EXHIBIT 10.3
AGREEMENT
This Agreement is made February 8, 2005, between ServiceWare Technologies,
Inc., a Delaware Corporation having offices at One Northshore Center, Suite 503,
12 Federal Street, Pittsburgh, Pennsylvania 15212 (the "Company"), and Xxxx
Xxxxxx, an individual with an address at 00 Xxxxxxxxxxx Xxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Xxxxxx").
In consideration of the mutual covenants contained herein, the parties
hereby agree as follows:
1. SERVICES. Xxxxxx agrees to provide the following services to the
Company (collectively, the "Services"):
1.1 CHAIRMAN OF BOARD. Xxxxxx agrees to serve as the non-executive
Chairman of the Company's Board of Directors (the "Board") commencing on the
closing date of the merger contemplated by that certain Agreement and Plan of
Merger dated December 22, 2004 by and among the Company, SVCW Acquisition, Inc.
and Kanisa Inc. (the "Merger Closing Date") and until Xxxxxx'x resignation from
the Chairman position or removal from the Chairman position by the Company's
Board of Directors, whichever occurs first.
1.2 CONSULTING SERVICES. Upon resignation or removal from the
Company's Board and for the remainder of the Term as defined in Section 2 below
(the "Consulting Term"), Xxxxxx agrees to provide advice, analysis and expertise
on a limited basis regarding the financial, operational, developmental or other
aspects of the business of the Company from time to time upon the Company's
request.
1.3 OTHER EMPLOYMENT. Until December 31, 2005, Xxxxxx agrees not to
accept full-time employment with any third party without the express written
consent of Xxxxxx Xxxxxxxxx and Xxx Xxxxxxx of the Board and shall remain
generally available to resume full time executive duties if requested by the
Board based on such terms and conditions mutually agreed to by the Board of and
Xxxxxx.
2. TERM AND TERMINATION. The term of this Agreement shall commence on the
Merger Closing Date and shall continue until the second year anniversary
following Xxxxxx'x resignation or removal as a member of the Company's Board of
Directors (the "Term").
3. COMPENSATION; EXPENSES.
3.1 COMPENSATIONS AND OTHER CONSIDERATION. As full compensation for
the Services to be provided by Xxxxxx pursuant to this Agreement and the other
terms set forth herein, the Company agrees to pay Xxxxxx the compensation set
forth below:
a. Until December 31, 2005, Xxxxxx will continue to receive
his current base salary ("Base Salary") and employee benefits comprised of
health insurance, life insurance, disability insurance, 401(K)-related benefits
and automobile reimbursement in the same amounts and pursuant to the same terms
currently in effect (collectively, "Benefits"). In addition, Xxxxxx shall be
entitled to an incentive compensation bonus for 2005 based on the following
criteria (the "2005 Bonus"): (i) the target amount of the bonus shall be
$125,000 with the opportunity to earn up to 150% of the target amount based upon
a schedule of performance against the Company's 2005 Operating Plan approved by
the Company's Board of Directors; (ii) the schedule of performance shall be
established by
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the Company's Board of Directors or Compensation Committee; and (iii)
notwithstanding any performance or other criteria in effect, Xxxxxx'x minimum
bonus for 2005 shall be $50,000. The 2005 Bonus shall be paid to Xxxxxx on or
before January 31, 2006.
b. For the period from January 1, 2006 until December 31,
2006, the Company shall pay Xxxxxx the Base Salary, Benefits (other than the
automobile reimbursement), and a bonus for 2006 equal to the full amount of the
2005 Bonus (collectively, the "2006 Compensation"). The salary, bonus, and
automobile reimbursement components of the 2006 Compensation shall be paid to
Xxxxxx in full, in advance in one lump sum payment on or before January 31,
2006.
c. During the Consulting Term, and in addition to any other
payments that may be payable to him hereunder, Xxxxxx shall be paid the sum of
$12,000 per year payable in advance on an annual basis.
