EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of June 16, 1999, is
between Lante Corporation, an Illinois corporation (the "Company"), and C. Xxxx
Xxxxxxx ("Executive").
RECITALS
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A. Executive has expertise in the management of companies that provide
computer consulting services.
B. The Company is in the business of providing computer consulting
services.
C. The Company desires to employ Executive as its President and Chief
Executive Officer, on the terms set forth in this Agreement.
D. Executive desires to be so employed by Company.
AGREEMENTS
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In consideration of the foregoing recitals and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Employment.
1.1 Term. Subject to the terms hereof, the Company agrees to employ
Executive as its President and Chief Executive Officer, and Executive agrees to
accept such employment. Executive's employment hereunder shall begin no later
than 21 days after the date Executive is first able to join the Company under
his agreement with his current employer or is otherwise released from
obligations under said agreement (the first day of Executive's employment shall
be the "Effective Date" hereunder) and continue until terminated as hereinafter
provided (the "Term").
1.2 Duties. During the Term, Executive shall perform such duties and
functions as are customarily performed by the president and chief executive
officer of a company the size and nature of the Company, including the duties
and functions consistent with the positions of President and Chief Executive
Officer as are from time to time assigned to him by the Board of Directors of
Company (the "Board").
1.3 Place of Performance. Executive shall perform his services
hereunder at the headquarters of the Company, except for required travel on the
Company's business.
1.4 Time to be Devoted to Employment. Except as otherwise specified
below and except for illness or injury, and reasonable vacation periods,
Executive shall devote his full business time and efforts to his duties and
responsibilities hereunder. During the Term, Executive shall not, without the
prior written consent of the Board, accept other employment or render or perform
other services for compensation, except that Executive may serve on the board of
directors, and committees thereof, of companies which do not compete with the
Company to any material extent, provided that such service does not materially
interfere with the performance by Executive of his duties and responsibilities
hereunder. Executive's expenditure of reasonable amounts of time on personal
matters and charitable activities shall not be deemed a breach of this
Agreement, provided the same do not materially interfere with the performance by
Executive of his duties and responsibilities hereunder.
1.5 Vacations. Executive shall be entitled to such paid vacation
time as the Company customarily provides from time to time to its executives
(but in no event less than 4 weeks per year), to be taken
in accordance with its then-current employment policy regarding such vacation
time. Executive shall also be entitled to all paid holidays given by the Company
to its employees.
2. Compensation.
2.1 Base Salary. As compensation for services rendered hereunder,
Executive shall receive an annual salary ("Base Salary") of not less than
$500,000, to be paid in accordance with the Company's customary payroll
practices but in no event less frequently than monthly. Such salary shall be
reviewed by the Board no less frequently than annually, beginning as of August
1, 2000.
2.2 Annual Bonuses. (a) In addition to the salary payable pursuant
to Section 2.1, the Company shall pay to Executive an annual bonus ("Annual
Target Bonus"), payable within 45 days after the end of each fiscal year of the
Company ("Fiscal Year") ending during the Term. The Annual Target Bonus shall
be equal to or greater than 50% of Executive's then-current Base Salary based on
attaining realistic performance standards determined by the Board and reasonably
acceptable to Executive. For each Fiscal Year during the Term (other than the
Fiscal Year ending on December 31, 1999), such performance standards shall be
approved by the Board and communicated to Executive in writing within 30 days of
the start of such Fiscal Year.
(b) Notwithstanding anything in paragraph (a) to the contrary,
Executive will be entitled to the following Minimum Annual Target Bonus amounts:
(i) for the Fiscal Year ending on December 31, 1999, a prorated amount of
$250,000 based on the number of days between the Effective Date and the Fiscal
Year end, (ii) for the Fiscal Year ending on December 31, 2000, $250,000, and
(iii) for the Fiscal Year ending on December 31, 2001, $125,000. The Minimum
Annual Target Bonus for a Fiscal Year shall be payable in quarterly installments
during said Fiscal Year within 15 business days after the close of each Fiscal
Quarter. The positive difference, if any, between the Annual Target Bonus
actually payable to Executive with respect to a Fiscal Year and the Minimum
Annual Target Bonus then paid to date with respect to the Fiscal Year is payable
in accordance with the first sentence of Section 2.2(a).
(c) With respect to any Fiscal Year, the Annual Target Bonus
shall be deemed to be "earned" on a pro-rated basis for every full month the
Executive is employed by the Company during such Fiscal Year.
