Exhibit 10.6
BLUESTONE SOFTWARE, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made on this 24th day of April,
1997 by and between Xxxxxx Xxxxxx, a resident of 000 X. 0xx Xxxxxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000 (the "Employee"), and BLUESTONE SOFTWARE, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Company")
and successor by merger to Bluestone Consulting Inc., a New Jersey corporation.
WHEREAS, the Company is engaged in the business of designing,
developing, supporting, marketing and selling Internet and intranet software
development tools and related products and services (as may be expanded by the
Company during the term of this Agreement, the "Business"); and
WHEREAS, the Company desires to employ the Employee and the Employee
desires to be employed by the Company upon the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations contained herein, and intending to be legally bound, the parties,
subject to the terms and conditions set forth herein, agree as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs the Employee and
the Employee hereby accepts employment as Senior Vice President and Chief
Operating Officer (the "Position") with the Company upon the terms and
conditions hereinafter set forth. The Employee understands and agrees that the
Employee's employment by the Company is at the will of the Company, and the
employment relationship may be terminated either by the Employee or the Company
at any time, with or without cause.
2. DUTIES. During the term of his employment, the Employee shall
serve the Company faithfully and to the best of his ability and shall devote his
full time, attention, skill and efforts to the performance of the duties
required by or appropriate for the Position. The Employee shall assume such
duties and responsibilities as may be customarily incident to such a position,
and such additional and other duties as may be assigned to the Employee from
time to time by the President or the Board of Directors of the Company,
including, without limitation, the duties and responsibilities set forth in
SCHEDULE A attached hereto. The Employee shall report to the President of the
Company.
3. COMPENSATION. The Company shall pay the Employee, and the Employee
hereby agrees to accept, as compensation for all services rendered hereunder and
for the Employee's intellectual property and other covenants and assignments as
provided for in Sections 4, 5 and 6 hereof, the compensation set forth in this
Section 3.
3.1 SALARY. The Company shall pay the Employee an initial base
salary at the annual rate of One Hundred Thirty-Five Thousand Dollars ($135,000)
(as the same may hereafter be adjusted, the "Base Salary"). The Base Salary
shall be inclusive of all applicable income, social security and other taxes and
charges that are required by law to be withheld by the Company, are requested to
be withheld by the Employee, and shall be withheld and paid in accordance with
the Company's normal payroll practice for its similarly situated employees from
time to time in effect. The Base Salary may be adjusted from time to time by the
Board of Directors of the Company in its discretion in accordance with the
normal executive employee compensation review practices of the Company.
3.2 BONUS PROGRAM. The Employee shall be entitled to participate
in any executive bonus program that may be established by and at the discretion
of the Company pursuant to which the Board of Directors of the Company may award
bonuses to executive employees, based upon the achievement of written individual
and corporate objectives such as the Board of Directors shall determine.
3.3 EQUITY PARTICIPATION.
(a) After the closing of the venture capital financing
contemplated by the Series A Preferred Stock Purchase Agreement, among the
Company, Bluestone Consulting, Inc., a Delaware corporation and the investors
listed therein, the Company shall grant to the Employee an incentive stock
option (the "Option") to purchase Three Hundred Thousand (300,000) shares of
common stock, par value $.001 per share, of the Company (the "Common Stock").
The Option shall vest in sixteen (16) equal installments on a quarterly basis
over a four (4) year period beginning as of the date of grant of the Option. The
exercise price of the Option shall be the fair market value of the Common Stock
of the Company on the date of grant of the Option as determined by the Board of
Directors of the Company in its sole discretion. The Option shall be subject to
and in accordance with the provisions of the 1996 Incentive and Nonqualified
Stock Option Plan of the Company, as amended (the "Plan").
(b) All shares of Common Stock issued under the Option, the
shall be subject to the terms and provisions of a Stock Purchase and Restriction
Agreement as required by the Plan.
