AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of July 3, 2000 between
Total Research Corporation, a Delaware corporation ("Company"), and Xxxxxx
Xxxxxxxxx ("Executive").
BACKGROUND
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Company and Executive entered into to an Employment Agreement dated as of
July 1, 1998 (the "Original Employment Agreement") pursuant to which Executive
continued his employment as the Chief Executive Officer of the Company.
Company and Executive desire to amend and restate the Original Employment
Agreement in its entirety on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:
TERMS
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SECTION 1. CAPACITY AND DUTIES
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1.1 EMPLOYMENT; ACCEPTANCE OF EMPLOYMENt. Company hereby employs Executive
and Executive hereby accepts employment by Company for the period and upon the
terms and conditions hereinafter set forth.
1.2 CAPACITY AND DUTIES.
(a) Executive shall serve as the President and Chief Executive Officer
of Company. Executive shall perform such other duties and shall have such
authority consistent with Executive's position as may from time to time be
specified by the Board of Directors of Company (the "Board"). Executive shall
report directly to the Board, and shall perform Executive's duties for Company
principally at Company's principal executive offices, presently in Princeton,
New Jersey, except for periodic travel that may be necessary or appropriate in
connection with the performance of Executive's duties hereunder. Executive shall
also serve as a member of the Executive Committee so long as he shall be a
member of the Board. Company shall use its reasonable efforts to cause Executive
to be elected a member of the Board during the period this Agreement is in
effect, but the failure of the stockholders of Company to elect the Executive a
member of the Board shall not constitute a breach of this Agreement by Company.
(b) Executive shall devote sufficient working time, energy, skill and
best efforts to the performance of Executive's duties hereunder, in a manner
that will faithfully and diligently further the business and interests of
Company. Company acknowledges that Executive has interests in the management or
operation of other business enterprises and such participation will not
constitute a breach of this Agreement by Executive or constitute grounds for
termination for Cause (as defined herein) as long as (i) Executive is not an
employee of any other business
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enterprise during the Term (as defined below) and (ii)such activities do not
unreasonably interfere with the Executive's performance of Executive's duties
and responsibilities hereunder.
SECTION 2. TERM OF EMPLOYMENT
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2.1 TERM. The term of Executive's employment hereunder shall commence on
July 3, 2000 (the "Commencement Date") and continue until June 30, 2001, as
further extended or unless sooner terminated in accordance with the other
provisions hereof (the "Term"). Except as hereinafter provided, on June 30,
2001, the Term shall be automatically extended for one additional year unless
Executive shall have given to Company written notice of nonrenewal of this
Agreement on or before January 1, 2001. After the initial Term, the written
notice of nonrenewal by either party must be given to the other party at least
six months prior to the expiration date of the current Term. If written notice
of nonrenewal is given as provided above, Executive's employment under this
Agreement shall terminate on the last day of the then-current Term.
SECTION 3. COMPENSATION
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3.1 BASE COMPENSATION. As compensation for Executive's services commencing
July 3, 2000, Company shall pay to Executive base compensation in the form of
salary of $325,000 per annum. The salary shall be payable in periodic
installments in accordance with Company's regular payroll practices for its
executive personnel at the time of payment, but in no event less frequently than
monthly. Executive's annual salary is hereinafter referred to as Executive's
"Base Compensation". The Executive Committee agrees to review Base Compensation
for fiscal years 2001 and 2002 for the purpose of determining whether Base
Compensation should be increased for such fiscal years, provided that Employee's
Base Compensation shall never be less than $325,000 per annum.
3.2 PERFORMANCE BONUS. As additional compensation for the services rendered
by Executive to Company, Executive shall be entitled to (i) a $175,000 cash
performance bonus for the fiscal year ending June 30, 2000 (the "FY2000 Bonus")
and (ii) a $175,000 cash performance bonus for the fiscal years ending June 30,
2001 and June 30, 2002 (the "FY2001 Bonus" and "FY2002 Bonus"), provided that
the FY2001 Bonus and FY2002 Bonus shall only be due if the Company meets
specific financial goals, to be set forth in a written agreement between the
Executive and the Executive Committee on or before December 31, 2000. The FY2000
Bonus shall be paid on or before March 31, 2001 and, if applicable, the FY2001
Bonus and FY2002 Bonus shall be paid by September 30, 2001 and September 30,
2002, respectively.
3.3 EMPLOYEE BENEFITS. During the Term, Executive shall be entitled to
participate in such of Company's employee benefit plans and benefit programs,
including medical, hospitalization, dental, disability, accidental death and
dismemberment and travel accident plans and programs, as may from time to time
be provided by Company for its senior executives generally. In addition, during
the Term Executive shall be eligible to participate in all pension, retirement,
savings and other employee benefit plans and programs maintained from time to
time by Company for the benefit of its senior executives generally. Company
shall have no
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obligation, however, to maintain any particular program or level of benefits
referred to in this Section 3.3.