d. Automatically upon the Merger Closing Date, Xxxxxx'x
unvested stock options in the Company shall accelerate and shall be deemed fully
vested and, despite anything to the contrary in any stock option award agreement
and/or any other documentation governing the Company's stock options, Xxxxxx'x
options to purchase stock in the Company shall neither lapse nor terminate and
he shall be authorized to exercise such options at any time during the
Consulting Term.
e. The rights granted to Xxxxxx under subsections 3.1(c) and
(d) are in lieu of, and not in addition to, the rights granted to the members of
Company's Board of Directors in the resolutions adopted by the Board on November
18, 2004.
f. For purposes of Xxxxxx'x Restricted Stock Award Agreements,
during the Term of this Agreement Xxxxxx shall be deemed an employee of the
Company.
3.2 EXPENSES. Company shall prepay, or reimburse, as applicable,
Xxxxxx for reasonable, actual expenses (including travel, meals or other
out-of-pocket expenses) incurred by Xxxxxx in the course of providing the
Services ("Expenses"). All such Expenses shall be documented by Xxxxxx in
reasonable detail if requested by the Company.
4. TERMINATION OF EMPLOYMENT AGREEMENT. Immediately and automatically upon
the commencement of the Term hereof, the parties hereby mutually agree to
terminate the Employment Agreement entered into between the Company and Xxxxxx
dated as of January 26, 2004 (the "Employment Agreement"). In consideration for
the Company granting Xxxxxx the rights set forth in this Agreement, Xxxxxx
hereby agrees to waive any and all rights that he may have under Paragraph 5 of
the Employment Agreement.
5. INVENTION ASSIGNMENT, CONFIDENTIALITY AND RESTRICTIVE COVENANTS.
5.1 DISCLOSURE OF INNOVATIONS. Xxxxxx agrees to disclose in writing
to the Company all inventions, improvements and other innovations of any kind
that he may have made, conceived, developed or reduced to practice, alone or
jointly with others, during the Term, whether or not they are related to the
Services and whether or not they are eligible for patent, copyright, trademark,
trade secret or other legal protection ("Innovations"). Examples of Innovations
shall include, but are not limited to, discoveries, research, inventions,
formulas, techniques, processes, know-how, marketing plans, new product plans,
production processes, advertising, packaging and marketing techniques and
improvements to computer hardware or software
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5.2 ASSIGNMENT OF OWNERSHIP OF INNOVATIONS. Xxxxxx agrees that all
Innovations, which are in any way related to the business or planned business of
the Company, are the sole and exclusive property of the Company and he hereby
assigns all of his rights, title and interest in the Innovations and in all
related patents, copyrights, trademarks, trade secrets, rights of priority and
other proprietary rights to the Company. At the Company's request and expense,
during and after the Term, Xxxxxx will assist and cooperate with the Company in
all respects and will execute documents, and, subject to his reasonable
availability, give testimony and take further acts requested by the Company to
obtain, maintain, perfect and enforce for the Company patent, copyright,
trademark, trade secret and other legal protection for the Innovations. Xxxxxx
hereby appoints the President and Chief Executive Officer, or another authorized
officer of the Company as his attorney-in-fact to execute documents on his
behalf for this purpose. Xxxxxx has attached hereto as Exhibit "A" a list of
Innovations as of the date hereof which belong to him and which are not assigned
to the Company hereunder (the "Prior Innovations"), or, if no such list is
attached, he represents that there are no Prior Innovations.
5.3 PROTECTION OF CONFIDENTIAL INFORMATION OF THE COMPANY. Xxxxxx
understands that his prior work as an employee of the Company and now as a
director creates a relationship of trust and confidence between himself and the
Company. During and after the Term, Xxxxxx will not use or disclose or allow
anyone else to use or disclose any "Confidential Information" (as defined below)
relating to the Company, its products, suppliers or customers except as may be
necessary in the performance of his work for the Company or as may be authorized
in advance by appropriate officers of the Company. "Confidential Information"
shall include methodologies, processes, tools, innovations, business strategies,
financial information, forecasts, personnel information, customer lists, trade
secrets and any other non-public technical or business information, whether in
writing or given to Xxxxxx orally, which he knows or has reason to know the
Company would like to treat as confidential for any purpose, such as maintaining
a competitive advantage or avoiding undesirable publicity. Xxxxxx will keep
Confidential Information secret and will not allow any unauthorized use of the
same, whether or not any document containing it is marked as confidential. These
restrictions, however, will not apply to Confidential Information that has
become known to the public generally through no fault or breach of Xxxxxx or
that the Company regularly gives to third parties without restriction on use or
disclosure.
