Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated effective January 2, 1997, by
and between Condor Technology Group, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxx ("Employee").
PRELIMINARY RECITALS
WHEREAS, the Company has been formed to execute a plan to consolidate a
limited number of information technology of companies (the "Business") and to
make an initial public offering ("IPO") common stock of the consolidated company
to the public (the "Plan");
WHEREAS, the Company is in the process of identifying and evaluating
companies that may meet its criteria to join with it in the planned
consolidation, to be followed by negotiations on merger agreements with the
companies;
WHEREAS, Hill has extensive experience in the information technology field;
WHEREAS, the Company desires to employ Hill as its President and
Chief Executive Officer;
NOW, THEREFORE, in consideration of the premises, the mutual covenants of
the parties hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Employment.
1.1 Engagement of Employee. The Company agrees to employ Employee as
its President and Chief Executive Officer of the Company, and Employee
agrees to accept such employment, all in accordance with the terms and
conditions of this Agreement.
1.2 Duties and Powers. At all times during the Employment Period (as
defined herein), the Company agrees that Employee will serve as the
President and Chief Executive Officer; provided, however, that Employee
shall resign as President of the Company effective upon the closing of the
Company's initial public offering of Common Stock. He shall have such other
responsibilities, duties and authorities, and will render such services
for the Company and its affiliates as the Board of Directors of the Company
(the "Board") shall from time to time reasonably direct.
1.3 Employment Period. Employee's employment under this Agreement
shall be for a period of three years commencing January 1, 1997 (the
"Initial Employment Period") unless the Company fails to execute its
planned IPO during 1997, in which case the term of this Agreement will end
at the time the Company ceases its efforts to execute the IPO but not
sooner than December 31, 1997. Provided the Company successfully
consummates the IPO, this Agreement shall automatically renew for
successive one-year periods (each one-year period shall be referred to
herein as a "Renewal Period") unless either the Company or
-1-
Employee, as the case may be, provides written notice within thirty (30) days
prior to the termination of any such period, stating its/his desire to terminate
this Agreement. The Initial Employment Period and each successive Renewal
Period shall be referred to herein together as the "Employment Period".
Notwithstanding anything to the contrary contained herein, the Employment Period
is subject to termination pursuant to Section 1.4 below.
1.4 Termination of Employment.
(a) Termination by Company For Cause . The Company has the right
to terminate Employee's employment under this Agreement, by notice to
Employee in writing at any time, (i) for "Cause" or (ii) due to the
death or the Disability of Employee. Any such termination shall be
effective upon the date of service of such notice pursuant to Section
6.6 hereof, except in the case of the death, in which case such
termination shall become effective immediately upon the death of
Employee.
"Cause," as used herein, means the occurrence of any of the following
events:
(i) willful and material fraud or dishonesty in connection with
the Employee's performance hereunder;
(ii) the failure of Employee to substantially perform his duties
hereunder that results in material harm to the Company;
(iii) the conviction for, or plea or nolo contendere to, a charge
of commission of a felony;;
(iv) subject to (v) below, a material breach by Employee of any
of the terms and conditions of this Agreement after (A) written notice
is delivered to Employee describing such breach and (B) Employee has
failed to cure or take substantial steps to cure such breach after a
reasonable time period, as determined by the Board in its reasonable
discretion (not to be less than 60 days); or
(v) a material breach by Employee of any of the terms,
conditions or covenants set forth in Section 3 of this Agreement.
Employee shall be deemed to have a "Disability" for purposes of this
Agreement if he is unable to perform, by reason of physical or mental
incapacity, his material duties or obligations under this Agreement,
for a total period of 180 days in any 360-day period. The Board shall
determine, according to the facts then available, whether and when the
Disability of the Employee has occurred. Such determination shall not
be arbitrary or unreasonable and the Board will take into
consideration the expert medical opinion of a physician chosen by
the Company as well as a physician chosen by Employee, after such
physician has completed an examination of Employee. Employee agrees
to make himself available for such examination upon the reasonable
request of the Company.
-2-
(b) Termination for Good Reason. Employee shall have the right
at any time to terminate his employment with the Company for any "good
reason." For purposes of this Agreement and subject to the Company's
opportunity to cure as provided in Section 1.4(c) below, the Employee
shall have "good reason" to terminate his employment hereunder if such
termination shall be the result of:
(i) a material breach by the Company of the compensation and
benefits provisions of Section 2 hereof;
(ii) a material breach by the Company of any other term of
this Agreement.