3.4 OTHER BENEFITS. During the Term, the Company shall provide Executive
with an automobile allowance of $1000.00 per month for the use of an automobile
owned or leased by him in accordance with the policies and procedures
established by the Company from time to time for executive employees.
3.5 VACATION. Executive shall be entitled to the normal and customary
amount of paid vacation provided to senior executive officers of the Company,
but in no event less than 20 days during each 12 month period. Any vacation days
that are not taken in a given 12 month period shall accrue and carry over from
year to year up to a maximum of 20 days. The Executive may be granted leaves of
absence with or without pay for such valid and legitimate reasons as the Board
in its sole and absolute discretion may determine, and is entitled to the same
sick leave and holidays provided to other senior executive officers of Company.
3.6 EXPENSE REIMBURSEMENT. Company shall reimburse Executive for all
reasonable and documented expenses incurred by him in connection with the
performance of Executive's duties hereunder in accordance with its regular
reimbursement policies as in effect from time to time.
3.7 STOCK OPTION AGREEMENT. Company acknowledges the prior grant to
Executive of 500,000 nonqualified stock options (the "Option Shares") made
pursuant to a certain Consulting Agreement between Company and Executive and
various Stock Option Agreements (collectively the "Option Agreement"). Under the
Option Agreement, 437,500 Option Shares are currently vested and 62,500 Option
Shares are scheduled to vest on or before June 30, 2001. Company and Executive
have previously agreed to execute an amendment to the Option Agreement relating
to the Option Shares to restructure the vesting and exercise schedules for the
Option Shares with the following restrictions applicable during the term of this
Agreement: (i) all 500,000 Option Shares shall be forfeited if Executive resigns
prior to June 30, 2001 for other than Good Reason; (ii) 62,500 of the Option
Shares shall be forfeited if Executive's employment is terminated by the Company
for Cause (as defined herein) on or after June 30, 2000 but prior to June 30,
2001; and (iii) all 500,000 Option Shares shall vest on June 30, 2001, or
earlier, if (x) the Company terminates Executive's employment without Cause
after the Commencement Date; (y) Executive terminates employment for Good Reason
or (z) employment is terminated by the death of Executive. If Executive
exercises any of the Option Shares prior to June 30, 2001, the shares so
purchased (the "Restricted Shares") shall reflect the same forfeiture
restrictions imposed upon the Option Shares. During the Term, Executive hereby
agrees not to sell any shares acquired by exercising the Option Shares, except
that Executive may sell shares which were acquired pursuant to Executive's
exercise of non-qualified Option Shares to the extent necessary to pay
Executive's income taxes resulting from Executive's exercise of such
non-qualified Option Shares (as long as such sales are in compliance with
applicable securities laws). Company and Executive shall execute such amendments
to the Option Agreement as may be reasonably necessary or appropriate to further
clarify or reflect this Section 3.7. The restrictions above shall not apply to
the incentive stock options previously granted to Executive, the terms of which
are governed by a separate Stock Option Agreements.
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3.8 LOANS.
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(a) Company and Executive hereby acknowledge and confirm that,
pursuant to the terms of the Original Employment Agreement, the Executive was
granted a non-collateralized loan provision from the Company, which provided the
Executive with three annual loans of $100,000 each, to be made separately on
August 1, 1998, August 1, 1999 and August 1, 2000. Interest was provided at the
minimum applicable federal rate for IRS purposes. The term of the loan is as
follows. The entire principal and interest due under the loan will be due on
June 30, 2002; provided, however, the entire amount will be forgiven if (i) the
price of the Company stock is at least $10 per share (after adjustments for
stock dividend, stock splits and similar recapitalization), determined by
averaging the closing price on the NASDAQ exchange for the 90 calendar day
period preceding June 30, 2002 or (ii) the Executive's Employment Agreement is
terminated prior to June 30, 2002 in a manner that requires a Severance Payment
(as defined below) to Executive. This provision shall survive termination of
Executive's employment.
(b) The Executive will be offered an additional loan provision from
the Company, which will provide Executive with loans (advanced from time to time
at the request of Executive) in a maximum aggregate amount of $500,000 to be
used by Executive to exercise all or a portion of his non-qualified Option
Shares. Interest will be at the minimum applicable federal rate for IRS
purposes. Such loans shall be secured by Executive's pledge of a sufficient
number of Company shares so that the market value of the pledged shares as of
the date of the loan is at least equal to 125% of the principal amount thereof.
