntary termination
for Good Reason, (i) the Company shall, at the election of Employee, either
continue to pay Employee his then effective salary and all benefits hereunder
for six (6) months, including
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50% of any bonus paid or payable to Employee with respect to the calendar year
immediately preceding termination, or pay Employee, within fifteen (15) days of
termination, a lump sum payment equal to Employee's salary and benefits
hereunder for six (6) months, including 50% of any bonus paid or payable to
Employee with respect to the calendar year immediately preceding termination,
and (ii) all outstanding stock options held by Employee shall become fully
vested and exercisable.
(e) Voluntary Termination by Employee. Employee may terminate this
Agreement at any time upon delivering ninety (90) days' written notice of
resignation to the Company. In the event of such voluntary termination (other
than for Good Reason), Employee shall be entitled only to his salary and the
unpaid performance bonus, if any, for the calendar year preceding the calendar
year in which the termination date occurs.
(f) Termination Following a Change in Control. Notwithstanding
anything to the contrary in this Agreement, if the Employee's employment is
terminated by the Company without Cause or if the Employee voluntarily
terminates this Agreement for Good Reason, in either case within twenty-four
(24) months following a "Change in Control," (i) the Company shall, at the
election of Employee, either continue to pay Employee his then effective salary
and all benefits hereunder for twelve (12) months, including 100% of any bonus
paid to Employee with respect to the calendar year immediately preceding
termination, or pay Employee, within fifteen (15) days of termination, a lump
sum payment equal to Employee's salary and benefits hereunder for twelve (12)
months, including 100% of any bonus paid to Employee with respect to the
calendar year immediately preceding termination, and (ii) all outstanding stock
options held by Employee shall become fully vested and exercisable.
For purposes of this Agreement, "Change in Control" shall mean the
occurrence of one or more of the following three events: (i) after the
effective date of this Agreement, any natural person, incorporated entity,
limited or general partnership, business trust, association, agency
(governmental or private), division, political sovereign, or subdivision or
instrumentality (including those groups identified as "persons" in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934) becomes a
beneficial owner (as such term is defined in Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) directly or indirectly of securities
representing 50% or more of the total number of votes that may be cast for the
election of directors of the Company; (ii) within two years after a merger,
consolidation, reorganization, liquidation or sale of assets involving the
Company, or a contested election of a Company director, or any combination of
the foregoing, the individuals who were directors of the Company immediately
prior to such merger, consolidation, reorganization, liquidation or sale or
contested election shall cease to constitute a majority of the Company's Board
of Directors; or (iii) within two years after a tender offer or exchange offer
for voting securities of the Company, the individuals who were directors of the
Company immediately prior to the effective date of such offer, shall cease to
constitute a majority of the Company's Board of Directors.
6. COVENANT NOT TO COMPETE. Employee acknowledges that by virtue of his
employment relationship, he shall have access to and control of confidential and
proprietary information concerning the Company's business and that the Company's
business depends, to a considerable extent, on the individual skills, efforts,
and leadership of Employee. Accordingly and
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in consideration of the Company's commitments to Employee under this Agreement,
Employee expressly covenants and agrees that during the term of this Agreement
and for twelve (12) months following the termination of his employment (unless
such termination is by the Company without Cause or by the Employee for Good
Reason), Employee will not, without the prior written consent of Company:
(a) on Employee's own or another's behalf, whether as an officer,
director, stockholder, partner, associate, owner, employee, consultant or
otherwise, directly or indirectly:
(i) solicit or do business which is the same, similar to, or
otherwise in competition with the business engaged in by the Company, from
or with persons or entities who are clients or customers of the Company,
who were clients or customers of the Company at any time during the last
year of Employee's employment with the Company, or to whom the Company had
made proposals for business at any time during the last year of Employee's
employment with the Company; or
(ii) offer employment to, or otherwise solicit for employment,
any employee or other person who had been employed by the Company during
the last year of Employee's employment with the Company;
(b) be employed (or otherwise engaged) in a management capacity by any
person or entity that directly competes with the Company.
Employee further acknowledges that the covenants contained in this Section
6 are reasonably necessary to protect the legitimate business interests of the
Company and are reasonable with respect to scope, time, and territory and are
described with sufficient accuracy and definiteness to enable him to understand
the scope of the restrictions imposed on him. The terms and conditions of this
Section 6 shall survive expiration or termination of this Agreement or
Employee's employment and shall not be affected by any change or modification of
this Agreement unless specific reference is made to this Section 6.
