EXHIBIT 10.68
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 22nd day of May, 2001 by and between
XXXXX-XXXXXXXXXX.XXX, CORP., a Delaware corporation having its principal offices
located at Two Xxxxxxxxxxx Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Company"), and XXXXX X XXxXXX, an individual residing at 00 Xxxxxx Xx.,
Xxxxxxxx, Xx 00000 (the "Employee").
WHEREAS, the Company wishes to employ Employee, and Employee wishes to
accept such employment subject to the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the mutual representations,
covenants and agreements herein set forth, the parties hereto agree as follows:
ARTICLE I
ENGAGEMENT AND DUTIES: DEVOTION OF TIME
1.1 Engagement and Duties. The Company hereby employs Employee for the
Term (as defined in Section 3.1) commencing on the date hereof (the "Effective
Date"). During the Term, Employee's duties shall include serving as the
Company's President, and as a member of the Company's Board of Directors. In
such capacities, Employee shall devote all of his business time, ability and
attention to performing the duties and responsibilities associated with such
position on behalf of the Company.
1.2 Acceptance. Employee hereby accepts such employment and agrees to
render the services described above. During the Term, Employee agrees to serve
the Company faithfully and to the best of Employee's ability, to devote
Employee's full time, energy and skill to such employment (subject to the
aforementioned proviso), and to use Employee's best efforts, skill and ability
to promote the Company's interest.
ARTICLE II
COMPENSATION
2.1 Salary. For all services to be rendered hereunder during the twelve
(12) month period immediately following the Effective Date and for each twelve
(12) month period thereafter during the Term, the Company shall pay Employee a
salary of Two Hundred Thousand and 00/100 ($200,000) Dollars per annum, payable
not less frequently than bi-weekly in accordance with the Company's payroll
practices. The compensation paid to Employee pursuant to this Section 2.1 is
hereinafter referred to as the "Salary".
2.2 Bonus. Employee shall be entitled to receive an annual bonus of up
to $50,000 or 10% of the profits; whichever is greater, upon achieving certain
milestones to be determined by the Board of Directors of the Company. The
employee will propose certain milestones to the Board of Directors of the
company within 30 days of employment.
2.3 Success Bonus. In the Event of the sale of substantially all of the
assets or stock of the company from the date of employment through December 31st
2001, the employee shall participate in a success fee biased upon the following:
A. If the valuation is less than $6.0M the employee shall
participate at a rate of 1% of the consideration.
B. If the valuation exceeds $6.0M the employee shall participate
at a rate of 1.5% of the consideration.
ARTICLE III
TERM, TERMINATION AND PAYMENT ON TERMINATION
3.1 Term. Subject to Section 3.2, the term of the Employee's Employment
by the Company (the "Term") shall commence on the Effective Date and shall
continue for a three (3) year period (the "Expiration Date"). The Term may also
be hereinafter referred to as the "Employment Period".
3.2 Termination. Subject to the provisions of Sections 3.1 and 3.3,
Employee's employment, salary and all rights under this Agreement as an employee
of the Company shall terminate immediately upon the first to occur of the
following events (the "Termination Date"):
(a) The death of Employee;
(b) The Disability of Employee. For purposes of this Agreement,
Employee shall be deemed to have suffered a disability ("Disability") if he is
unable to substantially perform the duties theretofore performed by him under
this Agreement by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted, or can
be expected to last, for not less than one hundred twenty (120) consecutive
days. The determination of whether Employee is subject to Disability shall be
made by a physician satisfactory to both the Employee and the Company; provided,
that if the Employee and the Company do not agree on a physician, the Employee
and the Company shall each select a physician and these two physicians together
shall select a third physician, whose determination as to Disability shall be
binding on all parties;
(c) The written resignation by Employee for any reason;
(d) The termination of Employee's employment by the Company for
Cause. "Cause" shall mean the occurrence of any of the following events:
(1) Employee's act or acts of dishonesty constituting a felony
or misdemeanor involving or resulting or intending to result directly or
indirectly in gains or personal enrichment at the expense of the Company or the
conviction of a crime involving moral turpitude; or
(2) Willful misconduct by Employee or Employee's gross
insubordination; or
(3) Habitual alcoholism or substance abuse; or
(4) Employee's material failure to perform the duties assigned
to him pursuant to this Agreement (other than by reason of death or Disability);
or
(5) Any other material breach of any of the terms or provisions
of this Agreement.
3.3 Compensation During Disability and Following Termination of
Employment. During any period of Disability the Employee shall continue to
receive his salary and other benefits provided for herein until the he is
terminated in accordance with Section 3.2(b). In the event that Employee's
employment with the Company is terminated pursuant to Section 3.2, the Company
shall pay to Employee his Salary earned and unpaid as of the Termination Date,
as applicable. Such amount(s) shall be paid to Employee, subject to standard
required payroll deductions, in accordance with the Company's payroll practices.
