NATIONAL INFORMATION CONSORTIUM, INC.
KEY EMPLOYEE AGREEMENT
FOR
XXXXX CHILDRESS
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of the 16th
day of May, 1999, by and between Xxxxx Childress ("Executive") and NATIONAL
INFORMATION CONSORTIUM, INC. a Colorado corporation (the "Company").
WHEREAS, the Company desires to employ Executive to provide personal
services to the Company and to the Company's subsidiaries, and desires to
provide Executive with certain compensation and benefits in return for his
services; and
WHEREAS, Executive desires to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT BY THE COMPANY.
1.1 EMPLOYMENT. Subject to terms set forth herein, the Company
or a subsidiary of the Company agrees to employ Executive in the position of
Chief Financial Officer and Executive hereby accepts such employment effective
as of the date first written above. During the term of his employment with the
Company, Executive will devote his best efforts and substantially all of his
business time and attention (except for vacation periods and reasonable periods
of illness or other incapacity permitted by the Company's general employment
policies) to the business of the Company.
1.2 DUTIES. Executive will serve in an executive capacity and
shall perform such duties as are customarily associated with his then current
title, consistent with the Bylaws of the Company and as required by the
Company's Board of Directors (the "Board"). Executive shall perform his duties
at the Company's corporate headquarters, currently in Overland Park, Kansas.
1.3 POLICIES. The employment relationship between the parties
shall also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company's general employment policies or
practices, this Agreement shall control.
1.4 INVESTMENT. As a condition to your employment you will
purchase 5,110 shares of the Company's common stock at a purchase price per
share of $24.46 or
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$125,000 in the aggregate.
2. COMPENSATION.
2.1 SALARY. Executive shall receive for services to be
rendered hereunder an annualized base salary of $175,000, payable in equal
installments (prorated for portions of a pay period) on the Company's regular
pay days and the Company will withhold from such compensation all applicable
federal and state income, social security and disability and other taxes as
required by applicable laws. In addition, Executive shall be entitled to
bonuses earned by Executive pursuant to bonus plans established from time to
time by the Company's Board of Directors.
2.2 STANDARD COMPANY BENEFITS. Executive shall be entitled to
all rights and benefits for which he is eligible under the terms and conditions
of the standard Company benefits and compensation practices which may be in
effect from time to time and provided by the Company to its employees generally.
2.3 MOVING EXPENSES. Executive shall be reimbursed by the
Company for all reasonable expenses incurred by Executive for moving his family
and his household and other belongings to the vicinity of the Company's
corporate offices, including transitional living expenses incurred by Executive
for a period and in an amount consistent with the policies of the Company which
policies shall be established in consultation with Executive.
3. PROPRIETARY INFORMATION OBLIGATIONS.
3.1 AGREEMENT. Executive agrees to execute and abide by the
Proprietary Information and Inventions Agreement attached hereto as EXHIBIT A
(the "Proprietary Information Agreement").
4. OUTSIDE ACTIVITIES.
4.1 Except with the prior written consent of the Company's
Board of Directors, Executive will not during the term of this Agreement
undertake or engage in any other employment, occupation or business enterprise,
other than ones in which Executive is a passive investor. Executive may engage
in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of his duties hereunder.
4.2 Except as permitted by Section 4.3, Executive agrees not to
acquire, assume or participate in, directly or indirectly, any position,
investment or interest known by him to be adverse or antagonistic to the
Company, its business or prospects, financial or otherwise.
4.3 During the term of his employment by the Company, except on
behalf of the Company, Executive will not directly or indirectly, whether as an
officer, director,
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stockholder, partner, proprietor, associate, representative, consultant, or
in any capacity whatsoever engage in, become financially interested in, be
employed by or have any business connection with any other person,
corporation, firm, partnership or other entity whatsoever which were known by
him to compete directly with the Company, throughout the world, in any line
of business engaged in (or planned to be engaged in) by the Company;
provided, however, that anything above to the contrary notwithstanding, he
may own, as a passive investor, shares of a publicly-held corporation that is
competitive with the Company, if such shares are actively traded on an
established national securities market, so long as the number of shares of
such corporation's capital stock that are owned beneficially (directly or
indirectly) by Executive shall not in the aggregate constitute more than 5%
of the outstanding voting stock of such corporation.