The payment term of the loans will be as follows. The entire principal and
interest due under the loans will be due on the earlier of (i) June 30, 2002 or
(ii) the date Executive's employment with the Company is terminated. This
provision shall survive termination of Executive's employment.
3.9 COMPENSATION FOR EXCESS "PARACHUTE PAYMENTS". If all or any portion of
the payments or other benefits provided under this Agreement to Executive,
either alone or together with other payments and benefits which Executive
receives or is entitled to receive from Company, constitutes an excess
"parachute payment" within the meaning of section 280G of the Internal Revenue
Code of 1986, as amended, and as it may be amended on or after the date of this
Agreement (the "Code"), and results in the imposition on Executive of an excise
tax under section 4999 of the Code, then, in addition to any other benefits to
which Executive is entitled under this Agreement, Company shall pay Executive an
amount equal to the sum of (i) the excise taxes payable by Executive by reason
of receiving excess parachute payments; and (ii) a gross-up amount necessary to
offset any and all applicable federal, state, and local excise, income, or other
taxes incurred by Executive by reason of Company's payment of the excise tax
described in (i) above on or after the date of this Agreement.
SECTION 4. TERMINATION OF EMPLOYMENT
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4.1 DEATH OF EXECUTIVE. If Executive dies during the Term, Company shall
not thereafter be obligated to make any further payments hereunder other than
amounts for Base Compensation, any Performance Bonus earned for a fiscal year
ending before the date of death
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(excluding fiscal years ending before the effective date of this Agreement),
expense reimbursement, and other amounts which have accrued as of the date of
Executive's death in accordance with generally accepted accounting principles
(the "Accrued Obligations", which, for purposes of this Agreement in situations
other than death, shall reference the date of termination).
4.2 DISABILITY OF EXECUTIVE. If Executive is permanently disabled (as
defined in Company's long-term disability insurance policy then in effect), then
the Board shall have the right to terminate Executive's employment upon 30 days'
prior written notice to Executive at any time during the continuation of such
disability. In the event Executive's employment is terminated for disability in
accordance with this Section 4.2, Company shall not thereafter be obligated to
make any further payments hereunder other than (i) Accrued Obligations through
the date of such termination and (ii) continued Base Salary and benefits, until
the earlier of (x) such time as payments to Executive commence under Company's
long-term disability insurance policy then in effect, or (y) the expiration of
the then current Term.
4.3 TERMINATION FOR CAUSE. Executive's employment hereunder shall terminate
immediately upon notice that the Board is terminating Executive for Cause (as
defined herein), in which event Company shall not thereafter be obligated to
make any further payments hereunder other than Accrued Obligations. "Cause"
shall be limited to the following:
(i) willful failure to substantially perform Executive's duties
as described in Section 1.2 (other than such failure resulting from Executive's
physical or mental illness, or the failure of Executive to perform such duties
during the remedy period set forth in Section 4.4(b)(i) hereof following the
issuance of a Notice of Termination (as herein defined) by Executive for Good
Reason, unless an arbitrator acting pursuant to Section 6.2 hereof finds
Executive to have acted in bad faith in issuing such Notice of Termination),
after demand for substantial performance is delivered by Company in writing that
specifically identifies the manner in which Company believes Executive has not
substantially performed Executive's duties and Executive's failure to cure such
non-performance within ten days after receipt of the Company's written demand;
(ii) willful misconduct that is materially and demonstrably
injurious to Company or any of its subsidiaries; or
(iii) conviction or plea of guilty or nolo contendere to a felony
or to any other crime which involves moral turpitude or, if not including moral
turpitude, provided the act giving rise to such conviction or plea is materially
and demonstrably injurious to the Company or any of its subsidiaries;
(iv) material violation of (x) Company's policies relating to
sexual harassment, substance or alcohol abuse or the disclosure or misuse of
Confidential Information (as hereinafter defined), or (y) other Company polices
set forth in Company manuals or written statements of policy provided in the
case of this clause (y) that such violation is materially and demonstrably
injurious to Company and continues for more then three (3) days after written
notice thereof is given to Executive by the Board; and
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(v) material breach of any material provision of this Agreement
by Executive, which breach continues for more than ten days after written notice
thereof is given by the Board to Executive.
Cause shall not exist under this Section 4.3 unless and until Company has
delivered to Executive a copy of a resolution duly adopted by a majority of the
Board at a meeting of the Board called and held for such purpose, or by written
consent, finding that such Cause exists in the good faith opinion of the Board.
