EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made and entered into on this 25th
day of January, 2001, (the "Effective Date"), by and between PurchaseSoft, Inc.,
a Delaware corporation with its principal business office in the State of
Massachusetts (hereinafter the "Company"); and Xxxxxxx Xxxxxxxxx, a
Massachusetts resident (hereinafter "Executive").
INTRODUCTION
A. Executive has been engaged as an employee of the Company and hereby
acknowledges that he has received all compensation due him for such services.
From and after the Effective Date, Executive has been and will be employed by
the Company in the capacity of Chief Product Strategist.
B. Executive possesses certain unique skills, talents, contacts, judgment
and knowledge of the Company business, strategies, ethics and objectives.
C. Executive and the Company are parties to an employment agreement dated
April 1, 1998. The Company currently needs to raise additional capital to fund
its operations and certain provisions of that agreement do and will act as an
impediment to the Company's ability to raise additional capital. In order that
the Company may raise additional capital to continue to operate, Executive
voluntarily rescinds and the Company accepts the rescission of that employment
agreement dated April 1, 1998. Both Executive and the Company desire to enter
into an employment agreement so that the Company may avail itself of the unique
services offered by Executive and continue in its efforts to raise additional
operating capital.
AGREEMENT
NOW, THEREFORE, in consideration of the facts recited above, which are a
part of this Agreement, and the parties' mutual covenants and undertakings
contained in this Agreement, the Company and Executive agree as follows:
ARTICLE 1
DEFINITIONS
Capitalized terms used in this Agreement shall have their defined meaning
throughout the Agreement. The following terms shall have the meanings set forth
below; unless the context clearly requires otherwise.
1.1 "Agreement" means this Executive Employment Agreement, as from time to
time amended.
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1.2 "Base Salary" means the total annual cash compensation payable to
Executive on a regular periodic basis under Section 3.1, without regard to any
voluntary salary deferrals or reductions to fund employee benefits.
1.3 "Board" means the Board of Directors of the Company.
1.4 "Cause" has the meaning set forth in Section 5.2.
1.5 "Company" means all of the following, jointly and severally: (a)
PurchaseSoft, Inc., (b) any Subsidiary thereof and (c) any Successor thereto.
1.6 "Confidential Information" means information that is proprietary to the
Company or proprietary to others and entrusted to the Company; whether or not
such information includes trade secrets. Confidential Information includes, but
is not limited to, information relating to the Company's business plans and to
its business as conducted or anticipated to be conducted, and to its past or
current or anticipated products. Confidential Information also includes, without
limitation, information concerning the Company's research, development,
purchasing, accounting, marketing, selling and services. All information that
Executive has a reasonable basis to consider as confidential shall be
Confidential Information, whether or not originated by Executive and without
regard to the manner in which Executive obtains access to this and any other
proprietary information of the Company.
1.7 "Executive means Xxxxxxx Xxxxxxxxx.
1.8 "Subsidiary" means any corporation or other business entity that is
controlled by the Company.
1.9 "Term" means the term of this Agreement and the employment of Executive
under this Agreement, as described in Section 2.3.
ARTICLE 2
EMPLOYMENT, DUTIES AND TERM
2.1 EMPLOYMENT. Upon the terms and conditions set forth in this Agreement,
the Company hereby employs Executive, and Executive accepts such employment as
Chief Product Strategist. Except as expressly provided herein, termination of
this Agreement by either party or by mutual agreement of the parties shall also
terminate Executive's employment by the Company.
2.2 DUTIES. During the Term, and excluding any periods of vacation, sick,
or other leave to which Executive is entitled, Executive agrees to devote
substantially all of his attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to Executive hereunder and under the Company's
bylaws, as amended from time to time to use Executive's reasonable best efforts
to perform faithfully and efficiently such responsibilities.
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2.3 TERM. Subject to the termination provisions of Article 5, the Term of
this Agreement and the employment of Executive under this Agreement shall be a
one (1) year period commencing on the Effective Date.
2.4 OWNERSHIP OF COMPANY PROPERTY. Executive agrees that all property in
Executive's possession belonging to Company, including without limitation, all
documents, reports, manuals, memoranda, computer print-outs, customer lists,
credit cards, keys, identification, products, access cards, and all other
property relating in any way to the business of the Company are the exclusive
property of the Company, even if Executive authored, created or assisted in
authoring or creating, such property. Executive shall return to the Company all
such documents and property immediately upon termination of his employment with
the Company or at such earlier time as the Company may reasonably request.
