EXHIBIT 10.6
LANTE CORPORATION
EMPLOYMENT, CONFIDENTIALITY AND NONCOMPETE AGREEMENT
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THIS EMPLOYMENT, CONFIDENTIALITY AND NONCOMPETE AGREEMENT (this
"Agreement") is made as of June 17, 1999, between Lante Corporation, an Illinois
corporation (the "Company"), and Xxxx X. Xxxxx ("Executive").
The Company and Executive desire to enter into an agreement (i) defining
the relative rights of the Company and Executive with respect to Inventions (as
defined below) owned by the Company or its customers or clients to which
Executive may have access or may contribute as a result of Executive's
employment with the Company and (ii) setting forth the obligation of Executive
to refrain from competing with the Company during his employment with the
Company and for a period of time thereafter as provided herein.
The Company is entering into a Series A Convertible Preferred Stock
Purchase Agreement, dated as of the date hereof, with certain investors (the
"Purchase Agreement"). In order to induce the Investors to enter into the
Purchase Agreement and the other agreements contemplated thereby and to purchase
the Convertible Preferred in the manner contemplated thereby, Executive has
agreed to enter into this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Executive hereby agree as follows:
1. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the date hereof and
ending as provided in Section 4 hereof (the "Employment Period").
2. Position and Duties.
a. During the Employment Period, Executive shall serve as the Chairman of
the Company's Board of Directors (the "Board") and shall serve as an
executive officer of the Company, with the normal duties,
responsibilities and authority of the attendant to an executive
officer, subject to the general power of the Board to expand or limit
such duties, responsibilities and authority and to override actions of
officers of the Company.
b. During the Employment Period, Executive shall report to the Board and
shall devote his best efforts and his full business time and attention
(except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the
Company. Executive shall perform his duties and responsibilities to
the Company hereunder to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.
3. Compensation and Benefits.
a. During the Employment Period, Executive's base salary shall be
$360,000 per annum or such rate as the Board of the Compensation
Committee of the Board may designate from time to time (the "Base
Salary"), which salary shall be payable in regular installments in
accordance with the Company's general payroll practices. In addition,
during the Employment Period, Executive shall be entitled to
participate in all of the Company's employee benefit programs for
which senior executive employees of the Company are generally eligible
(collectively "Executive Benefits").
b. During the Employment Period, the Company shall reimburse Executive
for all reasonable expenses incurred by him in the course of
performing his duties and responsibilities under this Agreement which
are consistent with the Company's policies in effect from time to time
with respect to travel, entertainment and other business expenses,
subject to the Company's requirements with respect to reporting and
documentation of such expenses.
c. In addition to the Base Salary, the Board may, in its sole discretion,
award a bonus to Executive following the end of each fiscal year
during the Employment Period based upon Executive's performance and
the Company's operating results during such year (the "Annual Bonus").
4. Employment.
a. The Company shall employ Executive, and Executive hereby accepts
employment with the Company, upon the terms and conditions set forth
in this Agreement for the period beginning on the date hereof and
ending as provided below in this Section 4 hereof (the "Employment
Period").
b. The Employment Period shall continue until the earlier of (i)
Executive's resignation, (ii) Executive's death or disability or other
incapacity (as determined by a majority of the disinterested Board in
its good faith judgment) or (iii) termination by the Company, whether
for Cause (as defined in clause (e) below) or without Cause. The date
of termination of the Employment Period is referred to herein as the
"Termination Date".
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c. Upon termination of the Employment Period for any reason (other than a
termination by the Company or its successors for Cause (as defined in
clause (d) below)), the Company shall have the right, in its sole
discretion, to elect to pay Executive thereafter in regular
installments the Severance Amount (as defined below), by delivering
written notice to Executive no later than the fifteenth day following
the Termination Date; provided that if the Company makes such
election, the Company shall be required to make payments of the
Severance Amount in accordance with the Company's general payroll
practices and provide Executive Benefits to Executive if and only so
long as Executive has not breached the provisions of Section 8 and
Section 9 hereof in any material respect. If the Company fails to make
the election described in this clause (c) or if the Company fails to
pay the Severance Amount or provide the Executive with Executive
Benefits for any reason or for no reason other than a breach of
Section 8 or 9 in a material respect, Executive's obligations under
Section 8 hereof (regarding Noncompetition) shall immediately
terminate, notwithstanding any provision in such Section to the
contrary. Executive and the Company each agree to enter into a mutual
release effective as of the Termination Date (but not including with
respect to the provisions of this Agreement) which mutual release
shall be in form and substance satisfactory to the Company and the
Executive.
