Xxxx Xxxxxx
AGREEMENT
This Agreement is made as of the latest date indicated below between
Mastech Systems Corporation, a Pennsylvania corporation (hereinafter called the
"Company") and the undersigned employee (hereinafter called the "Employee").
This Agreement is entered into contemporaneously with Employee's receipt of
certain stock options offered by Company which were not previously made
available to Employee.
WHEREAS, Employee is employed by the Company as an at-will employee
whose employment may be terminated by either party with or without reason or
cause and without any liability for such termination;
WHEREAS, this Agreement is necessary for the protection of Company's
legitimate and protectible business interests in its customers, prospective
customers, accounts and confidential, proprietary and trade secret information;
and
WHEREAS, this Agreement is a term and condition of Employee's employment
and is made in consideration for certain stock options offered to Employee
contemporaneously with this Agreement as well as Employee's continued employment
and access to Company's customers, prospective customers, accounts, and
confidential, proprietary and trade secret information.
NOW THEREFORE, for the consideration set forth herein, the receipt and
sufficiency of which is acknowledged by the parties, Company and Employee agree
as follows:
1. DEFINITIONS. As used herein:
-----------
(a) "Company" shall mean Mastech Systems Corporation and any
affiliate of Mastech Systems Corporation, including any direct or indirect
parent or subsidiary of Mastech Systems Corporation, as well as their respective
operating divisions.
(b) "Confidential Information" shall include, but is not
necessarily limited to, any information which may include, in whole or part,
information concerning the Company's accounts, sales, sales volume, sales
methods, sales proposals, customers and prospective customers, prospect lists,
identity of purchasing personnel in the employ of customers and prospective
customers, amount or kind of customer's purchases from the Company, the
Company's source of supply of products and/or personnel, sources of consultants,
Company manuals, formulae, products, processes, methods, machines, compositions,
ideas, improvements, inventions, research, computer programs, system
documentation, software products, patented products, copyrighted information,
know how and operating methods and any other trade secret or proprietary
information belonging to the Company or relating to the Company's affairs that
is not public information.
(c) "Customer(s)" shall mean any individual, corporation,
partnership, business or other entity with whom the Company has contracted
during the two (2) year period preceding the termination of Employee's
employment.
-1-
(d) "Competing Business" shall mean any individual, corporation,
partnership, business or other entity which provides or attempts to provide any
products or services that directly compete with products or services offered by
the Company, i.e., information technology services, including software
applications solutions and services, and which were sold by the Company at any
time and from time to time during the one (1) year prior to Employee's
termination of employment. Notwithstanding the foregoing, the term Competing
Business does not include a corporation that derives at least $200 million of
its revenues from the sale of information technology services.
2. DUTIES. Employee, who is employed in the position set forth on
------
Schedule A hereof as of the date of this Agreement, agrees to be responsible for
such duties as are commensurate with and required by such position and any other
duties as may be assigned to Employee by Company from time to time. Employee
further agrees to perform his or her duties in a diligent, trustworthy, loyal,
businesslike, productive, and efficient manner and to use Employee's best
efforts to advance the business and goodwill of Company. Employee further agrees
to devote all of his or her business time, skill, energy and attention
exclusively to the business of the Company and to comply with all rules,
regulations and procedures of the Company. During the term of this Agreement,
Employee will not engage in any other business for Employee's own account or
accept any employment from any other business entity, or render any services,
give any advice or serve in a consulting capacity, whether gratuitously or
otherwise, to or for any other person, firm or corporation, other than as a
volunteer for charitable organizations, without the prior written approval of
the Company.
3. COMPENSATION. Employee's annual base salary as of the date of this
------------
Agreement is as set forth on Schedule A hereto. As compensation for Employee's
employment by the Company, the Company will pay the Employee during the period
of employment hereunder such remuneration as is determined to be appropriate by
the Company from time to time in its discretion.
4. BENEFITS. Employee will receive the standard Company benefits
--------
described in the Company Handbook which is incorporated as though fully set
forth in this Agreement and which may be modified at any time by the Company.
