CCI GROUP, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into effective
as of the 1st day of January 1998 by and between CCI Group, Inc. (the "Company")
and Xxxxxx Xxxxxxx (the "Employee").
RECITALS
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company, upon the terms and conditions set forth in this
Agreement.
AGREEMENT
NOW THEREFORE, the parties agree as follows:
ARTICLE 1 EMPLOYMENT, TERMS AND DUTIES
1.1 TERM. The Company agrees to employ the Employee and Employee hereby
accepts such employment, in accordance with the terms of this Agreement,
for a period of five (5) years commencing on January 1, 1998, unless the
Agreement is earlier terminated as provided herein.
1.2 SERVICES AND EXCLUSIVITY OF SERVICES. So long as this Agreement shall
continue in effect, Employee shall devote Employee's full business time,
energy and ability exclusively to the business, affairs and interests of
the Company and matters related thereto; shall use Employee's best efforts
and abilities to promote the Company's interests; and shall perform the
services contemplated by this Agreement in accordance with policies
established by and under the direction of the Board of Directors of the
Company (the "Board"). Without the prior express written authorization of
the Board, Employee shall not, directly or indirectly, during the term of
this Agreement: (a) render services to any other person or firm for
compensation, or (b) engage in any activity competitive with or adverse to
the Company's business, whether alone, as a partner, officer, director,
employee or significant investor of or in any other entity. (An investment
of greater than 5% of the outstanding capital or equity securities of an
entity shall be deemed significant for these purposes).
1.3 DUTIES AND RESPONSIBILITIES. During the term of this Agreement, Employee
shall serve as Chief Executive Officer of the Company; shall discharge the
obligations and responsibilities normally associated with such office; and
shall use his best efforts to promote the interests of the Company and
refrain from acts which may adversely affect the reputation or business of
the Company.
1.4 RETURN OF PROPRIETARY PROPERTY. The Employee agrees that all property in
the Employee's possession belonging to the Company, including without
limitation, all documents, reports, manuals, memoranda, computer
print-outs, customer lists, credit cards, keys, identification, products,
access cards and all other property relating in any way to the business of
the Company is the exclusive property of the Company, even if the Employee
authored, created or assisted in authoring or creating, such property. The
Employee shall return to the Company all such documents (and copies and
summaries thereof) and property immediately upon termination of employment
or at any time upon the request of the Company.
ARTICLE 2. COMPENSATION AND BENEFITS
2.1 BASE SALARY. During the term of this Agreement, the Company will pay the
Employee a base salary at the rate of One Hundred Thousand Dollars
($100,000) per year (the "Base Salary") commencing on January 1, 1998,
payable in accordance with the Company' s usual payroll practice.
2.2 QUARTERLY BONUS. Employee shall be entitled to a bonus determined in
accordance with the following provisions: For purposes of this Section,
Employee's base bonus shall be $50,000 (the "Base Bonus"). The term
"Quarterly Bonus" shall mean 25% of the Base Bonus, or $12,500. Commencing
with the quarter ending March 31, 1998 and for each of the quarterly
periods thereafter through and including December 31, 1998, the Employee
shall be entitled to receive on the last business day of each quarter a
payment equal to 50% of his Quarterly Bonus (the "Quarterly Base Bonus")
If the Company attains 100% of the profitability levels set forth in the
annual projections attached as Exhibit A hereto for the year ended December
31, 1998 (the "Profit Target"), then Employee shall be entitled to receive,
no later than 90 days after the end of the year, the difference between the
aggregate amount of Quarterly Base Bonuses previously paid to Employee and
the Base Bonus (the "Year-End Bonus"); provided, however, that if the
Company attains less than 100% but more than or equal to 70% of the Profit
Target for such year, then Employee shall only be entitled to receive a
Year-End Bonus equal to the amount that results from subtracting (1)
the Quarterly Base Bonus amounts previously paid to Employee from (2) the
amount that results from multiplying (a) the percentage of the Profit
Targets actually attained by (b) the Base Bonus; and provided further,
however, that in the event that the Company attains more than 100% of its
Profit Target for such year, then the Employee shall be entitled to receive
a Year-End Bonus equal to the amount that results from subtracting (1) the
Quarterly Base Bonus amounts previously paid to Employee from (2) the
amount that results from multiplying (a) the percentage of the Profit
Targets actually attained (but in no event shall such percentage exceed
120%) by (b) the Base Bonus. The Quarterly Base Bonus and Year-End Bonus
for each year subsequent to December 31, 1998 shall be paid in accordance
with the foregoing provision and shall be determined based upon the Profit
Targets set forth on Exhibit A hereto, or as otherwise agreed to between
the Company and Employee. The determination of whether a Profit Target has
been met for any particular year shall be determined based upon the
Company's final year end financial statements as approved and accepted by
the Board of Directors of the Company and such determination shall be
binding upon the Company and Employee.