3.4 FRINGE BENEFITS. The Employee shall be entitled to
participate in any health or dental programs of the Company. The Employee shall
be entitled to participate in all vacation and other fringe benefit programs of
the Company to the extent and on the same terms and conditions as are accorded
to other officers and key employees of the Company. Notwithstanding the above,
the Employee is entitled to three (3) weeks paid vacation per calendar year.
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3.5 REIMBURSEMENT OF EXPENSES. The Employee shall be reimbursed
for all normal items of travel and entertainment and miscellaneous expenses
reasonably incurred by him on behalf of the Company, provided that such expenses
are documented and submitted to the Company all in accordance with the
reimbursement policies of the Company as in effect from time to time.
4. CONFIDENTIALITY. The Employee recognizes and acknowledges
that the Proprietary Information (as hereinafter defined) is a valuable, special
and unique asset of the Company. As a result, both during the term of his
employment and thereafter, the Employee shall not, without the prior written
consent of the Company, for any reason either directly or indirectly divulge to
any third-party or use for his own benefit, or for any purpose other than the
exclusive benefit of the Company, any confidential, proprietary, business and
technical information or trade secrets of the Company or of any subsidiary or
affiliate of the Company (the "Proprietary Information") revealed, obtained or
developed in the course of his employment with the Company. Proprietary
Information shall include, but shall not be limited to: the intangible personal
property described in Section 5(b) hereof; any information relating to methods
of production, manufacture and research; hardware and software configurations,
computer codes or instructions (including source and object code listings,
program logic algorithms, subroutines, modules or other subparts of computer
programs and related documentation, including program notation), computer inputs
and outputs (regardless of the media on which stored or located) and computer
processing systems, techniques, designs, architecture, and interfaces; the
identities of, the Company's relationship with, the terms of contracts and
agreements with, the needs and requirements of, and the Company's course of
dealing with, the Company's actual and prospective customers, contractors and
suppliers; and any other materials prepared by the Employee in the course of his
employment by the Company, or prepared by any other employee or contractor of
the Company for the Company or its customers, (including concepts, layouts, flow
charts, specifications, know-how, user or service manuals, plans, sketches,
blueprints, costs, business studies, business procedures, finances, marketing
data, methods, plans, personnel information, customer and vendor credit
information and any other materials that have not been made available to the
general public). Nothing contained herein shall restrict the Employee's ability
to make such disclosures during the course of his employment as may be necessary
or appropriate to the effective and efficient discharge of the duties required
by or appropriate for the Position or as such disclosures may be required by
law. Furthermore, nothing contained herein shall restrict the Employee from
divulging or using for his own benefit or for any other purpose any Proprietary
Information that is readily available to the general public so long as such
information did not become available to the general public as a direct or
indirect result of the Employee's breach of this Section 4. Failure by the
Company to xxxx any of the Proprietary Information as confidential or
proprietary shall not affect its status as Proprietary Information under the
terms of this Agreement.
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5. PROPERTY.
(a) All right, title and interest in and to Proprietary
Information shall be and remain the sole and exclusive property of the Company.
During the term of his employment, the Employee shall not remove from the
Company's offices or premises any documents, records, notebooks, files,
correspondence, reports, memoranda or similar materials of or containing
Proprietary Information, or other materials or property of any kind belonging to
the Company unless necessary or appropriate in accordance with the duties and
responsibilities required by or appropriate for the Position and, in the event
that such materials or property are removed, all of the foregoing shall be
returned to their proper files or places of safekeeping as promptly as possible
after the removal shall serve its specific purpose. The Employee shall not make,
retain, remove and/or distribute any copies of any of the foregoing for any
reason whatsoever, except as may be necessary in the discharge of the assigned
duties, and shall not divulge to any third person the nature of and/or contents
of any of the foregoing or of any other oral or written information to which he
may have access or with which for any reason he may become familiar, except as
disclosure shall be necessary in the performance of the duties; and upon the
termination of his employment with the Company, he shall return to the Company
all originals and copies of the foregoing then in the possession, whether
prepared by the Employee or by others.
