Exhibit 10.31
EXECUTION COPY
EMPLOYMENT AGREEMENT dated as of March 23, 2000, between
OPUS360 CORPORATION, a Delaware corporation (the "COMPANY"), and DR. RAM
XXXXXXXXXX (the "EMPLOYEE").
WHEREAS, the Company desires to employ the Employee as the
Executive Vice President-Engineering of the Company; and
WHEREAS, the Employee desires to accept such employment by the
Company, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Employee hereby agree as
follows:
SECTION 1. EMPLOYMENT.
The Company hereby employs the Employee, and the Employee
hereby accepts employment by the Company, upon the terms and subject to the
conditions hereinafter set forth.
SECTION 2. TERM OF EMPLOYMENT.
The Employee's employment hereunder shall be for the period
commencing on March 24, 2000 (the "START DATE") and ending on the day
immediately prior to the third anniversary of the Start Date (the "BASE TERM");
PROVIDED, HOWEVER, unless earlier terminated pursuant to the provisions of
Sections 6, 7, 8 or 9 hereof, the Base Term shall be automatically renewed and
extended for successive one-year terms without further act of the parties (each,
a "RENEWAL TERM" and together with the Base Term, collectively, the "EMPLOYMENT
PERIOD"), unless either the Company or the Employee gives the other party hereto
at least 45 days prior written notice before the end of the Employment Period of
such party's intent not to renew this Agreement (each, a "RIGHT NOT TO EXTEND").
SECTION 3. DUTIES.
The Employee shall be employed as the Executive Vice
President-Engineering of the Company or in such other position as the Company
and the
Employee shall agree in writing. The Employee shall report to the President of
the Company. The Employee shall perform such duties and services as are
appropriate and commensurate with the Employee's position as Executive Vice
President - Engineering of the Company and as are otherwise consistent in
stature and prestige with the position of Executive Vice President - Engineering
of a corporation with similar operations as the Company, and shall perform such
additional duties and services which are similarly consistent with such position
as may reasonably be assigned to him from time to time by the President. The
Employee shall be based in the New York City metropolitan area.
SECTION 4. TIME TO BE DEVOTED TO EMPLOYMENT.
(a) Except for three weeks vacation during each 12-month
period worked (in addition to public holidays), absences due to temporary
illness and time spent as a director in respect of a directorship held by the
Employee on or prior to the Start Date, the Employee shall devote substantially
all of his business time, attention and energies to the business and affairs of
the Company during the Employment Period.
(b) During the Employment Period, the Employee shall not
engage in any other business activity which conflicts with the duties of the
Employee hereunder, whether or not such activity is pursued for gain, profit or
other pecuniary advantage; PROVIDED, HOWEVER, to the extent not in conflict with
this Section 4, the Employee shall not be prohibited from (i) serving as an
officer, director, trustee or otherwise participating in purely educational,
welfare, social, charitable, religious and civic organizations, or (ii) managing
personal and family investments, in each case to the extent such activities (A)
do not interfere or conflict in any material respect with the performance of his
duties and responsibilities hereunder and (B) are conducted in accordance with
the limitations of Section 11. Except with the prior written approval of the
Board (excluding the Employee if he should be a member of the Board at the time
of such determination), which the Board of Directors of the Company (the
"BOARD") may grant or withhold in its sole and absolute discretion, the
Employee, during the Employment Period, will not serve on the board of directors
or similar body of any business entity other than the Company or any subsidiary
thereof (other than with respect to any directorship held by the Employee on or
prior to the Start Date, which directorships, if any, have been disclosed in
writing by the Employee to the Company).
SECTION 5. COMPENSATION; REIMBURSEMENT.
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(a) During the Employment Period, the Company (or at the
Company's option, any subsidiary or affiliate thereof) shall pay to the Employee
an annual salary (the "BASE SALARY") of not less than $250,000, payable
semi-monthly. Such Base Salary will be reviewed at least annually and may be
increased by the Board or the Board's designee (excluding the Employee if he
should be a member of the Board at the time of such determination) in its sole
discretion. Effective as of any such increase, the Base Salary as so increased
shall be considered the new Base Salary for all purposes of this Agreement and
may not thereafter be reduced.
(b) The Employee shall be eligible to receive an annual bonus
of no less than one hundred thousand dollars ($100,000) during each calendar
year of the Employment Period (pro-rated for partial calendar years of
employment by the Company with such pro ration for the year 2000 to be made as
if the calendar year 2000 began on March 1, 2000) based upon his achievement of
performance criteria mutually agreed upon by the Employee and the Company. The
performance criteria for the first year of the Employment Period shall be
satisfied in the event that the Company achieves gross revenue of $15 million
for calendar year 2000. With respect to subsequent calendar years, it is
expected that the performance criteria will be based on increasing gross revenue
targets to be agreed upon within thirty (30) days after each anniversary of this
Employment Agreement and that such targets shall be consistent with and no
higher than the performance targets established for the Chief Executive Officer
of the Company for such calendar year.
