EXHIBIT 10.4
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AMENDED AND RESTATED
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EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement"), made and entered into as of this
1st day of June, 1999 is amended and restated with respect to Section 4(e)
hereof as of the 13th day of January, 2000, by and between Click Commerce, Inc.,
a Delaware corporation formerly known as Click Interactive, Inc. ("Corporation")
and Xxxxxx X. Xxxxxxx, an individual residing _____________________ (the
"Executive").
RECITALS
WHEREAS, the Corporation is engaged in the development, sale and
distribution of interactive computer applications and internet related products
and services involved in business to business electronic commerce;
WHEREAS, the Corporation desires to employ Executive as an Executive Vice
President of the Corporation;
WHEREAS, the Executive desires to be employed by the Corporation at the
salary and benefits provided for herein;
WHEREAS, the Executive acknowledges and understands that during the course
of his employment, the Executive will become familiar with certain confidential
information of the Corporation which is exceptionally valuable to the
Corporation and vital to the success of the Corporation's business; and
WHEREAS, the Corporation and the Executive desire to protect such
confidential information from disclosure to third parties or use of such
information to the detriment of the Corporation.
AGREEMENT
NOW THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Employment. The Corporation hereby agrees to employ the Executive,
and the Executive hereby accepts such employment, as an Executive Vice President
of the Corporation.
2. Term. The term of this Agreement shall commence on June 1, 1999 and
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shall continue until December 31, 2002 (the "Term"), unless earlier terminated
pursuant to Section 12 of this Agreement.
3. Duties. The duties of the Executive shall have general responsibility
for all sales, marketing and operating activities of the Corporation, including
day-to-day operations with profit and loss responsibility and such other
responsibilities as may be as determined by the Chief Executive Officer of the
Corporation in accordance with the By-Laws of the Corporation in effect from
time to time, provided that such duties shall at all times be consistent with
the duties normally performed by Executive Vice Presidents of companies engaged
in businesses similar to the business of the Corporation with similar
responsibilities and reporting to the Chief Executive Officer of the
Corporation. The Executive agrees to devote all of his business time, attention
and energies to the diligent performance of his duties hereunder and will not,
during the Term hereof, engage in, accept employment from, or provide services
to any other person, firm, corporation, governmental agency or other entity that
engages in, any activities which, in the opinion of the Board of Directors,
would conflict with or detract from the Executive's capable performance of such
duties.
4. Compensation.
(a) Base Salary. During the Term of this Agreement, the Executive shall
receive compensation at the annual rate of $250,000 payable in equal monthly
installments or as otherwise agreed to by the parties. The annual amount of
salary payments to the Executive during the Term of this Agreement shall be
referred to herein as the "Annual Salary."
(b) Annual Incentive Bonus. During the Term of this Agreement, the
Executive shall participate in an annual bonus program to be adopted by the
Corporation providing the Executive with the opportunity to earn an annual cash
bonus equal to up to 50% of the Executive's Annual Salary (the "Annual Incentive
Bonus"). The Annual Incentive Bonus shall be based upon the achievement of
specified organizational and personal management objectives to be agreed upon by
the Executive and the Corporation ("Annual Incentive Bonus Objectives"). The
Annual Incentive Bonus Objectives will be set forth in writing on a quarterly
basis. The Annual Incentive Bonus shall be earned on a quarterly basis based
solely upon performance as measured against the applicable Annual Incentive
Bonus Objectives and shall be paid on an annual basis, if, and only if, earned.
(c) Special Year 2000 Performance Bonuses.
(i) In the event that the Corporation recognizes gross revenues in
the period commencing on January 1, 2000 through and including June 30,
2000 in an amount equal to or greater than $15,000,000, then the Executive
shall be entitled to receive a special performance bonus equal to $50,000.
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(ii) In addition to special performance bonus provided under
Section 4(c)(i) above, in the event that the Corporation recognizes gross
revenues in the period commencing on January 1, 2000 through and including
December 31, 2000 in an amount equal to or greater than $30,000,000, then
the Executive shall be entitled to receive a special performance bonus
equal to $50,000.
(d) Stock Option Grant. The Corporation shall grant to the Executive
options to purchase an aggregate of 285,000 shares of common stock, par value
$0.001 per share ("Common Stock"), of the Corporation, at an exercise price of
$4.60 per share ("Options"),which Options shall be restricted and non-
transferable and shall vest in accordance with the schedule set forth below.
The term of the Options shall be for a period of ten (10) years following the
date of the grant of the Options hereunder and the Options shall be subject to
such other terms and conditions as are determined by the Board of Directors.
