EMPLOYMENT AGREEMENT
Exhibit 4.16
THIS EMPLOYMENT AGREEMENT (the “Agreement”), is made this 8th day of December, 2005, by and
between PRESCIENT APPLIED INTELLIGENCE, a Delaware
corporation (hereinafter called “Company”), and XXXX XXXXXX, an individual (hereinafter called
“Employee”).
RECITAL
The Company wishes to employ Employee and Employee wishes to be employed by the Company on the
terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and
intending to be legally bound hereby, Company and Employee agree as follows:
1. Employment. Company hereby employs Employee and Employee hereby accepts employment
by Company for the period and upon the terms and conditions contained in this Agreement.
2. Office and Duties.
(a) Employee shall be President and CEO of Company and shall have such authority and such
responsibilities as the Company reasonably may determine from time to time. Employee shall be
provided with such office space, secretarial assistance and supplies as reasonably necessary to
support the satisfaction of the performance of goals to be established during the term hereof and
shall be appropriate to her status as an officer of the Company.
(b) Throughout the term of this Agreement, Employee shall devote her entire working time,
energy, skill and best efforts to the performance of her duties hereunder in a manner which will
faithfully and diligently furthers the business and interests of Company.
3. Term. The Company will employ the Employee for a period of two (2) years
commencing on January 1, 2005 (“Initial Term”) and automatically renewed for successive terms of
one (1) year each (“Renewal Term”) unless either party shall have given to the other party at least
30 days’ prior written Notice of the termination of this Agreement prior to the end of the current
term.
4. Compensation.
(a) Base Salary. For all of the services rendered by Employee to Company for the
Initial Term, Employee shall receive an annual base salary (“Base Salary”) of Two Hundred
Twenty-Five Thousand Dollars ($225,000.00), payable in reasonable periodic installments in
accordance with Company’s regular payroll practices in effect from time to time.
(b) Bonus. For all of the service rendered by Employee to Company for the first year
of the Initial Term, Employee shall be eligible for a performance bonus in an amount
determined by the Compensation Committee in its sole discretion, based on the Company’s
financial performance goals in 2005, among other factors to be considered by the Committee (“2005
Bonus”). For the second full year of the Initial Term, and for each Renewal Term, the Employee
shall be eligible to receive a performance bonus based on the financial performance of the Company.
Such bonus shall be in an amount, and based on MBOs, as determined by the Employee and the
Compensation Committee and set forth in an amendment to Schedule A, which amendment shall be dated
and signed by both Employee and the Company. Payment for each such bonus earned will be paid
annually based upon MBOs attained and Year to Date attainment of financial goals; provided.
Payment of each such bonus shall be paid in cash to Employee no later than thirty (30) days from
the end of the year. Nothing herein shall limit or restrict the Employee from receiving any other
bonuses or other compensation from the Company; provided that such bonus or compensations is
approved by the Compensation Committee of the Board of Directors of the Company.
(c) Equity. The Company grants the Employee an initial option to purchase shares of
the Company’s common stock equal to two percent (2%) of the fully diluted shares outstanding on
execution of this Agreement (the “initial options”). For vesting purposes, the initial options
shall be considered granted as of May 26, 2004, the signing date of the Merger Agreement, and be
set at a strike price equal to the closing price of the stock on the date of issuance of the
options. The options shall vest on a three-year schedule. Further, on each anniversary of this
Agreement, the Company shall grant the Employee additional options in an amount to be determined by
the Compensation Committee (the “additional options”). The additional options shall vest on a
three-year schedule.
(d) Benefits. Throughout the term of this Agreement and as long as they are kept in
force by Company, Employee shall be entitled to participate in and receive the benefits of any
profit sharing or retirement plans and any health, life, accident or disability insurance plans or
programs made available to, and on the same terms as, other similarly situated employees of
Company. In addition, throughout the term of this Agreement Company shall provide Employee with a
long-term disability policy providing her with maximum coverage.
(e) Paid Time Off (PTO). During each year of the term of this Agreement, Employee
shall be entitled to the number of days PTO according to the Company handbook. Initial PTO shall
be based upon tenure with her prior employer.
(e) Expenses. The Company will reimburse the Employee for reasonable expense
(consistent with Company policy) incurred by the Employee concerning the Company, upon presentation
of appropriate substantiation for such expenses.
5. Authority to Bind Company. Employee is permitted and authorized to make
disbursements or purchases and to incur liabilities on behalf of Company or to otherwise obligate
Company in any manner whatsoever up to $100,000. The Board of Directors of the Company must
authorize commitments above $100,000.
6. Death. If Employee dies, all payments hereunder shall cease at the end of the
month in which Employee’s death shall occur and, after such payments including any bonus
attributable to the period prior to death, Company shall have no other obligations or liabilities
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hereunder to Employee’s estate or legal representative or otherwise, other than the payment of
benefits, if any, pursuant to Section 4(c) hereof.