(c) During the Employment Period and to the extent available
to senior executive officers of the Company, the Employee shall be entitled to
participate in all of the Company's benefit plans, pension and retirement plans,
life insurance, hospitalization and surgical and major medical coverages, sick
leave, vacation and holiday policies, long-term disability coverage and such
other fringe benefits enjoyed by other senior executive officers of the Company.
Notwithstanding anything to the contrary contained in this Section 5(c), at no
time during the Employment Period shall the long-term disability coverage and
life insurance benefits that the Company provides to the Employee be reduced to
a level below that being provided to the Employee as of the Start Date.
(d) The Company shall reimburse the Employee, in accordance
with the practice from time to time for other senior executive officers of the
Company, for all reasonable and necessary traveling expenses, disbursements and
other reasonable and necessary incidental expenses incurred by him for or on
behalf of the
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Company in the performance of his duties hereunder upon presentation by the
Employee to the Company of appropriate vouchers.
(e) The Company shall grant the Employee, on the date of
grant, (i) an option (the "ISO") to purchase up to 30,000 shares of common stock
of the Company (the "Common Stock") pursuant to the terms and conditions of a
written option agreement between the Company and the Employee, the form of which
is attached hereto as EXHIBIT A (the "ISO AGREEMENT"), which shall contain all
of the terms and conditions of the ISO, and (ii) an option (the "NSO" and
together with the ISO, "OPTIONS") to purchase up to 470,000 shares of Common
Stock pursuant to the terms and conditions of a written option agreement between
the Company and the Employee, the form of which is attached hereto as EXHIBIT B
(the "NSO AGREEMENT" and together with the ISO Agreement, the "STOCK OPTION
AGREEMENTS"), which shall contain all of the terms and conditions of the NSO.
100,000 of Options shall vest on the date of grant and the remaining 400,000 of
Options shall vest over three years, 6/36 of such amount shall vest on the six
month anniversary of the date of grant and 1/36 of such amount shall vest each
month thereafter. The Company shall at least once each year commencing in 2001
consider the Employee for future annual or other grants of stock options and
other equity awards on at least the same basis as such options and equity awards
are granted to other senior executive officers. All references to share and
option numbers set forth herein assume and give effect to the 3-for-2 stock
split referred to in the Company's current Registration Statement on Form S-1,
consequently, actual option grants may reflect fewer shares if granted prior to
the consummation of the stock splits.
(f) The Employee authorizes the Company to deduct from any
amounts payable to him hereunder such sums as may be required to be deducted or
withheld under the provisions of any federal, state or local law or regulation
now in effect or hereafter put into effect during the term of this Agreement,
including, without limitation, social security and income withholding taxes.
SECTION 6. INVOLUNTARY TERMINATION.
(a) If the Employee is incapacitated or disabled by accident,
sickness or other cause so as to render him mentally or physically incapable of
performing the services required to be performed by him under this Agreement for
a period of 120 consecutive days or longer, or 150 days or longer during any 200
day period (such condition being herein referred to as a "DISABILITY"), prior to
the Employee resuming the performance of his duties as contemplated herein, the
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Company may terminate the employment of the Employee under this Agreement (an
"INVOLUNTARY TERMINATION"). Until the Company or the Employee shall have
terminated the Employee's employment hereunder, the Employee shall be entitled
to receive his compensation and other benefits as set forth in this Agreement
notwithstanding any such Disability.
(b) Any determination as to whether the Employee is subject to
a physical or mental incapacity shall first be made by the Board (excluding the
Employee if he should be a member of the Board at the time of such
determination) in its good faith judgment; PROVIDED, HOWEVER, if any such
determination is disputed by the Employee, the matter shall be referred to a
licensed physician practicing within New York, New York or a 50-mile radius
thereof and selected by the Board and the Employee, and the determination of
Disability made by such physician shall be final and binding on both the
Employee and the Company. The Employee represents and warrants to the Company
that, to the best of his knowledge, he does not have a Disability as of the date
hereof.
(c) If the Employee dies during the Employment Period, his
employment hereunder shall be deemed to cease as of the date of his death, and
the termination of his employment occasioned thereby shall be deemed an
Involuntary Termination.
SECTION 7. TERMINATION FOR CAUSE OR WITHOUT CAUSE.