3.4 Severance Payment. In addition to the compensation payable to the
Employee pursuant to Section 3.3 immediately above, in the event that Employee's
employment with the Company is terminated for any reason other than for Cause,
the Company shall pay to the Employee severance pay in lieu of any further
compensation for periods subsequent to the date of termination as follows:
(a) If Employee's employment with the Company is terminated at
any time during the first six months of his employment with the Company, an
amount equal to three (3) months of the Employee's Salary as of the date of
termination;
(b) If Employee's employment with the Company is terminated at
any time during the second six months of his employment with the Company, an
amount equal to six (6) months of the Employee's Salary as of the date of
termination; or
(c) If Employee's employment with the Company is terminated at
any time during the first year of his employment with the Company, or at any
time thereafter, an amount equal to nine (9) months of the Employee's Salary as
of the date of termination.
Any such severance payment shall be paid to Employee, subject to
standard required payroll deductions. During the period that the Employee is
entitled to receive severance payments, the Employee shall also continue to be
covered under the Company's medical, disability and other health benefit plans.
ARTICLE IV
BENEFITS
4.1 Business Expenses. The Employee is authorized to incur reasonable
expenses in the performance of his duties hereunder in furtherance of the
business and affairs of the Company and its Affiliates, and the Company shall
pay or reimburse the Employee for all reasonable expenses actually incurred or
paid by the Employee during the Employment Period, in all cases upon
presentation of detailed expense statements and expense reports, receipts,
vouchers or such other supporting information as the Company customarily may
require.
4.2 Travel Expenses. The Company shall pay or reimburse the Employee
for all reasonable travel related expenses, during the Employment Period, in all
cases upon presentation of detailed expense statements and expense reports,
receipts, vouchers or such other supporting information as the Company
customarily may require.
4.3 Fringe Benefits. The Employee shall, during the Employment Period,
be eligible to participate in such pension, profit sharing, life insurance,
medical and other employee benefit plans of the Company made available by the
Company to its key executive employees, and which may be in effect from time to
time, to the extent he is eligible under the terms of such plans, on the same
basis as other key executive employees of the Company; provided, however, that
the allocation of benefits under any plan which provides that allocation
thereunder shall be in the discretion of the Board of Directors of the Company
shall be determined from time to time by such Board of Directors.
4.4 Vacation. During the Term, Employee shall be entitled to a total of
three (3) weeks paid vacation per year (exclusive of the Company's paid holidays
and sick leave taken pursuant to the Company's policy), accrued at a rate of 10
hours per month, such vacation period or periods to be taken at such time as
Employee shall in his discretion determine upon consultation with and approval
of the Company. Any unused vacation days may not be carried over from one year
to the next.
ARTICLE V
ACTIVITIES DURING AND FOLLOWING EMPLOYMENT
5.1 Restrictive Covenants. Employee acknowledges and agrees that (i) as
an Employee of the Company he has and shall possess and learn valuable trade
secrets and other proprietary information relating to the Company's business,
(ii) Employee's services to the Company are unique in nature, (iii) the
Company's business is national in scope and (iv) the Company would be
irreparably damaged if the Employee were to provide services to any person or
entity in violation of the restrictions contained in this Agreement.
Accordingly, as an inducement for the Company to enter into this Agreement, the
Employee agrees that during the period that he is employed by the Company and
for a period of one (1) year thereafter (such period being referred to herein as
the "Restricted Period"), Employee shall not, directly or indirectly, either for
herself or for any other person or entity:
(a) anywhere in the United States of America engage or
participate in, or assist, advise or be connected with (including as an
employee, owner, partner, shareholder, member, officer, director, advisor,
consultant, agent or (without limitation by the specific enumeration of the
foregoing) otherwise), or permit his name to be used by or render services for,
any person or entity engaged in a Competing Business (as herein defined);
provided, however, that nothing in this Agreement shall prevent Employee from
acquiring or owning, as a passive investment, up to five percent (5%) of the
outstanding voting securities of an entity engaged in a Competing Business (as
hereinafter defined) which are publicly traded in any recognized securities
markets;
(b) take any action in connection with a Competing Business
which might divert from the Company or any of its Affiliates any opportunity
which would be (at the time of such action) within the scope of the Company's or
any such Affiliate's business;
(c) solicit or attempt to induce any person or entity who is
or has been a customer of the Company at any time during (i) the Employment
Period or (ii) the Restricted Period, to purchase Competing Products (as herein
defined) from any person or entity (other than the Company);
(d) solicit or attempt to induce any person or entity who is
or has been a customer, supplier, licensor, licensee or other business relation
of the Company at any time during (i) the Employment Period or (ii) during the
Restricted Period, to cease doing business with the Company;
(e) take any actions which are calculated to persuade any
person or entity who is a director, officer or agent of the Company or any of
its Affiliates to terminate their association with the Company or such
Affiliates; or
(f) solicit or hire any person or entity who is or was a
director, officer, employee or agent of the Company or any of its Affiliates to
perform services for any entity other than the Company and its Affiliates.