(c) Notice and Opportunity to Cure. Notwithstanding the
foregoing, it shall be a condition precedent to the Company's right to
terminate the Employee's employment for "cause" and the Employee's
right to terminate for "good reason" that (1) the party seeking the
termination shall first have given the other party written notice
stating with specificity the reason for the termination ("breach") and
(2) if such breach is susceptible of cure or remedy, a period of 30
days from and after the giving of such notice shall have elapsed
without the breaching party having effectively cured or remedied such
breach during such 30 day period, unless such breach cannot be cured
or remedied within 30 days, in which case the period for remedy or
cure shall be extended for a reasonable time (not to exceed an
additional 30 days), provided the breaching party as made and
continues to make a diligent effort to effect such remedy or cure.
2. Compensation and Benefits.
2.1 Salary. In consideration of Employee performing his duties under
this Agreement during the Employment Period, the Company will pay Employee
a base salary ("Base Salary") as follows:
(a) Pre-IPO. From the effective date of this Agreement until the
closing of the IPO, Employee shall receive a base salary at a rate of
$216,000 per annum;
(b) Post-IPO. From and after the successful consummation of the
IPO Employee shall receive a base salary at a rate of $300,000 per
annum(the "Base Salary").
The Base Salary shall be payable in accordance with the Company's regular
payroll policy for salaried employees. The Base Salary may be increased
(but not decreased) from time to time during the Employment Period, as
determined by the Board, in its sole discretion.
-3-
2.2 Stock Sale. In consideration for his agreement to accept this
engagement and in consideration of the consulting services provided to date
by Employee, the Company promises to sell to Hill a total of 1,000,000
shares of its common stock, before giving effect to a reverse stock split
to be made in connection with the Company's IPO, as soon as practicable
following the execution of this document.
2.3 Stock Options. Employee shall be granted options to purchase
100,000 shares of common stock of the Company, exercisable at the IPO price
and vesting over three years under the Company's 1997 Long-Term Incentive
Plan.
2.4 Bonus. Employee shall participate in an Executive Compensation
Program to be established by the Company (the "Bonus Program") under which
Employee shall be entitled to a bonus based on the financial performance of
the Company. All bonuses awarded to Employee hereunder shall be payable in
accordance with Company policy.
-4-
2.5 Compensation After Termination During Employment Period.
(a) If the Company shall terminate Employee's employment during
the first twelve months of the Employment Period for any reason (other
than for "Cause" pursuant to Section 1.4 of this Agreement) or
Employee shall terminate his employment during the first twelve months
for good reason as defined in Section 1.4(b), Employee shall be
entitled to receive his accrued benefits and as severance (A) his Base
Salary for the period of time which would have been remaining in the
Initial Employment Period or any Renewal Period (the "Severance
Period"), (B) his pro rated bonus, as determined by the Board in its
good faith judgment, for the period of any fiscal year prior to the
termination date, (C) all options to purchase shares of the Company's
common stock held by Employee immediately prior to termination of
employment shall become immediately vested and exercisable and,
subject to the terms of the Company's Long-Term Incentive Plan, shall
remain exercisable for the duration of the Severance Period and (D) a
continuation for the Severance Period of coverage under the group
medical care, disability and life insurance benefit plans or
arrangements in which the Employee is participating; provided however,
that the Company's obligation to provide such coverage shall be
terminated if the Employee obtains comparable coverage from another
employer at any time during the Severance Period. The Employee shall
be entitled, at the expiration of the Severance Period to elect
continued medical coverage in accordance with section 4980B of the
Internal Revenue Code. If the Company terminates Employee's employment
other than for Cause as defined in Section 1.4 between the twelfth and
thirty-sixth month or during a Renewal Period, or if the Employee
terminates his employment other than for good reason as defined in
Section 1.4(b) between the twelfth and thirty-sixth month or during a
Renewal Period, Employee shall be entitled to receive severance pay
equal to 100% of his Base Salary for the period of time which would
have been remaining in the Initial Employment Period or any Renewal
Period and ("Severance Pay").
(b) If the Company shall terminate Employee's employment during
the Employment Period pursuant to Section 1.4, the Company shall have
no further obligations hereunder or otherwise with respect to
Employee's employment from and after the termination or expiration
date (except payment of Employee's Base Salary accrued through the
date of termination or expiration), and the Company shall continue to
have all other rights available hereunder (including, without
limitation, all rights under Sections 3 and 4 hereof at law or in
equity).
2.6 Benefits, Expenses and Pension Plan. During the Employment
Period, the Company agrees to provide to Employee such vacation and other
health and insurance benefits as are generally provided, from time to time,
to senior officers of the subsidiaries of Condor.