2.3 ADDITIONAL BENEFITS. Employee shall also be entitled to all rights and
benefits for which Employee is eligible under the Company's 401(k) plan,
life, medical, dental, disability or insurance plan, in effect from time to
time, and that the Company generally provides to its senior level
executives from time to time.
2.4 PERIODIC REVIEW. The Board shall review Employee's Base Salary and benefits
then being paid to Employee and Employees performance not less frequently
than every twelve (12) months. Following such review, the Company may in
its discretion increase (but shall not be required to increase) the Base
Salary and any other benefits.
2.5 VACATION. The Employee shall be entitled to three (3) weeks paid vacation
each year during the term of this Agreement.
2.6 OVERALL QUALIFICATION. The Company reserves the right to modify, suspend or
discontinue any and all benefits at any time (whether before or after
termination of employment) without notice to or recourse by Employee so
long as such action is taken generally with respect to other similarly
situated persons and does not single out Employee.
2.7 LONG TERM INCENTIVE OPTIONS. Concurrently with the execution hereof,
Javelin Systems, Inc.("Javelin") will grant an option to Employee under the
Javelin's Equity Incentive Plan to purchase 5,000 shares of Javelin's
common stock at a price equal to the market value of the common stock at
the date of grant (the "Option"). The Option shall be exercisable at the
times, in the amounts and upon the terms and conditions set forth in the
Option Agreement attached as Exhibit B hereto.
ARTICLE 3. TERMINATION
3.1 This Agreement and all obligations hereunder (except the obligations
contained in Article 5, which shall survive any termination hereunder)
shall terminate upon the earliest to occur of any of the following:
(a) EXPIRATION OF TERM; RESIGNATION. The expiration of the term
provided for in Section 1.1 or the voluntary termination or
resignation by Employee or retirement from the Company in
accordance with the normal retirement policies of the Company or
the mutual agreement of the Company and Employee. In the event
of any termination under this Section 3.1(a), Employee will not
be entitled to receive any further payments or benefits from the
Company and the Company shall be released from any and all
obligations under this Agreement.
(b) DEATH OR DISABILITY OF THE EMPLOYEE. The death or any illness,
disability or other incapacity of Employee that results in
Employee being unable to perform Employee's duties with the
Company on a full-time basis for a period of three (3)
consecutive months, or for shorter periods aggregating 90 or more
days in any twelve (12)-month period with or without
accommodation. If Employee shall become ill, disabled or
incapacitated as set forth above, Employee's employment may be
terminated by written notice from the Company to Employee.
(c) FOR CAUSE. The Company may by delivering written notice to
Employee terminate Employee's employment and all of the
Employee's rights to receive Base Salary, Annual Bonus and any
benefits hereunder for cause. Such written notice shall be
effective upon delivery to Employee. For purposes of this
Agreement, the term "cause" shall be defined as any of the
following:
(i) Employee's material breach of any of the duties and
responsibilities under this Agreement ( other than as a
result of illness, incapacity or disability) or
engaging in any activities competitive with or
injurious to the Company, in either case in the good
faith reasonable judgment of the Board of Directors;
(ii) Employee's conviction by, or entry of a plea of guilty
or nolo contendre in, a court of competent and final
jurisdiction for a felony or a misdemeanor involving
moral turpitude (other than minor traffic violations or
similar offenses);
(iii) Employee's commission of an act of fraud upon the
Company or personal dishonesty, or willful misconduct;
or
(iv) Employee's willful failure or refusal to perform
Employee's duties or responsibilities under this
Agreement or Employee's material violation of any duty
of loyalty to the Company or a breach of Employee's
fiduciary duty involving personal profit.