(a) The Company may terminate the Employee's employment
hereunder at any time during the Employment Period for "Cause" (a "TERMINATION
FOR CAUSE"). Prior to, and in connection with, any Termination for Cause, (1)
the President of the Company or his designee shall give written notice to the
Employee of the specific circumstances which may constitute the basis for a
Termination for Cause, (2) the Employee shall be provided with ten (10) days to
cure the basis for a Termination with Cause (but only if such basis is capable
of cure), and (3) the Board shall have determined, in its sole discretion (so
long as not arbitrary or capricious), by a vote of not less three-fourths (3/4)
of the Board (excluding the Employee if he should be a member of the Board at
the time of such determination) at a meeting called and held for such purpose,
after reasonable notice to the Employee and an opportunity for the Employee,
together with his counsel, to be heard before the Board, that the Company has
Cause to terminate the Employee's employment. For purposes of this Agreement,
"CAUSE" shall be limited to:
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(i) the gross negligence or willful refusal or
failure by the Employee to attempt to substantially perform the duties
described in Section 3 (other than any failure resulting from an
illness or other similar incapacity or disability);
(ii) the Employee's conviction of, or plea of nolo
contendere to, misappropriation of funds, properties or assets of the
Company, or any other act of fraud, theft or financial dishonesty
involving the Company or its subsidiaries, or slander or libel
concerning the Company or a material tort relating to his office or
employment with the Company that has a material adverse effect on the
Company;
(iii) the material breach by the Employee of the
provisions of this Agreement including, without limitation, the
covenants set forth in Sections 11 and 12 hereof;
(iv) the Employee's conviction of, or plea of nolo
contendere to, a crime constituting a felony (other than a traffic
violation) or any criminal act involving moral turpitude; or
(v) the Employee's inability to perform his duties as
a result of alcohol or drug abuse, chronic alcoholism or drug
addiction.
(b) The Company may terminate the Employee's employment
hereunder at any time during the Employment Period without "Cause" by providing
written notice of such termination to the Employee (a "TERMINATION WITHOUT
CAUSE") at least five days prior to such Termination Without Cause or pay in
lieu of such notice.
SECTION 8. TERMINATION FOR POOR OR INCOMPETENT PERFORMANCE.
The Company may not terminate the Employee's employment
hereunder at any time during the first year of the Base Term for the Employee's
poor or incompetent performance of his duties or responsibilities hereunder.
Thereafter, the Company may terminate the Employee's employment hereunder at any
time for poor or incompetent performance ("TERMINATION FOR POOR OR INCOMPETENT
PERFORMANCE"); provided that the Board shall have determined, in its sole
discretion (so long as not arbitrary or capricious), by a vote of not less
three-fourths (3/4) of the
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Board (excluding the Employee if he should be a member of the Board at the time
of such determination) at a meeting called and held for such purpose, after
reasonable notice to the Employee and an opportunity for the Employee, together
with his counsel, to be heard before the Board, that the Employee's performance
hereunder has been poor or incompetent.
SECTION 9. TERMINATION FOR GOOD REASON OR BY RESIGNATION.
(a) The Employee may terminate his employment hereunder
at any time during the Employment Period for "Good Reason."
(b) For purposes of this Agreement:
(i) "GOOD REASON" means (A) a reduction in the title
or any material reduction in the authority, duties, responsibilities,
compensation, benefits or reporting line of the Employee from those on
the Start Date, where such reduction or material reduction is not cured
within 10 days after written notice thereof by the Employee to the
Company, (B) a Change of Control, if (1) within one (1) year of such
Change of Control the employment of the Employee is terminated by the
Company for any reason, or (2) during the 30-day period commencing 6
months after a Change of Control the Employee terminates his employment
for any or no reason, (C) a material breach by the Company of this
Agreement, which breach is incurable or otherwise not cured within 10
days after written notice thereof by the Employee to the Company, (D)
the failure of the Company to grant the Employee the Options pursuant
to the Stock Option Agreements provided for in Section 5(e) of this
Agreement, or (E) the failure of the Company to obtain a satisfactory
agreement from 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 assume and agree to perform
this Agreement to the same extent that the Company is required to
perform it, in each case without the prior written consent or waiver of
the Employee.
(ii) the Employee's continued employment shall not
constitute consent to or a waiver of rights with respect to, any
circumstances constituting Good Reason hereunder.
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(iii) "CHANGE IN CONTROL" of the Company shall be
deemed to have occurred if:
(A) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of
Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of
Common Stock immediately prior to the merger own a majority of the
common stock of the surviving corporation immediately after the merger,
or (y) 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;
(B) the stockholders of the Company approve
any plan or proposal for the liquidation or dissolution of the Company;
or
(C) 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")), other than Xxx X. Xxxxxxxx, shall become
the beneficial owner (within the meaning of Rule 13d-3 under the
Exchange Act) of 50% or more of the outstanding Common Stock.
(c) The Employee may terminate his employment hereunder at any
time during the Employment Period without "Good Reason" by providing written
notice of such termination to the Company (a "RESIGNATION") at least five days
prior to such Resignation.
