Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made on and as of February 12, 2001 (the "Agreement
Date") by and between XXXXXXX X. XXXXXX ("Employee") and CTI DATA SOLUTIONS
(USA) INC., a Delaware corporation ("Company").
BACKGROUND
A. Company desires to employ Employee, and Employee desires to be
employed by Company, upon the conditions and terms set forth in this Agreement.
NOW, THEREFORE, intending to be legally bound hereby, and in
consideration of the mutual covenants set forth this Agreement, Employee and
Company agree as follows:
1. Employment and Duties. Company shall employ Employee as Company's
Chief Operating Officer during the term of employment set forth in Section 2
hereof. Employee shall have such responsibilities and duties, consistent with
his position and expertise, as may from time to time be prescribed by Company's
President. Employee shall devote his full time, energy, skill and best efforts
to the business and affairs of Company, and shall not, during the term of this
Agreement, be engaged in any other business activity whether or not such
business activity is pursued for gain, profit or other pecuniary advantage;
provided, however, that nothing in this Agreement shall prevent Employee from
(i) engaging in charitable activities, or (ii) investing his assets in such form
or manner as (A) will not require any services on Employee's part in the
operations or the affairs of the company in which such investments are made
(other than services to Company and its affiliates) and (B) will not be an
investment in any company which competes, directly or indirectly, with Company
in any manner; provided, further, that the activities permitted in the foregoing
subsections (i) and (ii) shall not, either alone or together with other
activities permitted under those subsections, interfere in any material way with
Employee's responsibilities under this Agreement. Employee shall be employed by
Company, and shall spend his business time at Company's current offices at
Indianapolis, Indiana.
2. Term.
2.1 Term and Severance, The initial term of Employee's employment
under this Agreement shall be a period of three (3) years (the "Initial Term")
commencing on February 12, 2001, unless sooner terminated in accordance with
the other provisions of this Agreement. At the end of the Initial Term, this
Agreement shall automatically renew for successive periods of one year (each a
"Renewal Term" and together with the Initial Term, the "Term") unless either
party provides written notice of termination to the other party at least six (6)
months prior to the end of the then current Initial or Renewal Term. In such
event, this Agreement shall terminate at the end of the then current Initial or
Renewal Term, and following the end of such then current Initial or Renewal
Term, Employee shall be entitled to a severance payment equal to half his then
current annual Salary (as defined in Section 3.1), payable over a six-month
period after the termination date, in the same periodic installments that
payment of Salary are being made at the time.
2.2 Early Termination and Severance. In the event of a Change of
Control (as defined below) at anytime during the Term, Employee shall be
entitled to terminate this Agreement by providing 60 days written notice of
termination to Company. Such notice shall be provided no more than 60 days after
the date of the Change of Control. In the event of a termination pursuant to
this Section 2.2, Employee shall be entitled to a severance payment equal to his
then current annual Salary (as defined in Section 3.1), payable over a 12 month
period after the termination date, in the same periodic installments that
payments of Salary are being made at the time. For purposes of this Section 2.2,
the term "Change in Control" shall mean a change in control of a nature that
would be required to be reported in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), whether or not Company is then subject to such reporting
requirement; provided that, without limitation, such a Change in Control shall
be deemed to have occurred if (1) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of Company representing 50% or more of the combined voting power of
Company's then outstanding securities; (2) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of
such period constitute the Board of Directors and any new director, whose
election by the Board of Directors or nomination for election by Company's
stockholders was approved by a vote of at least a majority of the directors then
still in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof, or (3) the business of Company for
which Employee's services are principally performed is disposed of by the
Company pursuant to a partial or complete liquidation of Company, a sale of
assets (including stock of a subsidiary) of Company, or otherwise. Upon
termination under this Section 2.2, Employee shall continue to be bound by the
restrictions set forth in Section 5.
3. Compensation.
3.1 Salary. Company shall pay to Employee as compensation for all
services rendered hereunder a base salary of not less than $175,000 per year
("Salary"), payable in accordance with Company's normal payroll practices for
employees. Company shall deduct or cause to be deducted from the Salary all
taxes and amounts required by law to be withheld. The Salary shall be reviewed
by Company on an annual basis.
