EXHIBIT 10.35
-------------
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 28th day of August, 2000, by and between Heartsoft, Inc., a Delaware
corporation (the "Company"), and Xxxxxx Xxxxxx ("Employee"). This Agreement
hereby supersedes any other employment agreements or understandings, written or
oral, between the Company and Employee.
1. EMPLOYMENT AND DUTIES.
1.1 The Company hereby employs Employee as its Chief Financial
Officer. As such, Employee shall have responsibilities, duties and authority
reasonably accorded to and expected of a Chief Financial Officer. Employee
hereby accepts this employment upon the terms and conditions herein contained
and, subject to Section 1.2, agrees to devote his full working time, attention
and efforts to promote and further the business of the Company.
1.2 Employee's services will be rendered exclusively to
Company during the term hereof. Employee shall not, during the term of his
employment hereunder, be engaged in any other business activity pursued for
gain, profit or other pecuniary advantage. The foregoing limitations shall not
be construed as prohibiting Employee from making personal investments in such
form or manner as will neither require his services in the operation or affairs
of the companies or enterprises in which such investments are made.
2. COMPENSATION. For all services rendered by Employee, the Company
shall compensate Employee as follows:
2.1 Base Salary. The annual base salary payable to Employee
shall be a base salary of not less than $100,000 ("Base Salary"), payable on a
regular basis in accordance with the Company's standard payroll procedures.
2.2 Bonus. In addition, Employee shall be entitled to
participate in such bonus plans as are established by the Company's Board of
Directors from time to time.
2.3 Other Benefits. Employee shall be entitled to receive
additional benefits from the Company in such form and to such extent as
specified below:
(a) Coverage for Employee under retirement, 401(k),
or health, hospitalization, dental and other insurance plans or other employee
benefit or welfare plans, that the Company may have in effect from time to time
and makes available to its employees generally;
(b) Reimbursement for all business travel and other
out-of-pocket expenses reasonably incurred by Employee in the performance of his
services pursuant to this
Agreement. All reimbursable expenses shall be appropriately documented in
reasonable detail by Employee upon submission of any request for reimbursement,
and in a format and manner consistent with the Company's expense reporting
policy;
(c) Four weeks annual paid vacation (pro-rated for
any year in which Employee is employed for less than the full year). Employee
will acquire no rights to accrued vacation benefits based on allocated vacation
not taken while this Agreement is in effect; and
(d) An automobile allowance of $400 per month.
3. PLACE OF PERFORMANCE. The Employee's job location will be at
Company's offices in the Tulsa, Oklahoma metropolitan area.
4. TERM; TERMINATION; RIGHTS ON TERMINATION. The term of this Agreement
will commence on August 28, 2000 and will continue until terminated as provided
below. This Agreement and Employee's employment may be terminated in any one of
the following ways:
(a) Death. The death of Employee shall immediately terminate
the Agreement; provided any Base Salary and earned benefits to the date of death
will be paid to Employee's estate, legal representative or other beneficiary.
(b) Disability. The Company will make efforts to reasonably
accommodate Employee as required by applicable state or federal disability laws.
However, the parties irrefutably presume that, given Employee's position, it
would be an undue hardship to the Company if Employee is absent for more than
three (3) consecutive months. Therefore, if as a result of incapacity due to
physical or mental illness or injury, Employee shall have been absent from his
full-time duties hereunder for three (3) consecutive months, then thirty (30)
days after receiving written notice (which notice may occur before or after the
end of such three (3) month period, but which shall not be effective earlier
than the last day of such three (3) month period), the Company may terminate
Employee's employment hereunder provided Employee is unable to resume his
full-time duties at the conclusion of such notice period. In the event this
Agreement is terminated as a result of Employee's disability, Employee shall
receive from the Company, a payment equal to the amount of the Base Salary due
through the end of the month of termination due within ten (10) days of the
effective date of termination.
