EXHIBIT 10.18
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") made as of this 1st day of October,
1998 ("Effective Date") by and between The viaLink Company, an Oklahoma
corporation with its principal place of business at 00000 Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxx, 00000 ("viaLink"), and Xxxxxx X. Xxxxx ("Xxxxx").
WHEREAS, viaLink desires to hire Xxxxx as its President and Chief Operating
Officer, and
WHEREAS the Board of Directors of viaLink has determined that the
employment of Xxxxx as its President and Chief Operating Officer is material to
the success of viaLink, and
WHEREAS, the parties hereto wish to set forth certain terms and conditions
of Xxxxx'x employment with viaLink.
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. Employment. viaLink hereby employs Xxxxx, and Xxxxx hereby accepts such
employment, as the President and Chief Operating Officer of viaLink upon
the terms and subject to the conditions contained herein.
2. Duties. During the term ("Term") of this Agreement (as defined in Section
6.1 of this Agreement), but subject to all terms, covenants and conditions
of this Agreement:
2.1 As President and Chief Operating Officer, Xxxxx shall have the
following duties and responsibilities:
2.1.1. Xxxxx shall report to the Chief Executive Officer of
viaLink;
2.1.2. Xxxxx shall perform such duties and functions as are assigned
to him by viaLink's Chief Executive Officer and/or its Board
of Directors ("Board") to accomplish the operational
objectives set for viaLink by its Board and/or its Chief
Executive Officer in conjunction with and in reference to the
duties and responsibilities of the Chief Executive Officer of
viaLink;
2.1.3. Xxxxx shall faithfully, diligently and to the best of his
ability perform such duties as are assigned to him by
viaLink's Board or its Chief Executive Officer;
2.1.4. Xxxxx shall devote his full time, attention, knowledge and
skills during normal business hours in furtherance of the
business of viaLink;
1
2.1.5. Xxxxx shall observe and carry out all state, federal and local
laws, rules and regulations to the extent applicable to him.
2.1.6. Xxxxx shall at all times be subject to, observe and carry out
such reasonable rules, regulations, policies, directions and
restrictions promulgated by viaLink's Board and/or its Chief
Executive Officer, as viaLink's Board may from time to time
establish, to the extent they are consistent with Xxxxx'x
duties and responsibilities under this Agreement;
2.2 In carrying out his duties as President and Chief Operating Officer:
2.2.1. Xxxxx shall have the authority to delegate special powers and
duties to other officers and/or employees, so long as such
delegation is not inconsistent with (i) any applicable laws,
rules or regulations, (ii) viaLink's Articles of Incorporation
or Bylaws or (iv) any action(s) of the Board or the Chief
Executive Officer regarding the same; and
2.2.2. Xxxxx shall have the power to execute and shall execute bonds,
deeds, mortgages extensions agreements, modifications of
mortgage agreements, leases and contracts or other instruments
of viaLink except where required by law to be otherwise signed
and executed and except where the signing and execution
thereof shall be expressly delegated by the viaLink's Board or
by its Chief Executive Officer to some other person(s); and
2.2.3. Xxxxx shall have such other powers and duties as may be
prescribed by the Board from time to time regarding his duties
and responsibilities; and
2.2.4. Xxxxx shall have such other powers and duties as may be
reasonably necessary to carry out his duties and
responsibilities set forth in this Agreement.
3. Covenants. In order to induce viaLink to enter into this Agreement, Xxxxx
hereby agrees as follows:
3.1. Except when he is directed to do otherwise by viaLink's Board, and
except as may be required by law, court order or subpoena, Xxxxx shall
keep confidential and shall not divulge to any other person or entity,
during the Term of Xxxxx'x employment or thereafter, any of the
business secrets or other confidential information of or regarding
viaLink and/or its subsidiaries (i) which have not otherwise become
public knowledge, (ii) which were not already known to Xxxxx as of the
Effective Date of this Agreement or (iii) which have not been
disclosed by viaLink to others without substantial restriction on
further disclosure. The obligations of this Subsection shall survive
the termination or expiration of this Agreement.
2
3.2. All papers, books and records of every kind and description relating
to the business and affairs of viaLink, whether or not prepared by
Xxxxx, shall be the sole and exclusive property of viaLink, and Xxxxx
shall surrender them to viaLink at any time upon request by viaLink's
Board. The obligations of this Subsection shall survive the
termination or expiration of this Agreement.