2.3 Special Bonus. The Company will pay the Executive a one-time
special bonus ("Special Bonus") upon the earlier of (a) when Executive pays the
accrued interest on the Personal Loan (as defined in Section 3) in full or (b)
the Maturity Date (as defined in Section 3). The Special Bonus will be $20,833
times the number of full months of Executive's service hereunder from the
Effective Date until the accrued interest is paid. Executive shall notify the
Company within five business days of the intended date of payment that he
intends to pay the accrued interest on the Personal Loan, and, assuming that the
condition in (a) is met, the Company will pay the Special Bonus.
2.4 Welfare and Pension Payments. Executive shall be eligible to
participate in the various benefit plans maintained by the Company for its
employees, including, without limitation, group life, disability, medical,
dental and health insurance, retirement, deferred compensation, profit sharing,
and other plans in accordance with the terms of such plans as from time to time
in effect and applicable to employees of the Company.
2.5 Other Benefits. Executive will receive payment for all business-
related organizational or association memberships, in accordance with the
Company's then-current practices.
2.6 Life Insurance. (a) Upon presentation of appropriate premium
notices, at Executive's option, the Company shall pay, or reimburse Executive
for, the premiums of one or more term life insurance
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policies on Executive's life in an aggregate policy amount not to exceed
$5,000,000; provided, however, that if the insurance company that is writing
such policies publishes standard rates for such policies and the aggregate
annual premiums for such policies in any year exceed 140% of the standard rates
for such policies (based on Executive's age) then the amount of insurance for
such year shall be reduced to the amount of insurance that can be obtained for
140% of such standard rates. Executive shall be the owner of such policy or
policies and shall have the sole right to designate the beneficiaries of such
policy or policies.
(b) Executive agrees to comply with reasonable requests of the
Company in connection with the Company's attempts to obtain, maintain, replace
or renew one or more insurance policies on the life of Executive, of which the
Company would be the owner and have the right to designate the beneficiaries of
such policies; provided that the Company's attempts to obtain, maintain replace
or renew such policies do not interfere with Executive's attempts to obtain,
maintain, replace or renew the policies referred to in paragraph (a) above.
2.7 Disability Insurance. At Executive's option, the Company will
reimburse Executive for, or maintain and pay the premiums of, a long-term
disability insurance policy on Executive that provides that if Executive becomes
disabled for a period in excess of six months, the insurer will pay Executive
during the period that Executive is disabled an annual amount equal to the
maximum amount obtainable for the Executive up to his then-current Base Salary
plus Annual Target Bonus. If applicable, the Company agrees that the policy
will permit the Company to assign the policy to Executive upon the termination
for any reason of Executive's employment with the Company or permit Executive to
continue such policy on substantially the same terms after the termination of
Executive's employment. If applicable, the Company will take all actions
necessary to assign such policy to Executive upon the termination of Executive's
employment with the Company.
2.8 Expenses. The Company shall reimburse Executive promptly for all
ordinary and necessary travel and other business expenses incurred by him in
connection with his duties hereunder, provided that Executive properly accounts
therefor in accordance with the standard policies of the Company generally
applicable to its employees.
2.9 Withholding. All taxable compensation payable to Executive
pursuant to this Section 2 shall be subject to customary withholding taxes and
such other employment taxes as are required under Federal law or the law of any
state or governmental body to be collected with respect to compensation paid by
a corporation to an employee.
