EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Employment Agreement") made and entered into effective the
11th day of June, 1992 by and between I. A. ACQUISITION, INC., a Minnesota
corporation ("Employer") and Xxxx Xxxxxxx ("Executive").
WITNESSETH:
WHEREAS, Employer has entered into an asset purchase agreement with
Information Advantage, Incorporated (the "Seller") pursuant to which Employer
agreed to purchase substantially all of the assets and liabilities of the
Seller; and
WHEREAS, Seller is engaged in the business of client/server software
applications, system installation and consultation (the "Business");
WHEREAS, Executive was an officer of Seller and has been actively involved
in the business of Seller; and
WHEREAS, as a condition of purchasing substantially all of the assets and
liabilities of the Seller, Employer requires that Executive enter into this
Employment Agreement prior to engaging in any employment activities on behalf of
Employer, including, without limitation, the prohibitions on competition with
Employer and its subsidiaries, the use of confidential information and the
solicitation of customers, vendors and employees of Employer; and
WHEREAS, Employer desires to employ Executive in the capacity and on the
terms and conditions hereinafter set forth, and Executive has agreed to accept
such terms and conditions.
NOW THEREFORE, in consideration of the premises and the mutual promises
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT RELATIONSHIP. Employer hereby employs Executive as Vice
President - Development, subject to the direction of the Shareholders and Board
of Directors of the Employer. Executive accepts such employment and agrees to
devote his loyalty, skills and his full-time efforts to the conduct of the
Employer's business operations.
2. TERM OF EMPLOYMENT. Subject to Section 4 hereof, the term of this
Employment Agreement and the performance of Executive's services shall commence
as of the date of this Employment Agreement and shall continue for three (3)
years from the date of this Agreement. Upon expiration of the initial
three-year term, this Agreement shall be renewable for additional
one-year terms, subject to the mutual agreement of the parties and the
provisions on termination set forth in Section 4 hereof. The initial three
year term and subsequent one year terms shall be called the "Term".
3. COMPENSATION AND BENEFITS. For all services rendered by Executive to
Employer, Executive shall be compensated by Employer in accordance with the
terms and conditions set forth herein:
3.1 BASE SALARY. The base salary of Executive shall be $87,000 on an
annualized basis during the Term ("Base Salary") payable in accordance
with the Employer's normal payroll procedures and policies for
executive employees. Such salary may be increased at any time
pursuant to action taken by the Board of Directors of Employer.
3.2 BONUS. Executive shall be entitled to a bonus only upon written
action of the Board of Directors of Employer.
3.3 FRINGE BENEFITS. Executive shall be entitled to those employee
benefits as are available to all other employees of Employer, and such
other benefits as determined by written action the Board of Directors.
3.4 EXPENSE REIMBURSEMENTS. Executive is authorized to incur reasonable
expenses, including travel expense, in connection with the business of
the Employer. Employer will reimburse Executive for all such
reasonable expenses.
3.5 VACATION. Executive shall be entitled to three weeks of vacation
during each year of this Agreement
3.6 STOCK OPTION. Employer intends to establish a Stock Option Plan
within thirty (30) days after the date hereof. Executive shall be
entitled to participate in the initial grant of options thereunder.
4. TERMINATION. Executive's employment pursuant to this Agreement shall
continue for the period set forth in SECTION 2 hereof, subject to the following:
4.1 TERMINATION FOR CAUSE. Employer may terminate Executive's employment
with Employer for cause, effective upon notice in writing to the
Executive. "Cause", for purposes of this Agreement, is defined as an
indictment, charge or admission of a felony, fraud against Employer,
misappropriation of Employer's assets or embezzlement. Upon the
giving of such notice, Executive's employment shall immediately
terminate.
2
4.2 TERMINATION WITHOUT CAUSE. Employer may terminate Executive's
employment without cause at any time during the Term upon 30 days
written notice to Executive. If Executive's employment is terminated
without cause, Executive shall be paid an amount equal to his Base
Salary per month at the end of each of the six (6) months immediately
following the date of termination. However, such severance payments
shall cease at such time as Executive obtains other employment as a
full-time salaried employee.