5. STOCK OPTIONS. Upon the initial public offering of the Company's
-------------
common stock, Employee shall receive that number of stock options covering the
Company's shares as is set forth on Schedule A hereto. Such options shall be
granted under the Company's Stock Incentive Plan as then in effect and shall be
subject to the Stock Option Agreement evidencing such stock options.
6. POLICIES AND PRACTICES. Employee agrees to abide by all rules,
----------------------
regulations and instruments established by the Company including the policies,
practices and procedures contained in the Company Employee Handbook which
Employee has received and which is incorporated by reference as though fully set
forth herein. The Company reserves the right to disregard the Company Employee
Handbook in the event that a particular portion of the Company Employee Handbook
conflicts with this Agreement or is deemed by the Company to
-2-
be incompatible with Employee's position in the Company, and the Company may
amend the Handbook from time to time in its sole discretion.
7. AGREEMENT NOT TO COMPETE. In order to protect the business interest
------------------------
and good will of the Company in respect to customers and accounts, and to
protect Confidential Information, Employee covenants and agrees that for the
entire period of time that this Agreement remains in effect, and for a period of
one (1) year after termination of Employee's employment for any reason he or she
will not:
(a) directly or indirectly contact any Customer of the Company for the
purpose of soliciting such Customer to purchase, lease or license a
product or service that is the same as, similar to, or in
competition with those products and/or services made, rendered,
offered or under development by the Company;
(b) engage in any activity or business as a consultant, independent
contractor, agent, employee, employer, officer, partner, director
or otherwise, alone or in association with any other person,
corporation or other entity, in any Competing Business operating in
the United States of America or any other country where the Company
has conducted business within the one (1) year period prior to the
termination of Employee's employment; provided, however, that this
subsection (b) shall not apply if the Employee is terminated by the
Company without cause after the sale of substantially all of the
business or assets of Mastech Systems Corporation to an
unaffiliated third party for fair value;
(c) directly or indirectly employ, or knowingly permit any company or
business directly or indirectly controlled by Employee to employ,
any person who is employed by the Company at any time during the
one (1) year prior to termination of the Employee's employment, or
in any manner to seek to induce any such person to leave his or her
employment with the Company; or
(d) directly or indirectly interfere with or attempt to disrupt the
relationship, contractual or otherwise, between the Company and any
of its employees or solicit, induce, or attempt to induce employees
of the Company to terminate employment with the Company and become
self-employed or employed with others in the same or similar
business or any product line or service provided by Company.
Employee acknowledges that the Company is engaged in business throughout
the United States as well as in other countries and that the marketplace for the
Company's products and services is worldwide. Employee further covenants and
agrees that the geographic, length of term and types of activities restrictions
(non-competition restrictions) contained in this Agreement are reasonable and
necessary to protect the legitimate business interests of the Company because of
the scope of the Company's business.
In the event that a court of competent jurisdiction shall determine that
one or more of the provisions of this Section 7 is so broad as to be
unenforceable, then such provision shall be
-3-
deemed to be reduced in scope or length, as the case may be, to the extent
required to make this Paragraph enforceable. If the Employee violates the
provisions of this Section 7, the periods described therein shall be extended by
that number of days which equals the aggregate of all days during which at any
time any such violations occurred.
8. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION. The
----------------------------------------------------
Employee covenants and agrees during Employee's employment or any time after the
Termination of such employment, not to communicate or divulge to any person,
firm or corporation, either directly or indirectly, and to hold in strict
confidence for the benefit of the Company, all Confidential Information except
that employee may disclose such Information to persons, firms or corporations
who need to know such Information during the course and within the scope of
Employee's employment. Employee will not use any Confidential Information for
any purpose or for his or her personal benefit other than in the course and
within the scope of Employee's employment.
(a) Work Made For Hire. Employee recognizes and understands that
------------------
his or her duties at Company have included and may continue to include the
preparation of materials, including computer software and other written or
graphic materials, and that any such materials conceived or written by him or
her were done and shall continue to be done as "work made for hire" as defined
and used in the Copyright Act of 1976, 17 USC I et seq. In the event of
publication of such materials, Employee understands that since the work is a
"work made for hire," the Company will solely retain and own all rights in all
such materials, including the right to copyright.