3. Personal Loan. The Company agrees to loan Executive an aggregate
amount of $2.5 million within 15 days of the Effective Date (the "Personal
Loan"). Executive shall execute a recourse promissory note providing for all
principal and accrued interest thereunder to be due and payable on the earlier
of the fourth anniversary of the promissory note or six months after termination
of Executive's employment hereunder ("Maturity Date"), subject to the
forgiveness, if applicable, as described below or in Section 6.4. Interest
under the promissory note will accrue at 5.37% per annum. Executive may prepay
the Personal Loan without premium or penalty. If on the Maturity Date of the
Personal Loan (a) Executive is still employed by the Company, (b) the Company
has had a "Liquidity Event" and (c) the "Fair Market Value" of the Executive's
Purchased Stock (defined in Section 4) (including all proceeds received by the
Executive from prior sales) is at least $40 million, then the Personal Loan will
be due and payable in full on the Maturity Date. If Executive is not able on
the Maturity Date to liquidate or otherwise receive payment on part or all of
his Purchased Stock, then the Maturity Date shall be postponed until the first
date that he is able to so liquidate or receive payment ("Liquidity Date"). If
on the Maturity Date of the Personal Loan, the Executive is still employed by
the Company but conditions (b) or (c) above have not been met, the Personal Loan
will be forgiven at the rate of $100,000 per month beginning on the Maturity
Date of the Personal Loan and continuing until all principal and accrued
interest are forgiven, and Executive shall not be considered in default during
this period. For purposes hereof, a "Liquidity Event" shall mean an initial
public offering or any follow-on public offering; a sale of in excess of 50% of
the capital stock of the Company held by its shareholders to an unaffiliated
third party; any reorganization, consolidation or merger of
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the Company in which the Company is not the continuing or surviving corporation
or pursuant to which the Company's outstanding securities having the right to
vote in the election of directors would be converted into cash, securities or
other property; or any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or substantially all,
of the assets of the Company followed by a distribution to the shareholders
whether in liquidation or not. "Fair Market Value" shall be determined as
follows: (a) if the Company has shares of stock listed on a national exchange,
by multiplying the Purchased Stock by the closing share price on said national
exchange or (b) if the Company is privately-held, multiplying the Purchased
Stock by the value accorded a share of common stock in the Liquidity Event.
4. Stock. Upon execution of this Agreement, the Executive will be allowed
to purchase from the Company 1,200,000 restricted shares of the Company's common
stock ("Purchased Stock") at the fair market value on that date (estimated to be
$4.04 per share) (the "Purchased Stock Price"). These shares will vest over four
years at 1/48/th/ per month beginning on the Effective Date; provided, however,
that such Purchased Stock will become fully vested (that is, any Company
repurchase right shall lapse as to all Purchased Stock) upon a "Change of
Control" as hereinafter defined. Subject to acceleration described in Section
6.4, on termination of Executive's employment hereunder, all unvested shares of
Purchased Stock shall be subject to repurchase by the Company at the Purchased
Stock Price and the note evidencing the loan described in the next sentence will
be forgiven in a like amount. The Company will loan the Executive, on a fully
recourse basis, sufficient funds to purchase the Purchased Stock, which loan
shall be secured by a pledge of the Purchase Stock. The Executive agrees to
make a (S)83(b) election for this transaction. Interest will accrue annually at
5.37%. All principal and accrued interest will be due on the earlier of (a) six
years from the date of the loan or (b) three years after a Liquidity Event.
5. Termination.
5.1 End of Term or Earlier Death. Unless Executive's employment has
terminated sooner pursuant to the other provisions of this Section 5, such
employment shall terminate on the date of Executive's death.
5.2 Termination by the Company for Cause. The Company may terminate
Executive's employment hereunder for Cause. For purposes of this Agreement,
"Cause" shall mean (i) Executive's conviction of, guilty plea concerning or
confession of fraud, theft, embezzlement or similar malfeasance or any felony,
(ii) Executive's commission of embezzlement of Company funds (provided that the
Company has substantial proof of such embezzlement) or (iii) Executive has
engaged in serious misconduct which is materially injurious to the Company. In
order to terminate Executive's employment hereunder for Cause, the Company must
notify Executive of such decision in writing, specifying the Cause and the Date
of Termination (defined in Section 5.7). With respect to item (iii), Executive
shall have ten days after the receipt of such notice to eliminate the basis for
such Cause to the reasonable satisfaction of the Board.
5.3 Termination by the Company without Cause. The Company may
terminate Executive's employment hereunder at any time without Cause upon notice
to Executive specifying the Date of Termination.
5.4 Termination by Executive for Good Reason. Executive shall be
entitled to terminate his employment hereunder for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean the occurrence of any of the following
circumstances without the prior written consent of Executive:
(a) the relocation of the Company's principal executive offices
anywhere outside a 50-mile radius from the Company's current principal executive
offices in Chicago, Illinois, unless Executive agrees to such relocation, in
which case, the relocation of the Company's principal executive offices to an
unagreed location, or Executive being required to be based anywhere other than
the Company's principal executive offices, except for required travel on the
Company's business;
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(b) the requirement that Executive report to any officer,
consultant or committee, other than a formal committee of the Board, it being
the intent of the parties that Executive shall never be required to report to
anyone other than the Board or a formal committee thereof;
(c) the removal of any titles of Executive specified in Section
1.1;
(d) the assignment of any material duties of Executive to other
officers, employees, consultants or committees;
(e) the failure of the Company to maintain and to continue
Executive's participation in its benefit plans as in effect from time to time on
a basis substantially equivalent to the participation of employees similarly
situated to Executive;
(f) a material breach of the Company's obligations under this
Agreement;
(g) the performance standards for the Annual Bonus for any
Fiscal Year not being determined in accordance with Section 2.2 due to the fault
of the Board;
(h) the removal of, or failure to elect or re-elect, Executive
as a Director of the Company; or
(i) a Change of Control (as hereinafter defined).