(c) Good Cause. The Company may terminate the Agreement after
written notice to Employee for Good Cause, which shall be: (i) Employee's
material breach of this Agreement; (ii) the Employee's failure to adhere to any
written Company policy if the Employee has been given a reasonable opportunity
to comply with such policy or cure his failure to comply (which reasonable
opportunity must be granted during the ten-day period preceding termination of
this Agreement); (iii) the appropriation (or attempted appropriation) of a
material business opportunity of the Company, including attempting to secure or
securing any personal profit in connection with any transaction entered into on
behalf of the Company; (iv) the misappropriation (or attempted misappropriation)
of any of the Company's funds or property; (v) the conviction of, the indictment
for (or its procedural equivalent), or the entering of a guilty plea or plea of
no
2
contest with respect to, a felony, the equivalent thereof, or any other crime
with respect to which imprisonment is a possible punishment; or (vi) chronic
alcohol abuse or chronic illegal drug abuse by Employee. If the Company desires
to terminate Employee's employment for Good Cause, the Company shall deliver to
Employee a written notice (which shall be in addition to any notice and
opportunity to cure provided for above) which shall indicate the specific
provisions of this Agreement relied upon by the Company and which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis of
termination for Good Cause under the provision so relied upon (a "Notice of
Intended Termination for Good Cause"). Any proposed termination for Good Cause
shall be effective only upon approval and adoption of a resolution by the
affirmative vote of the Company's Board of Directors then in office at a meeting
duly of the Board called and held for the purpose finding that the Employee
committed the actions specified in the Notice of Intended Termination for Good
Cause. Any such meeting shall be held following the delivery of the Notice of
Intended Termination for Good Cause and at a time calculated to provide
reasonable notice to the Employee. The Employee, together with Employee's
counsel, shall be entitled to be heard before the Board at such meeting. In the
event of a termination for Good Cause, as enumerated above, Company will pay
Employee, in lieu of any other payment, Employee's Base Salary and earned
benefits to the effective date of termination.
(d) Without Cause. At any time after the commencement of
employment, the Company may, without cause, terminate this Agreement and
Employee's employment hereunder, effective ninety (90) days after written notice
is provided to Employee. Employee may only be terminated without cause by the
Company during the Term hereof if such termination is approved by the Company's
Board of Directors. Should Employee be terminated by the Company without cause,
Employee shall receive from the Company, in a lump-sum payment due on the
effective date of termination, an amount equal to six (6) months of his base
salary then in effect which six month period shall be measured from when written
notice is provided to Employee.
(e) Termination by Employee Without Cause. Employee may
terminate his employment with the Company upon ninety (90) days prior written
notice to the Company. If Employee resigns or otherwise terminates his
employment, Company will pay Employee, in lieu of any other payment, Employee's
Base Salary that has actually accrued to the date of termination.
(f) Termination by Employee for Good Reason. Employee may
terminate his employment hereunder for "Good Reason." As used herein, "Good
Reason" shall mean the continuance or failure to cure of any of the following
after thirty (30) days' prior written notice by Employee to the Company,
specifying the basis for such Employee's having Good Reason to terminate this
Agreement:
(i) The assignment to Employee of any duties
materially and adversely inconsistent with the position of chief financial
officer of the Company;
3
(ii) The failure by the Company to permit the
Employee (a) to participate in any bonus or other cash or equity incentive
compensation plan, program or arrangement made generally available to the senior
executive officers of the Company and (b) to have performance goals, if
applicable, and target bonus or other incentive awards under any such plan
program or arrangement that are reasonable in relation to the performance goals
and awards established for the other participating executive officers;
(iii) The failure by the Company to permit the
Employee to participate in any retirement plan or arrangement or any insurance
or other welfare benefit plan or arrangement made generally available to the
senior executive officers of the Company on a basis reasonable in relation to
the basis on which the other executive officers of the Company are eligible to
participate;
(iv) The relocation of the site from which the
Employee is to perform his principal duties or relocation of the Company's
principal executive offices to any place outside of the Tulsa, Oklahoma
metropolitan area; or
(v) The failure by the surviving or successor entity
in any merger, consolidation, reorganization or similar transaction in which the
Company is not the surviving entity to assume or otherwise be liable for the
obligations of the Company under this Agreement.