(b) Disclosure of Discoveries, Ideas and Inventions. Employee
-----------------------------------------------
represents that he does not have any right, title or interest in, nor has he
made or conceived wholly or in part prior to the commencement of his employment
by the Company any discovery, idea and invention.
(c) Disclosure of Other Discoveries, Ideas and
------------------------------------------
Inventions/Assignment of Patents. Employee shall disclose promptly to the
--------------------------------
Company, any and all works, inventions, discoveries and improvements authored,
conceived or made by Employee during the period of employment and related to the
business or activities of the Company, solely or jointly with others, which is
related to the lines of business, work or investigation of the Company at the
time of such discovery, idea or invention or which results from, or is suggested
by, any work which the Employee may do for or on behalf of the Company, and
hereby assigns and agrees to assign all his interest therein to the Company or
its nominee. Whenever requested to do so by the Company, Employee shall execute
any and all applications, assignments or other instruments which the Company
shall deem necessary to apply for and obtain Letters Patent or Copyrights of
the United States or any foreign country or to otherwise protect the interest
therein and shall assist the Company in every proper way (entirely at the
Company's expense, including reimbursement to him for all expense and loss of
income) to obtain such patents and copyrights and to enforce them. Such
obligations shall continue beyond the termination of employment with respect to
works, inventions, discoveries and improvements authored, conceived or made by
Employee during the period of employment, and shall be binding upon Employee's
assigns,
-4-
executors, administrators and other legal representatives. All such works,
inventions, discoveries and improvements shall remain the sole and exclusive
property of the Company, whether patentable or not.
9. RETURN OF MATERIALS. Upon termination of employment with Company
-------------------
for any reason, Employee shall promptly deliver to Company the originals and
copies of all correspondence, drawings, manuals, computerized information,
letters, notes, notebooks, reports, prospect lists, flow charts, programs,
proposals, and any documents concerning Company's customers or suppliers and,
without limiting the foregoing, will promptly deliver to Company any and all
other documents or materials containing or constituting Confidential
Information.
10. TERMINATION. This Agreement may be terminated with or without cause
-----------
by either party without any liability for such termination by giving to the
other party at least fifteen (15) days prior written notice, except that the
covenants of Sections 6, 7, 8, 9, 11, 12, 13, 14, 15, 16 and 18 hereof shall
survive the termination of this Agreement. All payments due as of the date of
termination shall be paid in full within thirty (30) days of this date.
11. SEVERANCE. If the Employee's employment is at any time terminated
---------
by the Company without cause, then the Company shall pay the Employee a
severance payment equal to three (3) times the monthly base salary of the
Employee then in effect, payable in the form of salary continuation in
accordance with the Company's then existing payroll practices; provided,
however, if the Employee's employment is terminated by the Company without cause
within 90 days after the sale of substantially all of the business or assets of
Mastech Systems Corporation to an unaffiliated third party for fair value, then
the Company (or its successor) shall pay the Employee a severance payment equal
to six (6) times the monthly base salary of the Employee then in effect in
accordance with the Company's then existing payroll practices.
12. ENTIRE AGREEMENTS. This Agreement supersedes all prior agreements,
-----------------
written or oral, between the parties hereto concerning the subject matter
hereof.
13. CHOICE OF LAW, JURISDICTION AND VENUE. The parties agree that this
-------------------------------------
Agreement shall be deemed to have been made and entered into in Pennsylvania and
that the Law of the Commonwealth of Pennsylvania shall govern this Agreement.
Jurisdiction and venue is proper in any proceeding by the Company to enforce its
rights hereunder filed in any court geographically located in Allegheny County,
Pennsylvania.