ARTICLE 3
COMPENSATION, BENEFITS AND EXPENSES
3.1 BASE SALARY. The Company shall pay Executive a Base Salary at an
annual rate that is not less than One Hundred Sixty-Five Thousand and no/100
Dollars ($165,000.00) or such higher annual rate as may from time to time be
approved by the Board, such Base Salary to be paid in substantially equal
regular periodic payments in accordance with the Company's regular payroll
practices.
3.2 BENEFITS. Executive shall be entitled to participate in all benefit
plans that are made available to all employees of the Company including, but not
limited, to health, dental, 401(k), Section 125 flexible spending accounts and
such other benefit programs that the Company may from time to time make
available to its employees.
3.3 VACATION. For the 2001 calendar year and each subsequent calendar year
that begins during the Term, Executive shall be entitled to twenty (20) paid
vacation days, pro-rated for any partial calendar year. The time or times at
which such vacation days are to be taken shall be reasonably determined by
Executive consistent with Executive's duties and obligations under this
Agreement. Any such vacation days that are unused at the end of any calendar
year may be carried over and used in a subsequent calendar year pursuant to the
Company's vacation policy.
3.4 BUSINESS EXPENSES AND INDEMNIFICATION. During the Term, the Company
shall, in accordance with, and to the extent of, its uniform policies in effect
from time to time, pay or reimburse all ordinary and necessary business expenses
incurred by Executive in performing Executive's duties as an employee of the
Company, including without limitation all travel and living expenses while away
from home on business in the service of the Company; provided, however, that
Executive accounts promptly for such expenses to the Company in the manner
reasonably prescribed from time to time by the Company.
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To the fullest extent permitted by applicable law, Executive shall have no
personal liability to the Corporation or its shareholders for any breach of
fiduciary duty or other duties as an employee or director of the Company. The
Company shall defend and indemnify Executive, to the fullest extent permitted by
applicable law, against any claim, damages, loss, costs or expenses (including
fees of experts and attorneys employed by him) resulting from any alleged breach
of duty.
ARTICLE 4
STOCK OPTION
4.1 EXPIRATION OF OPTION GRANTED APRIL 1, 1998. The Option granted to
Executive by the Company on April 1, 1998 shall be exercisable for five (5)
years from the effective date of its grant; provided, however, that in the
event that Executive ceases to be employed by the Company, for any reason or
no reason, with or without Cause, Executive or his legal representative shall
have no more than twelve (12) months from his Date of Termination to exercise
this Option pursuant to this Agreement. The Option granted April 1, 1998
shall terminate and become null and void upon the expiration of such 12-month
period or, if earlier, upon the expiration date of such Option, which shall
be the last day of such 5-year period.
ARTICLE 5
EARLY TERMINATION
5.1 EARLY TERMINATION. This Article 5 sets forth the terms for early
termination of Executive's employment under this Agreement.
5.2 TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate this
Agreement for Cause. For purposes of this Agreement, "Cause" means any of the
following, with respect to Executive's position of employment with the Company:
(1) an act or acts of personal dishonesty by Executive that is or are
intended to result in substantial personal enrichment of Executive at the
material expense of the Company;
(2) a violation or repeated violations by Executive of his obligations to
the Company which violation or violations are demonstrably willful and
deliberate on Executive's part and are not remedied within a reasonable
period after Executive's receipt of notice of such violation or violations
from the Company; or
(3) the willful engaging by Executive in illegal conduct that is injurious
to the Company.
For purposes of this Section 5.2, any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Company shall be conclusively presumed to be done,
or omitted to be done, by Executive in good faith and in the best interests of
the Company.
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5.3 TERMINATION IN THE EVENT OF DEATH. The Term, and Executive's employment
under this Agreement, shall end in the event of Executive's death.
5.4 TERMINATION BY MUTUAL AGREEMENT. The parties may terminate Executive's
employment under this Agreement at any time by mutual written agreement.
5.5 TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may terminate
Executive at any time during the Term of this Agreement without Cause by
delivering to Executive a notice that his services to the Company are no longer
necessary. In such event, the Executive's last day of employment shall be the
date specified in the notice which shall in no way be earlier than the date on
which the notice is delivered to Executive.