(b)(i) The Employee acknowledges that all right,
title and interest in and to any and all writings, documents, inventions,
discoveries, computer programs or instructions (whether in source code, object
code, or any other form), algorithms, formulae, plans, memoranda, tests,
research, designs, innovations, systems, analyses, specifications, models, data,
diagrams, flow charts, and/or techniques (whether reduced to written or
electronic form or otherwise) that the Employee creates, makes, conceives,
discovers or develops, either solely or jointly with any other person, at any
time during the term of Employee's employment, whether during working hours or
at the Company's facility or at any other time or location, and whether upon the
request or suggestion of the Company or otherwise, and that relate to or are
useful in any way in connection with the Business now or hereafter carried on by
the Company (collectively, "Intellectual Work Product") shall be the sole and
exclusive property of the Company. The Employee shall promptly disclose to the
Company all Intellectual Work Product, and the Employee shall have no claim for
additional compensation for the Intellectual Work Product.
(ii) The Employee acknowledges that all the Intellectual Work
Product that is copyrightable shall be considered a work made for hire under
United States Copyright Law. To the extent that any copyrightable Intellectual
Work Product may not be considered a work made for hire under the applicable
provisions of the United States Copyright Law, or to the extent that,
notwithstanding the foregoing provisions, the Employee may retain an interest in
any Intellectual Work Product that is not copyrightable, the Employee hereby
irrevocably assigns and transfers to the Company any and all right, title, or
interest that the Employee may have in the Intellectual Work Product under
copyright, patent, trade secret, trademark and other intellectual
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property laws, in perpetuity or for the longest period otherwise permitted by
law, without the necessity of further consideration. The Company shall be
entitled to obtain and hold in its own name all copyrights, patents, trade
secrets, and trademarks with respect thereto.
(iii) The Employee shall reveal promptly all information
relating to the Intellectual Work Product to an appropriate officer of the
Company, cooperate with the Company and execute such documents as may be
necessary or appropriate (A) in the event that the Company desires to seek
copyright, patent, trademark or other analogous protection thereafter relating
to the Intellectual Work Product, and when such protection is obtained, renew
and restore the same, or (B) to defend any opposition proceedings in respect of
obtaining and maintaining such copyright, patent, trademark or other analogous
protection.
(iv) In the event that the Company is unable after reasonable
effort to secure the Employee's signature on any of the documents referenced in
Section 5(b)(iii) hereof, whether because of the Employee's physical or mental
incapacity or for any other reason whatsoever, the Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as the Employee's agent and attorney-in-fact, to act for and in his behalf and
stead to execute and file any such documents and to do all other lawfully
permitted acts to further the prosecution and issuance of any such copyright,
patent, trademark or other analogous protection with the same legal force and
effect as if executed by the Employee.
6. COVENANT NOT TO COMPETE.
(a) During the term of his employment and for a period of one
(1) year thereafter (the "Restricted Period") the Employee shall not, in the
United States or in any country in which the Company is conducting or has
conducted business at any time during the one (1) year period immediately
preceding the termination of his employment, do any of the following directly or
indirectly without the prior written consent of the Company in its sole
discretion:
(i) engage or participate, directly or indirectly, in any
business activity competitive with the Business or the business of any of the
Company's subsidiaries or affiliates (other than the Services Company), as
conducted during the term of Employee's employment;
(ii) become interested (as owner, proprietor, promoter,
stockholder, lender, partner, co-venturer, director, officer, employee, agent,
consultant or otherwise) in any person, firm, corporation, association or other
entity engaged in any business that is competitive with the Business or the
business of any subsidiary or affiliate (other than the Services Company) of the
Company as conducted during the term of Employee's employment, or become
interested in (as owner, stockholder, lender, partner, co-venturer, director,
officer, employee, agent, consultant or otherwise) any portion of the business
of any person, firm, corporation, association or other entity where such portion
of such business is competitive with the Business of the Company or the business
of any subsidiary or affiliate (other than the Services Company) of the Company
as conducted during the term of Employee's employment
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(notwithstanding the foregoing, the Employee may hold not more than one percent
(1%) of the outstanding securities of any class of any publicly-traded
securities of a company that is engaged in activities referenced in Section 6(a)
hereof);
(iii) solicit or call on, either directly or indirectly, any
(A) customer with whom the Company shall have dealt at any time during the one
(1) year period immediately preceding the termination of the Employee's
employment hereunder, or (B) supplier or distributor with whom the Company shall
have dealt at any time during the one (1) year period immediately preceding the
termination of the Employee's employment hereunder;
(iv) influence or attempt to influence any
supplier, distributor, customer or potential customer of the Company to
terminate or modify any written or oral agreement or course of dealing with the
Company; or
(v) influence or attempt to influence any person either (A)
to terminate or modify the employment, consulting, agency, distributorship or
other arrangement with the Company, or (B) to employ or retain, or arrange to
have any other person or entity employ or retain, any person who has been
employed or retained by the Company as an employee, consultant, agent or
distributor of the Company at any time during the one (1) year period
immediately preceding the termination of the Employee's employment hereunder.
