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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of the Effective
Date indicated below by and between CRL Network Services, Inc., a California
corporation ("CRL"), Integral Networking Corporation, a California corporation
("INTEGRAL NETWORKING") and Xxxxxx X. Xxxx("Employee").
BACKGROUND
This Agreement is entered into in connection with an Agreement and Plan
of Reorganization (the "Plan") dated as of December 21, 1998 by and among CRL,
RMS Sub Inc., a Delaware corporation, INTEGRAL NETWORKING, and certain
shareholders of INTEGRAL NETWORKING, pursuant to which CRL Acquisition Corp., a
wholly-owned subsidiary of CRL, is to merge with and into INTEGRAL NETWORKING.
The date on which the merger becomes effective will be the effective date of
this Agreement (the "Effective Date").
Employee is a founder, principal shareholder and President of INTEGRAL
NETWORKING and has been actively involved in the development and marketing of
INTEGRAL NETWORKING's products. To preserve and protect the assets of INTEGRAL
NETWORKING, including INTEGRAL NETWORKING's goodwill, customers and trade
secrets of which Employee has and will have knowledge, and in consideration for
CRL entering into and performing under the Plan, Employee has agreed to enter
into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements of the parties contained herein, CRL and Employee hereby agree as
follows:
1. Employment. CRL will employ Employee and Employee accepts employment
with CRL for a period of two years from the Effective Date (the "Initial
Period"), unless Employee's employment is sooner terminated in accordance with
this Agreement. Employee's employment may continue after this Initial Period but
will then be terminable by either party at will, with or without cause. The
obligations of CRL and Employee set forth in the Proprietary Information and
Inventions Agreement (as defined in Section 7) (referring to confidentiality),
and in Section 8 (referring to termination), and in Section 9(i) (referring to
dispute resolution) and, to the extent specifically provided therein, the
obligations of CRL and Employee set forth in Section 5 (referring to employee
benefits) and Section 6 (referring to reimbursement of expenses), will survive
the termination of Employee's employment, regardless of cause.
2. Duties. Employee will be employed as a full-time employee of CRL and
will serve as President, Integral Networking Corporation, a CRL Company
responsible for INTEGRAL NETWORKING operations, reporting to Xxx Xxxxx,
President of CRL or his delegate. Employee agrees that, to the best of his
ability and experience, he will at all times conscientiously perform all of the
duties and obligations assigned to him under this Agreement. At CRL's option, it
will be entitled to reasonable use of Employee's name in promotional,
advertising and other materials used in the ordinary course of business.
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3. Full-time Employment. Employee's employment will be on a full-time
basis, in accordance with standard employee policies for CRL. Employee will sign
a standard CRL employment agreement. Employee will not engage in any other
business or render any commercial or professional services, directly or
indirectly, to any other person or organization, whether for compensation or
otherwise, provided that Employee may (i) provide incidental assistance to
family members on matters of family business; and (ii) sit on the boards of
charitable and nonprofit organizations or other companies which do not, at the
time of Employee's appointment or election, to Employee's knowledge, compete
with CRL; provided in each case that such activities do not conflict with or
interfere with Employee's obligations to CRL. Employee may make personal
investments in non-publicly traded corporations, partnerships or other entities,
which, to the knowledge of Employee, do not at the time of such investment
design, research, distribute or otherwise market products similar to or
competitive with CRL in the customer relationship management system for the
financial services industry software product market. Employee may make personal
investments in publicly traded corporations regardless of the business they are
engaged in, provided that Employee does not at any time own in excess of 1% of
the issued and outstanding stock of any such corporation.
4. Salary. Employee's salary for the period commencing on the Effective
Date will be no less than $56,500 per year, payable on CRL's regular payroll
dates, less required withholdings and will be eligible for a target bonus of
$100,000 based on targeted personal and company performance.
5. Employee Benefits. Employee will be entitled to insurance, vacation
and other benefits commensurate with other executive officers of CRL. Employee
has received a summary of CRL's standard employee benefits policies in effect as
of the date hereof.
6. Reimbursement of Business Expenses. CRL will, in accordance with
CRL's policies in effect from time to time, reimburse Employee for all
reasonable business expenses incurred by Employee in connection with the
performance of his duties under this Agreement, including, without limitation,
reasonable expenditures for office space, supplies, equipment and expenses and
for business entertainment and travel, upon submission of the required
documentation required pursuant to CRL's standard policies and record keeping
procedures.