SECTION 10. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE OR BY RESIGNATION. Upon the
termination of the Employee's employment hereunder pursuant to a Termination For
Cause or a Resignation, neither the Employee nor his beneficiary or estate shall
have any further rights or claims against the Company under this Agreement
except to receive:
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(i) any unpaid portion of the Base Salary provided
for in Section 5(a), computed on a pro rata basis to the date of
termination;
(ii) cash compensation equal to the product of (A)
the number of days of accrued vacation, if any, accumulated by the
Employee to the date of termination divided by 365 multiplied by (B)
the Base Salary;
(iii) reimbursement for any expenses for which the
Employee shall not have theretofore been reimbursed as provided in
Section 5(d);
(iv) any bonus from the prior calendar year which has
been earned but not yet paid; and
(v) all vested benefits under any compensation or
employee benefit plan maintained by the Company, whether funded or
unfunded, accrued through the date of termination.
(b) INVOLUNTARY TERMINATION. Upon the termination of the
Employee's employment hereunder pursuant to an Involuntary Termination, neither
the Employee nor his beneficiary or estate shall have any further rights or
claims against the Company under this Agreement except the right:
(i) to receive the payments and benefits, if any,
equal to those provided for in Section 10(a) hereof;
(ii) to receive monthly cash severance payments in an
amount equal to one-twelfth of the cash compensation (including Base
Salary and bonus) received by the Employee during the 12-month period
immediately prior to the date of termination under this subsection;
PROVIDED, HOWEVER, that if such termination occurs prior to the date of
payment of any bonus for calendar year 2000, the bonus amount for such
calculation shall be deemed to be $87,500 (such monthly payments,
"Monthly Severance"), for a period of twelve (12) months;
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(iii) to be credited with one additional year of
employment for purposes of calculating the Employee's vested interest
in the Options and any other stock options and equity awards granted to
the Employee during the Employment Period, which Options and other
options shall vest according to their original schedule as if the
Employee's employment hereunder had continued for twelve (12) months
from the date of Involuntary Termination, and all such Options and
other options shall be exercisable by the Employee for their full
remaining term; and
(iv) in the case of termination due to a Disability,
to receive all benefits pursuant to Section 5(c) above for a period of
twelve (12) months following the date of such termination.
(c) TERMINATION WITHOUT CAUSE OR WITH GOOD REASON. Upon the
termination of the Employee's employment hereunder pursuant to a Termination
Without Cause or With Good Reason, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
(i) to receive the payments and benefits, if any,
equal to those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period
lasting the longer of (A) twelve (12) months, or (B) the remainder of
the Base Term; PROVIDED, HOWEVER, that the Employee will not be
entitled to any such payments in the event that the Employee becomes
employed by another entity during the period that such payments would
otherwise be due;
(iii) to become fully vested in all of the Options
and any other stock options and equity awards granted to the Employee
during the Employment Period, which Options and other options shall
vest according to their original schedule as if the Employee's
employment hereunder had continued until all such Options and other
options had fully vested, and all such Options and other options shall
be exercisable by the Employee for their full remaining term; and
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(iv) to receive all benefits pursuant to Section 5(c)
above for a period lasting the longer of (A) twelve (12) months from
the date of Termination Without Cause or With Good Reason, or (B) the
remainder of the Base Term; PROVIDED, HOWEVER, that the Employee will
not be entitled to any such benefits in the event that the Employee
becomes employed by another entity during the period that such benefits
would otherwise be due.
(d) TERMINATION FOR POOR OR INCOMPETENT PERFORMANCE. Upon
termination of the Employee's employment hereunder pursuant to a Termination for
Incompetence or Non-Performance, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
(i) to receive payments and benefits, if any, equal
to those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period of
twelve (12) months; PROVIDED, HOWEVER, that the Employee will not be
entitled to any such payments in the event that the Employee becomes
employed by another entity during the period that such payments would
otherwise be due; and
(iii) to be credited with twelve (12) additional
months of employment for purposes of calculating the Employee's vested
interests in the Options and any other stock options and equity awards
granted to the Employee during the Employment Period, which options
shall vest according to their original schedule as if the Employee's
employment hereunder had continued for twelve (12) months from the date
of the Termination for Poor or Incompetent Performance, and all such
Options and other options shall be exercisable by the Employee for
their full remaining term.
(iv) to receive all benefits pursuant to Section 5(c)
above for a period of twelve (12) months following the date of such
Termination for Poor or Incompetent Performance; PROVIDED, HOWEVER,
that the Employee will not be entitled to any such benefits in the
event that the Employee becomes employed by another entity during the
period that such benefits would otherwise be due.
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(e) TERMINATION BASED ON THE EMPLOYEE'S RIGHT NOT TO EXTEND.
Upon the termination of the Employee's employment hereunder pursuant to the
Employee's Right Not To Extend, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right to receive the payments and benefits, if any, equal
to those provided for in Section 10(a) hereof.