This Section 4.3 shall not prevent Executive from challenging in any arbitration
proceeding or court of competent jurisdiction the Board's determination that
Cause exists or that Executive has failed to cure any act (or failure to act),
to the extent permitted by this Agreement that purportedly formed the basis for
the Board's determination. Company must provide written notice to Executive that
it is intending to terminate Executive's employment for Cause within one hundred
and twenty (120) days after the Board Company has actual knowledge of the
occurrence of the event it believes constitutes Cause.
4.4 TERMINATION WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD REASON.
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(a) If (i) Executive's employment is terminated by Company prior to
July 1, 2002 for any reason (other than (x) Cause under Section 4.3, or (y)
disability of Executive), (ii) Executive's employment is terminated by Executive
for Good Reason, (iii) the Executive elects not to renew this Agreement for any
term after June 30, 2001, or (iv) this Agreement is not renewed by either party
after June 30, 2002, then Company shall pay to Executive a lump sum cash payment
equal to one million dollars ($1,000,000.00) (the "Severance Payment"), within
ninety (90) days after expiration of the Term. Further, in the event of
termination by Company under such circumstances, or during any renewal Term,
Company shall maintain in full force and effect, for the continued benefit of
Executive, Executive's spouse and Executive's dependents for the remaining
balance of the unexpired Term as of the date of termination, the medical,
hospitalization, dental and life insurance programs in which Executive,
Executive's spouse and Executive's dependents were participating immediately
prior to the date of such termination at substantially the level in effect and
upon substantially the same terms and conditions (including without limitation
contributions required by Executive for such benefits) as existed immediately
prior to the date of termination (except to the extent thereafter reduced for
senior executives of Company generally); provided, that if Executive,
Executive's spouse or Executive's dependents cannot continue to participate in
the Company programs providing such benefits, the Company shall arrange to
provide Executive, Executive's spouse and Executive's dependents with the
economic equivalent of such benefits which they otherwise would have been
entitled to receive under such plans and programs, provided that such benefits
shall terminate upon the date or dates Executive receives coverage and benefits
which are substantially similar, taken as a whole, without waiting period or
pre-existing condition limitations, under the plans and programs of a subsequent
employer. Upon making the payments described in this Section 4.4, Company shall
have no further obligation to Executive hereunder.
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(b) "Good Reason" shall mean the following:
(i) material breach of Company's obligations hereunder, provided
that Executive shall have given reasonably specific written notice thereof to
Company, and Company shall have failed to remedy the circumstances within 60
days thereafter;
(ii) any decrease in Executive's salary as increased during the
Term (except for decreases that are in conjunction with decreases in salaries
generally) or any material reduction in the general nature of Executive's duties
or authority to a level inconsistent with a Chief Executive Officer, unless
previously agreed to in writing by Executive;
(iii) the failure of Executive to be elected to all of the
positions set forth in Section 1.2(a), ie., President, Chief Executive Officer,
Executive Committee and Board member, provided, however, the failure to be
appointed to the Board or Executive Committee shall not constitute Good Reason
if such failure is the result of the nonelection of Executive to the Board by a
shareholder vote at a duly convened meeting of the shareholders after nomination
of Executive to the Board by the Executive Committee and the Board and
submission of such nomination to a shareholder vote.
(iv) the relocation of Company's principal executive offices to a
location more than thirty (30) miles from Princeton, New Jersey;
(v) the failure of any successor in interest of Company to be
bound by the terms of this Agreement in accordance with Section 6.5 hereof;
(vi) substantial interference by the Board with Executive's
performance of Executive's duties, which interference results in the inability
of Executive to substantially perform Executive's duties hereunder; or
(vii) the appointment by the Board of a Chief Operating Officer
or Chief Financial Officer, or other offices or positions with duties
substantially similar to either, without first obtaining the prior written
consent of Executive, which consent will not be unreasonably withheld.
Executive must provide notice to the Company that he is intending to
terminate Executive's employment for Good Reason within one hundred and twenty
(120) days after Executive has actual knowledge of the occurrence of an event he
believes constitutes Good Reason. Executive's right to terminate Executive's
employment hereunder for Good Reason shall not be affected by Executive's
Disability. Subject to compliance by Executive with the notice provisions of
this Section 4.4, Executive's continued employment prior to terminating
employment for Good Reason shall not constitute consent to, or a waiver of
rights with respect to, any act or failure to act constituting Good Reason. In
the event Executive delivers to the Company a Notice of Termination for Good
Reason, Executive agrees to appear before a meeting of the Board called and held
for such purpose (after reasonable notice) and specify to the Board the
particulars as to why Executive believes adequate grounds for termination for
Good Reason exist. No action by the Board, other than the remedy of the
circumstances within the time periods specified in Section this 4.4, shall be
binding on Executive.