The Executive shall not be entitled to any rights with respect to the shares of
Common Stock underlying the Options, including the right to vote or receive
dividends or distributions with respect to any of the shares of Common Stock
underlying the Options. To the extent that the Executive is employed by the
Corporation as of each of the respective dates set forth below, the Options
shall vest in the Executive:
(i) 95,000 of the Options shall vest on December 31, 2000; and
(ii) 95,000 of the Options shall vest on December 31, 2001; and
(iii) 95,000 of the Options shall vest on December 31, 2002.
(e) Acceleration of Option Vesting. In the event of a Change in Control
(as hereinafter defined) of the Corporation prior to the termination or
expiration of this Agreement, notwithstanding the vesting schedule set forth in
Section 4(d) hereof, all of the unvested Options shall immediately vest. For
purposes of this Agreement, a "Change in Control" shall mean (i) a sale to a
third party of at least a majority of the outstanding shares of Common Stock,
(ii) a sale of substantially all of the assets of the Corporation, or (iii) a
merger or other consolidation with an unrelated third party following which the
ability to elect a majority of the members of the Board of Directors or a
majority of the voting power of the surviving corporation is not held by the
holders of Common Stock prior to such transaction. In addition, in the event of
the Corporation's initial Qualified Public Offering (as defined the
Corporation's Amended and Restated Certificate of Incorporation) or any other
subsequent public offering of the Corporation's Common Stock (collectively, a
"Public Offering") prior to December 31, 2000, notwithstanding the vesting
schedule set forth in Section 4(d) hereof, options equal to the number of shares
included in the Public Offering, but in no event exceeding 10% of the shares of
Common Stock issuable pursuant to the Options, shall accelerate and vest as of
the closing of the Public Offering in order to permit the Executive to
participate in such Public Offering.
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5. Benefits. During the Term of this Agreement, the Corporation agrees
to provide to the Executive such benefits as are provided generally to other
senior executives of the Corporation from time to time, including, without
limitation, any health, disability, dental, severance benefits, insurance,
defined contribution plan, deferred compensation, profit-sharing, pension, or
other employee benefit policies, programs (including child day-care) or plans
which the Corporation offers generally to senior executives (collectively, the
"Employee Benefits"). Executive shall be entitled to four (4) weeks of vacation
during each twelve (12) month period hereunder, provided, however, that
Executive shall be entitled to accrue or carryover unused vacation from one (1)
calendar year only to the next calendar year. Executive also shall be entitled
to participate in other compensation programs that the Corporation may make
available from time to time.
6. Expenses. During the Term of this Agreement, the Executive shall be
reimbursed by the Corporation for all reasonable, ordinary and necessary out-of-
pocket expenses for travel, lodging, meals, entertainment expenses, or any other
similar expenses incurred by the Executive in performing services for the
Corporation to the extent that such expenditures meet the requirements of the
Internal Revenue Code of 1986, as amended (the "Code"), for deductibility by the
Corporation for federal income tax purposes and are substantiated and documented
by the Executive as required by the Code.
7. Non-Disclosure of Confidential Information.
(a) The Executive will not during, or for a period of five (5) years after
termination of, this Agreement, in any form or manner, directly or indirectly,
divulge, disclose or communicate to any person, entity, firm, corporation or any
other third party, or utilize for the Executive's personal benefit or for the
benefit of any competitor of the Corporation, any Confidential Information (as
hereinafter defined).
(b) For the purposes of this Agreement, the term "Confidential
Information" shall mean, but shall not be limited to, any technical or non-
technical data, formulae, patterns, compilations, programs, devices, methods,
techniques, drawings, designs, processes, procedures, improvements, models or
manuals of the Corporation or which are licensed by the Corporation, any
financial data or lists of actual or potential customers or suppliers of the
Corporation, and any information regarding the Corporation's marketing, sales or
dealer network, which is not generally known to the public through legitimate
origins. The Corporation and the Executive acknowledge and agree that such
Confidential Information is extremely valuable to the Corporation and shall be
deemed to be a "trade secret." In the event that any part of the Confidential
Information becomes generally known to the public through legitimate origins
(other than by the breach of this Agreement by the Executive or by
misappropriation), that part of the Confidential Information shall no longer be
deemed
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Confidential Information for the purposes of this Agreement, but the Executive
shall continue to be bound by the terms of this Agreement as to all other
Confidential Information.
(c) Upon termination of this Agreement for any reason, the Executive will
promptly deliver to the Corporation all correspondence, drawings, blueprints,
manuals, letters, notes, notebooks, reports, programs, plans, proposals,
financial documents, or any other documents, including all copies in any form or
media, concerning the Corporation's customers, dealer network, marketing
strategies, products or processes and/or which contains Confidential
Information.