3.2 Benefits. During the Term, subject to the other provisions
of this Agreement, Employee shall be entitled to participate and shall be
included in any savings, 401(K), pension, xxxxx-sharing, group medical, group
disability or similar plan adopted by Company, now existing or established
hereafter, to the extent he is eligible under the general provisions thereof.
3.3 Cash Bonus. In addition to his Salary, Employee may also receive
cash bonuses on such terms, at such times and in such amounts as Company's
President or Board of Directors may determine in his or its sole discretion
("Cash Bonus").
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3.4 Fringe Benefits.
3.4.1 Vacation. Employee shall be entitled to twenty (20) days of
paid vacation during each year, with up to five days of unused vacation time
each year to accrue and be carried over to the next year.
3.4.2 Reimbursement of Expenses. Employee is authorized to incur
ordinary, necessary and reasonable expenses in the course of Company's business,
in accordance with Company's standard expense and expense reimbursement
procedures applicable to executive employees of Company ("Business Expenses").
Company shall reimburse Employee for Business Expenses upon presentation by the
Employee of an itemized account of such Business Expenses in a manner reasonably
prescribed by Company, unless Business Expenses have been paid directly by
Company.
3.4.3 Options. Employee shall be entitled to participate in any
employee stock option plan adopted by Company for the benefit of employees of
Company and its subsidiaries.
3.4.4 Automobile. Company shall provide Employee with an automobile
allowance of $500.00 per month. Employee shall maintain liability, collision and
comprehensive insurance covering any such automobile, in such amounts and on
such terms as are required by applicable law and shall provide Company with
proof of such coverage as and when requested.
3.5 Entire Compensation. The compensation provided for in this
Section shall be the full consideration for the services to be rendered by
Employee to Company hereunder.
4. Termination.
4.1 Notice of Termination. Except as otherwise provided in this
Agreement, any termination of Employee's employment under this Agreement shall
be communicated by written Notice of Termination to Employee. As used in this
Agreement, "Notice of Termination" means a notice specifying the termination
provision in this Agreement relied upon and setting forth the circumstances
providing the basis for termination of Employee's employment under the provision
specified. As used in this Agreement, "Date of Termination" shall mean the date
specified in the Notice of Termination or, where notice is not required, the
date employment actually terminates.
4.2 Grounds for Termination.
4.2.1 Termination upon Death. Employee's employment with Company and
all of Employee's rights to compensation and benefits hereunder shall
automatically terminate upon his death, except that Employee's heirs, personal
representatives or estate shall be entitled to any unpaid portion of his Salary,
his earned but unpaid bonus, if any, and accrued benefits up to the
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Date of Termination and shall also be entitled to reimbursement for any Business
Expenses properly incurred by Employee.
4.2.2 Termination upon Disability. If Employee becomes disabled,
Employee shall continue to receive all of his compensation and benefits in
accordance with Section 3 for a period of six months following the Onset of
Disability (as defined in this Section 4.2.2). Any amounts due to Employee under
this Section 4.2.2 shall be reduced, dollar-for-dollar, by any amounts received
by Employee under any Company disability insurance policy or plan ("Disability
Payments") provided to Employee by Company. "Onset of Disability" means the
first day on which Employee shall be unable to attend to his duties on a full
time basis by reason of physical or mental incapacity, sickness or infirmity.
Company will notify Employee promptly upon having made a determination of the
Onset of Disability. If Employee's disability continues for more than six months
after the Onset of Disability or for periods aggregating more than six months
during any twelve (12) month period, then, Company shall have the right to
terminate Employee's employment immediately upon notice, and all of his rights
to compensation and benefits hereunder shall simultaneously terminate, except
that Employee shall be entitled to any unpaid portion of his Salary and accrued
benefits up to the Date of Termination and to any benefits which are to be
continued or paid after the Date of Termination in accordance with the terms of
the corresponding benefit plans, if any. A determination of Employee's
disability shall be subject to the certification of a qualified physician agreed
to by Company and Employee or, in the event of Employee's incapacity to
designate a physician, Employee's legal representative. In the absence of
agreement between Company and Employee, each party shall nominate a qualified
physician and the two physicians shall select a third physician, who shall make
the determination as to disability.