For purposes of this Agreement, the term "Severance Amount" means an
amount per annum equal to the sum of (i) Executive's Base Salary in
effect as of the Termination Date, and (ii) an amount based on the
Annual Bonus most recently paid to Executive.
d. For purposes of this Agreement, "Cause" shall mean (i) the conviction
of a felony, (ii) chronic drug or alcohol abuse or (iii) a wilful and
repeated failure to substantially perform duties which results in
serious material damage to the Company after 30 day written notice of
such failure.
5. Inventions.
a. As used herein, the term "Inventions" means any discovery,
improvement, idea, design, new development, device, product, method or
process (whether or not patentable or reduced to practice or
comprising Confidential Information (as defined below)), any
copyrightable work (whether or not comprising Confidential
Information) or any other form of Confidential Information, in each
case (i) which reasonably relates to the business of the Company as
previously and as hereinafter conducted, (ii) which reasonably relates
to the Company's actual or demonstrably anticipated research or
development, (iii) which results primarily from any work performed by
Executive for or on behalf of the Company and its businesses, (iv) for
which equipment, supplies, facility or trade secret information of the
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Company is used in any material respect or (v) which is developed by
the Company at any time.
b. In the event that Executive as part of his activities on behalf of the
Company generates, authors or contributes to (and to the extent that
Executive has generated, authored or contributed to) any Inventions,
Executive acknowledges that such Inventions are the exclusive property
of the Company and hereby assigns all right, title and interest in and
to such Inventions to the Company.
c. Any Invention made, authored or conceived, either solely or jointly
with others, whether before or after the date hereof, will be deemed
"a work made for hire" under Section 201(b) of the 1976 Copyright Act,
and the Company shall own all of copyright and other rights comprised
therein. Executive shall (i) keep accurate, complete and timely
records of any material Inventions, which records shall be the
Company's property and shall be retained on the Company's premises,
(ii) promptly and fully disclose and describe all material Inventions
in writing to the Company and shall reasonably cooperate with the
Company to protect the Company's interests in and rights to such
Inventions (including, without limitation, providing reasonable
assistance in securing patent protection and copyright registrations
and executing all documents as reasonably requested by the Company,
whether such requests occur prior to or after termination of
Executive's employment with the Company) so long as the Company pays
all costs and expenses thereof, and (iii) acknowledge and deliver
promptly to the Company (without charge to the Company, but at the
Company's expense) such written instruments and such other acts as may
be necessary in the opinion of the Company to obtain and preserve such
property rights and to vest the entire right and title thereto in the
Company.
d. In accordance with Section 2872 of the Illinois Employee Patent Act,
Ill. Rev. Stat. Chap. 140, (S) 301 et seq. (1983), Executive is hereby
advised that this Section 5 regarding the Company's ownership of
Inventions does not apply to any invention for which no equipment,
supplies, facilities or trade secret information of the Company was
used and which was developed entirely on Executive's own time, unless
(i) the invention relates to the business of the Company or to the
Company's actual or demonstrably anticipated research or development
or (ii) the invention results from any work performed by Executive for
or on behalf of the Company.
e. With respect to any Inventions, Executive hereby represents and
warrants to the Company that no prior assignment of or license,
agreement or permission pertaining to any Inventions has been granted
by Executive; Executive has never agreed to indemnify any person or
entity from or against any interference, infringement,
misappropriation or violation with respect to any Invention.