4.3 RESIGNATION. Executive may resign from his position and terminate his
employment at any time upon 30 days written notice to Employer.
4.4 DISABILITY. The determination of whether Executive has suffered a
total and permanent disability ("Disability") shall be the inability
of Executive to fully perform his duties hereunder for a period of 90
days or more (with any working periods of less than 15 business days
not to be construed as interrupting such disability period).
Executive shall be entitled to the continuation of Base Salary and
fringe benefits as provided in SECTIONS 3.1 AND 3.3 hereof through the
end of such 90 day period. All determinations as to whether Executive
has suffered a Disability shall be determined by the Board of
Directors of Employer in its reasonable discretion.
4.5 DEATH. In the event of Executive's death, Executive's Base Salary as
provided in SECTION 3.1 shall be continued only through the end of the
pay period in which Executive dies. Employer shall have no further
obligations to Executive, his heirs, personal representatives or
Executive's estate after the end of such period, except to the extent
Employer is required to continue certain fringe benefits as requested
by law or the terms of the applicable fringe benefit plans in effect
on the date of Executive death.
4.6 TERMINATION OF COMPENSATION AND BENEFITS. Except as required by law
or as provided in SECTION 4.2 hereof, Executive shall not be entitled
to the continuation of the Base Salary under SECTION 3.1, Bonus under
SECTION 3.2, fringe benefits under SECTION 3.3 hereof or expense
reimbursement (unless incurred in the ordinary course of business
prior to termination) under SECTION 3.4 hereof, after termination of
his employment hereunder.
4.7 MATERIALS. Upon termination under SECTION 4 hereof, Executive shall
return to Employer any materials and property owned by Employer, and
in the event of Executive's failure to do so, Employer may, in
addition
3
to any other remedy provided by law, withhold any amounts due
Executive until full compliance with this provision. If Employer
believes that Executive has failed to return certain materials or
property to Employer, Employer shall give the Executive notice of such
materials or property with reasonable specificity. Upon receipt of
such materials and property, or evidence satisfactory to Employer that
Executive does not have such materials or property, Employer shall
promptly forward the amounts owed Executive to Executive.
5. COVENANT NOT TO COMPETE. During the Term and, for such period after
the expiration of the Term as the Employer pays Executive an amount equal to
two-thirds (66.66%) of the Executive's Base Salary at the end of the Term, but
in no event longer than two (2) years after the end of the Term, Executive shall
not, directly or indirectly, through an existing or to be existing corporation,
unincorporated business, affiliated party, successor employer or otherwise,
compete with Employer. Severance payments made to Executive pursuant to
SECTION 4.2 shall be credited in full against the covenant not to compete
payments specified herein. This covenant not to compete shall not prevent
Executive from being employed by a division or subsidiary of an entity which is
not competing with Employer where that entity has another division or subsidiary
which competes with Employer provided that Executive is in no way involved with
such competing division or subsidiary. Before beginning employment, Executive
shall provide a copy of this Agreement to any employer of his during the two
year period immediately following the end of the Term. This covenant not to
compete shall apply to activities of Executive which directly or indirectly
compete with Employer in the United States, the United Kingdom and any other
countries in which Employer is engaged in business during the Term.