In the event Employee's employment is terminated at
any time with cause, Employee will not be entitled
to any further payments or benefits from the Company
and the Company shall be immediately released from any
and all obligations under this Agreement.
(d) WITHOUT CAUSE. Notwithstanding any other provision of this
Section 3.1, the Company shall have the right to terminate
Employee's employment with the Company without cause at any time.
If Employee is so terminated without cause, then the Company
shall pay to the Employee, within thirty (30) days after the date
of such termination, a lump sum equal to the Employee's annual
Base Salary in lieu of all rights of Employee hereunder,
including, without limitation, any rights to Annual Bonus and to
benefits hereunder, all of which shall terminate upon the payment
of such lump sum. The Company agrees, however, that
notwithstanding anything to the contrary in the preceding
sentence, the rights of Employee under the Option Agreement
attached as Exhibit B hereto shall remain in effect and such
rights may be exercised by Employee in accordance with the terms
of the Option Agreement.
(e) TERMINATION OF EMPLOYMENT AFTER A CHANGE OF CONTROL. In the
event of a voluntary termination of employment with the Company
by the Employee within ninety (90) days following a Change of
Control (as hereafter defined), Employee shall be entitled to
receive, within thirty (30) days of such termination, a lump sum
equal to Employee's annual Base Salary in lieu of all rights of
Employee hereunder, including, without limitation, any rights to
Annual Bonus and to benefits hereunder, all of which shall
terminate upon the payment of such lump sum. The Company agrees,
however, that notwithstanding anything to the contrary in the
preceding sentence, the rights of Employee under the Option
Agreement attached as Exhibit B hereto shall remain in effect and
such rights may be exercised by Employee in accordance with the
terms of the Option Agreement. As used in this Section 3.1(e),
"Change of Control" shall mean the acquisition by an Unrelated
Party (as hereafter defined) of sufficient voting stock of the
Company's parent, Javelin Systems, Inc. ("Javelin"), to enable
such Unrelated Party to effect a change in the majority of the
Board of Directors of Javelin; provided that the sale or
acquisition of shares of voting stock in a registered public
offering and the sale or acquisition of shares of voting stock in
connection with normal trading activities shall not constitute a
Change of Control. As used in this Section 3.1(e), "Unrelated
Party" shall mean any individual, corporation, partnership or
other entity, or any group of such entities acting in concert,
other than Xxxxxxx Xxxxx.
3.2 EXCLUSIVE REMEDY. Employee agrees that the payments expressly provided and
contemplated by Section 3 of this Agreement shall constitute the sole and
exclusive obligation of the Company in respect of employee's employment with
and relationship to the Company and that the payment thereof shall be the sole
and exclusive remedy for any termination of Employee's employment.
ARTICLE 4. BUSINESS EXPENSES
4.1. BUSINESS EXPENSES. During the term of this Agreement, to the extent that
such expenditures satisfy the criteria under the Internal Revenue Code for
deductibility for federal income tax purposes as ordinary and necessary business
expenses, the Company shall reimburse Employee promptly for reasonable business
expenditures, including travel, entertainment and parking, made and
substantiated in accordance with policies, practices and procedures established
from time to time by the Company and incurred in the pursuit and furtherance of
the Company's business and goodwill.
ARTICLE 5. CONFIDENTIAL INFORMATION;
NON COMPETITION AGREEMENT
5.1 CONFIDENTIALITY. Employee agrees to be bound by the provisions of the
Employee Proprietary Information and Inventions Agreement ("Proprietary
Information Agreement") attached hereto as Exhibit A.