As used herein, a "Competing Business" shall mean a business which
engages, in whole or in part, in the business of developing and marketing and
supporting computer software and products that are competitive with, are similar
to, may be used as substitutes for, or may detract from any products designed,
distributed, marketed or sold by the Company or that are under development by
the Company at the termination of the Employment Period. As used herein, the
products and services, subject to the foregoing provisions of this Section 5.1,
are collectively referred to herein as "Competing Products".
5.2 Non-Disclosure of Confidential Information. Employee recognizes
that he possesses and will possess Confidential Information (as herein defined).
Accordingly, as an additional inducement for the Company to enter into this
Agreement, Employee covenants and agrees that:
(a) during his employment with the Company, except in the
performance of his duties hereunder, and at all times until the first (1st)
anniversary of the termination or expiration of his Employment with the Company,
Employee shall hold in strictest confidence and shall not, other than as
required by law, without the prior written consent of the Company, use for his
own benefit or that of any third party or disclose to any person, firm or
corporation, except the Company, any of its Affiliates, or any employees of the
Company or its Affiliates, any Confidential Information. For purposes of this
Agreement, and intending that the term shall be broadly construed to include
anything protectable by the Company as a trade secret under applicable law,
"Confidential Information" shall mean and include all information, and all
documents and other tangible items which record information, relating to the
development and marketing by the Company of products and/or services from time
to time, which at the time or times concerned are protectable by the Company as
a trade secret under applicable law, which are not generally known to the
Company's competitors and which have been or are from time to time disclosed to
or known by Employee, including, without limitation, the following especially
sensitive types of information relating to the development and marketing of the
Company's products and services;
(i) any and all versions of the Company's proprietary
computer software (including source code and object code),
hardware, firmware and documentation;
(ii) technical information concerning the Company's
products and services, including product data and
specifications, diagrams, flow charts, drawings, test results,
know-how, processes, inventions, research projects and product
development;
(iii) information concerning the Company's business,
including cost information, profits, sales information,
accounting and unpublished financial information, business
plans, markets and marketing methods, customer lists and
customer information, purchasing techniques, supplier lists
and supplier information and advertising strategies;
(iv) information concerning the Company's employees,
including their salaries, strengths, weaknesses and skills;
(v) information submitted by the Company's customers,
suppliers, employees, consultants or co-venturers with the
Company for study, evaluation or use;
(vi) any other information not generally known to the
public which, if misused or disclosed, could reasonably be
expected to adversely affect the Company's business;
provided, however, that Confidential Information shall not be deemed to include
any of the foregoing which (A) is or becomes generally available to the public
other than as a result of Employee's fault or the fault of any other person
known by the Employee to be bound by a duty (contractual or otherwise) of
confidentiality to the Company or its Affiliates (or, if applicable, any
successors or assigns); or (B) is required by law or court order or subpoena to
be disclosed by the Employee, provided that the Employee gives the Company
prompt advance written notice of such requirement and cooperates with any
attempt by the Company to eliminate, limit or reduce such requirement so as to
minimize disclosure.
(b) Employee (or if Employee is deceased, his personal
representative) shall promptly following a request therefor from the Company,
return to the Company, without retaining copies, all tangible items which are or
which contain Confidential Information and Employee shall also return all
equipment, files, software programs and other personal property belonging to the
Company; and
(c) at the reasonable request of the Company made at any time
or from time to time hereafter, Employee (or if Employee is deceased, his
personal representative) shall make, execute and deliver all applications,
papers, assignments, conveyances, instruments or other documents and shall
perform or cause to be performed such other lawful acts as the Company may
reasonably deem necessary to implement any of the provisions of this Agreement,
and shall give testimony and cooperate with the Company, its Affiliates or its
representatives in any controversy or legal proceedings involving the Company,
its Affiliates or its representatives with respect to any Confidential
Information.
As used herein, an "Affiliate" shall mean and include any person or
entity which controls a party, which such party controls or which is under
common control with such party, and which is engaged in any business similar to
that of the Company. "Control" means the power, direct or indirect, to direct or
cause the direction of the management and policies of a person or entity through
voting securities, contract or otherwise.