For purposes of this Agreement, a "Change of Control" shall be deemed to have
occurred if at any time after the date hereof:
(1) any reorganization, consolidation or merger of the Company in
which the Company is not the continuing or surviving corporation or
pursuant to which the Company's outstanding securities having the right to
vote in the election of directors would be converted into cash, securities
or other property, unless, following such reorganization, merger of
consolidation, (A) 51% or more of the voting power of the then outstanding
securities having a right to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially
all of the persons who were the beneficial owners respectively, of the
securities having a right to vote generally in the election of directors of
the Company at the time of the initial agreement providing for such
reorganization, merger or consolidation, and (B) at least a majority of the
members of the board of directors of the corporation resulting from such
reorganization, merger or consolidation were Continuing Directors (as
defined below) at the time of the initial agreement providing for such
reorganization, merger or consolidation; or
(2) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all, or substantially all, of the
assets of the Company, other than to a corporation with respect to which
following the sale or other disposition (A) 51% or more of the voting power
of the then outstanding securities having a right to vote generally in the
election of directors is then beneficially owned, directly or indirectly,
by all or substantially all of the persons who were immediately prior to
such sale, lease, exchange or other transfer beneficial owners of the
securities having a right to vote generally in the election of directors of
the Company, and (B) at least a majority of the members of the board of
directors of such corporation were Continuing Directors (as defined herein)
at the time of the execution of the initial agreement or action of the
board providing for the sale or other disposition of assets of the Company;
or
(3) the stockholders of the Company have approved any plan or
proposal for the liquidation or dissolution of the Company; or
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(4) at any time the Company's Board of Directors shall be comprised
of directors a majority of which are not Continuing Directors; or
(5) any person (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
("Person") (other than (A) the Company or a person acquiring the securities
directly from the Company, (B) a person or group including the Executive or
with whom or with which the Executive is affiliated, (C) any Executive
benefit plan maintained by the Company or (D) any corporation pursuant to a
reorganization, merger or consolidation, if following such reorganization,
merger or consolidation, the conditions described in clauses (1)(A) and (B)
above are satisfied) shall become the beneficial owner (within the meaning
of Rule 13(d)-3 under the Exchange Act) of securities of the Company
representing fifty-one percent (51%) or more of the combined voting power
of the Company's then outstanding securities having the right to vote in
the election of directors, as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise.
For purposes hereof a "Continuing Director" shall mean (y) any member of the
Board of Directors at the close of business on the Effective Date; or (z) any
member of the Board who immediately succeeded any Continuing Director described
in clause (y) if such successor's election, or nomination for election by the
Company's stockholders, was approved by a vote of at least two-thirds of the
Continuing Directors then still in office. A Continuing Director shall not
include any person whose initial assumption of office occurs as a result of an
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board.
In order to terminate his employment hereunder for Good Reason, Executive shall
give the Company written notice thereof within six months following the
occurrence of Good Reason, specifying such Good Reason and the Date of
Termination, which shall be not less than ten days from the date of such notice,
provided that Company may eliminate the basis of such Good Reason during the
period prior to the specified Date of Termination.
5.5 Termination for Disability. The Company may terminate
Executive's employment for Disability. For purposes of this Agreement,
"Disability" shall mean Executive's inability, due to physical or mental illness
or accident or injury, to perform his duties hereunder on a full-time basis for
90 or more business days within five consecutive months and Executive shall not
(a) within ten days after a written notice of intention to terminate is received
by Executive, have returned to the full-time performance of his duties and (b)
have continued during the following two months to perform his duties full-time
without absences due to physical or mental disability aggregating more than ten
business days. If the Company elects to terminate Executive's employment for
Disability, it shall give written notice thereof to Executive specifying the
Date of Termination.
5.6 Termination by Executive Without Good Reason. Executive may
terminate his employment hereunder at any time for reasons other than Good
Reason upon notice to the Company specifying the Date of Termination.