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4.5 CHANGE IN CONTROL.
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(a) If, during the Term, there should be a Change of Control (as defined
herein), and within one year thereafter either (i) Executive's employment should
be terminated for any reason other than for Cause , (ii) Executive terminates
Executive's employment for Good Reason, or (iii) Executive's employment with
Company (including for this purpose any successor to Company) has continued for
such one year period, Company shall, on or before Executive's last day of
full-time employment hereunder or upon such one year anniversary in the event of
the applicability of subparagraph (iii), pay to Executive the amounts set forth
in Section 4.4 above.
(b) Upon the occurrence of a Change in Control during the Term, the Company
shall pay Executive a lump sum bonus of Two Hundred Fifty Thousand Dollars
($250,000). If Executive remains employed with Company (including for this
purpose any successor to Company for at least one year after the Change in
Control), Company shall pay Executive an additional bonus of Two Hundred Fifty
Thousand Dollars ($250,000), payable on the first anniversary after such Change
in Control.
(c) Upon the occurrence of a Change in Control, any stock options
previously granted to Executive that are not then exercisable, ie. unvested,
shall immediately vest and become exercisable by Executive . The Company shall
execute all necessary amendments to the applicable stock option plans and
agreements provided such amendments are permitted by law and will not adversely
affect the tax status or qualification of the plan as an Incentive Stock Option
Plan or Non-qualified Stock Option Plan.
(d) A "Change in Control" of Company shall be deemed to have occurred if:
(1) at any time after the date hereof, there shall occur (i) any
consolidation or merger of Company in which Company is not the continuing or
surviving corporation or pursuant to which the shares of common stock of Company
("Common Stock") would be converted into cash, securities or other property, or
(ii) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of assets accounting for 50% or more of total assets or
50% or more of the total revenues of Company, other than, in case of either (i)
or (ii), a consolidation or merger with, or transfer to, a corporation or other
entity of which, or of the parent entity of which, immediately following such
consolidation, merger or transfer, (x) more than 50% of the combined voting
power of the then outstanding voting securities of such entity entitled to vote
generally in the election of directors (or other determination of governing
body) is then beneficially owned (within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934) by all or substantially all of the individuals
and entities who were such owners of Common Stock immediately prior to such
consolidation, merger or transfer in substantially the same proportion, as among
themselves, as their ownership of Common Stock immediately prior to such
consolidation, merger or transfer, or (y) a majority of the directors (or other
governing body) consists of members of the Board of Directors of Company in
office on the date hereof for purposes of (2) below or approved as provided in
(2) below;
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(2) at any time after the date hereof, (x) members of the Board of
Directors of Company in office on the date hereof (including any designated as
contemplated by Section 4.2 of the Stock Purchase Agreement made as of April 16,
1998 between Company and Xxxxx Xxxxxxx) plus (y) any new director (excluding a
director designated by a person or group who has entered into an agreement with
Company to effect a transaction described in Section 4.5(d)(1) whose election by
the Board of Directors of Company or nomination for election by Company's
stockholders was approved by (i) Executive (if a director) or (ii) a vote of at
least a majority of the directors then still in office who either were directors
on the date hereof or whose election or nomination for election was previously
so approved, shall cease for any reason to constitute a majority of the Board;
or
(3) at any time after the date hereof, the stockholders of Company
approve a complete liquidation or dissolution of Company, except in connection
with a recapitalization or other transaction which does not otherwise constitute
a Change of Control for purposes of Section 4.5(a)(1) above;
4.6 TERMINATION BY EXECUTIVE WITHOUT GOOD REASON. In the event Executive's
employment is voluntarily terminated by Executive without Good Reason, Company
shall not be obligated to make any further payments to Executive hereunder other
than Accrued Obligations through the date of such termination.
4.7 MITIGATION. Executive shall not be required to mitigate amounts payable
under this Section 4 by seeking other employment or otherwise, and there shall
be no offset against amounts due Executive under this Agreement on account of
subsequent employment except as specifically provided herein.
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SECTION 5. NON-COMPETITION AND CONFIDENTIALITY
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5.1 NON-COMPETITION
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(a) During the Term, including any unexpired portion thereof, and for
a period of one year thereafter (the "Non-Competition Period"), Executive shall
not, directly or indirectly, own, manage, operate, join, control, participate
in, invest in or otherwise be connected or associated with, in any manner,
including, without limitation, as an officer, director, employee, distributor,
independent contractor, independent representative, partner, consultant,
advisor, agent, proprietor, trustee or investor, any Competing Business located
in any state or region (including foreign jurisdictions) where Company conducts
business; provided, however, that (i) ownership of 4.9% or less of the stock or
other securities of a corporation, the stock of which is listed on a national
securities exchange or is quoted on the NASDAQ Stock Market's National market,
shall not constitute a breach of this Section 5, so long as the Executive does
not in fact have the power to control, or direct the management of, or is not
otherwise engaged in activities with, such corporation and (ii) investment
banking and similar advisory services after the Term, even if provided to a
Competing Business, shall not constitute a breach of this Section 5.