5.4 NON-COMPETITION, NON-SOLICITATION, NON-INTERFERENCE. Because
Xxxxxx acknowledges and agrees that he has and will continue to have access to
confidential and trade secret information of the Company, the following
restrictive covenant is necessary to protect the interests and continued success
of the Company. Except as otherwise expressly consented to in writing by the
Company, during the time period that begins on the commencement of the Term of
this Agreement and ends twelve (12) months from the date of termination of this
Agreement (the "Restricted Period"), Xxxxxx shall not, directly or indirectly,
acting as an employee, owner, shareholder, partner, joint venturer, officer,
director, agent, salesperson, consultant, advisor, investor or principal of any
corporation or other business entity:
(a) engage, in any state or territory of the United States of
America where the Company is actively doing business (determined as of the
commencement of the Term), in direct or indirect competition with the business
conducted by the Company; specifically, eServices or knowledge management; or
(b) request or otherwise attempt to induce or influence,
directly or indirectly, any customer or supplier, or prospective customer or
supplier, of the Company, or other persons sharing
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a business relationship with the Company, to cancel, limit or postpone their
business with the Company, or otherwise take action which might be to the
material disadvantage of the Company; or
(c) hire or solicit for employment or other business
relationship, or induce or actively attempt to influence, any employee, officer,
director or other business associate of the Company to terminate his or her
employment or discontinue such person's consultant, contractor or other business
association with the Company.
(d) Nothing in this section, whether express or implied, shall
prevent Xxxxxx from being a holder or not more than one percent (1%) of the
total outstanding stock of either a publicly held company under Section 12 of
the Securities Exchange Act of 1934, as amended, or any privately held company.
If Xxxxxx violates any of the restrictions contained in this
section, the Restricted Period shall be increased by the period of time from the
commencement of any such violation until the time such violation shall be cured
by Xxxxxx to the satisfaction of the Company, and the Company may withhold any
and all payments otherwise due and owing to Xxxxxx under this Agreement, if any,
other than Base Salary.
5.5 BUSINESS OPPORTUNITIES. Xxxxxx agrees that, during the Term, he
will not take personal advantage of any business opportunities that are similar
or substantially similar to the business of the Company without: (a) first
offering in writing such opportunity to the Company; and (b) thereafter
obtaining a written refusal of such opportunity from the Company. In addition,
all material facts regarding any such business opportunities must be promptly
and fully disclosed by Xxxxxx to the Board as soon as Xxxxxx becomes aware of
any such opportunity.
5.6 INJUNCTIVE RELIEF. Xxxxxx acknowledges that, due to the nature
of the Company's business, the scope of the provisions set forth in Section 5.4
are reasonable and necessary for the protection of the business and goodwill of
the Company. Xxxxxx agrees that any breach of Section 5 will cause the Company
substantial harm and therefore, in the event of any such breach, in addition to
such other remedies which may be available, the Company shall have the right to
seek a temporary restraining order, preliminary injunctive relief and permanent
injunctive relief. In the event that either the geographical area or the
Restricted Period set forth in Section 5.4 of this Agreement is deemed by any
court of competent jurisdiction to be unreasonably restrictive, Xxxxxx and the
Company agree that the provision shall remain in full force and effect for the
greatest time period and in the greatest area that would not render it
unenforceable.