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6. Nondisclosure and Nonuse of Confidential Information.
a. During the Employment Period or thereafter, Executive shall not, at
any time, disclose, reveal or report at any time, any Confidential
Information (as defined below) of which Executive is or becomes aware,
whether or not such information is developed by him, except to the
extent that such disclosure or use is directly related to and required
by Executive's performance of duties assigned to Executive by the
Company or by law or legal process. Executive shall take all
appropriate steps to safeguard Confidential Information and to protect
it against disclosure, misuse, espionage, loss and theft. In addition,
Executive will cooperate with the Company in the execution of any
personal confidentiality agreement which may be requested or required
of Executive by any of the Company's customers, clients or other
business relations from time to time containing terms consistent with
this Section 6.
b. As used in this Agreement, the term "Confidential Information" means
information that is proprietary to the Company and is not known to the
public and that is primarily used or is developed or obtained by the
Company or any of its clients and customers in connection with its
business, including, but not limited to, (i) products or services,
(ii) fees, costs and pricing structures, (iii) designs and sales
proposals, (iv) operations, processes and analysis, (v) drawings,
photographs, research, development and reports, (vi) computer
software, including operating systems, applications, program listings
and techniques, (vii) flow charts, manuals and documentation, (viii)
data bases, business systems and computer systems, (ix) accounting and
business methods and other financial information, (x) products,
inventions, devices, new developments, methods and processes, whether
patentable or unpatentable and whether or not reduced to practice,
(xi) customers and clients and customer or client lists, (xii)
copyrightable works, (xiii) all information comprising the Inventions,
(xiv) all technology and trade secrets, and (xv) all similar and
related information in whatever form. Confidential Information shall
not include any information that has been disclosed in a form
available to the public prior to the date Executive proposes to
disclose or use such information. All information disclosed to
Executive by the Company or which Executive should reasonably expect
to be Confidential Information or which is reasonably treated by the
Company or its customers, clients or other business relations as being
confidential information of the Company shall be presumed to be
Confidential Information for purposes of this Agreement.
7. Delivery of Materials Upon Termination of Employment. As requested by the
Company from time to time and upon the Termination Date, Executive shall
promptly deliver to the Company all copies and embodiments, whether in
paper, electronic or any other form, of all Confidential Information and
Inventions in Executive's possession or reasonably within
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his control (including, but not limited to, written records, files, books,
notes, photographs, manuals, notebooks, documentation, program listings,
hardware, software, flow charts, magnetic media, keys, keycards, disks,
diskettes, tapes, Company credit cards and all other materials containing
any Confidential Information or Inventions) irrespective of the location or
form of such material and, if requested by the Company, shall provide the
Company with written confirmation that all such materials have been
delivered to the Company.
8. Noncompetition. Executive acknowledges and agrees with the Company that
Executive's services to the Company are (and, prior to the date hereof,
have been) unique in nature and that the Company would be irreparably
damaged if Executive were to provide similar services to any person or
entity competing with the Company or engaged in a similar business.
Executive accordingly covenants and agrees with the Company that during the
Employment Period and through the second anniversary of the Termination
Date (the "Noncompetition Period"), Executive shall not, whether directly
or indirectly, participate in any business (including, without limitation,
any division, group or franchise of a larger organization) anywhere in the
United States which engages or which proposes to engage in any business now
or hereafter conducted by the Company but prior to the earlier of the
Termination Date or the date a Sale of the Company (as defined in the
Second Shareholders Agreement dated as of the date hereof) has occurred.
For purposes of this Agreement, the term "participate in" shall mean having
any direct or indirect ownership interest in any corporation, partnership,
limited liability company, joint venture or other entity, whether as a sole
proprietor, owner, stockholder, partner, member, joint venturer, creditor
or otherwise, or rendering any direct or indirect material service or
assistance to any individual, corporation, partnership, limited liability
company, joint venture and other business entity (whether as a director,
officer, manager, supervisor, employee, agent, advisor, consultant or
otherwise); provided that the foregoing restriction shall not prohibit
Executive from owning publicly traded securities of any company, so long as
Executive does not own securities representing an ownership interest in
excess of 5% of such company.