7. Confidentiality. Simultaneously with the execution of this Agreement,
Employee is executing and delivering and hereby adopts and agrees to be bound by
CRL's standard Employee Proprietary Information and Inventions Agreement, a copy
of which is attached to this Agreement as Exhibit A (the "Proprietary
Information and Inventions Agreement").
8. Termination.
(a) By CRL. CRL may terminate Employee's employment at any time
with or without cause upon written notice to Employee.
(b) By Employee. Employee may terminate Employee's employment in
the event that CRL is in material breach of this Agreement upon written notice
to CRL, provided that such termination will become effective only upon the
expiration of 30 days following such notice
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and then only if the alleged breach remains uncured. Such termination shall be
deemed a termination by CRL of Employee's employment under Section 8(a) for
which Employee shall have the remedy set forth in Section 8(d).
(c) If Employee resigns or otherwise terminates Employee's
employment without cause, Employee shall receive no Termination Payments
(defined below).
(d) If CRL terminates Employee For Cause (as defined below), this
Agreement shall terminate and Employee shall not be entitled to any further
benefits hereunder, except as specifically set forth herein. If, during the
Initial Period, CRL terminates Employee and such termination is not For Cause,
CRL will pay to Employee, for the lesser of three months or the remainder of the
Initial period, on a monthly basis an amount equal to Employee's monthly salary
at the monthly rate paid to Employee immediately prior to such termination (the
"Termination Payments"). CRL's obligation to make these Termination Payments
pursuant to this Section 8(d) is in lieu of any damages or any other payment
which CRL might otherwise be obligated to pay Employee as a result of Employee's
termination of employment. CRL and Employee agree that, in view of the nature of
the issues likely to arise in the event of such a termination, it would be
impracticable or extremely difficult to fix the actual damages resulting from
such termination and proving actual damages, causation and foreseeability in the
case of such termination would be costly, inconvenient and difficult. In
requiring CRL to make the Termination Payments as set forth herein, it is the
intent of the parties to provide, as of the date of this Agreement, for a
liquidated amount of damages to be paid by CRL to Employee. Such liquidated
amount shall be deemed full and adequate damages for such termination and is not
intended by either party to be a penalty. For purposes of this Agreement, "For
Cause" shall mean:
(i) Employee's continued failure to perform his duties
hereunder in good faith, after written notice of such failure from CRL or
INTEGRAL NETWORKING to Employee and an opportunity to cure such failure to
perform;
(ii) Employee engaging in knowing and intentional illegal
conduct which is injurious to CRL or INTEGRAL NETWORKING or their affiliates;
(iii) Employee being convicted of a felony or committing
an act of dishonesty or fraud against, or the misappropriation of property
belonging to, CRL or INTEGRAL NETWORKING or their affiliates;
(iv) Employee breaching in any material respect the terms
of this Agreement or the Noncompetition Agreement;
(v) Employee's commencement of employment with another
employer while an employee of CRL or INTEGRAL NETWORKING; and
(vi) Any behavior or breach of CRL's standards of business
conduct which would be cause for termination under CRL's employment policies as
they currently exist or
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as effected in the future, after written notice of such behavior or breach from
CRL or INTEGRAL NETWORKING to Employee and an opportunity to cure such behavior
or breach.
(e) Upon Death. If Employee dies during the term of this
Agreement, CRL will pay his estate an amount equal to all salary, bonuses and
benefits accrued as of the date of his death.
9. Miscellaneous.
(a) Notices. Any and all notices permitted or required to be
given under this Agreement must be in writing. Notices will be deemed given (i)
when personally received or when sent by facsimile transmission (to the
receiving party's facsimile number), (ii) on the first business day after having
been sent by commercial overnight courier with written verification of receipt,
or (iii) on the third business day after having been sent by registered or
certified mail from a location on the United States mainland, return receipt
requested, postage prepaid, whichever occurs first, at the address set forth
below or at any new address, notice of which will have been given in accordance
with this Section 9(a):
If to CRL: CRL Network Services
Xxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxxx
With a copy to: Fenwick & West LLP
Two Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxxx Xxxxx, Esq.
If to Employee: Xx. Xxxxxx X. Xxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxx Xxxxxxx, XX 00000
Copy to: Xxxx X. Xxxxxx
Xxxxxxxxx, Genshlea & Xxxxxx
000 Xxxxxxx Xxxx
00xx xxxxx
Xxxxxxxxxx, XX 00000
p) 916-558-6000
f) 916-446-1611
(b) Amendments. This Agreement, including Exhibit A hereto,
contains the entire agreement and supersedes and replaces all prior agreements
between CRL and Employee or INTEGRAL NETWORKING and Employee concerning
Employee's employment. This Agreement may not be changed or modified in whole or
in part except by a writing signed by the party against whom enforcement of the
change or modification is sought.