8. Covenant-Not-To-Compete. The Executive will not during, or for a
period of two (2) years after termination of, this Agreement, in any form or
manner, directly or indirectly, on his own behalf or in combination with others,
become interested in (as an individual, partner, stockholder, director, officer,
principal, agent, independent contractor, employee, trustee, lender of money or
in any other relation or capacity whatsoever, except as a holder of securities
of a corporation whose securities are publicly traded and which is subject to
the reporting requirements of the Securities Exchange Act of 1934, and then only
to the extent of owning not more than two percent (2%) of the issued and
outstanding securities of such corporation), or provide services similar to
those provided to the Corporation for, any business which renders implementation
services or sells products, or proposes to render services or sell products,
that compete with the Business of the Corporation within the United States,
Western Europe or Australia. For purposes of this Agreement, the "Business" of
the Corporation shall mean providing business to business electronic commerce
solutions to Global 1000 companies.
9. Covenant Not to Solicit.
(a) Covenant Not to Solicit Employees. During Executive's employment by
the Corporation and for a period of two (2) years following termination or
cessation of Executive's employment pursuant to this Agreement, Executive agrees
and covenants that he will not, for any reason, directly or indirectly, employ,
solicit or endeavor to entice away from the Corporation or any of its affiliates
(whether for his own benefit or on behalf of another person or entity), or
facilitate the solicitation, employment or enticement of, any employees of
Corporation to work for Executive, any affiliate of Executive or any competitor
of Corporation, nor will Executive otherwise attempt to interfere (to the
Corporation's detriment) in the relationship between the Corporation or any of
its affiliates and any such employees.
(b) Covenant Not to Solicit Customers. During Executive's employment
pursuant to this Agreement and for a period of two (2) years following
termination or cessation of Executive's employment, Executive agrees and
covenants that he will not directly
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or indirectly in any form or manner, contact, solicit, or facilitate the
contacting or solicitation of any Customers of the Corporation, for the purpose
of competing with the Business of the Corporation. For purposes of this
Agreement, a "Customer" of the Corporation shall mean and refer to (i) each
person that has received services or purchased products from the Corporation or
any of its affiliates during the period of Executive's employment hereunder and
(ii) each person or entity formally solicited by the Corporation to provide
services or purchase products during the period of Executive's employment
hereunder.
10. Equitable Remedies. In the event that the Executive breaches any of
the terms contained in Sections 7, 8 or 9 of this Agreement, the Executive
stipulates that said breach will result in immediate and irreparable harm to the
business and goodwill of the Corporation and that damages, if any, and remedies
at law for such breach would be inadequate. The Corporation shall therefore be
entitled to apply for and receive from any court of competent jurisdiction an
injunction to restrain any violation of this Agreement and for such further
relief as the court may deem just and proper, and the Executive shall, in
addition, pay to the Corporation, following judgment or other final
determination by such court, the Corporation's costs and expenses in enforcing
such terms (including court costs and reasonable attorneys' fees).
11. Continuing Obligation. The obligations, duties and liabilities of
the Executive pursuant to Sections 7, 8 and 9 of this Agreement are continuing,
absolute and unconditional and shall remain in full force and effect as provided
therein despite any termination of this Agreement for any reason whatsoever,
including, without limitation, the expiration of the Term of this Agreement.
12. Termination of Employment.
(a) Termination by Corporation of Executive for Cause. The Corporation
shall have the right to terminate the Executive's employment at any time for
"cause." For purposes hereof, "cause" shall mean that the Executive has:
(i) been convicted of, or plead nolo contendere to, a felony or crime
involving moral turpitude; or
(ii) committed an act of personal dishonesty or fraud involving personal
profit in connection with the Executive's employment by the
Corporation; or
(iii) committed a breach of any material covenant, provision, term,
condition, understanding or undertaking set forth in this Agreement,
including, without limitation, the provisions contained in Sections
7, 8 and 9 hereof; or
(iv) committed an act which the Board of Directors of the Corporation has
found to
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have involved willful misconduct or negligence on the part of the
Executive; or
(v) exhibited documented habitual absenteeism or been unable or
repeatedly failed to perform any reasonable or customary task
typically required in connection with the Executive's employment and
position with the Corporation or its subsidiaries.