4.2.3 Termination for Cause. At anytime during the Term, Company may
terminate Employee's employment hereunder for Cause (as defined below),
effective immediately upon notice to Employee.
For purposes of this Agreement, Cause shall mean: (1) Employee breaches,
neglects or fails to diligently perform any or all of his duties under this
Agreement (other than such failure resulting from Employee's incapacity due to
physical or mental illness within the meaning of Section 4.2.2), (2) Employee
commits an act of dishonesty or breach of trust, or acts in a manner which is
inimical or injurious to the business or interests of Company, either during the
Term or in connection with the Transaction, (3) Employee violates or breaches
any of the provisions of this Agreement, and, shall have either failed to remedy
such breach within 30 days after his receipt of written notice from Company
identifying the breach in reasonable detail and demanding that he remedy such
breach, or, if incapable of full cure within such 30 day period, shall have
failed to take all reasonable steps to that end during such 30-day period and
thereafter fails to fully cure within an additional period of 15 days, (4)
Employee's intentional act or omission to act results in or is intended to
result directly in gain to or personal enrichment of Employee and injury to
Company or, (5) Employee is indicted for or convicted of a felony or any crime
involving larceny, embezzlement or moral turpitude (which, in the case of moral
turpitude, materially adversely affects Company in any financial manner).
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On termination of this Agreement pursuant to this Section 4.2.3, all
rights to compensation and benefits of Employee shall cease as of the Date of
Termination, except Employee shall be entitled to any unpaid portion of his
Salary and benefits earned to the Date of Termination.
4.3 Procedure Upon Termination: On termination of employment
regardless of the reason, Employee shall promptly return to Company all
information regarding Company in whatever manner or media such information is
stored or maintained, and all documents (including copies) and other property of
Company, including without limitation, customer lists, manuals, letters,
materials, reports, and records in his possession or control no matter from whom
or in what manner acquired.
5. Employee's Covenants.
5.1 Discoveries. Employee shall communicate to Company and preserve
as confidential information of Company each discovery, idea, design, invention
and improvement relating in any manner to Company's business, whether or not
patentable and whether or not reduced to practice, which is conceived, developed
or made by Employee, whether alone, or jointly with others, at any time during
the Term hereof (such discoveries, ideas, designs, inventions and improvements
are referred to as "Employee's Discoveries"). All of Employee's Discoveries
shall be Company's exclusive property, and all of Employee's right, title and
interest therein are hereby irrevocably assigned to Company. Employee shall not,
except with Company's express prior written consent, or except in the proper
course of his employment with Company, use any of Employee's Discoveries for his
own benefit or the benefit of any Person (as defined herein), or disclose any of
Employee's Discoveries to any outside Person through publication or in any other
manner.
For purposes of this Agreement the term "Person" means a natural
person, corporation, partnership, trust, estate, joint venture, sole
proprietorship, government (and any branch or subdivision thereof), governmental
agency, association, cooperative or other entity.
5.2 Nondisclosure. At all times during and after the Term, Employee
shall keep confidential and shall not, except with Company's express prior
written consent, or except in the proper course of his employment with Company,
directly or indirectly, communicate, disclose, divulge, publish, or otherwise
express, to any Person, or use for his own benefit or the benefit of any Person,
any trade secrets, confidential or proprietary knowledge or information, no
matter when or how acquired, concerning the conduct and details of Company's
business, including without limitation names of customers and suppliers,
marketing methods, trade secrets, policies, prospects and financial
condition. For purposes of this Section 5.2, confidential information shall not
include any information which is now known by or readily available to the
general public or which becomes known by or readily available to the general
public other than as a result of any improper act or omission of Employee.
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5.3 Non-Solicitation and Noncompetition.
5.3.1 Non-Solicitation. During the Term hereof and for a period of
one (1) year thereafter, Employee shall not except with Company's express
prior written consent, directly or indirectly, in any capacity, for the benefit
of any Person, communicate with or solicit or employ any Person who is or during
such period becomes a customer, supplier, employee, salesman, agent or
representative of Company, in any manner which interferes or might interfere
with such Person's relationship with Company, or in an effort to obtain such
Person as a customer, supplier, employee, salesman, agent, or representative of
any business in competition with Company.
