Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of this 1st
day of January, 2000, by and between Xxxxxx Xxx, a resident of Georgia
("Employee") and ENGINEERING ANIMATION, INC., a Delaware corporation with its
principal offices in Ames, Iowa ("EAI" or "Company").
RECITALS
A. EAI is in the business of producing 3D visualization software products
and conducting various other activities associated therewith.
B. EAI desires to employ Employee and Employee desires to be employed by
EAI on the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Employment Terms. Subject to the terms and conditions set forth
herein, EAI will employ Employee for a term commencing as of January 1, 2000
(the "Effective Date") and ending on the second anniversary of the Effective
Date, or such earlier date as may occur pursuant to the terms of this Agreement
(the "Employment Term"). This Agreement may be extended by mutual agreement of
the parties.
2. Employment Duties. During the term of this Agreement, Employee will
serve EAI as Vice President, Worldwide Sales and Marketing. Employee's duties
shall include those duties as assigned from time to time by the President of
EAI, subject to the terms of this Agreement. Employee will, during the term of
this Agreement, serve the Company faithfully, diligently and competently and
will perform assigned duties on a full-time basis to the best of Employee's
ability.
3. Compensation. During the term of employment, EAI will pay to
Employee for services rendered by Employee under this Agreement, thefollowing:
(a) From the Effective Date of this Agreement through the second
anniversary of the Effective Date, a salary at a rate of
$230,000 per annum ($19,166.67 per month) payable in arrears
monthly, in accordance with the EAI's ordinary payroll
practices; and
(b) During the last quarter of each fiscal year Employee will
participate in the planning process which results in the
establishment of goals and budgets for the following fiscal
year. After the end of each fiscal year of the Company, during
the Employment Term, Employee shall be eligible for an annual
performance bonus, the nature and amount of which shall be
determined by and in the discretion of the Company after
reviewing Employee's performance and the Company's results of
operations during and for such fiscal year and such other
considerations deemed appropriate by the Company.
Notwithstanding anything else in this Agreement, the
declaration and payment an the amount of any performance
bonus to Employee shall be in the discretion of the Company
and Employee shall have no absolute right to a performance
bonus in any year.
Payments made pursuant to this section while Employee is employed by shall be
treated as wages for withholding and employment tax purposes.
4. Severance Provisions. In the event that Employee is terminated
during the term of this Agreement for any reason whatsoever (including
termination for Good Reason), except for cause as defined in Paragraph 8,
Employee shall receive a lump sum severance payment in an amount equal to
Employee's annual total compensation at plan at the time of termination and an
amount equal to the cost of health insurance benefits for twelve months.
5. Benefits.
(b) Employee shall be entitled during the Employment Term to
participate in such employee benefit plans and programs,
including, without limitation, 401(k) plan, cafeteria, health
and life insurance plans, as are maintained from time to time
for employees of EAI to the extent that his position, tenure,
compensation, age, health and other qualifications make him
eligible to participate. The Company does not promise the
adoption or continuance of any particular plan or program
during the employment term and employee's (and his dependents')
participation in any such plan or program shall be subject to
the provisions, rules, regulation and laws applicable from
time to time thereto.
(c) During the Employment Term, Employee shall be entitled to paid
time off in accordance with the policies of the Company which
provide for fifteen (15) days paid time off during the first
year of employment, eighteen (18) days during the second year
of employment, and twenty-one (21) days during the third year
of employment. In addition, Employee shall be entitled to paid
time off on such holidays as are observed by the Company from
time to time. Accrued, unused vacation may be carried over
from one year to the next in accordance with Company policies.
6. Reimbursement of Expenses. To the extent consistent with the general
expense reimbursement policies maintained by EAI from time to time, Employee
shall be entitled to reimbursement for ordinary, necessary and reasonable
out-of-pocket trade or business expenses which Employee incurs in connection
with performing his duties under this Agreement, including reasonable travel and
meal expenses. The reimbursement of all such expenses shall be made upon
presentation of evidence reasonably satisfactory to EAI of the amounts and
nature of such expenses and shall be subject to the prior approval of EAI.
7. Employee Proprietary Information, Invention and Business\Opportunity
Agreement. Employee agrees to be bound by the terms of the Employee Proprietary
Information, Invention and Business Opportunity Agreement which is attached
hereto as Exhibit A.
8. Termination. This Agreement may be terminated for Cause or for Good
Reason. Cause shall be defined as (i) any action by Employee involving willful
gross misconduct having a material adverse effect on the Company; (ii) Employee
being convicted of a felony under the laws of state of the United States or any
state or under the laws of any other country or political subdivision thereof.
Good Reason shall be defined as: (a) a reduction in the salary, or in the
benefits or perquisites provided the Employee; (b) a substantial reduction in
the Employee's responsibilities, authorities or functions.
9. Arbitration. Any and all disputes arising directly or indirectly out
of or relating in any way to this Agreement that cannot be satisfactorily
resolved by the parties shall be submitted to binding arbitration pursuant to
the rules then in effect of the American Arbitration Association (AAA).
Arbitration shall be held in Chicago, Illinois. The arbitrator(s), who shall be
attorneys experienced in employment law, shall decide the matters submitted to
them based upon the evidence presented and the terms of this Agreement. The
arbitrator(s) shall issue a written award that shall state the basis of the
award, the findings of fact and the conclusions of law. The arbitration award
shall be final, non-appealable and binding upon the parties. Judgment upon the
award may be entered in any court having jurisdiction thereof.
10. Miscellaneous.
a. All notices hereunder shall be in writing and shall be deemed
given when delivered in person or when sent by email or
telecopier followed by hard copy; or following three (3)
business days after being deposited in the United States mail,
postage prepaid, registered or certified mail, or two (2) days
after delivery to a nationally recognized express courier,
expenses prepaid, addressed as follows:
If to Employee: Addressed to the last address on the payroll
records of EAI.
If to EAI: Engineering Animation, Inc.
0000 Xxxxx Xxxx Xxxxx
Xxxx, XX 00000
Attention: Xxxxx X. Xxxx, General Counsel
b. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, successors
and permitted assigns
c. This Agreement contains all of the agreements between the
parties with respect to the subject matter hereof and this
Agreement supersedes all other agreements, oral or written,
between the parties hereto with respect to the subject matter
hereof.
d. No change or modification of this Agreement shall be valid
unless the same shall be in writing and signed by the parties
hereto. No waiver of any provisions of this Agreement shall be
valid unless in writing and signed by the waiving party.
e. If any provisions of this Agreement (or portions thereof)
shall, for any reason, be deemed invalid or unenforceable by
any court of competent jurisdiction, such provisions (or
portions thereof) shall be ineffective only to the extent of
such invalidity or unenforceability, and the remaining
provisions of this Agreement (or portions thereof) shall
nevertheless be valid, enforceable and of full force and
effect. EAI's rights under this Agreement shall not be
exclusive and shall be in addition to all other rights and
remedies available at law or in equity.
f. This Agreement may be executed in multiple counterparts, each
of which shall be deemed to be an original and all of which,
when taken together, shall constitute a single instrument.
g. This Agreement shall be governed and controlled as to
validity, enforcement, interpretation, construction, effect
and in all other respects by the laws of the State of Iowa
applicable to contracts made in Iowa (other than any conflict
of laws rule which might result in the application of the laws
of any other jurisdiction).
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
ENGINEERING ANIMATION, INC. XXXXXX XXX
By: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxx
--------------------------------------- --------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President amd
Chief Operating Officer