5.6 COMPENSATION UPON TERMINATION OR DEATH .
(1) If Executive's employment under this Agreement is terminated on
account of death, the Company shall, within five (5) calendar days
following the date of termination, pay any amounts due to Executive for
Base Salary through the date of termination, together with any other
unpaid and pro rata amounts to which Executive is entitled as of the date
of termination.
(2) If Executive's employment under this Agreement is terminated by
the Company for Cause, the Company shall pay Executive his Base Salary
through the Date of Termination.
(3) If Executive's employment under this Agreement is terminated by
the mutual agreement of the parties under Section 5.4, the Company shall
provide Executive with the compensation benefits as specified in that
agreement.
(4) If Executive's employment under this Agreement is terminated by
the Company pursuant to Section 5.5, the Company shall pay Executive, as
liquidated damages, the balance of Executive's Base Salary for the
un-expired Term of this Agreement or nine months Base Salary, whichever
amount is larger. All payments of liquidated damages made to Executive
pursuant to this section shall be in the form of salary continuation, as
opposed to lump sum distributions, and shall be made in the normal course
of the Company's payroll practices.
(5) If after the expiration of the Term of this Agreement, Executive
remains in the employ of the Company as an Employee at will, and Executive
is terminated by the Company for any reason other than Cause as defined in
Section 5.2, Death as discussed in Section 5.3 or by mutual agreement as
discussed in Section 5.4, the Company shall pay Executive nine months of
the Executive's Base Salary. All payments made to Executive pursuant to
this section shall be in the form of salary continuation, as opposed to
lump sum distributions, and shall be made in the normal course of the
Company's payroll practices.
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ARTICLE 6
CONFIDENTIAL INFORMATION AND COMPETITION
6.1 CONFIDENTIAL INFORMATION. Executive shall not, during the Term or
subsequent to the termination of Executive's employment under this Agreement,
use or disclose, other than in connection with Executive's employment with the
Company, any Confidential Information to any person not employed by the Company
or not authorized by the Company to receive such Confidential Information,
without the prior written consent of the Company. Executive will use reasonable
and prudent care to safeguard and protect and prevent the unauthorized use and
disclosure of Confidential Information. The obligations contained in this
Section 6.1 will survive for as long as the Company in its sole judgment
considers the information to be Confidential Information.
The obligations under this Section 6.1 will not apply to any Confidential
Information that is now or becomes generally available to the public through no
fault of Executive or to Executive's disclosure of any Confidential Information
required by law or judicial or administrative process.
6.2 NON-COMPETITION. Subject to Section 6.3, Executive agrees that, during
the Term and for any period following his termination of Company employment
during which time Executive is receiving payments from the Company pursuant to
Section 5.6(4) or Section 5.6(5), Executive will not directly or indirectly,
alone or as an officer, director, shareholder, partner, member, employee or
consultant of any other corporation or any partnership, limited liability
company, firm or other business entity, engage in any business or commercial
activity in competition with any part of the Company's business as conducted
during the Term or as of Executive's Date of Termination or with any part of the
Company's contemplated business with respect to which Executive has Confidential
Information governed by Section 6.1. For purposes of this paragraph,
"shareholder" shall not include beneficial ownership of less than five percent
(5%) of the combined voting power of all issued and outstanding voting
securities of a publicly held corporation whose stock is traded on a major stock
exchange or quoted on NASDAQ.
6.3 OPTION TO REVISE. At its sole option, the Company may, by written
notice given to Executive within thirty (30) days after his Date of Termination,
waive or limit the time and/or geographic area in which Executive is prohibited
from engaging in competitive activity under Section 6.2.
ARTICLE 7
GENERAL PROVISIONS
7.1 NO ADEQUATE REMEDY. The parties declare that it is impossible to
accurately measure in money the damages which will accrue to either party by
reason of a failure to perform any of the obligations under this Agreement.
Therefore, if either party institutes any action or proceeding to enforce the
provisions hereof, the party against whom such action or proceeding is brought
hereby waives the claim or defense that such party has an adequate remedy at
law, and such party shall not assert in any such action or proceeding the claim
or defense that such party has an adequate remedy at law.
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7.2 SUCCESSORS AND ASSIGNS.