(b) For purposes hereof, the term "Competing Business" shall mean any
business or venture which is substantially similar to the whole or any
significant part of the business conducted by Company.
(c) Notwithstanding the above, except as provided below, the
non-competition obligation in Section 5.1(a) shall not apply after the Term if
Executive's employment is terminated (i) by Company without Cause, (ii) by
Executive for Good Reason or (iii) as a result of nonrenewal of the Agreement by
Company; provided, however, in the event of any such termination, the
non-competition obligation shall continue after the Term for the remainder of
the Non-Competition period if (i) Executive is entitled to the Severance Payment
and payment thereof is made within 90 days after expiration of the Term or (ii)
Company has given written notice to Executive at least 12 months prior to the
expiration of the Term agreeing to continue payment of Base Compensation and the
applicable Performance Bonus to Executive after the Term and during the
remainder of the Non-Competition Period.
5.2 NO SOLICITATION. During the Term, including any unexpired portion
thereof, and for a period of one year thereafter, the Executive shall not,
directly or indirectly, including on behalf of, for the benefit of, or in
conjunction with, any other person or entity, (i) solicit, assist, advise,
influence, induce or otherwise encourage in any way, any employee of Company to
terminate Executive's relationship with Company for any reason, or assist any
person or entity in doing so, or employ, engage or otherwise contract with any
employee or former employee of Company in a Competing Business or any other
business unless such former employee shall not have been employed by Company for
a period of at least one year, (ii) interfere in any manner with the
relationship between any employee and Company or (iii) contact, service or
solicit any existing clients, customers or accounts of Company on behalf of a
Competing Business, either as an individual on Executive's own account, as an
investor, or as an officer, director, partner, joint venturer, consultant,
employee, agent or sales man of any other person or entity.
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5.3 CONFIDENTIAL INFORMATION
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(a) "Confidential Information" shall mean confidential records and
information, including, but not limited to, development, marketing, purchasing,
organizational, strategic, financial, managerial, administrative, manufacturing,
production, distribution and sales information, distribution methods, data,
specifications and processes (including the Transferred Property as hereinafter
defined) presently owned or at any time hereafter developed by Company or its
agents or consultants or used presently or at any time hereafter in the course
of the business of Company, that are not otherwise part of the public domain.
(b) Executive hereby sells, transfers and assigns to Company, or to
any person or entity designated by Company, all of Executive's entire right,
title and interest in and to all inventions, ideas, methods, developments,
disclosures and improvements (the "Inventions"), whether patented or unpatented,
and copyrightable material, and all trademarks, trade names, all goodwill
associated therewith and all federal and state registrations or applications
thereof, made, adopted or conceived by solely or jointly, in whole or in part
(collectively, the "Transferred Property"), prior to or during the Term which
(i) relate to methods, apparatus, designs, products, processes or devices sold,
leased, used or under construction or development by Company or (ii) otherwise
relate to or pertain to the business, products, services, functions or
operations of the Company. Executive shall make adequate written records of all
Inventions, which records shall be Company's property and shall communicate
promptly and disclose Company, in such forms Company requests, all information,
details and data pertaining to the aforementioned Inventions. Whether during the
Term or thereafter, Executive shall execute and deliver to Company such formal
transfers and assignments and such other papers and documents as may be required
of Executive to permit Company, or any person or entity designated by Company,
to file and prosecute patent applications (including, but not limited to,
records, memoranda or instruments deemed necessary by Company for the
prosecution of the patent application or the acquisition of letters patent in
the United states, foreign counties or otherwise) and, as to copyrightable
material, to obtain copyrights thereon, and as to trademarks, to record the
transfer of ownership of any federal or state registrations or applications.