If the Corporation shall terminate the Executive's employment pursuant to this
Section 12(a), the Executive shall forfeit all rights with respect to the
Options (whether or not vested) granted to the Executive pursuant to Section
4(d). In addition, the Corporation shall be obligated to pay to the Executive
the Annual Salary then in effect and the Employee Benefits payable to the
Executive pursuant to this Agreement, accrued up to and including the date on
which the Executive's employment is so terminated. Thereafter, the Corporation
shall have no further obligation whatsoever to the Executive.
(b) Termination by Corporation of Executive Because of Executive's
Disability, Injury or Illness. The Corporation shall have the right to
terminate the Executive's employment if the Executive is unable to perform the
duties assigned to him by the Corporation because of the Executive's disability,
injury or illness (as such terms may be defined under the applicable disability
plan covering the Executive); provided, however, that in the event of such
disability, injury or illness, the Executive's inability to perform such duties
must have existed for a total of six (6) months in any consecutive twelve (12)
month period before such termination can be made effective. If the Corporation
shall terminate the Executive's employment pursuant to this Section 12(b), the
Corporation shall be obligated (i) to pay to the Executive the Annual Salary
then in effect payable to the Executive pursuant to this Agreement, accrued up
to and including the date on which the Executive's employment is so terminated,
and (ii) to provide Employee Benefits to the extent the Executive remains
eligible to continue to participate in such Employee Benefits pursuant to the
terms and conditions of such policies, programs or plans. Notwithstanding
anything to the contrary in this Agreement, the Corporation's obligations to
make payments to the Executive shall be reduced by any amounts actually paid to
the Executive pursuant to any disability insurance payments received by the
Executive pursuant to the Employee Benefits or otherwise. In the event of a
termination of the Executive's employment pursuant to this Section 12(b), the
Executive shall be entitled to retain all Options vested pursuant to Section
4(d) hereof as of the date of termination.
(c) Termination by Corporation as a Result of Executive's Death. The
obligations of the Corporation to the Executive under this Agreement (except as
provided in this Section 12(c)) shall automatically terminate upon the
Executive's death and the Corporation shall then only be obligated to pay to the
Executive's estate the Annual Salary then in effect and the Employee Benefits
payable to the Executive pursuant to this Agreement, accrued up to and including
the date on which the Corporation's obligation to the Executive is so
terminated.
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Thereafter, the Corporation shall have no further obligation whatsoever to the
Executive. In the event of a termination of the Executive's employment pursuant
to this Section 12(c), the Executive shall be entitled to retain all Options
vested pursuant to Section 4(d) hereof as of the date of termination. In the
event of the Executive's death, any payments due to the Executive shall be paid
to the Executive's estate.
(d) Termination of Executive for Any Other Reason. The Corporation shall
have the right to terminate the Executive's employment for any other reason upon
thirty (30) days prior written notice to the Executive. In the event of a
termination of the Executive's employment for any reason other than the reasons
set forth in Sections 12(a), 12(b) or 12(c) hereof, (i) the Corporation shall be
obligated to provide twelve (12) months severance or the balance of this
Agreement, whichever is shorter, in equal semi-weekly installments or otherwise
as agreed to by the parties, (ii) the Corporation shall be obligated to provide
the Employee Benefits, if any and to the extent the Executive remains eligible
to participate in such Employee Benefits pursuant to the terms and conditions of
such policies, programs or plans, for the remaining period of the Term (but in
no event shall the total amount payable to the Executive hereunder be in excess
of the Executive's then current Annual Salary, plus amounts payable pursuant to
Section 12(d)(iii) below), (iii) the Corporation shall be obligated to pay the
Executive the earned portion of the Annual Incentive Bonus and Special Year 2000
Performance Bonus as provided in Section 4(b) hereof, and (iv) the Executive
shall be entitled to retain all Options vested pursuant to Section 4(d) hereof
as of the date of termination and shall be entitled to retain such additional
Options that would otherwise vest as within the twelve (12) month period
immediately following such termination date. Thereafter, the Corporation shall
have no further obligation whatsoever to the Executive.
(e) Termination by Executive. The Executive may resign and terminate his
employment by the Corporation for any reason whatsoever upon thirty (30) days
prior written notice to the Corporation. Thereafter, the Corporation shall have
no obligation to the Executive, except for those obligations provided as a
matter of federal or state law. In the event of a termination of the Executive's
employment pursuant to this Section 12(e), the Executive shall be entitled to
retain all Options vested pursuant to Section 4(d) hereof as of the date of
termination
13. Capacity. The Executive hereby represents and warrants that, in
entering into this Agreement, he is not in violation of any contract or
agreement, whether written or oral, with any other person, firm, partnership,
corporation or other entity to which he is a party or by which he is bound and
will not violate or interfere with the rights of any other person, firm,
partnership, corporation or other entity. In the event that such a violation or
interference does occur, or is alleged to occur, notwithstanding the
representation and warranty made hereunder, the Executive shall indemnify the
Corporation from and against any and all manner of expenses and liabilities
incurred by the Corporation or any affiliated company of the Corporation in
connection with such violation or interference or alleged violation or
interference.