5.2. COVENANT NOT TO COMPETE. Employee acknowledges and agrees that the
Company's reputation and goodwill are an integral part of the business
success throughout the areas where the Company conducts its business. In
consideration and recognition of the fact that Employee's position involves
fiduciary responsibility to the Company and access to the Company's
confidential proprietary information, Employee agrees
that Employee shall not, without the Company's prior written consent,
directly or indirectly own, manage, operate, join, control or
participate in the ownership, management, operation or control of, or be
connected as a director, officer, employee, partner, consultant or
otherwise with, any business or organization anywhere in the United
States, which directly or indirectly, competes with the businesses of
the Company or Javelin, as presently conducted or proposed to be
conducted; provided, however that ownership of an equity interest in any
business or organization constituting less than one percent (1%) of the
outstanding equity interest of such business or organization shall not
constitute a breach of this Section. This Section 5.2 shall survive for
a period of two (2) years from the date of termination of this
Agreement. In the event the covenant in this Section 5.2 shall be
determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too great a period of time or over too great
a geographical area or by reason of its being too extensive in any other
respect, it shall be interpreted to extend only over the maximum period
of time for which it may be enforceable, and/or over the maximum
geographical area as to which it may be enforceable and/or to the
maximum extent in all other respects as to which it may be enforceable,
all as determined by such court in such action.
5.3 SOLICITATION OF EMPLOYEES. In consideration and recognition of the fact
that Employee's position with the Company is an executive position
involving fiduciary responsibility to the Company and access to the
Company's confidential, proprietary information, Employee agrees that
Employee will not, directly or indirectly, solicit or take away any
employees of the Company for employment by any enterprise that competes
with, or is engaged in a substantially similar business to, the business of
the Company or Javelin as presently conducted or proposed to be conducted.
This Section 5.3 shall survive for a period of two (2) years from the date
of termination of this Agreement.
5.4 REPRESENTATION BY EMPLOYEE. Employee represents and warrants that Employee
is under no restriction or disability by reason of any prior contract or
otherwise which would prevent Employee from entering into and performing
Employee's duties and obligations under this Agreement.
ARTICLE 6. DISPUTE RESOLUTION
6.1 DISPUTES SUBJECT TO ARBITRATION. To ensure rapid and economical resolution
of any disputes which may arise under this Agreement, Employee and the Company
hereby agree than any and all disputes or controversies, whether of law or fact
of any nature whatsoever arising from or regarding the interpretation,
performance, enforcement or breach of this Agreement (including, but not limited
to, all state and federal statutory and discrimination claims), with the sole
exception of those disputes which may arise from your Proprietary Information
and Inventions Agreement, shall be resolved by final and
binding arbitration conducted by an arbitrator in accordance with the rules
and regulations of the American Arbitration Association; provided, however,
that depositions will be conducted as follows: each party may take no more
than three depositions (pursuant to the Revised Missouri Statutes) with a
maximum of six hours of examination per deposition. All arbitration hearings
will take place exclusively in Saint Louis, Missouri, and will be held no
earlier than ninety (90) days after the arbitrator has been selected. The
arbitrator shall apply Missouri law and shall be able to decree any and all
relief of an equitable nature, including, but not limited to such relief as a
temporary restraining order, a preliminary injunction, a permanent
injunction, or replevin of Employee's property.
6.7 ATTORNEYS FEES, COSTS AND EXPENSES. The prevailing party shall be entitled
to recover reasonable attorney fees, costs and expenses incurred in arbitration
from the non-prevailing party, including the cost of the arbitrator.
ARTICLE 7. MISCELLANEOUS
7.1 MODIFICATIONS. This Agreement supersedes all prior agreements and
understandings between the parties relating to the employment of the Employee by
the Company, and it may not be changed or terminated orally. No modification,
termination, or attempted waiver of any other provisions of this Agreement will
be valid unless in writing signed by both parties hereto.