(f) TERMINATION BASED ON THE COMPANY'S RIGHT NOT TO EXTEND.
Upon the termination of the Employee's employment hereunder pursuant to the
Company's Right Not To Extend, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
(i) to receive the payments and benefits, if any,
equal to those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period of
twelve (12) months; PROVIDED, HOWEVER, that the Employee will not be
entitled to any such payments in the event that the Employee becomes
employed by another entity during the period that such payments would
otherwise be due;
(iii) to become fully vested in all of the Options
and any other stock options and equity awards granted to the Employee
during the Employment Period, which Options and other options shall
vest according to their original schedule for twelve (12) months from
the date of Termination Based on the Company's Right Not To Extend, and
all such Options and other options shall be exercisable by the Employee
for their full remaining term; and
(iv) to receive all benefits pursuant to Section 5(c)
above for a period of twelve (12) months following the date of the
termination of the Employee's employment hereunder pursuant to the
Company's Right Not To Extend; PROVIDED, HOWEVER, that the Employee
will not be entitled to any such benefits in the event that the
Employee becomes employed by another entity during the period that such
benefits would otherwise be due.
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(g) If the Employee's employment with the Company hereunder is
terminated pursuant to Sections 2, 6, 7, 8 or 9, the Employee shall not have the
obligation to mitigate his damages as a result of such termination.
(h) Any obligations of the Company to provide payments and
benefits to the Employee under this Section 10 are expressly conditioned on the
Employee's compliance with Sections 11 and 12 of this Employment Agreement.
(i) Except to the extent requested by the Board, upon the date
of termination, the Employee shall immediately resign all positions and
directorships with the Company and each subsidiary thereof.
SECTION 11. NON-COMPETITION; NON-SOLICITATION.
(a) In consideration of the compensation and other benefits to
be provided to the Employee hereunder, the Employee shall not, directly or
indirectly, for any reason whatsoever, during the Employment period and for a
period of one year following the Employee's Termination for any reason,
including without limitation Termination for Cause, Termination for Poor or
Incompetent Performance, Termination without Cause, Termination by Employee with
Good Reason, or Employee's Resignation:
(i) engage, become involved or acquire an interest in
any Competitive Business (as hereinafter defined), whether such
engagement, interest or involvement shall be as an employee, employer,
manager, material investor, owner, consultant, lender, partner or other
participant in any Competitive Business;
(ii) assist others in engaging in any Competitive
Business in the manner described in the foregoing clause (i);
(iii) solicit or induce, or attempt to solicit or
induce, employees of, consultants to, or independent contractors of,
the Company or its subsidiaries to terminate their employment,
engagement or affiliation with the Company or in any way interfere with
the relationship between the Company or any of its subsidiaries, on the
one hand, and any such employee of, consultant to, or independent
contractor of the Company or any of its subsidiaries, on the other
hand; or
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(iv) knowingly employ or retain any such employee of,
consultant to, or independent contractor of the Company or any of its
subsidiaries during his or her employment, engagement or affiliation
with the Company or any of its subsidiaries for a period of three
months after the termination of such employee's, consultant's or
independent contractor's employment, engagement or affiliation with the
Company or any of its subsidiaries unless such retainer is not
competitive, and does not interfere with, the simultaneous retention of
such consultant or independent contractor by the Company.
(v) induce customers or vendors of the Company; or
any independent knowledge workers or other information technology
professionals, or end user organizations that have a business
relationship with the Company, to alter or terminate their business
relationship with the Company or any of its subsidiaries; PROVIDED,
HOWEVER, that nothing contained in this Section 11 shall be deemed to
prohibit the Employee from acquiring, directly or indirectly, solely as
a passive investment, securities of any Competitive Business traded on
any national securities exchange if the Employee is not a controlling
person of, nor a member of a group which controls such person and does
not, directly or indirectly, own 5% or more of any class of securities
of such person. As used herein, the term "COMPETITIVE BUSINESS" shall
mean any business which competes with the Company in the business of
primarily providing labor resource management services or products
relating to information technology professionals by means of
business-to-business electronic commerce or any business or activity
that is substantially the same as any business or activity conducted by
the Company at any time during the Employee's employment with the
Company within the geographic area that the Company is engaged in such
business or activity as of the Start Date or upon such date that the
Employee ceases to receive salary or severance payments from the
Company (including, without limitation, any subsidiary thereof).
(b) Notwithstanding any other provision of this Agreement to
the contrary, any business activities engaged in by the Employee on behalf of,
or in connection with the Employee's employment by, or service as a director or
consultant to, any subsidiary or affiliate of the Company or in connection with
a directorship
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held by the Employee on or prior to the Start Date, shall not be deemed to
violate the provisions of this Agreement.