6. CONFIDENTIAL INFORMATION.
6.1. DEFINITIONS. For purposes of this Agreement:
A. "Confidential Information" means information or material,
techniques, formulas, processes or procedures, which are proprietary to Employer
or designated as Confidential Information by Employer and not generally known
independently by knowledgeable non-Employer personnel, which Executive developed
or has or may obtain knowledge of or access to through or as a result of his
relationship with Employer (including, but not limited to, information
conceived, originated, discovered, improved or developed in whole or in part by
Executive). Confidential Information includes, but is not limited to, the
following types of information and other information of a similar nature
(whether or not reduced to writing): discoveries, ideas, inventions, concepts,
technologies, computer programs and software, whether application or operating
programs, and associated source and object codes,
4
modules, components, routines, formats, files and all documentation related
thereto, designs, secrets, drawings, specifications, techniques, models,
data, documentation, diagrams, flow charts, research development, processes,
procedures, know-how, marketing techniques and materials, marketing and
development plans, customer names and other information related to customers,
price lists, pricing policies and financial information. Confidential
Information also includes any information described above which Executive
obtains from another party (including, for example, customers or vendors of
Employer) and which Employer treats as proprietary or designates as
Confidential Information, whether or not owned by Employer. In the event
Executive is uncertain whether any particular information constitutes
Confidential Information, he will seek clarification from Employer.
B. "Inventions" includes discoveries, improvements,
techniques, models, processes, procedures, designs, diagrams and ideas (whether
patentable or not).
C. "Works" of authorship includes writings, drawings, software,
and other works of authorship (whether or not they are copyrightable).
6.2. CONFIDENTIALITY COVENANT.
A. CONFIDENTIAL INFORMATION. Executive shall not, both during
and after the end of the Term, directly or indirectly divulge, communicate, use
to the detriment of Employer, or any of its affiliates, successors or assigns,
or for the benefit of any other person or entity, or misuse any Confidential
Information. Confidential Information shall not be used by Executive for any
purpose whatsoever except as required to perform the work Employer requests
under the terms of this agreement. Employer reserves the right to demand the
return of any such information at any time. Upon any termination of this
agreement, Executive shall immediately return any such information in his
possession to Employer. This paragraph shall survive the termination of this
Agreement indefinitely.
B. INVENTIONS AND WORKS OF AUTHORSHIP. With respect to
inventions or works of authorship, Executive shall: (i) promptly disclose to
Employer in writing all inventions and works of authorship which are or were
conceived, made, discovered, written or created by Executive alone or jointly
with someone else while employed at Employer during the Term and the two (2)
year period immediately after the end of the Term, and Executive hereby assign
all rights to these inventions and works of authorship to Employer; and (ii)
give Employer all assistance it reasonably requires to perfect, protect, and use
its rights to inventions and works of authorship. In particular, Executive will
sign all documents, do all things, and supply all information that Employer
considers necessary or desirable to transfer or record the transfer
5
of his entire right, title and interest in inventions and works of
authorship; and to enable Employer to obtain patent, copyright, or other
legal protection for inventions and works of authorship. Any out-of-pocket
expenses will be paid by Employer. This paragraph shall survive the
termination of this agreement indefinitely. Executive will be paid (on a
monthly basis) (at least) at a rate equivalent to his ending salary for time
spent.
6.3. EXCLUSIONS. NOTICE: Minnesota law exempts from this Employment
Agreement "AN INVENTION FOR WHICH NO EQUIPMENT, SUPPLIES, FACILITY OR TRADE
SECRET INFORMATION OF THE EXECUTIVE WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON
THE EXECUTIVE'S TIME, AND (1) WHICH DOES NOT RELATE (A) DIRECTLY TO THE BUSINESS
OF THE EMPLOYER OR (B) TO THE EMPLOYER'S ACTUAL OR DEMONSTRABLY ANTICIPATED
RESEARCH OR DEVELOPMENT, OR (2) WHICH DOES NOT RESULT FROM ANY WORK PERFORMED BY
THE EXECUTIVE FOR THE EMPLOYER. Also excluded from this Employment Agreement
are the following inventions and works of authorship which Executive owns or
controls and WHICH WERE CONCEIVED, MADE, WRITTEN, OR CREATED BY EXECUTIVE PRIOR
TO EMPLOYMENT WITH THE EMPLOYER, although they would be useful to the Employer,
its subsidiaries or affiliates:
(1)
--------------------------------------------------------------------
(2)
--------------------------------------------------------------------
(3)
--------------------------------------------------------------------
Other than these, Executive does not claim to own or control rights in any
inventions or works of authorship and will not assert any such rights against
the Employer.