(1) For purposes of this Agreement, "Successor" shall mean any
corporation, individual, group, association, partnership, limited
liability company, firm, venture or other entity or person that,
subsequent to the date hereof, succeeds to the actual or practical ability
to control (either immediately or with the passage of time), or
substantially all of the Company and/or the Company's business and/or
assets, directly or indirectly, by merger, consolidation,
re-capitalization, purchase, liquidation, redemption, assignment, similar
corporate transaction, operation of law or otherwise.
(2) This Agreement shall be binding upon and inure to the benefit of
any Successor of the Company and each Subsidiary.
(3) 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 and any assignees permitted hereunder.
If Executive should die while any amounts would still be payable to
Executive hereunder if Executive 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 devise, legatee or other designee
or, if there be no such designee, to Executive's estate. Executive may not
assign this Agreement, in whole or in any part, without the prior written
consent of the Company.
7.3 DISPUTES. Any dispute, controversy or claim for damages arising under
or in connection with this Agreement shall be settled by such judicial remedies
as each party may seek to pursue or by arbitration in Boston, Massachusetts by a
panel of three (3) arbitrators in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (as then in effect for expedited
proceedings). Notwithstanding the foregoing, no disputant shall be required to
seek arbitration regarding any cause of action that would entitle such disputant
to injunctive relief. Each of the disputants shall be entitled to present
evidence and argument to the arbitrators. The arbitrators shall have the right
only to interpret and apply the provisions of this Agreement (including other
applicable agreements) and may not change any of such provisions. The
arbitrators shall permit reasonable pre-hearing discovery of facts, to the
extent necessary to establish a claim or a defense to a claim, subject to
supervision by the arbitrators.
The determination of the arbitrator shall be conclusive and binding upon
the parties and judgment may be entered on the arbitrators' award by any court
of competent jurisdiction. The Company shall be entitled to seek an injunction
or restraining order in a court of competent jurisdiction to enforce the
provisions of Article 6.
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7.4 NOTICES. All notices, requests and demands given to or made pursuant
hereto shall, except as otherwise specified herein, be in writing and be
personally delivered or mailed postage prepaid, registered or certified U. S.
mail, to any party as its address set forth on the last page of this Agreement.
Either party may, by notice hereunder, designate a changed address. Any notice
hereunder shall be deemed effectively given and received: (a) if personally
delivered, upon delivery; or (b) if mailed, on the registered date or the date
stamped on the certified mail receipt.
7.5 CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement. When used herein, the terms "Article" and "Section" mean an Article
or Section of this Agreement, except as otherwise stated.
7.6 GOVERNING LAW. The validity, interpretation, construction,
performance, enforcement and remedies of or relating to this Agreement, and the
rights and obligations of the parties hereunder, shall be governed by the
substantive laws of the State of Massachusetts (without regard to the conflict
of laws rules or statutes of any jurisdiction), and any and every legal
proceeding arising out of or in connection with this Agreement shall be brought
in the appropriate courts of the State of Massachusetts, each of the parties
hereby consenting to the exclusive jurisdiction of said courts for this purpose.
7.7 CONSTRUCTION. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
7.8 WAIVER. No failure on the part of either party to exercise, and no
delay in exercising, any right or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy granted hereby or by any related document or by law
7.9 MODIFICATION. This Agreement may not be modified or amended except by
written instrument signed by the parties hereto.
7.10 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding between the parties hereto in reference to all the matters herein
agreed upon. This Agreement replaces in full all prior employment agreements or
understandings of the parties hereto, and any and all such prior agreements or
understandings are hereby rescinded by mutual agreement.
7.11 SURVIVAL. The parties expressly acknowledge and agree that the
provisions of this Agreement which by their express or implied terms extend
beyond the termination of this Agreement, including, without limitation Article
6 (relating to confidential information and non-competition), shall continue in
full force and effect notwithstanding Executive's termination of employment
hereunder or the termination of this Agreement, respectively.
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IN WITNESS WHEREOF, the parties hereto have caused this Executive Employment
Agreement to be duly executed and delivered on the day and year first above
written.
COMPANY: PurchaseSoft, Inc.
By: /s/ Xxxxxx X. XxXxxxxxx
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Xxxxxx X. XxXxxxxxx
President and CEO
EXECUTIVE: /s/ Xxxxxxx Xxxxxxxxx
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Xxxxxxx Xxxxxxxxx
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