3.3. Xxxxx agrees that any and all inventions, developments, discoveries,
copyrightable works, or contributions thereto, including, without
limitation, any written works, software products or code, images,
designs, and/or instructions created in whole or part by Xxxxx during
his employment with viaLink hereunder or otherwise or relating in any
way to the business of viaLink (hereinafter "Work Product") are and
shall be the sole and exclusive property of viaLink. Xxxxx conveys,
transfers and assigns all rights, title and interest in and to any
Work Product to viaLink, and further agrees to execute any written
assignment or other agreement viaLink deems necessary at any time to
effect the foregoing and to obtain or uphold, for viaLink's benefit,
all copyright, patent, and/or other rights of viaLink in such Work
Product. The obligations of this Subsection shall survive the
termination or expiration of this Agreement.
4. Compensation. As full compensation for Xxxxx'x services hereunder and in
exchange for his promises contained herein, viaLink shall compensate Xxxxx
in the manner set forth below. The amounts set forth below shall be subject
to any withholding or other deductions required by law.
4.1. Beginning on October 1, 1998 Xxxxx shall receive a biweekly salary of
$6,735.65 ($175,127 per year), paid two weeks in arrears. Xxxxx'x
salary may not be decreased during the Term of this Agreement without
the prior, written consent of Xxxxx.
4.2. Beginning with first quarter of quarter of 1999 and for each quarter
of the Term of this Agreement, but subject to the terms and conditions
of this Section 4.2 and all of its Subsections, Xxxxx shall be
eligible to receive a quarterly bonus equal to one/eighth of his then
current annual salary ("Bonus"). Notwithstanding anything to the
contrary in this Agreement, to be eligible to receive a Bonus for any
given quarter, Xxxxx must fully meet the criteria for such Bonus as is
established by viaLink's Board for that quarter. The Bonus criteria
for the first quarter of 1999 is set forth in Subsection 4.2.1 of this
Agreement. The Bonus criteria for quarters subsequent thereto shall be
established pursuant to the procedure as set forth in Subsection
4.2.2.
4.2.1. The Bonus criteria for the first quarter of 1999 is that
viaLink's Board must approve and viaLink must execute the
documents required by a transaction(s) which have will bring
investment(s)
3
and/or financing into viaLink of at least five million dollars
($5,000,000).
4.2.2. The Bonus criteria for each quarter of the Term of this
Agreement after the first quarter of 1999 shall be determined
as follows:
4.2.2.1. At least forty five (45) days, but not earlier than
sixty (60) days, prior to the beginning of each such
quarter, the officer to whom Xxxxx reports or such
other designee of the Board shall submit to
viaLink's Board his recommendations for Xxxxx'x
eligibility criteria for such Bonus for the upcoming
quarter. The Board, at its discretion, may direct
Xxxxx to make such recommendations.
4.2.2.2. At least fifteen (15) days prior to the beginning of
each such quarter, after receipt of such
recommendations pursuant to Subsection 4.2.2. 1,
viaLink's Board shall establish such criteria as it,
in its sole discretion, deems appropriate for
Xxxxx'x eligibility for the Bonus for that quarter
and advise Xxxxx of the same.
4.2.2.3. If the Board directs Xxxxx to make the
recommendations required by Subsection 4.2.2.1
hereof and Xxxxx fails to meet his obligations under
Subsection 4.2.2.1 of this Agreement, no Bonus shall
be due to Xxxxx for that quarter.
4.2.2.4. If Xxxxx has met his obligations under Subsection
4.2.2.1 of this Agreement, and if viaLink's Board
fails to meet its obligations under Subsection 4.2.2
of this Agreement, Xxxxx shall be automatically
eligible to receive his Bonus for that quarter.
4.2.3. Notwithstanding anything to the contrary in this Agreement, to
be eligible for a Bonus for a given quarter, Xxxxx, except as
otherwise stated in Section 6 of this Agreement, must be an
employee of viaLink as of the end of such quarter.
4.2.4. Each quarterly Bonus, if any, shall be calculated and paid
quarterly; provided, however, the payment due hereunder for
any quarter for which a Quarter has been earned shall be paid
not later than the next regular payroll after the sixtieth
(60th) day following the end of each quarter for which the
Bonus is earned. If Xxxxx fails to earn a Bonus for any given
quarter, the Bonus which otherwise could have been earned for
that quarter is not carried forward to the next or any
subsequent quarter.