6. COMPANY PROPERTY. All records, files, lists, including computer
generated lists, drawings, documents, equipment and similar items relating to
the Company's business that Xxxxxx shall prepare for or receive from the Company
shall remain the Company's sole and exclusive property. Xxxxxx agrees than upon
termination of this Agreement, or upon demand from the Company, he shall
immediately return to the Company all property of the Company in his possession,
custody or control. Xxxxxx further represents that he will not copy or cause to
be copied, print out, or cause to be printed out any software, documents or
other materials belonging to the Company. Other than cell phoine, blackberry and
laptop computer.
7. GENERAL.
7.1 SURVIVAL. Sections 5, 6 and 7 of this Agreement shall survive
the termination by either party of this Agreement for any reason.
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7.2 CHOICE OF LAW AND JURISDICTION. This Agreement shall be
construed, interpreted and the rights of the parties determined in accordance
with the laws of the Commonwealth of Pennsylvania, without giving effect to any
choice or conflict of law provision or rule (whether in the Commonwealth of
Pennsylvania or any other jurisdiction) that would cause the application of laws
of any jurisdictions other than those of the Commonwealth of Pennsylvania. The
parties hereby consent to the exclusive jurisdiction of the state and federal
courts located within the Commonwealth of Pennsylvania for the resolution of all
disputes arising under this Agreement.
7.3 ASSIGNMENT. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the Company, and the Company shall
be obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
Xxxxxx or his legal representatives, executors, administrators, successors,
heirs, distributes, devisees and legatees. Xxxxxx may not assign any of his
duties, responsibility, obligations or positions hereunder to any person and any
such purported assignment by him shall be void and of no force and effect. The
Company may assign its rights hereunder to any other party.
7.4 WAIVER. Any waiver or consent from the Company with respect to
any term or provision of this Agreement or any other aspect of Xxxxxx'x conduct
or employment shall be effective only in the specific instance and for the
specific purpose for which given and shall not be deemed, regardless of
frequency given, to be a further or continuing waiver or consent. The failure or
delay of the Company at any time or times to require performance of, or to
exercise any of its powers, rights or remedies with respect to any term or
provision of this Agreement or any other aspect of Xxxxxx'x conduct or
employment in no manner (except as otherwise expressly provided herein) shall
affect the Company's right at a later time to enforce any such term or
provision.
7.5 NOTICES. All notices, requests, demands, and other
communications hereunder must be in writing and shall be deemed to have been
duly given if delivered by hand or mailed within the continental United States
by first class, registered mail, return receipt requested, postage and registry
fees prepaid, to the applicable party, at the addresses first stated above or at
such other subsequent address as is made known to the other party as an address
at which such party receives similar important correspondence.
7.6 AMENDMENT. This Agreement may be amended or modified only be a
written instrument executed by Xxxxxx and a representative of the Company duly
authorized by the Board.
7.7 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit the term or
provision, to delete specific works or phrases, or to replace any invalid or
unenforceable term or provision with 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, and this Agreement shall be enforceable as so
modified.
7.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
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7.9 HEADINGS. The section headings contained in this Agreement are
used for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.10 CONSTRUCTION. Every covenant, term and provision of this
Agreement shall be construed simply according to its fair meaning and not
strictly for or against any party.
7.11 ACKNOWLEDGMENT. Xxxxxx represents and agrees that he fully
understands his rights to discuss all aspects of this Agreement with his
counsel, that he has been given the opportunity to avail himself of this right,
that he has carefully read and fully understands all the provisions of this
Agreement, that he is competent to execute this Agreement, that his decision to
execute this Agreement has not been obtained by any duress, that he freely and
voluntarily enters into this Agreement, and that he has read this document in
its entirety and fully understands the meaning, intent, and consequences of this
Agreement.
7.12 COUNTERPARTS; FACSIMILE SIGNATURE. This Agreement may be
executed in two (2) or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
This Agreement may be executed by facsimile signature.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year set forth above.
AGREED TO BY:
SERVICEWARE TECHNOLOGIES, INC.
By: _____________________________________
Name:
Title:
__________________________________________
XXXX XXXXXX
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