9. Nonsolicitation. During the Noncompetition Period, Executive shall not,
without the Company's prior written consent, directly or indirectly, by
himself or as agent of another or through others as Executive's agents, (i)
solicit any customer, supplier, licensee or other business relation of the
Company with whom the Company has performed material services for,
submitted proposals to or otherwise had a business relationship with during
the 18 month period prior to such solicitation, (ii) induce or attempt to
induce any material customer, supplier, licensee or other business relation
of the Company to withdraw, curtail or cancel its business with the
Company, or in any material respect interfere with the relationship between
any such customer, supplier, licensee or business relation and the Company,
(iii) induce or attempt to induce any employee of the Company to leave the
employ of the Company, or in any way interfere with the relationship
between the Company and any employee thereof, or (iv) solicit for
employment, or seek to engage as
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a consultant or advisor any person who was an employee of or consultant or
advisor to the Company during the 18 month period prior to such
solicitation.
10. Notices. Any notice provided for in this Agreement must be in writing and
must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) directed to the recipient at the address
below indicated:
To the Company:
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Lante Corporation
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
With copies to:
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Frontenac Company
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx
To Executive:
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Xxxx X. Xxxxx
c/o Lante Corporation
000 Xxxxx Xxxxx Xxxxxx, #0000
Xxxxxxx, Xxxxxxxx 00000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
11. General Provisions.
a. Company Subsidiaries. For purposes of this Agreement, the term
"Company" shall include all subsidiaries of the Company.
b. Absence of Conflicting Agreements. Executive hereby warrants and
covenants that (i) his employment by the Company and his execution,
delivery and performance of this Agreement do not and shall not result
in a breach of the terms, conditions or provisions of any agreement,
instrument, order, judgment or decree to which Executive is subject,
(ii) Executive is not a party to or bound by any employment
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agreement, noncompete agreement or confidentiality agreement with any
other person or entity or any other agreement relating in any way to
the subject matter hereof and (iii) upon the execution and delivery of
this Agreement by the Company, this Agreement shall be the valid and
binding obligation of Executive, enforceable in accordance with its
terms.
c. 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
invalid, illegal or unenforceable in any respect under any applicable
law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other
jurisdiction, and this Agreement shall be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein. The parties
agree that a court of competent jurisdiction making a determination of
the invalidity or unenforceability of any term or provision of Section
8 or Section 9 of this Agreement shall have the power to reduce the
scope, duration or area of any such term or provision, to delete
specific words or phrases or to replace any invalid or unenforceable
term or provision in Section 8 or Section 9 with a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified.
d. Complete Agreement. This Agreement, those documents expressly referred
to herein and other documents of even date herewith embody the
complete agreement and understanding among the parties and supersede
and preempt any prior understandings, agreements or representations by
or among the parties, written or oral, which may have related to the
subject matter hereof in any way.
e. Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
f. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
the Company and Executive and their respective successors and assigns;
provided that the rights and obligations of Executive under this
Agreement may not be assigned or delegated without the prior written
consent of the Company and that the Company shall not assign this
agreement in any way except in connection with a Sale of the Company.
g. Choice of Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement and the exhibits
hereto shall be governed by the internal law, and not the law of
conflicts, of the State of Illinois.
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h. Remedies. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorneys fees) caused by any
breach of any provision of this Agreement and to exercise all other
rights existing in its favor. The parties hereto agree and acknowledge
that Executive's breach of any term or provision of this Agreement
shall materially and irreparably harm the Company, that money damages
shall accordingly not be an adequate remedy for any breach of the
provisions of this Agreement by Executive and that the Company in its
sole discretion and in addition to any other remedies it may have at
law or in equity may apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or
prevent any violations of the provisions of this Agreement.
i. Amendment and Waiver. The provisions of this Agreement may be amended
and waived only with the prior written consent of the Company and
Executive.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
LANTE CORPORATION
By /s/ C. Xxxx Xxxxxxx
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Its Pres. and CEO
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/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
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