5. TERMINATION OF EMPLOYMENT.
5.1 TERMINATION WITHOUT CAUSE.
(a) The Company shall have the right to terminate
Executive's employment with the Company at any time without cause.
(b) In the event Executive's employment is terminated
without cause before May 16, 2002, the Company shall pay Executive severance
equal to eighteen months at Executive's then-current salary. This severance
will be paid in equal monthly payments on the first day of the month for each
of the eighteen months following such termination.
(c) In the event Executive's employment is terminated
without cause on or after May 16, 2002, Executive will not be entitled to
severance pay, pay in lieu of notice or any other such compensation, except as
provided in the Company's Severance Benefit Plan, if any, in effect on the
termination date.
5.2 TERMINATION FOR CAUSE.
(a) The Company shall have the right to terminate
Executive's employment with the Company at any time for cause. Written
notification of termination and specific cause of termination shall be provided
to Executive at the time of termination.
(b) "Cause" for termination shall mean: (i) indictment
or conviction of any felony or of any crime involving dishonesty; (ii) willful
participation in any fraud against the Company; (iii) breach of Executive's
duties to the Company, including persistent unsatisfactory performance of job
duties; (iv) intentional damage to any property of the Company; or (v) conduct
by Executive which in the good faith and reasonable determination of the Board
demonstrates gross unfitness to serve. With respect to clause (iii) above,
Executive shall be given written notice of such unsatisfactory performance and
30 days from the date of such notice to cure the causes set forth therein.
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(c) In the event Executive's employment is terminated at
any time with cause, Executive will not be entitled to severance pay, pay in
lieu of notice or any other such compensation; PROVIDED, HOWEVER, that Executive
shall receive all compensation earned prior to and including the date of
termination.
5.3 VOLUNTARY OR MUTUAL TERMINATION.
(a) Executive may voluntarily terminate his employment
with the Company in writing at any time, after which no further compensation
will be paid to Executive.
(b) In the event Executive voluntarily terminates his
employment, he will not be entitled to severance pay, pay in lieu of notice or
any other such compensation; PROVIDED, HOWEVER, that Executive shall receive all
compensation earned prior to and including the date of termination.
6. NON-INTERFERENCE; NON-COMPETITION.
(a) While employed by the Company, and for three (3) years
immediately following the Termination Date, Executive agrees not to interfere
with the business of the Company by:
(i) soliciting, attempting to solicit, inducing, or
otherwise causing any employee of the Company to terminate his or her employment
in order to become an employee, consultant or independent contractor to or for
any competitor of the Company; or
(ii) directly or indirectly soliciting the business of
any customer of the Company which at the time of termination or one year
immediately prior thereto was listed on the Company's customer list.
(b) Executive agrees to execute and abide by the
Non-Competition Agreement attached hereto as EXHIBIT B.
7. GENERAL PROVISIONS.
7.1 NOTICES. Any notices provided hereunder must be in writing
and shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail,
to the Company at its primary office location and to Executive at his address as
listed on the Company payroll.
7.2 SEVERABILITY. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or
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unenforceable provisions had never been contained herein.
7.3 WAIVER. If either party should waive any breach of any
provisions of this Agreement, he or it shall not thereby be deemed to have
waived any preceding or succeeding breach of the same or any other provision of
this Agreement.
7.4 COMPLETE AGREEMENT. This Agreement and its Exhibits,
constitute the entire agreement between Executive and the Company and it is the
complete, final, and exclusive embodiment of their agreement with regard to this
subject matter. It is entered into without reliance on any promise or
representation other than those expressly contained herein, and it cannot be
modified or amended except in a writing signed by Executive and an officer of
the Company.
7.5 COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
7.6 HEADINGS. The headings of the sections hereof are inserted
for convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
7.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.
7.8 ATTORNEY FEES. If either party hereto brings any action to
enforce his or its rights hereunder, the prevailing party in any such action
shall be entitled to recover his or its reasonable attorneys' fees and costs
incurred in connection with such action.
7.9 CHOICE OF LAW. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by the law of the
State of Kansas.
IN WITNESS WHEREOF, the parties have executed this Key Employee
Agreement on the day and year first above written.
NATIONAL INFORMATION
CONSORTIUM, INC.:
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx, President
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/s/ Xxxxx X. Childress
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Xxxxx X. Childress
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