In the event of any dispute with respect to the termination by the Employee for
Good Reason, such dispute shall be resolved pursuant to the provisions of
Section 11.5 below. In the event that it is determined that Good Reason did
exist, the Company shall pay all amounts and damages to which Employee may be
entitled as a result of such breach, including interest thereon and all
reasonable legal fees and expenses and other costs incurred by Employee to
enforce his rights hereunder. Should Employee terminate his employment for Good
Reason, Employee shall receive from the Company, in a lump-sum payment due on
the effective date of termination, six (6) months of his base salary at the rate
then in effect.
(g) Effect of Termination. Upon termination of this Agreement
all rights and obligations of the Company and of Employee under this Agreement
shall cease as of the effective date of termination, except that obligations
under paragraphs 5, 6, 7, 8, 9, 11.5, 11.7 and 11.8 herein shall survive such
termination in accordance with their terms.
5. SEVERANCE PAYMENT ON CHANGE OF CONTROL. In the event that (i)
a "change in control" (as hereinafter defined) of the Company occurs and (ii)
either Employee's employment is terminated, Employee is assigned duties
materially and adversely inconsistent with the position of chief financial
officer of the Company or Employee is asked to move, or the Company's principal
executive offices are relocated, outside of the Tulsa, Oklahoma metropolitan
area, then Employee shall receive from Company a lump-sum payment equal to one
year's base salary at the rate then in effect. The payment shall be made to
Employee fifteen (15) days after written notice to Company from Employee of his
entitlement to the lump-sum payment described herein.
4
A "Change in Control" of the Company shall have occurred if, after the
effective date of the Plan, (i) an Acquiring Person (other than the Company, any
subsidiary, any employee benefit plan of the Company or of any subsidiary, or
any person or entity organized, appointed or established by the Company or any
subsidiary for or pursuant to the terms of any such plans), alone or together
with its Affiliates and Associates, shall become the beneficial owner of more
than fifty percent (50%) of the voting power of the capital stock of the Company
then outstanding, and (ii) the Continuing Directors no longer constitute a
majority of the Board.
"Acquiring Person" means any person (any individual, firm, corporation
or other entity) who or which together with all Affiliates and Associates, shall
be the beneficial owner of more than fifty percent (50%) of the Company's Common
Stock. "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). "Continuing
Director" means (i) any individual who is a member of the Board, while such
individual is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative or nominee of
an Acquiring Person or of any such Affiliate or Associate and was a member of
the Board prior to the occurrence of the Change in Control date, or (ii) any
successor of a Continuing Director, while such successor is a member of the
Board, and who is not an Acquiring Person, or an Affiliate or Associate, and is
recommended or elected to succeed the Continuing Director by a majority of the
Continuing Directors.
6. BUSINESS RECORDS. All business records prepared or utilized by
Employee in providing services will, at all times, remain the property of the
Company.
7. NON-SOLICITATION OF CUSTOMERS AND VENDORS. Employee agrees that
during the continuance in force of this Agreement and for a period of one (1)
year following the termination of this Agreement, Employee will not, without the
prior written consent of Company identifying such customer or vendor, directly
or indirectly, personally, or as principal, agent, employee, shareholder,
partner, consultant or trustee of any company, firm, enterprise or business,
solicit, sell, call upon or otherwise contact any customer or vendor of Company
or any subsidiary or affiliate of Company or any person who has been in contact
with Company or any subsidiary or affiliate of Company with respect to their
business, for the purpose of selling and providing the same or similar services
provided or offered by Company or any subsidiary or affiliate of Company to such
customers, vendors or prospective customers and vendors. In addition for the
same time period, Employee will not be employed by, extend financial or business
assistance to or handle patronage for any company, firm, enterprise or business
which solicits, sells, calls upon or otherwise contacts such customers, vendors
or prospective customers and vendors for the purpose of selling the same or
similar products or services provided or offered by Company to such persons. The
identity of customers, vendors or prospective customers and vendors of Company
and its subsidiaries and affiliates shall be determined as of the time of
termination of this Agreement.