14. ACKNOWLEDGMENTS OF EMPLOYEE. Employee hereby acknowledges and
---------------------------
agrees that:
(a) This Agreement is necessary for the protection of the
legitimate business interests of the Company;
(b) the restrictions contained in this Agreement may be enforced
in a court of law whether or not Employee is terminated with
or without cause or for performance related reasons;
-5-
(c) The execution and delivery of this Agreement is a mandatory
condition precedent to the Employee's receipt of the
consideration provided herein;
(d) Employee has no intention of competing with the Company within
the limitations set forth above;
(e) Employee has received adequate and valuable consideration for
entering into this Agreement;
(f) Employee's covenants shall be construed as independent of any
other provision in this Agreement and the existence of any
claim or cause of action Employee may have against the
Company, whether predicated on this Agreement or not, shall
not constitute a defense to the enforcement by Company of
these covenants;
(g) this Agreement does not prevent Employee from earning a
livelihood after termination of employment; and
(h) Employee further acknowledges that his or her education and
experience enables Employee to work for different types of
employers, so that it will not be necessary for Employee to
violate the provisions of this covenant not to compete in
order to remain economically viable.
15. FULL UNDERSTANDING. Employee acknowledges that Employee has
------------------
carefully read and fully understands all of the provisions of this Agreement and
that Employee, in consideration for the compensation set forth herein, is
voluntarily entering into this Agreement.
16. EQUITABLE RELIEF. Employee stipulates and agrees that any breach of
----------------
this Agreement by Employee will result in immediate and irreparable harm to the
Company, the amount of which will be extremely difficult to ascertain, and that
the Company could not be reasonably or adequately compensated by damages in an
action at law. For these reasons, the Company shall have the right, without
objection from Employee, to obtain such preliminary, temporary or permanent
injunctions or restraining orders or decrees as may be necessary to protect the
Company against, or on account of, any breach by Employee of the provisions of
this Agreement. Such right to equitable relief is in addition to all other
legal remedies the Company may have to protect its rights. Employee further
covenants and agrees that any order of court or judgment obtained by the Company
which enforces the Company's rights under this Agreement may be transferred,
without objection or opposition by Employee, to any court of law or other
appropriate law enforcement body located in any other country in the world where
Company does business, and that said court body will give full full force and
effect to said order and or judgment.
17. AMENDMENTS. No supplement, modification, amendment or waiver of the
----------
terms of this Agreement shall be binding on the parties hereto unless executed
in writing by the party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be
-6-
deemed to or shall constitute a waiver of any other provisions hereof (whether
or not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided. Any failure to insist upon strict compliance with
any of the terms and conditions of this Agreement shall not be deemed a waiver
of any such conditions.
18. SUCCESSORS IN INTEREST. This Agreement shall be binding upon and
----------------------
shall insure to the benefit of the successors, assigns, heirs and legal
representatives of the parties hereto. The Company shall have the right to
assign this Agreement in connection with a merger involving the Company or a
sale or transfer of substantially all of the business and assets of the Company,
and Employee agrees to be obligated by this Agreement to any successor, assign
or surviving entity.
19. HEADINGS. The headings used in this Agreement are for convenience
--------
only and are not to be considered in construing or interpreting this Agreement.
MASTECH SYSTEMS
CORPORATION (COMPANY)
By: /s/ Xxxxx Xxxxxxx /s/ Xxxx X. Xxxxxx
------------------------------------ -----------------------------------
Xxxx Xxxxxx (Employee)
Dated as of: December 16, 1996 Dated as of: December 16, 1996
-7-
Xxxx Xxxxxx
Attachment A
1. Position: Director
--------
2. Base Salary (for fiscal 1997): $80,000, subject to the appropriate
----------------------------
federal, state and local taxes and withholdings.
3. Target Bonus (for fiscal 1997): $120,000, subject to individual, business
-----------------------------
unit/function and/or corporate performance goals to be established by the
Company's Board of Directors.
4. Stock Options: As consideration for this Agreement, Employee is entitled to
-------------
the stock options set forth on Schedule A hereto, subject to the terms of
the Stock Option Agreement evidencing the same.
-8-
Schedule A
Vesting Schedule for Option
The Option shall vest in accordance with the following schedule:
(i) 6,000 shares shall vest on June 30, 1997; provided that the Option for
such shares may not be exercised until the first anniversary of the
Effective Date;
(ii) 16,000 shares shall vest on the first anniversary of the Effective Date;
(iii) 10,000 shares shall vest on the second anniversary of the Effective
Date;
(iv) 10,000 shares shall vest on the third anniversary of the Effective
Date; and
(v) 10,000 shares shall vest on the fourth anniversary of the Effective Date.
-9-