5.7 Notice and Date of Termination. Any termination by the Company
or Executive shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 12.4. As used herein, the term "Date of
Termination" shall mean the date specified in the Notice of Termination (which
shall be not less than 30 days from the date such Notice of Termination is given
unless otherwise expressly provided herein).
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6. Payments Upon or After Termination.
6.1 Accrued Compensation. Upon termination of Executive's employment
with the Company for any reason, Executive shall be entitled to receive the
compensation accrued and unpaid as of the Date of Termination, including salary
through the Date of Termination and the portion of his Annual Target Bonus
earned through the Date of Termination in accordance with Section 2.2. Such
portion of the Annual Target Bonus shall be calculated and paid after the end of
the Fiscal Year in which such termination occurs in the same manner as if
Executive had been employed for the full Fiscal Year. The Company shall continue
to provide Executive with all profit sharing, pension, life, disability,
accident, health insurance, and other employee benefit and fringe benefit plans
and programs through the Date of Termination in accordance with the terms and
provisions of such plans and programs in effect at the time of that Notice of
Termination is given.
6.2 Payment in Case of Death. In addition to the Company's
obligations under Section 6.1, if at the time of Executive's death, Executive
maintained health insurance for members of his immediate family, the Company
shall pay the premiums to maintain such health insurance in full force and
effect for a period of at least one year from the date of Executive's death
(which to the extent permitted by applicable law, shall not count toward or
reduce the minimum length of time that the Company is obligated to provide
health insurance to Executive's immediate family under Section 4980(B) of the
Internal Revenue Code of 1986, as amended (the "Code")).
6.3 Termination for Cause. Other than the Company's obligations
under Section 6.1, if Executive's employment with the Company is terminated by
the Company for Cause, the Company shall have no further obligations to
Executive under this Agreement.
6.4 Termination by Company Without Cause or Termination by Executive
for Good Reason. In addition to the Company's obligations under Section 6.1, if
(a) Executive's employment is terminated by the Company and such termination
does not comply with Section 5.2 or Section 5.5, or (b) Executive's employment
is terminated by Executive for Good Reason in accordance with the provisions of
Section 5.4, the Company shall (i) pay Executive, within 30 days of the Date of
Termination, an amount equal to one year's Base Salary and current year's Annual
Target Bonus, whether earned or not, (ii) accelerate the vesting of the
Purchased Stock that is to vest over the next 18 months and (iii) the unpaid
principal balance under the Personal Loan shall be forgiven at the rate of
$83,333 for each full month of service hereunder. In addition, the Company
shall pay, or reimburse Executive for (i) the premiums to maintain health
insurance for Executive and members of his immediate family in full force and
effect for a period of one year after the Date of Termination (which, to the
extent permitted by applicable law, shall not count toward or reduce the minimum
length of time that the Company is obligated to provide health insurance to
Executive and Executive's immediate family under Section 4980(B) of the Code),
(B) the premiums to maintain the term life insurance policies maintained by
Executive in accordance with Section 2.5(a) in full force and effect for a
period of at least one year after the Date of Termination and (C) the premiums
to maintain the disability insurance policy maintained in accordance with
Section 2.6 in full force and effect for a period of one year after the Date of
Termination.
6.5 Termination for Disability. During any period that Executive
fails to perform his duties hereunder as a result of incapacity due to physical
or mental illness or accident or injury, Executive shall continue to receive his
full salary at the annual rate in effect at the commencement of such period and
all other benefits and all other compensation pursuant to this Agreement until
his employment is terminated pursuant to Section 5.5. In addition to the
Company's obligations under Section 6.1, if Executive's employment with the
Company is terminated pursuant to Section 5.5, the Company shall pay to
Executive, within 30 days of the Date of Termination, an amount equal to six
months' salary at his then annual current salary. In addition, the Company
shall pay, or reimburse Executive for, (a) the premiums to maintain health
insurance for Executive and members of his immediate family in full force and
effect for a period of at least one year after the Date of Termination (which,
to the extent permitted by applicable law, shall not count toward or reduce the
minimum length of time
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that the Company is obligated to provide health insurance to Executive and
Executive's immediate family under Section 4980(B) of the Code), (b) the
premiums to maintain the term life insurance policies maintained by Executive in
accordance with Section 2.5(a) in full force and effect for a period of at least
one year after the Date of Termination and (c) the premiums to maintain the
disability insurance policy maintained in accordance with Section 2.6 in full
force and effect for a period of at least one year after the Date of
Termination, or until Executive begins receiving disability payments under such
policy, if earlier. If Executive's employment is terminated pursuant to Section
5.5, Executive agrees to pay to the Company any proceeds received by Executive
pursuant to the disability insurance policy maintained pursuant to Section 2.6
with respect to the period commencing on the Date of Termination and ending on
the six month anniversary thereof.