7.2 ENFORCEABILITY AND SEVERABILITY. If any term of this Agreement is deemed
void, voidable, invalid or unenforceable for any reason by an arbitrator or a
court of competent jurisdiction, such term will be deemed severable from all
other terms of this Agreement, which will continue in full force and effect. In
the event that any term is held by an arbitrator or a court of competent
jurisdiction to over broad as written, the term will be deemed amended to narrow
its application to the extent necessary to make the term enforceable.
7.3 WITHHOLDING. To the extent required by any applicable law, including,
without limitation, any federal or state income tax or excise tax law or laws,
the Federal Insurance Contributions Act, the Federal Unemployment Tax Act or any
comparable federal, state or local laws, the Company retains the right to
withhold such portion of any amount or amounts payable to the Employee under
this Agreement as the Company deems necessary.
7.4 CAPTIONS. The various headings or captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement.
7.5 GOVERNING LAW. The validity, interpretation, construction, performance,
enforcement and remedies of or relating to this Agreement, and the rights and
obligations of the parties hereunder, shall be governed by the substantive laws
of the State of Missouri, and any
and every legal proceeding (other than arbitration proceedings conducted in
accordance with Article 6 hereof) arising out of or in connection with this
Agreement shall be brought in the appropriate courts of the State of
Missouri, each of the parties hereby consenting to the exclusive jurisdiction
of said courts for this purpose.
7.6 SUCCESSION. This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns and any such successor or
assignee shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" and "assignee" shall
include any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly
acquires the stock of the Company or to which the Company assigns this
Agreement by operation of law or otherwise. The obligations and duties of
Employee hereunder are personal and otherwise not assignable. Employee's
obligations and representations under this Agreement will survive the
termination of Employee's employment, regardless of the manner of such
termination.
7.7 WAIVERS. No failure on the part of either party to exercise, and no delay
in exercising, any right or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder preclude any other further exercise thereof or the exercise of any
right or remedy granted hereby or by law.
7.8 INJUNCTIVE RELIEF. The Employee acknowledges and agrees that any breach
or threatened breach of this Agreement or the Proprietary Information
Agreement might cause irreparable harm to the Company and that in such case,
the Company would have no adequate remedy at law. In the event of a breach
or threatened breach by the Employee of this Agreement or the Proprietary
Information Agreement, the Company may, in addition to any other rights and
remedies it may have pursuant to this Agreement, immediately seek any
judicial action that the Company may deem necessary or appropriate, including
without limitation, the obtaining of injunctive relief against the Employee
without the necessity of posting a bond or other security and without
prejudice to any other remedies which may be available to the Company at law
or in equity.
7.9 ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all prior or contemporaneous agreements or understandings, oral or
written, between the parties hereto with respect to the subject matter hereof.
7.10 REPRESENTATION BY COUNSEL; INTERPRETATION. The Company and Employee each
acknowledges that each party to this Agreement has been represented by
counsel in connection with this Agreement and the matters contemplated by
this Agreement. Accordingly, any rule of law or any legal decision that
would require interpretation of any claimed ambiguities in this Agreement
against the party that drafted it has no application and is expressly waived.
The provisions of this Agreement shall be interpreted in a reasonable manner
to effect the intent of the parties.
7.11 NOTICES. All notices, requests, demands or other communications under
this Agreement shall be in writing and shall be validly given or made to
another party if given by personal delivery, telex, facsimile, telegram, or
if deposited in the United States mail, certified or registered, postage
prepaid, return receipt requested. If such notice, demand or other
communication is given by personal delivery, telex, facsimile or telegram,
service shall be conclusively deemed made at the time of receipt. If such
notice, demand or other communication is given by mail, such notice shall be
conclusively deemed given forty-eight (48) hours after the deposit thereof in
the United States mail addressed to the party to whom such notice, demand or
other communication is to be given as hereinafter set forth:
If to Company: 00000 Xxxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
If to Employee: Xxxxxx Xxxxxxx
Include appropriate address
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES
"EMPLOYEE" "COMPANY"
---------------------- CCI GROUP, Inc.
Xxxxxx Xxxxxxx
Individually
By:
------------------------
Its:
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