(b) The Employee hereby acknowledges that the limitations as to
time, character or nature and geographic scope placed on his subsequent
employment by this Section 6 are reasonable and fair and will not prevent or
materially impair his ability to earn a livelihood.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE EMPLOYEE.
(a) The Employee represents and warrants to the Company that:
(i) There are no restrictions, agreements or understandings
whatsoever to which the Employee is a party which would prevent or make unlawful
the Employee's execution of this Agreement or the Employee's employment
hereunder, or which is or would be inconsistent or in conflict with this
Agreement or the Employee's employment hereunder, or would prevent, limit or
impair in any way the performance by the Employee of the obligations hereunder;
and
(ii) The Employee has disclosed to the Company all
restraints, confidentiality commitments or other employment restrictions that he
has with any other employer, person or entity.
(b) Upon and after his termination or cessation of employment
with the Company and until such time as no obligations of the Employee to the
Company hereunder
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exist, the Employee (i) shall provide copies of Sections 4, 5 and 6 of this
Agreement to any prospective employer or other person, entity or association in
the Business, with whom or which the Employee proposes to be employed,
affiliated, engaged, associated or to establish any business or remunerative
relationship prior to the commencement thereof and (ii) shall notify the Company
of the name and address of any such person, entity or association prior to his
employment, affiliation, engagement, association or the establishment of any
business or remunerative relationship.
8. SURVIVAL OF PROVISIONS. The provisions of this Agreement
set forth in Sections 3.3 and 4 through 19 hereof shall survive the termination
of the Employee's employment hereunder.
9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the Company and the Employee and their respective
successors, executors, administrators, heirs and/or permitted assigns; provided
that the Employee may not assign this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the Company
in its sole discretion.
10. NOTICE. Any notice hereunder by either party shall be
given by personal delivery, by sending such notice by certified mail,
return-receipt requested, by overnight delivery with a reputable courier
service, or by telecopier, addressed or telecopied, as the case may be, to the
other party at its address set forth below or at such other address designated
by notice in the manner provided in this section. Such notice shall be deemed to
have been received upon the date of actual delivery if personally delivered or,
in the case of mailing, two (2) days after deposit with the U.S. mail, or if by
overnight delivery, or the date of delivery or, in the case of facsimile
transmission, when confirmed by the facsimile machine report.
If to the Employee:
Xxxxxx Xxxxxx
000 X. 0xx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Fax: (000) 000-0000
If to the Company:
Bluestone Software, Inc.
0000 Xxxxxx Xxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xx. Xxx Xxxxxx, President
Fax: (000) 000-0000
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with a copy to:
Pepper, Xxxxxxxx & Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, Esquire
Fax: (000) 000-0000
11. ENTIRE AGREEMENT AND AMENDMENTS. This Agreement contains
the entire agreement and understanding of the parties hereto relating to the
subject matter hereof, and merges and supersedes all prior and contemporaneous
discussions, agreements and understandings of every nature between the parties
hereto relating to the employment of the Employee with the Company. This
Agreement may not be changed or modified, except by an agreement in writing
signed by each of the parties hereto.