7. SOLICITATION OF SUPPLIERS AND CUSTOMERS. During the Term, and for two
years after the termination of this Agreement, Executive shall not directly,
through an existing or to be existing operation, unincorporated business,
affiliated party, successor employer, or otherwise, reveal the name or related
information of, solicit or interfere with, or endeavor to entice from the
Employer, or an affiliate of Employer, any of its suppliers or customers during
the Term.
8. SOLICITATION OF EMPLOYEES. Executive during the Term and for two
years after the termination of the Term, Executive shall not directly or
indirectly, through an existing or to be existing corporation, unincorporated
business, affiliated party, successor employer or otherwise, solicit, hire for
employment, or work with, on a part-time, consulting, advising or any other
basis, any employee or independent contractor of Employer, or any of its
affiliates, successors and assigns, during the Term and the two year period
after the end of the Term.
9. NOTICES. All notices given hereunder shall be in writing and shall be
personally served or sent by registered or certified mail, return receipt
requested, addressed as follows:
6
To Employer:
I. A. Acquisition, Inc.
00000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
To Executive:
Xxxx Xxxxxxx
0000 X. 00xx Xx.
Xxxxxxxxxxx, XX 00000
10. MISCELLANEOUS.
11.1 COMPLETE AGREEMENT. This Employment Agreement is the entire
Employment Agreement between the parties concerning the subject matter
hereof and supersedes and replaces any existing arrangement between
the parties hereto relating to Executive's employment. Employer and
Executive hereby acknowledge that there are no other agreements
regarding Executive's employment, apart from this Employment
Agreement.
11.2 NO WAIVER. No failure on the part of Employer or Executive to
exercise, and no delay in exercising any right hereunder will operate
as a waiver thereof, nor will any single or partial exercise of any
right hereunder by Employer or Executive preclude any other or further
exercise thereof or the exercise of any other right.
11.3 SEVERABILITY. It is further agreed and understood by the parties
hereto that if any part, term or provision of this Agreement should be
held unenforceable in the jurisdiction in which either party seeks
enforcement of the contract, it shall be construed as if not
containing the invalid provision or provisions, and the remaining
portions or provisions shall govern the rights and obligations of the
parties.
11.4 GOVERNING LAW. This Employment Agreement shall be construed and
enforced in accordance with the internal laws of the State of
Minnesota, without regard to conflicts of law provisions.
11.5 ASSIGNMENT. This Employment Agreement is personal in nature and
cannot be assigned by Executive. This Employment Agreement can be
assigned by Employer. The terms, conditions and covenants herein
shall be binding upon the heirs and personal representatives of
Executive,
7
and the successors, assigns of Employer and any subsidiary or
"affiliate" of Employer.
11.6 REMEDIES NOT EXCLUSIVE. No remedy conferred hereunder is intended to
be exclusive, and each shall be cumulative and shall be in addition to
every other remedy. The election of any one or more remedies shall
not constitute a waiver of any other remedy.
11.7 TERMINATION OF EMPLOYMENT. In the event of Executive's termination of
employment all obligations of Employer to Executive under this
Agreement shall terminate with the exception as to the continuation of
certain payments and fringe benefits as specified in SECTION 4.
Executive's obligations under SECTIONS 4, 5, 6, 7, 8 AND 9 shall
survive the termination of employment.
11.8 CAPTIONS. Captions and section headings used herein are for
convenience only and are not a part of this Employment Agreement, and
shall not be used in construing it.
8
IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the date and year first above written.
EMPLOYER: I. A. ACQUISITION, INC.
By /s/ Xxx X. Xxxx
--------------------------------
Xxx X. Xxxx
Its Chairman and Chief
Executive Officer
EXECUTIVE: /s/ Xxxx Xxxxxxx 6-11-92
--------------------------------
Xxxx Xxxxxxx
9