7. Disability.
(a) If Employee becomes unable to perform her duties hereunder due to partial or total
disability or incapacity resulting from a mental or physical illness, injury or any other cause,
Company will continue the payment of Employee’s Base Salary at the then current rate for a period
of ninety (90) days following the date Employee is first unable to perform her duties due to such
disability or incapacity. Thereafter, Company shall have no obligation for Base Salary or other
compensation payments to Employee during the continuance of such disability or incapacity.
(b) If Employee is unable to perform her duties hereunder due to partial or total disability
or incapacity resulting from a mental or physical illness, injury or any other cause for a period
of thirty (30) consecutive days or for a cumulative period of sixty (60) days during any
twelve-month period, Company shall have the right to terminate this Agreement thereafter, in which
event, after payment of the amount set forth in Section 7(a) and any bonus attributable to the
period prior to date of termination, Company shall have no other obligations or liabilities
hereunder after the date of such termination.
8. Discharge for Cause.
(a) The Company may terminate the Agreement for “Cause.” As used herein, “Cause.” As used
herein, “Cause” shall mean any of the following:
(i) the Employee’s conviction or plea of nolo contendre to a felony, or a crime involving
moral turpitude;
(ii) the Employee’s commission or omission of an act or course of conduct constituting willful
or intentional misconduct, embezzlement, fraud or malfeasance as to the Company and/or the
Employee’s employment hereunder;
(iii) the Employee’s failure to follow the good faith written instructions of the Board of
Directors of the Company;
(iv) the Employee’s breach of this Agreement in any material respect;
(v) the Employee’s failure to comply with the Company’s written policies and procedures of
which she has notice in any material respect; or
(vi) the continued refusal by or inability of Employee, after written notice by the Company,
to make herself available for the performance of her duties hereunder (other than as the result of
physical or mental disability, as determined under the Company’s health or disability insurance
plan). The term “continued” shall mean a period of not less than thirty (30) consecutive business
days (other than while Employee is taking vacation or is otherwise unavailable with the permission
of the Board of Directors) and the term “available”
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shall mean that Employee shall be personally present at the Company’s offices and shall be
immediately willing and able to perform her duties.
(b) If the Cause is such that there is a reasonable prospect that it can be cured with
diligent effort, and such Cause is not the result of the Employee’s willful or intentional
misconduct, then prior to any termination by the Company for Cause, the Employee shall have a
reasonable time (having regard for the nature of the Cause) to cure such Cause, which time shall
not in any case exceed thirty (30) days from the date notice of termination for Cause is given to
the Employee.
(c) If the Employee’s employment hereunder is terminated for Cause prior to the expiration of
the then current term, the Employee shall be entitled to any unpaid Salary accrued through the date
of termination, and any unpaid bonuses earned with respect to the last full month that Employee was
employed by the Company.
9. Severance.
(a) If Employee’s employment with the Company terminates at Company’s request without cause,
or at Employee’s request pursuant to any of the following terms: (i) the failure of Company to
continue Employee in the position of President and Chief Executive Officer of Company, (ii) failure
by Company to pay and provide to Employee the compensation and benefits at the rate provided for
in Section 4 hereof, which failure is not cured within ten (10) days after written notice of such
failure given by Employee to Company, (iii) requiring Employee to be permanently based anywhere
other than within a fifty (50) mile radius of Company’s location on the date of this Agreement
(excluding business-related travel to an extent reasonably consistent with past practice), then
Company shall pay to Employee, upon delivery of a general release satisfactory to Company, an
amount equal to the annual Base Salary in effect at the date of termination, paid in bi-monthly
equal installments, which would have otherwise been payable to Employee pursuant to Section 4(a) of
this Agreement for the period from the date of termination until the first anniversary of the date
of termination, any unpaid bonuses earned as of the date of termination, and, upon a Change of
Control, Employees stock options shall be deemed fully vested. Thereafter, Company shall have no
other obligations or liabilities hereunder.
In the event of a Change of Control (as defined below), then Company shall pay to Employee,
upon delivery of a general release satisfactory to Company, an amount equal to the annual Base
Salary in effect at the date of termination, paid upon termination. Employee’s stock options shall
be deemed fully vested. Thereafter, Company shall have no other obligations or liabilities
hereunder.
(b) For purposes of the Agreement, “Change of Control” shall mean any of the following
transactions effecting a change in ownership or control of the Company: (i) a merger or
consolidation in which the Company is not the surviving entity, except for a transaction the
principal purpose of which is to change the Company’s jurisdiction of incorporation; (ii) the sale,
transfer or other disposition of all or substantially all of the assets of the Company in complete
liquidation or dissolution of the Company; (iii) any reverse merger in which the Company is the
surviving entity but in which securities representing 50% or more of
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the total combined voting power of the Company’s outstanding securities are transferred to
person or persons different from the persons holding those securities immediately prior to such
merger; (iv) the acquisition, directly or indirectly by any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is controlled by, or is
under common control with, the Company), of beneficial ownership (within the meaning of Rule 13d-3
of the 0000 Xxx) of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made
directly to the Company’s stockholders.
