Exhibit 10.18
ESPS, Inc.
Employment Agreement
To Xxxxx Xxxxxxxxxxxx:
This Agreement establishes the terms of your employment with ESPS, Inc., a
Delaware corporation (the "Company").
Employment and Duties You and the Company agree to your employment as Chief
Financial Officer on the terms contained herein.
Term of Employment Your employment under this Agreement begins as of your
execution of this Agreement (the "Effective Date").
Unless sooner terminated under this Agreement or
extended under the Expiration provisions of this
Agreement, your employment ends at 6:00 p.m. Eastern
Time on December 31, 2001.
The period running from the Effective Date to December
31, 2001 of this Agreement is the "Term", subject to
the extension option provided under the Expiration
provisions of this Agreement.
Termination or expiration of this Agreement ends your
employment but does not end the Company's obligation,
if any, to make payments under the Payments on
Termination and Severance provisions or the Company's
obligation to comply with the Indemnification, Public
Statements, and Successors and Assigns provisions as
specified below.
Compensation
Salary The Company will pay you an annual salary (the
"Salary") from the Effective Date at the rate of not
less than $175,000 in accordance with its generally
applicable payroll practices.
Bonus You will be eligible for an annual bonus equal to up to
$75,000. This bonus will be calculated according to
annual incentive plan formulas. It is the Company's
good faith intention to provide formulas for future
fiscal years within 90 days of the commencement of such
fiscal year.
Options In the event that either you or the Company elect to
extend this Agreement in accordance with the Expiration
provisions of this Agreement, on the date of such
election to extend this Agreement or on January 2,
2002, whichever is later, the Company will grant you
75,000 options under the Company's employee stock
option plan, with an exercise price equal to the
closing price of the Company's stock on the date of
grant. The Company agrees that such options will be
subject to the following vesting schedule:
28,875 of these options will vest at the time of
grant, and
4,125 of these options will vest every three
months from the date of the grant.
In the event of the occurrence of a Change of Control
as defined in the Severance section below, unvested
options will vest as follows:
1. If the Change of Control occurs prior to October
2, 2001, 75% of options granted to you will
immediately vest upon the occurrence of a Change
of Control.
2. If the Change of Control occurs on or after
October 2, 2001 but before April 2, 2002, 87.5% of
options granted
to you will immediately vest upon the occurrence
of a Change of Control.
3. If the Change of Control occurs on or after April
2, 2002, 100% of options granted to you will
immediately vest upon the occurrence of a Change
of Control.
Employee Benefits While the Company employs you under this Agreement, the
Company will provide you with the same benefits
currently provided to the Company's employees.
Car Allowance You will receive a car allowance equal to $500 per
month.
Place of Employment Your principal place of employment will be within 50
miles of Fort Washington, Pennsylvania.
Expenses The Company will reimburse you for reasonable and
necessary travel and other business-related expenses
you incur for the Company in performing your duties
under this Agreement.
Termination Subject to the provisions of this section, you and the
Company agree that it may terminate your employment, or you
may voluntarily resign, except that, if you voluntarily
resign, you must provide the Company with 90 days' prior
written notice (unless the Board or the Company's Chief
Executive Officer has previously waived such notice in
writing or authorized a shorter notice period). The Company
agrees that it will continue to pay you salary, bonus and
benefits in accordance with the Compensation section above
for the period from the receipt of your notice of
resignation through the last day of your employment, even if
this period extends beyond the Term. In addition, the
Company agrees to provide the additional payments and
benefits described in the Payments on Termination and
Severance sections below.
For Cause The Company may terminate your employment if you:
1. seize a corporate opportunity for yourself instead of
offering such opportunity to the Company if within the
scope of the Company's or its subsidiaries' business;
or
2. with respect to your employment, are convicted of or
plead guilty or no contest to a felony.
Your termination For Cause will be effective immediately
upon the Company's mailing or written transmission of
notice of such termination. Before terminating your
employment For Cause, the Company will specify in writing
to you the nature of the act that it deems to constitute
For Cause and, unless the Board or the Company's Chief
Executive Officer reasonably concludes the situation could
not be corrected, give you 30 days after you receive such
notice to correct the situation (and thus avoid
termination For Cause), unless the Company agrees to
extend the time for correction. The Company agrees to pay
you the benefits according to the provisions of the
Payments on Termination if your employment is terminated
For Cause.
Without Cause Subject to the provisions below under Payments on
Termination and Severance, the Company may terminate your
employment under this Agreement Without Cause before the
end of the Term.
Voluntary Subject to the provisions below under Payments on
Resignation Termination and Severance, you may resign as Chief
Financial Officer with 90 days' advance written notice.
Expiration of this Agreement shall constitute Voluntary
Resignation and shall entitle you to the Payments on
Termination and Severance benefits described below.
Payments on If you resign in accordance with the Voluntary Resignation
Termination provision above, or the Company terminates your employment
For Cause or Without Cause, the Company will pay you any
unpaid portion of your Salary pro-rated through the date
of actual termination, reimburse any substantiated but
unreimbursed business expenses, pay any accrued and unused
vacation time,
and provide such other benefits as applicable laws or the
terms of the benefits require.
Severance In addition to the foregoing payments, in the event your
employment is terminated Without Cause or if you resign in
accordance with the Voluntary Resignation provisions of
this Agreement, the Company will
pay you severance in a lump sum equal to the
number of days remaining in the Term of this
Agreement divided by 365 days, multiplied by
$175,000; and
pay you severance in a lump sum equal to $87,500;
and,
pay the after-tax premium cost for you to receive
any group health coverage the Company must offer
you under Section 4980B of the Internal Revenue
Code of 1986 ("COBRA Coverage") for the period of
such coverage (unless the coverage is then
provided under a self-insured plan)
In addition to foregoing payments, the Company agrees to
the following:
The Company will pay you additional severance
equal to $87,500 if your employment is terminated
within six months of a Change of Control as
defined below.