4.3 Xxxxx shall be entitled to four (4) weeks vacation during each
calendar year of the Term of this Agreement.
4
4.4 Xxxxx shall be eligible for all viaLink group benefits programs
provided to other viaLink employees.
4.5 As additional consideration, viaLink shall grant to Xxxxx options to
purchase one hundred and fifty thousand (150, 000) shares of viaLink
common stock in accordance with the Stock Option Agreement(s) attached
hereto as Exhibits 1 and 2.
4.6. In the event that Xxxxx becomes subject to any excise tax imposed
pursuant to Section 280(G) of the Internal Revenue Code or any
amendment thereto, as a result of the payments made to Xxxxx under
this Agreement or as a result of the acceleration of any of the stork
options granted under this Agreement, viaLink shall reimburse Xxxxx
for such portion of any such tax which is attributable thereto. Upon
request by viaLink, Xxxxx shall provide to viaLink such documentation
as viaLink reasonably requests to support the demand of Xxxxx for such
reimbursement.
5. Noncompetition.
5.1 If viaLink terminates this Agreement for cause (as defined in Section
6 of this Agreement) or if Xxxxx terminates this Agreement for other
than cause, for a period of one (1) year after the termination of this
Agreement, Xxxxx shall not, directly or indirectly, alone, or as a
partner, officer, director, employee, stockholder, consultant or agent
of any other corporation, partnership or other business organization,
knowingly solicit the employment of, or hire, any employee of viaLink,
or any viaLink subsidiary, or cause any such employee to terminate
such employee's relationship with viaLink or any viaLink subsidiary,
without the prior written approval of viaLink.
5.2. If viaLink terminates Xxxxx'x employment without Cause, the provisions
of Section 5.1 of this Agreement shall be enforceable against Xxxxx
only as long as Xxxxx is receiving the compensation set forth in
Section 4.1 of this Agreement.
5.3. If viaLink terminates this Agreement for cause (as defined in Section
6 of this Agreement) or it Xxxxx terminates this Agreement for the
uncured breach of this Agreement by viaLink, for a period of one (1)
year after the termination of this Agreement, Xxxxx shall not,
directly or indirectly, alone, or as a partner, officer, director,
employee, stockholder, consultant or agent of any other corporation,
partnership or other business organization, knowingly solicit any of
the accounts of viaLink which were customers of viaLink during the
Term of this Agreement unless such solicitation is undertaken on
behalf of a business venture which does not compete directly with the
products or services owned, sold, manufactured, marketed, provided or
developed by viaLink. For the purposes of this
5
Subsection, a business shall be deemed to be in competition with
viaLink only if the products or services of such business are
substantially similar in purpose, function or capability to the
products or services then being developed, manufactured, marketed,
provided or sold by viaLink.
5.4. If viaLink terminates Xxxxx'x employment without Cause, the provisions
of Section 5.3 of this Agreement shall be enforceable against Xxxxx
only as long as Xxxxx is receiving the compensation set forth in
Section 4.1 of this Agreement.
5.5. The parties agree that Xxxxx'x services are unique and that any breach
or threatened breach of the provisions of this Agreement will cause
irreparable injury to viaLink and that money damages will not provide
an adequate remedy. Accordingly, viaLink shall, in addition to other
remedies provided by law, but subject nonetheless to the terms and
conditions of this Agreement, be entitled to such equitable and
injunctive relief as may be necessary to enforce the provisions of
this Agreement against Xxxxx or any person or entity participating in
such breach or threatened breach. Nothing contained herein shall be
construed as prohibiting viaLink from pursuing any additional remedies
available to it, at law or in equity, for such breach or threatened
breach including any recovery of damages from Xxxxx and the immediate
termination of his employment.
5.6. During the Term of this Agreement, Xxxxx shall not knowingly engage
in, and shall not knowingly solicit any employees of viaLink or its
subsidiaries or other affiliates to engage in any commercial
activities which are in any way in competition with the activities of
viaLink, or which in any way materially interfere with the performance
of his or any such other employee's duties or responsibilities to
viaLink.
5.7. Sections 5.1 through 5.5 of this Agreement shall survive the
expiration or termination of this Agreement.