8. CONFIDENTIALITY. Employee agrees to regard and preserve as
confidential at all times during his employment with the Company and thereafter
all Confidential Information (as defined below) pertaining to the Company's
business that has been or may be obtained by
5
Employee in the course of his employment with Company whether he has such
information in his memory or in writing or other physical form. Employee will
not, without written authority from Company to do so, use for his benefit or
purposes, or disclose to others for any reason, either during the term of his
employment hereunder or thereafter, except as required by the conditions of his
employment hereunder, any Confidential Information connected with the business
of Company. This provision shall not apply after the Confidential Information
has been voluntarily disclosed to the public, independently developed and
disclosed by others, or otherwise enters the public domain through lawful means.
For purposes of this Agreement, "Confidential Information"
shall mean any information relating to the business of Company or any of its
subsidiaries or affiliates that has not previously been publicly released by
duly authorized representatives of Company and shall include (but shall not be
limited to) Company information encompassed in all plans, proposals, computer
programs, business, marketing and sales plans and strategies, financial
information, costs, research information, pricing information, customer and
vendor identity, records, files and information, and all methods, concepts,
information, knowledge and ideas reasonably related to the business of Company.
9. INDEMNIFICATION. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement, the Company shall indemnify Employee against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Employee in connection therewith. In the
event that both Employee and the Company are made a party to the same
third-party action, complaint, suit or proceeding, the Company agrees to engage
competent legal representation, and Employee agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Employee,
Employee may engage separate counsel and the Company shall pay all reasonable
attorneys' fees of such separate counsel. Further, while Employee is expected at
all times to use his best efforts to faithfully discharge his duties under this
Agreement, Employee shall not be held liable to the Company for errors or
omissions made in good faith where Employee has not exhibited willful and/or
deliberate malfeasance or performed criminal and fraudulent acts which damage
the business of the Company.
10. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.
6
11. MISCELLANEOUS.
11.1 Assignment; Binding Effect. Employee understands that he
has been selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding, this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
11.2 Complete Agreement. This Agreement is not a promise of
future employment. Employee has no oral representations, understandings or
agreements with the Company or any of their respective officers, directors or
representatives covering the same subject matter as this Agreement. This written
Agreement is the final, complete and exclusive statement and expression of the
agreement between the Company and Employee and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This Agreement may not
be later modified except by a further writing signed by a duly authorized
officer of the Company and Employee, and no term of this Agreement may be waived
except by writing signed by the party waiving the benefit of such term.
11.3 Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a) personally
delivered; (b) sent by telecopier, facsimile transmission or other electronic
means of transmitting written documents; or (c) sent to the parties at their
respective addresses indicated herein by registered or certified U.S. mail,
return receipt requested and postage prepaid, or by private overnight mail
courier service. The respective addresses to be used for all such notices,
demands or requests are as follows:
To the Company: Heartsoft, Inc.
0000 X. Xxxxxxx Xxxxxx
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxxx, Chairman
To Employee: Xxxxxx Xxxxxx
00000 X. Xxxxxxxx
Xxxxx, XX 00000
If personally delivered, such communication shall be deemed delivered upon
actual receipt. If electronically transmitted pursuant to this Section, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this Section, such communication shall be deemed delivered
upon receipt, and if sent by U.S. mail pursuant to this Section, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of
7
the date of such failure or refusal. Any party to this Agreement may change its
address for the purposes of this Agreement by giving notice thereof in
accordance with this Section.