6.6 Other Termination by Executive. If Executive shall terminate his
employment hereunder for any reason other than Good Reason, other than the
Company's obligations under Sections 2.3 and 6.1, the Company shall have no
further obligations to Executive under this Agreement.
6.7 Disclaimer of Mitigation Duty. Executive shall not be required
to mitigate the amount of any payment provided for or referred to in this
Section 4 by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for or referred to in this Section 4 be reduced by
any compensation earned by Executive as a result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by Executive to Company or otherwise.
6.8 Other Benefits. In addition to all other amounts payable to
Executive under this Section 4, Executive shall be entitled to receive all
benefits payable to Executive under any plans or agreements relating to
retirement or other benefits in accordance with the terms and provisions
thereof.
6.9 Golden Parachute Provision. In the event that in the opinion of
tax counsel selected and compensated by Executive ("Executive's Tax Counsel"), a
payment or benefit received or to be received by Executive following his
termination (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company or any person affiliated with the
Company) (collectively, with the payments provided for in the foregoing
provisions of this Section 6, the "Post Termination Payments") would be subject
to excise tax (in whole or part) as a result of section 4999 of the Code, and
(b) as a result of such excise tax, the net amount of Post Termination Payments
retained by Executive (taking into account such excise tax) would be less than
the net amount of Post Termination Payments retained by Executive if the Post
Termination Payments were reduced as described in this Section 6.9, then the
Post Termination Payments shall be reduced until no portion of the Post
Termination Payments is subject to excise tax. For purposes of this limitation
(i) no portion of the Post Termination Payments the receipt or enjoyment of
which Executive shall have waived in writing prior to the date of payment
following termination of the Post Termination Payments shall be taken into
account, (ii) no portion of the Post Termination Payments shall be taken into
account which in the opinion of Executive's Tax Counsel does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the Code, (iii)
the Post Termination Payments shall be reduced only to the extent necessary so
that the Post Termination Payments (other than those referred to in clauses (i)
and (ii)) in their entirety constitute reasonable compensation for services
actually rendered within the meaning of section 280G(b)(4) of the Code or are
otherwise not subject to any excise tax under Section 4999 of the Code, in the
opinion of Executive's Tax Counsel, and (iv) the value of any non-cash benefit
and all deferred payments and benefits included in the Post Termination Payments
shall be determined by the mutual agreement of the Company and Executive in
accordance with the principles of sections 280G(d)(3) and (4) of the Code and
the proposed Treasury Regulations thereunder.
6.10 Return of the Company Property. Upon termination of employment,
Executive shall return to the Company all copies of any Confidential Information
(whether in paper, electronic or any other form) as well as all hardware,
software, books, documentation, files, keys, keycards, company credit cards,
records, lists and any other information or property owned by the Company within
Employee's possession or control, including all copies thereof.
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7. Proprietary Rights. (a) As used herein, "Inventions" means
discoveries, improvements and ideas (whether or not shown or described in
writing or reduced to practice) and works of authorship, whether or not
patentable or copyrightable, (i) which relate directly to the business of the
Company, (ii) which relate to the Company's actual or demonstrably anticipated
research or development, (iii) which result from any work performed by Executive
for the Company (iv) for which equipment, supplies, facility or trade secret
information of the Company is used, or (v) which is developed on any the Company
time. This section does not apply to any invention developed by Executive prior
to Executive's employment by the Company, provided that such invention is listed
and described in an exhibit attached to and made part of this Agreement.
(b) With respect to Inventions made, authored or conceived by
Executive, either solely or jointly with others, during Executive's employment,
whether or not during normal working hours and whether or not at the Company's
premises, Executive acknowledges and agrees that all such works are "works made
for hire" and, consequently, that the Company owns all copyright and other
rights thereto. Executive further agrees that it will (i) will keep accurate,
complete and timely records of such Inventions, which records shall be the
Company's property and be retained on the Company's premises; (ii) promptly and
fully disclose and describe such Inventions in writing to the Company; (iii)
assign, and does hereby assign, to the Company all of Executive's rights to such
Inventions and to patents, copyrights, and applications therefore with respect
to such Inventions; and (iv) acknowledge and deliver promptly to the Company
(without charge to the Company but at the expense of the Company) such written
instruments and do such other acts as may be necessary in the opinion of the
Company to obtain and preserve such property rights and to vest the entire right
and title thereto in the Company.