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(c) Successors and Assigns. This Agreement will not be assignable
by either Employee or CRL, except that the rights and obligations of CRL under
this Agreement may be assigned to a corporation which becomes the successor to
CRL as the result of a merger or other corporate reorganization and which
continues the business of CRL, or any other subsidiary of CRL, provided that CRL
guarantees the performance by such assignee of CRL's obligations hereunder.
(d) Governing Law. This Agreement will be governed by and
interpreted according to the substantive laws of the State of California without
regard to such state's conflicts law.
(e) No Waiver. The failure of either party to insist on strict
compliance with any of the terms of this Agreement in any instance or instances
will not be deemed to be a waiver of any term of this Agreement or of that
party's right to require strict compliance with the terms of this Agreement in
any other instance.
(f) Severability. Employee and CRL recognize that the limitations
contained herein are reasonably and properly required for the adequate
protection of the interests of CRL. If for any reason a court of competent
jurisdiction or binding arbitration proceeding finds any provision of this
Agreement, or the application thereof to be unenforceable, the remaining
provisions of this Agreement will be interpreted so as best to reasonably effect
the intent of the parties. The parties further agree to replace any such invalid
or unenforceable provisions with valid and enforceable provisions designed to
achieve, to the extent possible, the business purposes and intent of such
unenforceable provisions.
(g) Counterparts. This Agreement may be executed in counterparts
which when taken together will constitute one instrument. Any copy of this
Agreement with the original signatures of all parties appended will constitute
an original.
(h) Effect of Agreement. This Agreement will be void and have no
effect if the Effective Date does not occur on or before January 31, 1999.
(i) Dispute Resolution.
(i) Arbitration of Disputes. Any dispute under this
Agreement shall be resolved by arbitration in San Francisco, California and,
except as herein specifically stated, in accordance with the commercial
arbitration rules of the American Arbitration Association ("AAA Rules") then in
effect. However, in all events, these arbitration provisions shall govern over
any conflicting rules which may now or hereafter be contained in the AAA Rules.
Any judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction over the subject matter thereof The arbitrator shall
have the authority to grant any equitable and legal remedies that would be
available in any judicial proceeding instituted to resolve such dispute; except
that the arbitrator shall not grant any punitive, consequential or incidental
damages.
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(ii) Compensation of Arbitrator. Any such arbitration will
be conducted before a single arbitrator who will be compensated for his or her
services at a rate to be determined by the parties or by the American
Arbitration Association, but based upon reasonable hourly or daily consulting
rates for the arbitrator in the event the parties are not able to agree upon his
or her rate of compensation.
(iii) Selection of Arbitrator. The American Arbitration
Association will have the authority to select an arbitrator from a list of
arbitrators who are partners in a nationally recognized firm of independent
certified public accountants from the management advisory services department
(or comparable department or group) of such firm; provided, however, that such
firm cannot be the firm of certified public accountants then auditing the books
and records of either party or providing management or advisory services for
either party.
(iv) Payment of Costs. CRL and Employee will each pay 50%
of the initial compensation to be paid to the arbitrator in any such arbitration
and 50% of the costs of transcripts and other normal and regular expenses of the
arbitration proceedings; provided, however, that the prevailing party in any
arbitration will be entitled to an award of attorneys' fees and costs, and all
costs of arbitration, other than those provided for above, will be paid by the
losing party, and the arbitrator will be authorized to make such determinations.
(v) Burden of Proof. For any dispute submitted to
arbitration, the burden of proof will be as it would be if the claim were
litigated in a judicial proceeding.
(vi) Award. Upon the conclusion of any arbitration
proceedings hereunder, the arbitrator will render findings of fact and
conclusions of law and a written opinion setting forth the basis and reasons for
any decision reached and will deliver such documents to each party to this
Agreement along with a signed copy of the award.
(vii) Terms of Arbitration. The arbitrator chosen in
accordance with these provisions will not have the power to alter, amend or
otherwise affect the terms of these arbitration provisions or the provisions of
this Agreement.
(viii) Exclusive Remedy. Except as specifically otherwise
provided in this Agreement, arbitration will be the sole and exclusive remedy of
the parties for any dispute arising out of this Agreement.
IN WITNESS WHEREOF, this Agreement is made and effective as of the day
and year first above written.
CRL NETWORK SERVICES, INC. EMPLOYEE
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxx
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Xxxxx X. Xxxxx Xxxxxx X. Xxxx
President and
Chief Executive Officer
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