5.3 Injunctive Relief. Notwithstanding the provisions of Section 6.1,
Employee acknowledges and agrees that in the event of a breach or threatened
breach of any of the foregoing provisions of Sections 5.1 and 5.2, the Company
shall have no adequate remedy at law and shall therefore be entitled upon notice
to Employee (provided giving of such notice shall not entitle Employee to delay
any proceedings to enforce the foregoing provisions) to enforce each such
provisions of Sections 5.1 and 5.2 by temporary or permanent injunctive or
mandatory relief obtained in any court of competent jurisdiction without the
necessity of proving damages, posting any bond or other security, and without
prejudice to any other remedies which may be available at law or in equity to
the Company. Employee and the Company agree that the Superior Court in and for
the County of New York, State of New York, United States of America or the
United States District Court for the Southern District of New York are courts of
competent jurisdiction and Employee and the Company each consent to the personal
jurisdiction of those courts for purposes of such an action or proceeding
instituted to obtain equitable relief or monetary damages relating to the
provisions of Sections 5.1 and 5.2 and in connection therewith Employee and the
Company agree that process in any action may be served upon Employee and the
Company, as the case may be, and shall be deemed to be complete when the same is
delivered to Employee (by personal service or by such method as may be ordered
by a court) or the Company, as the case may be, in the same manner as notices
are required to be given pursuant to the provisions of this Agreement.
ARTICLE VI
ARBITRATION
6.1 Except as specifically set forth in Section 5.3, the parties will
first attempt to settle each and every dispute, controversy or claim, whether
based in contract, tort, statute, fraud, misrepresentation or any other legal
theory, arising out of or relating to this Agreement ("Dispute(s)"), through
good faith negotiations. Any Dispute not thus resolved within thirty (30) days
or such other period as the parties shall mutually agree in writing, shall be
then settled by final and binding arbitration conducted at a mutually agreed
location in Boston, Massachusetts by one neutral arbitrator, in accordance with
this Section and the then current Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). Each party shall bear its own expenses and the
parties shall equally share the filing and other administrative fees of the AAA
and the expenses of the arbitrator. Judgment upon an award may be entered in any
Court having competent jurisdiction. The arbitrator shall not have the power to
award any consequential or punitive damages. The arbitrator shall have the power
to order prehearing discovery of documents or the taking of depositions, and may
compel attendance of witnesses and the production of documents at the hearing.
The arbitrability of any Dispute, including those as to the enforceability of
this Section, shall be determined solely by the arbitrator. The Federal
Arbitration Act, 9 U.S.C. Sections 1 to 16, shall govern the interpretation and
enforcement of this Section 6.1. Any party may seek a temporary injunction in
any court of competent jurisdiction to the limited extent necessary to preserve
the status quo during the pendency of final resolution of a Dispute in
accordance with this Section. The statute(s) of limitation applicable to any
Dispute shall be tolled upon initiation of the Dispute resolution procedures
under this Section and shall remain tolled until the Dispute is resolved under
this Section. However, tolling shall cease if the aggrieved party does not file
a demand for arbitration of the Dispute with the AAA within sixty (60) calendar
days after good faith negotiations have been terminated by either party.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, requests, demands and other communications
(collectively, a "Notice") given or made pursuant to this Agreement shall be in
writing and shall be given by personal delivery facsimile (with written
confirmation of receipt) or by registered or certified mail, return receipt
requested, postage and fees prepaid, to the following addresses:
(a) If to the Company, addressed to:
xxxxx-xxxxxxxxxx.xxx, corp.
Two Xxxxxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chairman Compensation Committee
(b) If to Employee, to:
Xx. Xxxx Xxxxxx
00 Xxxxxx Xx.
Xxxxxxxx, XX 00000
Any Notice shall be deemed duly given when received by the addressee thereof,
provided that any Notice sent by registered or certified mail shall be deemed to
have been duly given five days after the date of deposit in the United States
mail, unless sooner received. Any of the parties to this Agreement may from time
to time change its address for receiving Notices by giving written notice
thereof in the manner set forth above.
7.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Massachusetts, and the terms hereof may
be enforced in any court of competent jurisdiction in action for specific
performance which may be instituted under this Agreement.
7.3 Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be or become
prohibited or invalid under applicable law, such provisions shall be ineffective
to the extent of such prohibition or invalidity without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
7.4 Captions. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions or
interpretation of this Agreement.
7.5 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
7.6 Binding Effect. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective successors,
assigns, heirs and legal representatives.
7.7 Waiver. Waiver by either of the parties of any breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
prior or subsequent breach of the same or any other provision hereof.
7.8 Amendment. This Agreement may be amended, modified, superseded or
cancelled, in whole or in part, only by a written instrument executed by
Employee and by an authorized representative of the Company.
IN WITNESS WHEREOF, this Agreement has been made and entered into as of
the date and year first above written.
xxxxx-xxxxxxxxxx.xxx, corp.
By: /s/ XXXX XXXXX /s/ XXXXX X XXXXXX
---------------------- --------------------------
Name: Xxxx Xxxxx CEO Xxxxx X Xxxxxx