(c) Executive will cooperate with the Company in the execution
of any documents which effect the assignment of Inventions or rights thereto
which may be required by the Company clients or other third party, provided that
such requirement is no broader than the requirements of Section 2(b) above.
(d) Pursuant to the provisions of the Illinois Executive Patent
Act, 765 ILCS 1060/2, Executive acknowledges receipt of notice that this
assignment does not apply to an invention for which no equipment, supplies,
facility, or trade secret of the Company was used and which was developed
entirely on Executive's own time, unless (a) the invention relates (i) to the
business of the Company, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by Executive for the Company.
8. Confidential Information. (a) During the term of Executive's
employment by the Company and three (3) years thereafter, except in the course
of performing Executive's employment duties for the Company, Executive will not
use, disclose, reveal or report any Confidential Information of the Company, of
the Company's past or current clients, or of other parties which have disclosed
confidential or proprietary information to the Company. As used herein,
"Confidential Information" means information not generally known that is
proprietary to the Company, its clients or other parties, including but not
limited to information about any clients, prospective clients, sales proposals,
Executives, processes, operations, products, services, organization, research,
development, accounting, marketing, applications, selling, servicing, finance,
business systems, computer systems, software systems and techniques. All
information disclosed to Executive, or to which Executive obtains access,
whether originated by Executive or by others, which Executive has reasonable
basis to believe to be Confidential Information, or which is treated by the
Company or its clients or other parties as being Confidential Information, shall
be presumed to be Confidential Information provided that Confidential
Information shall not include (i) information that was or became generally known
or available to the public at the time of disclosure or thereafter other than as
a result of an unauthorized or unlawful disclosure by Executive, or
(ii) information required to be disclosed under law or by court order.
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(b) Executive will cooperate with the Company in the execution
of any personal confidentiality agreement which may be required by the Company
clients or other third party, provided that such agreement is no broader in its
provisions to the requirements of Section 3(a) above.
9. Nonsolicitation. During the Nonsolicitation Period (defined below)
Executive shall not, without the Company's written consent, directly nor
indirectly, by or for himself or as the agent of another or through others as
Executive's agents (i) solicit or accept any business that directly competes
with products and services then offered by the Company from any client for whom
the Company has performed any services or issued any proposals in the two (2)
year period prior to such solicitation or acceptance, (ii) request, induce or
advise any such client to withdraw, curtail or cancel its business with the
Company, or (iii) solicit for employment, employ, or engage as a consultant any
person who had been an Executive of the Company at any time within the six (6)
months prior to such solicitation or engagement.
The "Nonsolicitation Period" is two (2) years following termination of
employment (whether voluntary or involuntary).
10. Non-competition. During the Non-compete Period (as defined below),
Executive shall not, or as the Company consents in writing, be employed
(directly or indirectly, whether as an Executive, an independent contractor or
in self-employment) in the strategy, design or implementation of internet or
electronic commerce oriented business solutions. The Non-compete Period is 6
months following termination of employment (whether voluntary or involuntary).
11. Injunctive Relief. In the event of a breach or threatened breach of
Sections 8, 9, or 10 by Executive, the Company shall be entitled, without
posting of a bond, to an injunction restraining such breach, an accounting and
repayment of profits, compensation, commission, remuneration or other benefits
that Executive, directly or indirectly, may realize as a result of such
violation. In the event of a legal action resulting from an allegation of a
breach or threatened breach of Sections 8, 9 or 10, the prevailing party in the
court of law, agrees to reimburse the other any attorneys' fees and costs
incurred in such legal action. Nothing herein shall be construed as prohibiting
The Company from pursuing any other remedy available to it for such breach.
12. Miscellaneous.
12.1 Successors and Assigns; Binding Agreement. (a) The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform this Agreement if no such succession had taken place.
(b) This Agreement and all rights of Executive hereunder shall
inure to the benefit of and be enforceable by Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive shall die while any amounts remain unpaid
hereunder, including any amounts which would be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to Executive's spouse or
if Executive does not have a living spouse at such time, to Executive's estate.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; provided, however, that the duties of
Executive hereunder are personal to Executive and may not be delegated by him.
12.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without regard
to conflicts of law principles.