-5-
3. Covenants.
3.1 Employee's Acknowledgment. Employee acknowledges that:
(i) the Company is and will be engaged in the Business during
the Employment Period and thereafter;
(ii) Employee is one of a limited number of persons who will
develop the Business;
(iii) Employee will occupy a position of trust and confidence
with the Company after the date of this Agreement, and during such
period and Employee's employment under this Agreement, Employee will
become familiar with the Company's proprietary and confidential
information concerning the Company and the Business;
(iv) the agreements and covenants contained in this Section 3 are
essential to protect the Company and the goodwill of the Business and
are a condition precedent to the Company entering into this Agreement;
(v) Employee's employment with the Company has special, unique
and extraordinary value to the Company and the Company would be
irreparably damaged if Employee were to provide services to any person
or entity in violation of the provisions of this Agreement.
(vi) Employee has means to support himself and his dependents
other than by engaging in the Business and the provisions of this
Section 3 will not impair such ability.
3.2 Non-Compete. Subject to the provisions of Section 4, Employee
hereby agrees that during the Employment Period and hereafter through the
period ending six months after the last day of the Initial Employment
Period and any Renewal Period during which the termination date occurred,
as the case may be (collectively, the "Restrictive Period"), he shall not,
for any reason whatsoever, directly or indirectly, for himself or on behalf
of or in conjunction with any other person, persons, company, partnership,
corporation or business of whatever nature:
(a) engage, as an officer, director, shareholder, owner,
partner, joint venturer, or in a managerial capacity, whether as an
employee, independent contractor, consultant or advisor, or as a sales
representative, in the information technology business in direct
competition with the Company in any community in which the Company is
doing business during the term of this Agreement (the "Territory");
(b) call upon any person who is, at that time, within the
Territory, an employee of the Company or any of its subsidiaries in a
managerial capacity for the purpose or with the intent of
-6-
enticing such employee away from or out of the employ of the Company; provided,
that the Employee shall be permitted to call upon and hire any member of his or
her immediate family.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit the Employee from acquiring as an investment not more than one
(1%) percent of the capital stock of a competing business whose stock is
traded on a national securities exchange or over the counter so long as the
Employee does not consult with or is not employed by such competitor.
3.3 Interference with Relationships. Other than in the performance of his
duties hereunder, during the Restrictive Period, Employee shall not, directly or
indirectly, as employee, agent, consultant, stockholder, director, co-partner or
in any other individual or representative capacity solicit or encourage any
present or future customer, supplier or other third party to terminate or
otherwise alter his, her or its relationship with the Company or any of its
subsidiaries with respect to the Business engaged in by the Company and its
subsidiaries in the Territory.
3.4 Confidential Information. Other than in the performance of his duties
hereunder, during the Restrictive Period and thereafter, Employee shall keep
secret and retain in strictest confidence, and shall not, without the prior
written consent of the Company, furnish, make available or disclose to any third
party or use for the benefit of himself or any third party, any Confidential
Information. As used in this Agreement, "Confidential Information" shall mean
any information relating to the business or affairs of the Company or the
Business, including, but not limited to, information relating to financial
statements, employees, suppliers, construction, manufacturing and servicing
methods, equipment, programs, strategies and information, analyses, profit
margins, or other proprietary information used by the Company or any of its
subsidiaries in connection with the Business; provided, however, that
Confidential Information shall not include any information which is in the
public domain or becomes known in the industry through no wrongful act on the
part of Employee. Employee acknowledges that the Confidential Information is
vital, sensitive, confidential and proprietary to the Company.
3.5 Blue-Pencil. If any court of competent jurisdiction shall at any time
deem the term of this Agreement or any particular Restrictive Covenant (as
defined) too lengthy or the Territory too extensive, the other provisions of
this Section 3 shall nevertheless stand, the Restrictive Period herein shall be
deemed to be the longest period permissible by law under the circumstances and
the Territory herein shall be deemed to comprise the largest Territory
permissible by law under the circumstances. The court in each case shall reduce
the time period and/or Territory to permissible duration or size.
-7-
3.6 Remedies. Employee acknowledges and agrees that the covenants set
forth in this Section 3 (collectively, the "Restrictive Covenants") are
reasonable and necessary for the protection of the Company's business interests,
that irreparable injury will result to the Company if Employee breaches any of
the terms of said Restrictive Covenants, and that in the event Employee breaches
or threatens to breach any such Restrictive Covenants, the Company will have no
adequate remedy at law. Employee accordingly agrees that in the event Employee
breaches or threatens to breach any of the Restrictive Covenants, the Company
shall be entitled to immediate temporary injunctive and other equitable relief,
without bond and without the necessity of showing actual monetary damages,
subject to hearing as soon thereafter as possible. Nothing contained herein
shall be construed as prohibiting the Company from pursuing any other remedies
available to it for such breach or the threat of such a breach by Employee,
including the recovery of any damages which it is able to prove.