(c) All such Confidential Information is considered secret and will be
disclosed to the Executive in confidence, and Executive acknowledges that, as a
consequence of Executive's employment and position with Company, Executive may
have access to and become acquainted with Confidential Information. Except in
the performance of Executive's duties as an employee of Company, Executive shall
not, during the term and at all times thereafter, directly or indirectly for any
reason whatsoever, discloser or use any such Confidential Information. All
records, files, drawings, documents, equipment and other tangible items,
wherever located, relating in any way to or containing Confidential Information,
which Executive has prepared, used or encountered or shall in the future
prepare, use or encounter, shall be and remain Company's sole and exclusive
property and shall be included in the Confidential Information. Upon termination
of this agreement, or whenever requested by Company, Executive shall promptly
deliver to Company any and all of the Confidential Information and copies
thereof, not previously delivered to Company, that may be in the possession or
under the control of the Executive. The foregoing restrictions shall not apply
to the use, divulgence, disclosure or grant of access to Confidential
Information to the extent, but only to the extent, (i) expressly permitted
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or required pursuant to any other written agreement between Executive and
Company, (ii) such Confidential Information has been publicly disclosed (not due
to a breach by the Executive of Executive's obligations hereunder, or by breach
of any other person, of a fiduciary or confidential obligation to Company or
(iii) the Executive is required to disclose Confidential Information by or to
any court of competent jurisdiction or any governmental or quasi-governmental
agency, authority or instrumentality of competent jurisdiction, provided,
however, that the Executive shall, prior to any such disclosure, immediately
notify Company of such requirements and provided further, however, that the
Company shall have the right, at its expense, to object to such disclosures and
to seek confidential treatment of any Confidential Information to be so
disclosed on such terms as it shall determine.
5.4 ACKNOWLEDGEMENT; REMEDIES; SURVIVAL OF THIS AGREEMENT
-----------------------------------------------------
(a) Executive acknowledges that violation of any of the covenants
and provisions set forth in this Agreement would cause Company irreparable
damage and agrees that Company's remedies at law for a breach or threatened
breach of any of the provisions of this Agreement would be inadequate and, in
recognition of this fact, in the event of a breach or threatened breach by
Executive of any of the provisions of this Agreement, it is agreed that, in
addition to the remedies at law or in equity, Company shall be entitled, without
the posting of a bond, to equitable relief in the form of specific performance,
a temporary restraining order, temporary or permanent injunction, or any other
equitable remedy which may then be available for the purposes of restraining
Executive from any actual or threatened breach of such covenants. Without
limiting the generality of the foregoing, if Executive breaches or threatens to
breach this Section 5 hereof, such breach or threatened breach will entitle
Company to enjoin Executive from disclosing any Confidential Information to any
Competing Business, to enjoin any Competing Business from retaining Executive or
using any such Confidential Information, to enjoin Employee form rendering
personal services to or in connection with any Competing Business. The rights
and remedies of the parties hereto are cumulative and shall not be exclusive,
and each such party shall be entitled to pursue all legal and equitable rights
and remedies and to secure performance of the obligations and duties of the
other under this Agreement, and the enforcement of one or more of such rights
and remedies by a party shall in no way preclude such party from pursuing, at
the same time or subsequently, any and all other rights and remedies available
to it.
(b) The provisions of this Agreement shall survive the
termination of Executive's employment with Company.
SECTION 6. MISCELLANEOUS
-------------
6.1 AMENDMENT AND RESTATEMENT OF ORIGINAL EMPLOYMENT AGREEMENT. The
Original Employment Agreement is hereby amended and restated in its entirety and
shall no longer have any effect.
6.2 ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Princeton,
New Jersey, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect.
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Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The parties consent to the authority of the arbitrator, if the
arbitrator so determines, to award fees and expenses (including legal fees) to
the prevailing party in the arbitration. Notwithstanding the foregoing, Company
shall be entitled to enforce the provisions of Section 5 hereof through
proceedings brought in a court of competent jurisdiction as contemplated by
Section 6.9 hereof.
6.3 SEVERABILITY; REASONABLENESS OF AGREEMENT. If any term, provision or
covenant of this Agreement or part thereof, or the application thereof to any
person, place or circumstance shall be held to be invalid, unenforceable or void
by a court of competent jurisdiction, the remainder of this Agreement and such
term, provision or covenant shall remain in full force and effect, and any such
invalid, unenforceable or void term, provision or covenant shall be deemed,
without further action on the part of the parties hereto, modified, amended and
limited, and the court shall have the power to modify, amend and limit any such
term, provision or covenant, to the extent necessary to render the same and the
remainder of the Agreement valid, enforceable and lawful. In this regard, the
Executive understands that the provisions of Section 5 may limit Executive's
ability to earn a livelihood in a business similar or related to the business of
Company, but nevertheless agrees and acknowledges that (i) the provisions of
Section 5 are reasonable and necessary for the protection of Company, and do not
impose a greater restraint than necessary to protect the goodwill or other
business interest of Company and (ii) such provisions contain reasonable
limitations as to the time and the scope of activity to be restrained. In
consideration of the foregoing and in light of Executive's education, skills and
abilities, Executive agrees that all defenses by Executive to the strict
enforcement of such provisions are hereby waived by Executive.