6. Duration and Termination.
6.1. Unless earlier terminated pursuant to the provisions hereof, the
initial Term ("Initial Term") of this Agreement shall commence on
October 1, 1998 and shall continue through September 30, 2001, and the
same shall be automatically renewed on a year to year basis thereafter
("Extended Term") unless one party hereto notifies the other party
hereto in writing, at least six (6) months prior to the end of the
then current Initial Term or Extended Term, as the case may be, that
such party giving the notice will terminate this Agreement at the end
thereof. For purposes of this Agreement, unless otherwise indicated by
the context of the reference, the word "Term" shall refer collectively
to both the Initial Term and to any Extended Term.
6
6.2. This Agreement shall immediately terminate, and all rights, benefits
and obligations hereunder shall cease, in the event of Xxxxx'x death,
except such rights of Xxxxx which have accrued as of the date of
death.
6.3. In the event that a physician, mutually acceptable to both viaLink and
Xxxxx, determines that Xxxxx is unable to substantially perform his
usual and customary duties under this Agreement for more than three
(3) months in any calendar year, this Agreement shall immediately
terminate and all rights, benefits and obligations hereunder shall
cease, except such rights of Xxxxx which have accrued as of the date
of disability.
6.4. If, and only if, Xxxxx has fully met the Bonus criteria for the first
quarter of 1999 established by viaLink's Board for him as set forth in
Subsection 4.2.1 of this Agreement, and subject to all of the terms
and conditions of this Agreement, upon the termination of this
Agreement, unless such termination is (i) by viaLink for cause as
defined in this Agreement, (ii) by Xxxxx other than for the uncured
breach of this Agreement by viaLink or (iii) pursuant to either
Section 6.2 or 6.3 of this Agreement or (iv) as a result of the
rejection of this Agreement by a Bankruptcy Court, Xxxxx shall be
entitled to the following payments:
6.4.1. The continuation of his then current salary as of the
effective date of the termination (without duty to mitigate)
for the remaining portion of the then current Term of this
Agreement; and
6.4.2. The continuation of the group employee benefits available to
Xxxxx immediately prior to his termination to the extent that
the applicable plan(s) allow for the continuation of the same
or, to the extent that such plan(s) do not allow for the
continuation of the same, a payment equal to the cost of Cobra
benefits for Xxxxx only, if Xxxxx elects such Cobra option.
Such reimbursement, if any, shall be due within thirty (30)
days after Xxxxx presents proof of payment for the same to
viaLink; and
6.4.3. A one time payment, which shall by made by viaLink not later
than sixty (60) days following the quarter in which the
termination occurs, and which payment shall be equal to the
greater of (i) the Bonus due pursuant to the applicable
Subsection of Section 4.2 of this Agreement or (ii) fifteen
percent (15%) of his the salary as of the effective date of
the termination;
6.4.4. A one time lump sum payment of four hundred thousand dollars
($400,000) to be paid by viaLink not later than sixty (60)
days following the date of Xxxxx'x termination.
6.5. viaLink shall have the right to terminate this Agreement in any of the
following events, each of which shall constitute "Cause":
7
6.5.1. Xxxxx fails to earn the Bonus for the first quarter of 1999 as
set forth in Section 4.2.1 of this Agreement.
6.5.2. Xxxxx'x breach in respect of his duties under this Agreement
if such breach continues unremedied for thirty (30) days after
receipt of written notice thereof to Xxxxx specifying in
detail the acts constituting the alleged breach and requesting
that the same be remedied; or
6.5.3. a conviction, plea of nolo contendere, plea to a lesser charge
in lieu of a felony, of a felony, a crime involving fraud or
misrepresentation, or any other crime, the effect of which is
likely to materially adversely affect viaLink, or
6.5.4. intentional violation of any Law which results in material
liability to viaLink.
6.5.5. abuse of alcohol or other drugs, or the illegal use of drugs,
which materially interferes with the performance by Xxxxx of
his duties hereunder.
6.5.6. Notwithstanding anything to the contrary herein, no notice or
cure period is required to be given to Xxxxx if the
termination is as a result of a violation of said Subsections
6.63, 6.6.4 or 6.6.5 of this Agreement.
6.6. Xxxxx shall have the right to terminate this Agreement in the event of
the following:
6.6.1. viaLink's breach in respect of its duties under this Agreement
if such breach continues unremedied for thirty (30) days after
receipt of written notice thereof directed to the Chairman of
viaLink's Board specifying in detail the acts constituting the
alleged breach and requesting that the same by remedied.