4. Effect of Termination.
4.1 For Cause or Voluntary Quitting. If the Employee should terminate
Employee's employment during the Employment Period other than for good
reason as defined in Section 1.4(b) or the Company should terminate
Employee's employment for Cause pursuant to Section 1.4(a), then,
notwithstanding such termination, the provisions contained in Sections 3
hereof shall remain in full force and effect.
4.2 Other than for Cause. If the Company should terminate
Employee's employment prior to the passage of twelve months from the
date of this Agreement other than for Cause as defined in Section 1.4
or Employee shall terminate his employment during the first twelve
months for good reason as defined in Section 1.4(b), then
(i) the provisions and covenants of Section 3.2 and 3.3
shall have no effect and shall be unenforceable, and
(ii) Employee shall be entitled to receive all of the
benefits payable under this Agreement for the balance of the
Initial Employment Period.
-8-
5. Miscellaneous.
5.1 Assignment. No party hereto may assign or delegate any of its
rights or obligations hereunder without the prior written consent of the
other party hereto; provided, however, that the Company shall have the
right to assign all or any part of its rights and obligations under this
Agreement (i) to any affiliate of the Company to which the Business of the
Company is assigned at any time, any subsidiary or affiliate of the Company
or any surviving entity following any merger or consolidation of any of
those entities with any entity other than the Company or (ii) in connection
with the sale of the Business by the Company provided, however, for any
such assignment of obligations Company shall guarantee thereof by such
assignee unless Employee expressly, in writing, releases Company. Except
as otherwise expressly provided herein, all covenants and agreements
contained in this Agreement by or on behalf of any of the parties hereto
shall bind and inure to the benefit of the respective legal
representatives, heirs, successors and assigns of the parties hereto
whether so expressed or not.
5.2 Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement and all other agreements entered into by the parties
hereto on the date hereof set forth the entire understanding of the
parties, and supersede and preempt all prior oral or written understandings
and agreements, with respect to the subject matter hereof. In particular,
the agreement between the parties made effective as of October 1, 1996
pursuant to which Hill was appointed to the Board of Directors and all
amendments thereto, herein incorporated by reference, is terminated, and
neither party has any duty or liability under that agreement.
5.3 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
5.4 Amendment; Modification. No amendment or modification of this
Agreement and no waiver by any party of the breach of any covenant
contained herein shall be binding unless executed in writing by the party
against whom enforcement of such amendment, modification or waiver is
sought. No waiver shall be deemed a continuing waiver or a waiver in
respect of any subsequent breach or default, either of a similar or
different nature, unless expressly so stated in writing.
5.5 Governing Law. This Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the
laws of the State of Delaware, without giving effect to provisions thereof
regarding conflict of laws. To the extent that any provision of this
Agreement is inconsistent with the laws of the State of Delaware, the
parties agree to be governed and abide by the law of the State of Delaware.
5.6 Notices. All notices, demands or other communications to be
given or delivered hereunder or by reason of the provisions of this
Agreement shall be in writing and
-9-
shall be deemed to have been properly served if (a) delivered personally,
(b) delivered by a recognized overnight courier service, (c) sent by certified
or registered mail, return receipt requested and first class postage prepaid, or
(d) sent by facsimile transmission followed by a confirmation copy delivered by
a recognized overnight courier service the next day. Such notices, demands and
other communications shall be sent to the addresses indicated below:
If to Employee:
Xxxxxxx X. Xxxx
000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxx 00000
(b) If to the Company:
Condor Technology Group, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: J. Xxxxxxxx Xxxxxxx
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
Date of service of such notice shall be (i) the date such notice is
personally delivered or sent by facsimile transmission (with issuance by
the transmitting machine of a confirmation of successful transmission,
(ii) three days after the date of mailing if sent by certified or
registered mail or (iii) one day after date of delivery to the overnight
courier if sent by overnight courier.
5.7 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement and shall become effective
when one or more counterparts have been executed by each of the parties hereto
and delivered to the other.
5.8 Descriptive Headings; Interpretation. The descriptive headings in
this Agreement are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. The use of the word "including" in this Agreement shall be by way of
example rather than by limitation. The Preliminary Recitals set forth above are
incorporated by reference into this Agreement.
5.9 No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
interest, and no rule of strict construction will be applied against any party
hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
-10-
COMPANY:
By: /s/ J. Xxxxxxxx Xxxxxxx
------------------------------------
J. Xxxxxxxx Xxxxxxx
EMPLOYEE:
/s/ Xxxxxxx X. Xxxx
------------------------------------------
Xxxxxxx X. Xxxx
-11-