6.4 KEY EMPLOYEE INSURANCE. Company shall have the right at its expense to
purchase insurance on the life of Executive, in such amounts as it shall from
time to time determine, of which Company shall be the beneficiary. Executive
shall submit to such physical examinations as may reasonably be required and
shall otherwise cooperate with Company in obtaining such insurance.
6.5 ASSIGNMENT; BENEFIT. This Agreement shall not be assignable by
Executive, other than Executive's rights to payments or benefits hereunder,
which may be transferred only by will or the laws of descent and distribution.
Upon Executive's death, this Agreement and all rights of Executive hereunder
shall inure to the benefit of and be enforceable by Executive's beneficiary or
beneficiaries, personal or legal representatives, or estate, to the extent any
such person succeeds to Executive's interests under this Agreement. No rights or
obligations of Company under this Agreement may be assigned or transferred
except that Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that Company would be
required to perform it if no such succession had taken place. As used in this
Agreement, "Company" shall mean Company as hereinbefore defined and any
successor to its business and/or assets (by merger, purchase or otherwise) which
executes and delivers the agreement provided for in this Section or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
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6.6 NOTICES. All notices hereunder shall be in writing and shall be
sufficiently given if hand-delivered, sent by documented overnight delivery
service or registered or certified mail, postage prepaid, return receipt
requested or by telegram or telefax (confirmed by U.S. mail), receipt
acknowledged, addressed as set forth below or at such other address for either
party as may be specified in a notice given as provided herein by such party to
the other. Any such notice shall be deemed to have been given as of the date
received, in the case of personal delivery, or on the date shown on the receipt
or confirmation therefor, in all other cases. Any and all service of process and
any other notice in any such action, suit or proceeding shall be effective
against any party if given as provided in this Agreement; provided that nothing
herein shall be deemed to affect the right of any party to serve process in any
other manner permitted by law.
(a) If to Company:
Total Research Corporation
Princeton Corporate Center
0 Xxxxxxxxxxxx Xxx
Xxxxxxxxx, XX 00000
With Copies To:
Xxxxxx X. Xxxxxx, Esq.
Drinker Xxxxxx & Xxxxxxx LLP
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxx, Esq.
Kramer, Levin, Naftalis & Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
If to Executive:
Xxxxxx Xxxxxxxxx
00 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
6.7 TERMINATION PROCEDURES. Any termination of Executive's employment by
the Company or by Executive during the Term (other than termination pursuant to
death) shall be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment under the
provision so indicated.
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6.8 ENTIRE AGREEMENT AND MODIFICATION. This Agreement constitutes the
entire agreement between the parties hereto with respect to the matters
contemplated herein and supersedes all prior agreements and understandings with
respect thereto. No amendment, modification, or waiver of this Agreement shall
be effective unless in writing. Neither the failure nor any delay on the part of
any party to exercise any right, remedy, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power, or privilege with respect to such
occurrence or with respect to any other occurrence.
6.9 GOVERNING LAW. This Agreement is made pursuant to, and shall be
construed and enforced in accordance with, the laws of the State of New Jersey
and the federal laws of the United States of America, to the extent applicable,
without giving effect to otherwise applicable principles of conflicts of law.
The parties hereto expressly consent to the jurisdiction of any state or federal
court located in New Jersey, and to venue therein, and consent to the service of
process in any such action or proceeding by certified or registered mailing of
the summons and complaint therein directed to Executive or Company, as the case
may be, at its address as provided in Section 6.6 hereof.
6.10 WITHHOLDING. All payments hereunder shall be subject to any required
withholding of Federal, state and local taxes pursuant to any applicable law or
regulation.
6.11 HEADINGS; COUNTERPARTS. The headings of paragraphs in this Agreement
are for convenience only and shall not affect its interpretation. This Agreement
may be executed in two or more counterparts, each of which shall be deemed to be
an original and all of which, when taken together, shall be deemed to constitute
the same Agreement.
6.12 FURTHER ASSURANCES. Each of the parties hereto shall execute such
further instruments and take such other actions as the other party shall
reasonably request in order to effectuate the purposes of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TOTAL RESEARCH CORPORATION
By:/s/Xxxxx Xxxxxxx
-------------------------------------------------
Xxxxx Xxxxxxx, Chairman of the Executive Committee
By:/s/Xxxxxx X. Xxxxxxx
--------------------------------------------------
Xxxxxx X. Xxxxxxx, Executive Committee
/s/Xxxxxx Xxxxxxxxx
--------------------------------------------------
Executive