It is agreed that ownership, directly or indirectly, of not more than five
percent (5%) of the issued and outstanding stock of a corporation, the shares of
which are regularly traded on a national securities exchange or in the over-the-
counter market, shall not be deemed to be in violation of this Section 6.
7. EXCISE TAX GROSS-UP PAYMENT. If the total of all payments made to the
Employee pursuant to this Agreement, together with any other payments which the
Employee has a right to receive from the Company (or any affiliates or
subsidiaries of the Company) result in the imposition of an excise tax under
Section 4999 (or any successor thereto) of the Internal Revenue Code of 1986, as
amended, the Company shall pay the Employee an additional excise tax adjustment
payment in an amount such that, after the payment of all federal and state
income and excise taxes, the Employee will be in the same after-tax position as
if no excise tax had been
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imposed. Any payment or benefit which is required to be included under Section
280G or 4999 (or any successor provisions thereto) of the Internal Revenue Code
for purposes of determining whether an excise tax is payable shall be deemed a
payment "made to the Employee" or a payment "which the Employee has a right to
receive" for purposes of this provision. The Company shall be responsible for
the cost of calculation of the excise tax by its independent certified
accountant and tax counsel and shall notify the Employee of the amount of excise
tax due prior to the time such excise tax is due. If at any time it is
determined that the additional excise tax adjustment payment previously made to
the Employee was insufficient to cover the effect of the excise tax, the excise
tax gross-up payment pursuant to this provision shall be increased to make the
Employee whole, including an amount to cover the payment of any penalties
resulting from incorrect or late payment of the excise tax resulting from the
prior calculation.
8. REMEDIES. Employee agrees that his breach or violation of Section 6
(Covenant Not to Compete), will result in immediate and irreparable harm to the
Company for which legal remedies would be inadequate. Therefore, in addition to
any legal or other relief to which the Company may be entitled, the Company may
seek legal and equitable relief, including but not limited to, preliminary and
permanent injunctive relief.
9. EMPLOYEE REPRESENTATION. Employee represents and warrants that his
employment and obligations under this Agreement will not breach any duty or
obligation he owes to another person or entity.
10. COMPANY REPRESENTATION. Company represents and warrants that it has
no obligation which would prohibit it from entering into this Agreement or
complying with its provisions and that it has the authority to enter into this
Agreement.
11. WAIVER OF BREACH. The Company's or Employee's waiver of any breach of
a provision of this Agreement shall not waive any subsequent breach by the other
party.
12. ENTIRE AGREEMENT. This Agreement including any schedule, exhibit or
attachment hereto: (i) supersedes all other understandings and agreements, oral
or written, between the parties with respect to the subject matter of this
Agreement including any schedule, exhibit or attachment hereto; and (ii)
constitutes the sole agreement between the parties with respect to this subject
matter. Each party acknowledges that: (i) no representations, inducements,
promises or agreements, oral or written, have been made by any party or by
anyone acting on behalf of any party, which are not embodied in this Agreement
including any schedule, exhibit or attachment hereto; and (ii) no agreement,
statement or promise not contained in this Agreement shall be valid. No change
or modification of this Agreement shall be valid or binding upon the parties
unless such change or modification is in writing and is signed by the parties.
13. SEVERABILITY. If a court of competent jurisdiction holds that any
provision or sub-part thereof contained in this Agreement is invalid, illegal or
unenforceable, that invalidity, illegality or unenforceability shall not affect
any other provision in this Agreement. Additionally, if
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any of the provisions, clauses or phrases in Section 6 (Covenant Not to Compete)
are held unenforceable by a court of competent jurisdiction, then the parties
desire that they be "blue-penciled" or rewritten by the court to the extent
necessary to render them enforceable.
14. PARTIES BOUND. The terms, provisions, covenants and agreements
contained in this Agreement shall apply to, be binding upon and inure to the
benefit of the Company's successors and assigns; however the Company may not
assign this Agreement without the Employee's prior written consent.
15. GOVERNING LAW. This Agreement and the employment relationship created
by it shall be governed by Texas law.
IN WITNESS WHEREOF, the parties have entered into this Agreement on the day
and year written below.
/s/ XXXX XXXXXXXX 1/31/98
_____________________________ _________________
Employee Date
DA CONSULTING GROUP, INC.
By: /s/ XXXXXXXX X. XXXXXXXX 1/31/98
_____________________________ _________________
Date
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