7. Successors and Assigns. The rights and obligations of viaLink hereunder
shall run in favor of and shall be binding upon viaLink, its successors,
assigns, nominees or other legal representatives. Termination of Xxxxx'x
employment shall not operate to relieve him of any remaining obligations
hereunder. Xxxxx may not assign his rights and obligations hereunder.
8. Notices. All notices, requests, demands and other communications hereunder
must be in writing and shall be given (i) by hand delivery, (ii) by
telecopier, (iii) by overnight courier such as Federal Express, or (iv) by
certified mail, return receipt requested, postage prepaid, to the other
party. The Notice in each case shall be addressed as follows:
8
8.1. if to viaLink: The viaLink Company, 00000 Xxxxxx Xxxx, Xxxxxx,
Xxxxxxxx 00000 Attention to viaLink's then current Chairman of its
Board; and
8.2. if to Xxxxx: Xxxxxx X. Xxxxx, 3209 Adobe, Xxxxxx, Xxxxxxxx 00000.
The address at which a party wants Notice under this Agreement to be sent
may be changed by that party by giving Notice thereof to the other party
pursuant to this Section 8.
9. Severabili1y. If any provision of this Agreement shall be adjudged by any
court of competent jurisdiction to be invalid or unenforceable for any
reason, such judgment shall not affect, impair or invalidate the remainder
of this Agreement.
10. Entire Understanding . This Agreement embodies the entire understating of
the parties hereto, and supersedes all other oral or written agreements or
understandings between them regarding the subject matter. No change,
alteration or modification hereof may be made except in a writing, signed
by both parties hereto.
11. Captions. The headings in this Agreement are for convenience and reference
only and shall not be construed as part of this Agreement or to limit or
otherwise affect the meaning hereof.
12. Execution in Counterparts . This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed to be original, but
all such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart.
13. Choice of Law. Jurisdiction over disputes with regard to this Agreement
shall be exclusively in the courts of the State of Oklahoma, and this
Agreement shall be construed in accordance with and governed by the laws of
the state of Oklahoma without giving effect to principles of conflicts of
law hereunder.
14. Attorney Fees. In the event of any litigation between the parties hereto,
the prevailing shall be entitled to all of its costs incurred in such
litigation, including reasonable attorneys' fees.
15. Nonwaiver. The waiver of any violation or breach of this Agreement by
either party hereto shall not be deemed to be a waiver of any continuing
violation or breach or a waiver of any other violation or breach of this
Agreement.
16. Arbitration. Notwithstanding anything to the contrary in this Agreement,
any controversy or claim arising out of or relating to this Agreement, or
its breach, or its validity or interpretation, except claims for injunctive
relief and claims involving necessary third parties who refuse to
participate shall be settled by binding arbitration in accordance the then
current Commercial Arbitration Rules
9
of the American Arbitration Association ("AAA") subject, however, to the
following:
16.1. The location for the arbitration shall be at such location as agreed
by the parties in Oklahoma County, Oklahoma or if the parties cannot
agree at such location in Oklahoma County, Oklahoma as designate by
the AAA.
16.2. Such arbitration shall be heard and determined by a panel of three
(3) arbitrators in accordance with the then current rules or
regulations of the AAA relating to commercial disputes ("Rules"). All
arbitrators shall be selected pursuant to the then current Rules
thereof within thirty (30) days after the filing of a demand for
arbitration. Each arbitrator shall be a person with experience in
handling disputes relating to employment disputes regarding
management or executive personnel.
16.3. The hearing on the arbitration shall be heard not later than six (6)
months after the demand for arbitration has been made by a party.
16.4. The arbitration award shall be binding on the parties and may be
enforced in any court of competent jurisdiction.
16.5. The prevailing party in such arbitration shall be entitled to recover
its reasonable attorney fees and costs incurred in such arbitration
proceeding.
17. Exclusivity. Unless specifically otherwise stated in this Agreement, the
rights and remedies granted to the parties in this Agreement are exclusive.
18. Limitation of Actions. No arbitration or action, regardless of form,
relating to or arising out of this Agreement may be brought by either party
more than three (3) years after such party knew or should have known of the
occurrence of the event(s) which gave rise to any claim, demand or cause of
action.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE viaLink Company Xxxxx
By:
------------------------------ ------------------------------
Xxxxxx X. Xxxxx
Its:
-----------------------------
Date: Date:
---------------------------- -------------------------
10