(c) The Employee is aware that the services performed by him
for the Company are of a special, unique and intellectual character and
understands that the foregoing restrictions may limit his ability to earn a
livelihood in a Competitive Business, but he nevertheless believes that he has
received and will receive sufficient consideration and other benefits in
connection with his employment to clearly justify such restrictions which, in
any event, the Employee does not believe would prevent him from earning a
living. Nothing herein contained shall prohibit the Employee from engaging in a
business that is not a Competitive Business.
SECTION 12. NON-DISCLOSURE OF INFORMATION.
The Employee understands that he will have access to
Confidential Information relating to the Company and agrees that he will not, at
any time during or after the Employment Period, disclose to any person, firm,
corporation or other entity, except as required by law, any Confidential
Information concerning the business, clients or affairs of the Company or any
subsidiary or affiliate thereof, or of any person which the Company or any of
its subsidiaries is under an obligation to keep secret or confidential, for any
reason or purpose whatsoever other than in furtherance of the Employee's good
faith performance of his duties as an employee of the Company, nor shall the
Employee make use of any of such Confidential Information for his own purpose or
for the benefit of any person, firm, corporation or other business entity except
the Company or any subsidiary or affiliate thereof. For purposes of this
Agreement, "CONFIDENTIAL INFORMATION" shall include, without limitation,
products or services, fees, costs, pricing schedules, designs, analyses,
drawings, photographs, reports, computer software and hardware (including
operating systems, applications and program listings), customers and clients,
customer and client lists, marketing plans and related information, sales plans
and related information, operating policies and manuals, business plans,
financial records or practice management methods, inventions, devices, new
developments, methods and processes, technology or trade secrets, know-how or
techniques, whether patentable or unpatentatable and whether or not reduced to
practice, and all similar and related information in whatever form.
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SECTION 13. COMPANY RIGHT TO INVENTIONS AND BUSINESS
OPPORTUNITIES.
(a) The Employee shall promptly disclose, grant and assign to
the Company for its sole use and benefit any and all (i) discoveries,
developments, designs, improvements, inventions, formulae, processes,
techniques, computer programs, strategies, know-how and data, whether or not
patentable or registerable under patent, copyright, trademark or similar
statutes, together with all patent applications, patents, copyrights, copyright
applications, trademarks, trademark applications and any reissues thereof that
may at any time be granted for or upon any such inventions (the "INVENTIONS") or
(ii) business opportunities relating to the actual or anticipated business of
the Company or any of its subsidiaries ("BUSINESS OPPORTUNITY"), presented to or
learned by the Employee during the period of the Employee's employment with the
Company prior to any termination of employment (whether or not during usual
working hours).
(b) The Employee shall promptly, without charge and at the
expense of the Company, at all times hereafter execute and deliver such
applications, assignments, descriptions and other instruments as may be
reasonably necessary or proper in the reasonable opinion of the Company to (i)
vest title to and enforce patents, copyrights, trademarks, improvements,
technical information and methods and other rights and protections relating to
the Inventions and (ii) to assign or otherwise establish such ownership of the
Company in all rights in or to such Business Opportunities, and to enable the
Company to obtain and maintain the entire right and title thereto in any and all
countries; and
(c) The Employee shall render to the Company at its expense
(including a reasonable payment for the time involved in case he is not then in
its employ) all such assistance as it may reasonably require at times and
locations agreed to by the Company and the Employer in the (i) prosecution of
applications for the Inventions, in the prosecution or defense or interferences
which may be declared involving the Inventions and in any litigation in which
the Company may be involved relating to the Inventions, each including, without
limitation, the execution of assignments, consents, powers of attorney,
applications and other instruments and the giving of testimony in support
thereof or (ii) confirmation and protection of such ownership of the Company in
all rights in or to any Business Opportunities, PROVIDED, HOWEVER, that such
assistance shall not interfere with the Employee's employment or business
activities.
16
(d) The Employee shall deliver to the Company at the
termination of the Employment Period, or upon the request of the Company, at any
time, all memoranda, notes, plans, records, reports, computer tapes and software
and other documents and data (and copies thereof) relating to the Confidential
Information, Inventions, Business Opportunities or the business of the Company
or any of its subsidiaries, which he may then possess or have under his control,
regardless of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
SECTION 14. ENFORCEMENT.
It is the desire and intent of the parties hereto that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such amendment to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made; PROVIDED, HOWEVER, that if any one or more of the
provisions contained in this Agreement shall be adjudicated to be invalid or
unenforceable because such provision is held to be excessively broad as to
duration, geographical scope, activity or subject, such provision shall be
deemed amended by limiting and reducing it so as to be valid and enforceable to
the maximum extent compatible with the applicable laws of such jurisdiction,
such amendment to apply only with respect to the operation of such provision in
the particular jurisdiction in which such adjudication is made.
SECTION 15. EXCISE TAXES.