12. WAIVER. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.
13. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Jersey, without regard to the
principles of conflicts of laws of any jurisdiction.
14. INVALIDITY. If any provision of this Agreement shall be
determined to be void, invalid, unenforceable or illegal for any reason, then
the validity and enforceability of all of the remaining provisions hereof shall
not be affected thereby. If any particular provision of this Agreement shall be
adjudicated to be invalid or unenforceable, then such provision shall be deemed
amended to delete therefrom the portion thus adjudicated to be invalid or
unenforceable, such amendment to apply only to the operation of such provision
in the particular jurisdiction in which such adjudication is made; provided
that, if any provision contained in this Agreement shall be adjudicated to be
invalid or unenforceable because such provision is held to be excessively broad
as to duration, geographic scope, activity or subject, then 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 only to apply with respect to the operation of such provision in
the applicable jurisdiction in which the adjudication is made.
15. SECTION HEADINGS. The section headings in this Agreement
are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
16. NUMBER OF DAYS. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and legal holidays; provided that, if the final day of any time period
falls on a Saturday, Sunday or day which is a legal holiday
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in New Jersey, then such final day shall be deemed to be the next day which is
not a Saturday, Sunday or legal holiday.
17. SPECIFIC ENFORCEMENT; EXTENSION OF PERIOD.
(a) The Employee acknowledges that the restrictions contained in
Sections 4, 5, 6 and 7 hereof are reasonable and necessary to protect the
legitimate interests of the Company and its affiliates and that the Company
would not have entered into this Agreement in the absence of such restrictions.
The Employee also acknowledges that any breach by him of Sections 4, 5, 6 or 7
hereof will cause continuing and irreparable injury to the Company for which
monetary damages would not be an adequate remedy. The Employee shall not, in any
action or proceeding to enforce any of the provisions of this Agreement, assert
the claim or defense that an adequate remedy at law exists. In the event of such
breach by the Employee, the Company shall have the right to enforce the
provisions of Sections 4, 5, 6 and 7 of this Agreement by seeking injunctive or
other relief in any court, and this Agreement shall not in any way limit
remedies of law or in equity otherwise available to the Company.
(b) The periods of time set forth in Section 6 hereof
shall not include, and shall be deemed extended by, any time required for
litigation to enforce the relevant covenant periods, provided that the Company
is successful on the merits in any such litigation. The "time required for
litigation" is herein defined to mean the period of time commencing on the
earlier of the Employee's first breach of such covenants or the service of
process upon the Employee ending on the date of a final non-appealable order or
settlement by the parties relating to such litigation.
18. CONSENT TO SUIT. In the case of any dispute under or in
connection with this Agreement, the Employee may only bring suit against the
Company in the Courts of the State of New Jersey or in the Federal District
Court for such geographic location. The Employee hereby consents to the
exclusive jurisdiction and venue of the courts of the State of New Jersey or the
Federal District Court for such geographic location, provided that such Federal
Court has subject matter jurisdiction over such dispute, and the Employee hereby
waives any claim he may have at any time as to FORUM NON CONVENIENS with respect
to such venue. The Company shall have the right to institute any legal action
arising out of or relating to this Agreement in any appropriate court and in any
jurisdiction. Any judgment entered against either of the parties in any
proceeding hereunder may be entered and enforced by any court of competent
jurisdiction. If an action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, then the prevailing party shall be
entitled to recover, in addition to any other relief, reasonable attorneys'
fees, costs and disbursements.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed on the day and year first written above.
BLUESTONE SOFTWARE, INC.
By: /s/ Xxx Xxxxxx
------------------------------------
Title: President
WITNESS:
/s/ Xxxxxx Xxxxxx
----------------------------- ---------------------------------------
Name: XXXXXX XXXXXX
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