The Company will pay you additional severance
equal to $45,000 if your employment is terminated
Without Cause.
You are not required to mitigate amounts payable under the
Severance paragraph by seeking other employment or
otherwise,
nor must you return to the Company amounts earned under
subsequent employment.
Change of Control A Change of Control for the purposes of the
Severance provision of this Agreement means either
Board of Directors or shareholder approval of the
occurrence of any one or more of the following
events: a person, entity, or group (other than the
Company, any Company subsidiary, any Company
benefit plan, or any underwriter temporarily
holding securities for an offering of such
securities) acquires ownership of more than 50% of
the undiluted total voting power of the Company's
then-outstanding securities eligible to vote to
elect members of the Board ("COMPANY VOTING
SECURITIES"); consummation of a merger or
consolidation of the Company with or into any
other entity; or the stockholders of the Company
approve (i) a plan of complete liquidation or
dissolution of the Company or (ii) an agreement
for the Company's sale or disposition of all or
substantially all the Company's assets, AND such
liquidation, dissolution, sale, or disposition is
consummated.
Indemnification ESPS and its successors and assigns hereby covenant and
agree to indemnify, defend, protect and hold you harmless
from, against and in respect of all claims or damages
suffered, sustained, incurred, or paid by you, or awarded by
a court of competent jurisdiction, or paid in settlement, as
well as all reasonable expenses (including reasonable
attorney's, paralegal's and expert witness' fees) incurred
by you as a result of any claim against you by virtue of
your past, present or future employment as Chief Financial
Officer of the Company.
Public Statements The Company agrees that any oral or written communication
regarding your departure from the Company upon termination
or expiration of this Agreement shall include the following
statements:
Upon your identification of the apparent verbal assurances
in connection with the three transactions in 2000 as well
as apparent verbal and written assurances provided in
connection with three
transactions in 2001, all of which had not been previously
disclosed to the finance department, you immediately
advised the Company's Audit Committee and the Company's
outside auditors.
After conducting a preliminary internal review, you
recommended to the Audit Committee that the Company
conduct an investigation into the transactions identified.
You left the Company with a much stronger financial
structure that should ensure accurate, reliable financial
information going forward;
You met or exceeded all of the Company's initial
expectations; and
Your departure was strictly for personal reasons, and was
not in any way related to information discovered in
connection with the Company's historical financial errors.
In addition, neither you nor the Company shall make or publish,
or cause to be made or published, any disparaging remarks,
comments or statements about the other party.
Expiration Either you or the Company have the option of extending
this Agreement for an additional period of twenty-four
(24) months. Such notice will be effective immediately
upon the mailing or written transmission of notice of
extension by either you or the Company. Upon election of
this extension of this Agreement by either you or the
Company, the Term of this Agreement shall be redefined as
the period commencing on the Effective Date of this
Agreement and ending at 6:00 p.m. Eastern Time on December
31, 2003, and all other provisions of this Agreement shall
remain unchanged.
Severability If the final determination of an arbitrator or a court of
competent jurisdiction declares, after the expiration of
the time within which judicial review (if permitted) of
such determination may be perfected, that any term or
provision of this Agreement is invalid or unenforceable,
the remaining terms and provisions will be
unimpaired, and the invalid or unenforceable term or
provision will be deemed replaced by a term or provision
that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable
term or provision.
Amendment; Waiver Neither you nor the Company may modify, amend, or waive
the terms of this Agreement other than by a written
instrument signed by you and an executive officer of the
Company duly authorized by the Board. Either party's
waiver of the other party's compliance with any provision
of this Agreement is not a waiver of any other provision
of this Agreement or of any subsequent breach by such
party of a provision of this Agreement.
Withholding The Company will reduce its compensatory payments to you
for withholding and FICA taxes and any other withholdings
and contributions required by law.
Governing Law The laws of the State of Pennsylvania (other than its
conflict of laws provisions) govern this Agreement.
Notices Notices must be given in writing by personal delivery, by
certified mail, return receipt requested, by telecopy, or
by overnight delivery. You should send or deliver your
notices to the Company's corporate headquarters. The
Company will send or deliver any notice given to you at
your address as reflected on the Company's personnel
records. You and the Company may change the address for
notice by like notice to the others. You and the Company
agree that notice is received on the date it is personally
delivered, the date it is received by certified mail, the
date of guaranteed delivery by the overnight service, or
the date the fax machine confirms effective transmission.
Successors All covenants and agreements contained herein shall bind
And Assigns and inure to the benefit of the parties hereto and their
respective successors and assigns. None of the parties
hereto may assign any of its or his rights and obligations
under this Agreement without the prior written consent of
the other parties hereto.
Superseding Effect This Agreement represents the entire agreement between you
and the Company and supersedes any prior oral or written
employment, option, severance, or fringe benefit
agreements between you and the Company. This Agreement
supersedes all prior or contemporaneous negotiations,
commitments, agreements, and writings with respect to the
subject matter of this Agreement. All such other
negotiations, commitments, agreements, and writings will
have no further force or effect; and the parties to any
such other negotiation, commitment, agreement, or writing
will have no further rights or obligations thereunder.
If you accept the terms of this Agreement, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.
ESPS, Inc.
By: /s/ R. Xxxxxxx Xxxx
I accept and agree to the terms of employment set
forth in this Agreement:
/s/ Xxxxxxxxxxx Xxxxxxxxxxxx
Dated: June 22, 2001