5.3.2 Noncompetition. During the Term hereof and for a period of six
(6) months thereafter, Employee shall not, except with Company's express prior
written consent, directly, or indirectly, in any capacity, for the benefit of
any person, establish, engage, own, manage, operate, join or control, or
participate in the establishment, ownership, management, operation or control
of, or be a director, officer, employee, salesman, agent or representative of,
or be a consultant to, any Person in any business in competition with Company,
at any location in North America or the United Kingdom or any other location
where Company now conducts or during the Term begins conducting any business, or
act or conduct himself in any manner which he would have reason to believe
harmful or contrary to the best interests of Company.
5.4 Enforcement. Employee acknowledges that any breach by him of any
of the covenants and agreements of this Section 5 ("Covenants") will result in
irreparable injury to Company for which money damages could not adequately
compensate Company, and therefore, in the event of any such breach, Company
shall be entitled, in addition to all other rights and remedies which Company
may have at law or in equity, to have an injunction issued by any competent
court enjoining and restraining Employee and/or all other Persons involved
therein from continuing such breach. The existence of any claim or cause of
action which Employee or any such other Person may have against Company shall
not constitute a bar to the enforcement of any of the Covenants. If Company is
obliged to resort to litigation to enforce any of the Covenants which has a
fixed term, then such term shall be extended for a period of time equal to the
period during which a material breach of such Covenant was occurring, beginning
on the date of a final court order (without further right of appeal) holding
that such a material breach occurred or, if later, the last day of the original
fixed term of such Covenant.
5.5 Consideration. Employee expressly acknowledges that the
Covenants are a material part of the consideration bargained for by Company and,
without the agreement of Employee to be bound by the Covenants, Company would
not have agreed to enter into this Agreement.
5.6 Scope. If any portion of any Covenant or its application is
construed to be invalid, illegal or unenforceable, then the other portions and
their application shall not be affected thereby and shall be enforceable without
regard thereto. If any of the Covenants is determined to be unenforceable
because of its scope, duration, geographical area or similar factor, then the
court making such determination shall have the power to reduce or limit such
scope, duration, area or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.
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6. Additional Terms and Provisions.
6.1 Notices. All notices, requests, demands, consents, waivers, and
other communications required or permitted under this Agreement must be in
writing and shall be deemed to have been given (i) upon delivery to the
appropriate addresses stated below, if delivered personally, or (ii) three (3)
days after the date mailed to the appropriate addresses stated below, if mailed
by first class certified mail, registered mail, or express mail, in each case
with postage prepaid and return receipt requested, or (iii) one (1) day after
the date sent to the appropriate addresses stated below, if sent by a nationally
recognized overnight delivery or courier service, with delivery charges prepaid
and proof of delivery or receipt requested, or (iv) on the date sent to the
appropriate addresses or fax numbers stated below, if sent by prepaid telegram,
e-mail, or fax, provided that a copy is sent within twenty-four (24) hours
thereafter by one of the other methods of giving notices permitted under this
Section. The addresses, e-mail addresses, and fax numbers of the parties for
purposes of this Section are set forth below. Any party may change its
addresses, e-mail addresses, or fax numbers for purposes of this Section by
giving notice of such change to all other parties in the manner permitted under
this Section.
If to Company:
CTI Group (Holdings) Inc.
000 X. Xxxxxxx Xx.
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
6.2 Entire Understanding. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous, written, oral, expressed or implied,
communications, agreements and understandings with respect to the subject matter
hereof.
6.3 Modification. This Agreement shall not be amended, modified,
supplemented or terminated except in writing signed by both parties.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the agreement Date.
CTI DATA SOLUTIONS (USA) INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx
President
Witness:
/s/ Xxxx Xxx Xxxxx /s/ Xxxxxxx X. Xxxxxx
-------------------------------- --------------------------------
Xxxxxxx X. Xxxxxx
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