To the extent that any of the payments and benefits provided
for in this Agreement or otherwise payable to the Employee constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and, but for this Section 15, would be subject to
the excise tax imposed by Section 4999 of the Code, then the Employee's benefits
under this Agreement shall be payable either (i) in full or (ii) to such lesser
amount as would result in no portion of severance payments being subject to
excise tax under Section 4999 of the Code, which ever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes and
excise tax imposed by Section
17
4999, results in the receipt by the Employee on an after tax basis of the
greatest amount of severance benefits provided pursuant to this Agreement,
notwithstanding that all or some portion of such severance benefits may be
taxable under Section 4999 of the Code. Unless the Company and the Employee
otherwise agree in writing, any determination required under this Section shall
be made in writing by an independent public accounting firm selected by the
Employee and reasonably acceptable to the Company other than that used by the
Company (the Accountants), whose determination shall be conclusive and binding
upon the Employee and the Company for all purposes. For purposes of making the
calculations required by this Section 15, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Section
280G and 4999 of the Code. The Company and the Employee shall furnish to the
Accountants such information as the Accountants may reasonably request in order
to make a determination under this Section 15 The Company shall bear all costs
the Accountants may reasonably incur in connection with any calculations
contemplated by this Section 15.
SECTION 16. REMEDIES; SURVIVAL.
(a) The Employee acknowledges and understands that the
provisions of this Agreement are of a special and unique nature, the loss of
which cannot be accurately compensated for in damages by an action at law, and
that the breach of the provisions of this Agreement would cause the Company
irreparable harm. In the event of a breach by the Employee of the provisions of
Section 11, 12, or 13 hereof, the Company shall be entitled to an injunction
restraining him from such breach; PROVIDED, HOWEVER, nothing herein contained
shall be construed as prohibiting the Company from pursuing any other remedies
available for any breach of this Agreement.
(b) Notwithstanding anything contained in this Agreement to
the contrary, the provisions of Sections 9 through 18, including this Section
16, shall survive the expiration or other termination of this Agreement until,
by their terms, such provisions are no longer operative.
(c) It is understood and agreed that the provisions of
Sections 11, 12 and 13 of this Agreement are separate and distinct from any
other agreement between the parties hereto. Accordingly, in the event of a
breach of such provisions, the breaching party shall only be held responsible
for damages arising under such
18
provisions and not for any damages which may be claimed to arise under or with
respect to any other agreement that is not separately breached.
SECTION 17. NOTICES.
All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given or made when (i) delivered
personally to the recipient, (ii) transmitted by facsimile or electronic mail
(with hard copy sent to the recipient by reputable overnight courier service
(charges prepaid) that same day and, in the latter case, with receipt
acknowledged by the recipient by return electronic mail) if faxed or e-mailed
before 5:00 p.m. (New York City time) on a Business Day, and otherwise on the
next Business Day (as hereinafter defined), (iii) two Business Days after being
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iv) five Business Days after being sent to the recipient by registered or
certified mail (postage prepaid and return receipt requested). The term
"BUSINESS DAY" shall mean any day, other than a Saturday, Sunday or other day on
which banking institutions in the State of New York are authorized or obligated
by law or executive order to close. Such notices, demands and other
communications shall be sent to the address for such recipient as set forth
below (or to such other address or to the attention of such other person as the
recipient party has specified by like notice):
(i) if to the Company, to:
Opus360 Corporation
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxx@xxxx000.xxx
with a copy (which shall not constitute notice) to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
19
Facsimile: (000) 000-0000
E-Mail: xxx@xxx.xxx
(ii) and, if to the Employee, to:
Dr. Ram Xxxxxxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
E-Mail: xxx@xxxxxxxxxx.xxx
with a copy to:
Xxxxx & Xxxxxxxx
Xxxxxxxxx Xxxxx, Xxxxx 0000
000 Xxxx Xxx Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxxxxxxx@xxxxx-xxxxxxxx.xxx
SECTION 18. GENERAL PROVISIONS.
(a) BINDING AGREEMENT. This Agreement shall inure to the
benefit of and be enforceable by the Employee's personal or legal
representatives, executors, administrators, successors, heirs, distributees and
devisees. If the Employee should die while any amount would still 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
the beneficiary designated by the Employee in a writing delivered to the
Company, or if there be no such designated beneficiary, to his estate.
(b) GOVERNING LAW AND CHOICE OF JURISDICTION AND VENUE. THE
PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND
FULLY PERFORMED WITHIN THE STATE OF NEW YORK BY RESIDENTS OF THE
20
STATE OF NEW YORK. WITH RESPECT TO ANY LAWSUIT OR PROCEEDING BROUGHT WITH
RESPECT TO THIS AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY (I) SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK OR FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK, (II) WAIVES ANY
OBJECTION IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING
BROUGHT IN ANY SUCH COURT, (III) WAIVES ANY CLAIM THAT SUCH PROCEEDING HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, AND (IV) FURTHER WAIVES THE RIGHT TO OBJECT,
WITH RESPECT TO SUCH PROCEEDINGS, THAT SUCH COURT DOES NOT HAVE JURISDICTION
OVER SUCH PARTY.