(c) Notwithstanding anything in this Section 9 to the contrary, if, (a) by reason of any
actions or events in which Employee participates in a capacity other than in your capacity as an
executive or director of the Company, or (b) Employee’s employment with the Company is not
terminated within one year after the date of consummation of such Change in Control, then no Change
of Control of the Company shall be deemed to have occurred for purposes of this Agreement.
10. Noncompetition, Trade Secrets, Etc.
(a) During the term of this Agreement and for a period of one (1) year from the date of
termination, unless the Company terminated Employee or in the event of a Change of Control,
Employee shall not engage in, as a principal, partner, director, officer, agent, consult or any
employee, competition with Company’s software and services developed or acquired by the Company
during the term of this Agreement. Due to the nature of the business conducted by Company,
Employee acknowledges that the restrictions contained herein, which have no geographic limitation,
are reasonable and necessary to protect the legitimate interests of Company. Nothing contained in
this Paragraph 11 shall prevent Employee from: (i) holding for investment up to five percent (5%)
of any class of equity securities of a company whose equity securities are traded on a national
securities exchange; or (ii) working for any consumer products’ company or any channel partner of
Company as an employee or consultant.
(d) Any and all writings, improvements, processes, procedures and/or techniques which Employee
may make, conceive, discover or develop, either solely or jointly with any other person or persons,
at any time during the term of this Agreement, whether during working hours or at any other time
and whether at the request or upon the suggestion of the Company or otherwise, which relate to or
are useful in connection with any business now or hereafter carried on or contemplated by the
Company, including developments or expansions of its present fields of operations, shall be the
sole and exclusive property of Company. Employee shall make full disclosure to Company of all such
writings, improvements, processes, procedures and techniques, and shall do everything necessary or
desirable to vest the absolute title thereto in Company.
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11. Binding Arbitration
Any controversy or claim arising out of this Agreement, or the breach thereof, shall be
settled by arbitration administered by the American Arbitration Association before a single
arbitrator in Philadelphia, Pennsylvania in accordance with its Commercial Arbitration Rules, and
judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Each party shall bear its own costs and expenses and an equal share of the arbitrator’s
and administrative fees of arbitration.
12. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on the part of either party
to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.
(b) Controlling Law. This Agreement and all questions relating to its validity,
interpretation, performance and enforcement (including, without limitation, provisions concerning
limitations of actions), shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania, and without the aid of any canon, custom or rule of law requiring
construction against the draftsman.
(c) Notices. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have been duly given,
made and received only when delivered (personally, by courier service such as Federal Express, or
by other messenger) or when deposited in the United States mails, registered or certified mail,
postage prepaid, return receipt requested, addressed as set forth below:
| (i) If to Employee: | ||||
| Xxxx Xxxxxx | ||||
| X.X. Xxx 00 | ||||
| Xxxxxxxxxxx, XX 00000 | ||||
| (ii) If to Company: | ||||
| Prescient Applied Intelligence | ||||
| 0000 Xxxx Xxxxxx | ||||
| Xxxxx 000 | ||||
| Xxxx Xxxxxxx, XX 00000 | ||||
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Any party may alter the address to which communications or copies are to be sent by giving notice
of such change of address in conformity with the provisions of this paragraph for the giving of
notice.
(d) Binding Nature of Agreement. This Agreement shall be binding upon and inure to
the benefit of Company and its successors and assigns and shall be binding upon Employee, his heirs
and legal representatives.
(e) Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as the signatories.
(f) Provisions Separable. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered invalid or unenforceable
by virtue of the fact that for any reason any other or others of them may be invalid or
unenforceable in whole or in part. If any of the restrictions contained in Paragraph 11 are found
to be unenforceable in whole or in part, Employee agrees that the court should nevertheless enforce
each restriction or portion thereof that is not found to be unenforceable and may modify any
unenforceable restriction or obligation to render it enforceable.
(g) Entire Agreement. This Agreement contains the entire understanding among the
parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions, express or implied, oral
or written, except as herein contained. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement
may not be modified or amended other than by an agreement in writing.
(h) Paragraph Headings. The paragraph headings in this Agreement are for convenience
only; they form no part of this Agreement and shall not affect its interpretation.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement on the date first
above written.
| PRESCIENT APPLIED INTELLIGENCE, INC. | |||||
| By: | |||||
| Name: | |||||
| Title: | |||||
| Xxxx Xxxxxx |
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SCHEDULE A
2005 Bonus
1.