11.4 Severability; Headings. If any portion of this Agreement
is held invalid or inoperative, the other portions of this Agreement shall be
deemed valid and operative and, so far as is reasonable and possible, effect
shall be given to the intent manifested by the portion held invalid or
inoperative. The section headings herein are for reference purposes only and are
not intended in any way to describe, interpret, define or limit the extent or
intent of the Agreement or of any part hereof.
11.5 Resolution of Disputes
(a) Arbitration. Any dispute, controversy or claim arising out
of or relating to this Agreement or the negotiation hereof or entry hereunto or
any contract or agreement entered into pursuant hereto or the performance by the
parties of its or their terms shall be settled by binding arbitration held in
Tulsa, Oklahoma, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association then in effect, except as specifically
otherwise provided in this Section 11.5. This Section 11.5 shall be construed
and enforced in accordance with the Federal Arbitration Act, notwithstanding any
other choice of law provision in this Agreement. Notwithstanding the foregoing:
(i) Any party hereto may, in its discretion, apply to
a court of competent jurisdiction for equitable relief. Such an application
shall not be deemed a waiver of the right to compel arbitration pursuant to this
Section 11.5.
(b) Arbitrators. The panel to be appointed shall consist of
three neutral arbitrators mutually acceptable to the parties.
(c) Procedures. The arbitrators shall allow such discovery as
the arbitrators determine appropriate under the circumstances and shall resolve
the dispute as expeditiously as practicable, and if reasonably practicable,
within one hundred twenty (120) days after the selection of the arbitrators. The
arbitrators shall give the parties written notice of the decision, with the
reasons therefor set out, and shall have thirty (30) days thereafter to
reconsider and modify such decision if any party so requests within ten (10)
days after the decision.
(d) Authority. The arbitrators shall have authority to award
relief under legal or equitable principles, including interim or preliminary
relief, and to allocate responsibility for the costs of the arbitration and to
award recovery of attorneys fees and expenses in such manner as is determined to
be appropriate by the arbitrators.
(e) Entry of Judgment. Judgment upon the award rendered by the
arbitrators may be entered in any court having in personam and subject matter
jurisdiction. Company and Employee hereby submit to the in personam jurisdiction
of the Federal and State courts in Tulsa, Oklahoma, for the purpose of
confirming any such award and entering judgment thereon.
8
(f) Confidentiality. All proceedings under this Section 11.5,
and all evidence given or discovered pursuant hereto, shall be maintained in
confidence by all parties and by the arbitrators.
(g) Continued Performance. The fact that the dispute
resolution procedures specified in this Section 11.5 shall have been or may be
invoked shall not excuse any party from performing its obligations under this
Agreement and during the pendency of any such procedure all parties shall
continue to perform their respective obligations in good faith, subject to any
rights to terminate this Agreement that may be available to any party.
(h) Tolling. All applicable statutes of limitation shall be
tolled while the procedures specified in this Section 11.5 are pending. The
parties will take such action, if any, required to effectuate such tolling.
11.6 Governing Law. This Agreement shall in all respects be
construed according to the laws of the State of Delaware (including conflicts of
laws principles).
11.7 Counterparts. This Agreement may be executed
simultaneously in two (2) or more counterparts, each of which shall be deemed an
original and all of which together shall constitute but one and the same
instrument.
11.8 Attorneys' Fees. In the event of any litigation or
arbitration arising under or in connection with this Agreement, the prevailing
party shall be entitled to reasonable attorneys' fees as determined by the court
or arbitration panel, as the case may be. Each party to this Agreement
represents and warrants that it has been represented by counsel in the
negotiation and execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY:
Heartsoft, Inc.
a Delaware corporation
/s/ Xxxxxxxx Xxxxx
-------------------------------------------
By: Xxxxxxxx Xxxxx, Chairman and President
EMPLOYEE:
/s/ Xxxxxx Xxxxxx
--------------------------------------------
Xxxxxx Xxxxxx
9