(c) WAIVER OF BREACH. The waiver by either party of a breach
of any provision of this Agreement by the other party must be in writing and
shall not operate or be construed as a waiver of any subsequent breach by such
other party.
(d) COMPLETE AGREEMENT; AMENDMENTS; PRIOR AGREEMENTS. This
Agreement amends and restates the Existing Employment Agreement in its entirety
and this Agreement, together with the Stock Option Agreements and the other
agreements referred to herein contain the entire agreement between the parties
with respect to the subject matter contained herein and supersede all prior
agreements or understandings written or oral between the parties with respect
thereto. The parties hereto hereby forever release any and all rights under the
Existing Employment Agreement. This Agreement may not be amended, supplemented,
canceled or discharged except by written instrument executed by both parties
hereto.
(e) COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
(f) BUSINESS DAYS. If any time period for giving notice or
taking action hereunder expires on a day which is not a Business Day, the time
period for giving notice or taking action shall be automatically extended to the
immediately following Business Day.
(g) HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
21
(h) SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
(i) ASSIGNMENT. With respect to the Employee, this Agreement
is personal in its nature and the Employee shall not assign or transfer this
Agreement or any rights or obligations hereunder. The Company may in its sole
discretion assign or otherwise transfer this Agreement and the provisions hereof
(including, without limitation, Sections 11, 12 and 13) shall inure to the
benefit of, and be binding upon, each successor of the Company, whether by
merger, consolidation, transfer of all or substantially all assets, or
otherwise.
(j) NOUNS AND PRONOUNS. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice-versa.
(k) CONSTRUCTION. Where specific language (such as the word
"INCLUDING") is used to clarify by example a general statement contained herein,
such specific language shall not be deemed to modify, limit or restrict in any
manner the construction of the general statement to which it relates. The
language used in this Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party hereto. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
(l) DELIVERY BY FACSIMILE. This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments or supplements hereto or thereto, to the extent signed and delivered
by means of a facsimile machine, shall be treated in all manner and respects as
an original agreement or instrument and shall be considered to have the same
binding legal effect as if
22
it were the original signed version thereof delivered in person. At the request
of any party hereto or to any such agreement or instrument, each other party
hereto or thereto shall reexecute original forms thereof and deliver them to all
other parties. No party hereto or to any such agreement or instrument shall
raise the use of a facsimile machine to deliver a signature or the fact that any
signature or agreement or instrument was transmitted or communicated through the
use of a facsimile machine as a defense to the formation or enforceability of a
contract and each such party forever waives any such defense.
(m) INDEMNIFICATION. The Company shall indemnify the Employee
to the fullest extent permitted by applicable law and its certificate of
incorporation and by-laws against all costs, charges and expenses incurred or
sustained by the Employee in connection with his employment with the Company,
other than as a result of actions taken by him in bad faith or due to his gross
negligence. This indemnification obligation shall survive termination of this
Agreement. In addition, during the Employment Period, the Company shall continue
to maintain, and shall cover the Employee under, its Directors and Officers
Liability Insurance and Errors and Omissions Insurance at coverage levels which
are no less than those currently in effect.
(n) COSTS AND EXPENSES OF AGREEMENT. All reasonable costs and
expenses (including fees and disbursements of counsel) incurred by the Employee
in negotiating the terms and conditions of this Agreement or any agreements
ancillary to this Agreement shall be promptly reimbursed to the Employee by the
Company together with a tax gross-up payment to cover all taxes due on such
payment upon submission of an invoice therefor.
(o) ARBITRATION. Prior to the commencement of any legal action
to enforce any provision of this Agreement or to resolve any dispute arising
under this Agreement, the Company and the Employee agree to notify the other for
the purpose of determining whether the parties will agree to submit any such
dispute to mediation or arbitration on mutually agreeable terms; PROVIDED,
HOWEVER, that the Company does not need to notify the Employee of its intent to
file a legal action for a breach of Sections 12 or 13 hereof, nor must the
Company seek to mediate or arbitrate any such dispute. Nothing in this Section
18(o) shall require the parties to mediate or arbitrate any disputes arising
under this Employment Agreement.
* * *
23
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the date first above written.
OPUS360 CORPORATION
By: /s/ Xxxx Xxxx Walk
---------------------------
Name: Xxxx Xxxx Walk
Title: Senior Vice President
Human Resources
/s/ Dr. Ram Xxxxxxxxxx
------------------------------
DR. RAM XXXXXXXXXX
24
EXHIBIT A
ISO AGREEMENT
[TO COME]
25
EXHIBIT B
NSO AGREEMENT
[TO COME]
26