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12.3 Waivers. The waiver by either party hereto of any right
hereunder or of any failure to perform or breach by the other party hereto shall
not be deemed a waiver of any other right hereunder or of any other failure or
breach by the other party hereto, whether of the same or a similar nature or
otherwise. No waiver shall be deemed to have occurred unless set forth in a
writing executed by or on behalf of the waiving party. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and each
such waiver shall operate only as to the specific term or condition waived and
shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.
12.4 Notices. All notices and communications that are required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally, upon mailing by registered or
certified mail, postage prepaid, return receipt requested, or upon delivery to a
reputable overnight courier as follows:
If to the Company, to:
Lante Corporation
000 Xxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Board of Directors
With a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
If to Executive, to:
C. Xxxx Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxxx Xxxxxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxxxx
0 Xxxxxxxxxxxx Xxxxx
0000 Xxxx Xxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
or to such other address as may be specified in a notice given by one party to
the other party hereunder.
12.5 Severability. If for any reason any term or provision of this
Agreement is held to be invalid or unenforceable, all other valid terms and
provisions hereof shall remain in full force and effect, and all of the terms
and provisions of this Agreement shall be deemed to be severable in nature. If
for any reason any term or provision containing a restriction set forth herein
is held to cover an area or to be for a length of time which is unreasonable, or
in any other way is construed to be too broad or to any extent invalid, such
term or
11
provision shall not be determined to be null, void and of no effect, but to the
extent the same is or would be valid or enforceable under applicable law, any
court of competent jurisdiction shall construe and interpret or reform this
Agreement to provide for a restriction having the maximum enforceable area, time
period and other provisions (not greater than those contained herein) as shall
be valid and enforceable under applicable law.
12.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one and the same instrument.
12.7 Indemnification. The Company shall indemnify and hold harmless
Executive from any claim asserted against him arising out of the performance of
his duties and responsibilities (a) as an employee, officer or director of the
Company or any of its subsidiaries, or (b) as director, officer or partner of
any other enterprise if Executive serves or served in such capacity at the
request of the Company, to the fullest extent permitted by applicable state
laws. Notwithstanding anything to the contrary above, in the event of any claim
by the Executive's prior employer relating to this Agreement or Executive's
performance of his duties for the Company, the Company's sole responsibility
shall be to provide for the cost of defense (i.e. attorney's and other
professional fees and expenses); and such responsibility shall be subject to the
Executive's compliance with all the Company's policies and procedures and good-
faith effort to comply with all contractual obligations and arrangements of his
prior employer. If Executive terminates his employment with the Company without
Good Reason, then the Company's obligations in the preceding sentence shall
terminate as to costs of defense incurred thereafter. Expenses incurred by
Executive in connection with any such claim shall be paid by the Company in
advance upon the written request of Executive. Executive shall reimburse the
Company for such expenses in the event and only to the extent that it shall be
ultimately determined that Executive is not entitled under applicable state law
to be indemnified for such expenses.
12.9 Legal Fees. The Company shall pay, or reimburse Executive for,
the reasonable legal or consultant fees and expenses to Executive in connection
with the negotiation, execution and delivery of this Agreement.
12.10 Amendment; Survival. This Agreement may be amended or
canceled by mutual agreement of the parties in writing without the consent of
any other person and, so long as Executive lives, no person, other than the
parties hereto, shall have any rights under or interest in this Agreement or the
subject matter hereof. The provisions of Sections 6, 7, 8, 9, 10 and 11
survive the termination or expiration of this Agreement.
12.11 Entire Agreement. This Agreement constitutes the entire
agreement between the parties, and supersedes all prior oral or written
understandings between the parties, relating to Executive's employment. In the
event of any inconsistency between the terms of this Agreement and any other
agreement contemplated herein, the terms of this Agreement shall control.
12.12 No Attachment. Except as required by law, no right to
receive payments under this Agreement shall be subject to anticipation,
commutation, alienation, sale, assignment, encumbrance, charge, pledge, or
hypothecation or to execution, attachment, levy, or similar process or
assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
12.13 Shareholders Agreement. Executive agrees to execute a copy
of the Company's Shareholders Agreement with respect to his Purchased Stock.
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The parties hereto have executed this Agreement on the date and year first
above written.
LANTE CORPORATION
By: /s/ Xxxx Xxxxx
---------------------------
Title: President
-------------------
/s/ C. Xxxx Xxxxxxx
-------------------------------
C. Xxxx Xxxxxxx
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