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14. Entire Agreement. This Agreement contains the entire agreement
between the parties and shall not be modified except in writing by the parties
hereto. Furthermore, the parties hereto specifically acknowledge and agree that
this agreement supersedes all prior agreements between the Executive, the
Corporation and its officers, directors, and agents, if any and in whatever
capacity so entered into, whether written or oral, and all such prior
agreements, whether written or oral, shall be of no further force or effect from
and after the date hereof.
15. Severability. If any phrase, clause or provision of this Agreement
is declared invalid or unenforceable by a court of competent jurisdiction, such
phrase, clause or provision shall be deemed severed from this Agreement, but
will not affect any other provisions of this Agreement, which shall otherwise
remain in full force and effect. If any restriction or limitation in this
Agreement is deemed to be unreasonable, onerous and unduly restrictive by a
court of competent jurisdiction, it shall not be stricken in its entirety and
held totally void and unenforceable, but shall remain effective to the maximum
extent permissible within reasonable bounds.
16. Notices. Any notice, request or other communication required to be
given pursuant to the provisions hereof shall be in writing and shall be deemed
to have been given when delivered in person, on the next business day after
being delivered to a nationally-recognized overnight courier service (for such
next-day delivery) or five (5) days after being deposited in the United States
mail, certified or registered, postage prepaid, return receipt requested and
addressed to the other party at its or his last known address. The address of
any party may be changed by notice in writing to the other party duly served in
accordance herewith.
17. Waiver. The waiver by the Corporation or the Executive of any breach
of any term or condition of this Agreement shall not be deemed to constitute the
waiver of any other breach of the same or any other term or condition hereof.
18. Governing Law. This Agreement and the enforcement hereof shall be
governed and controlled in all respects by the internal laws, and not the laws
of conflict, of the State of Illinois.
19. Registration Rights. The Corporation shall use its reasonable best
efforts to extend registration rights to the Executive to register for sale up
to 10% of the shares of Common Stock held by the Executive (or which may be
acquired pursuant to the exercise of vested and exercisable options to purchase
Common Stock), (a) if registration rights are granted to selling stockholders of
the Corporation in a Public Offering of the Corporation, and (b) subject to (i)
cutbacks determined by the managing underwriter of such offering and (ii) the
consent and approval of unaffiliated third party investors in the Corporation.
20. Assignment of Inventions. The Executive shall disclose promptly in
writing to a designated representative of the Corporation all material of a
proprietary nature, including, but not limited to, ideas, inventions,
discoveries, improvements, developments, designs, methods,
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systems, computer programs, trade secrets or any other intellectual property
whether or not patentable or copyrightable, specifically including, but not
limited to, copyright and mask works, formulae, compositions, products,
processes, apparatus, and new uses of existing materials or machines (hereafter
collectively called "Inventions") made, conceived or first reduced to practice
by the Executive solely or jointly with others while employed by the
Corporation. The Corporation shall be the owner of all property rights in any
such Inventions, including, but not limited to, rights arising from the
obtaining of letters of patent or copyright in respect thereof, which shall be
vested in the Corporation. The Executive will at the Corporation's request
execute any and all assignment, patent or copyright forms and the like, deemed
reasonably necessary by the Corporation, and will assist in drafting of any
description or specification of the Inventions as may be required by the
Corporation to protect the Corporation's rights in and to the Inventions,
including, but not limited to, application(s) for letters of patent. The
Corporation's rights hereunder shall not be limited to this country but shall
extend to any country in the world and shall attach to each Invention
notwithstanding that it is perfected, improved, reduced to specific form or used
after termination the Executive's employment. The Executive agrees to lend such
assistance as he may be able, at the Corporation's request without charge in
connection with any proceedings relating to such letters of patent, trade
secrets, copyright or application thereof, as may be determined by the
Corporation to be reasonably necessary. In such case the Corporation will
reimburse expenses which the Executive may reasonably incur in assisting the
Corporation to obtain, assert, defend and protect such letters of patent, trade
secrets, copyright or other protection.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
CLICK COMMERCE, INC.
By_______________________
Xxxxxxx X. Xxxxx, Xx.,
Chairmen and Chief Executive Officer
EXECUTIVE
________________________
Xxxxxx X. Xxxxxxx
Address:________________________
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