EXHIBIT 10(l)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of March 1,
2000, (the "Effective Date"), by and between Boundless Technologies, Inc. and
Boundless Corporation, both Delaware corporations, ("Company") and Xxxxx Xxxxxx
Xxxxx ("Employee").
RECITALS
A. Company desires to employ Employee as its Chief Executive Officer
because of his experience and expertise and to secure his services upon the
terms and subject to the conditions set forth in this Agreement.
B. Employee desires and is willing to accept such employment upon such
terms and subject to the conditions set forth in this Agreement.
THEREFORE, for and in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, Company and Employee agree
as follows;
1. Employment. Upon the terms and subject to the conditions contained in
this Agreement, Company hereby employs Employee; and the Employee hereby accepts
such employment, upon such terms and subject to such conditions.
2. Duties and Authority.
2.1 Duties of Employee. During the term of this Agreement, Employee will
serve as Company's Chief Executive Officer and will faithfully and to the best
of his ability perform such duties consistent with the Position as are
determined and directed by the Board of Directors. In his capacity as Chief
Executive Officer, Employee will be generally responsible for the conception and
implementation of the overall strategy and direction of the Company. In
performing his duties under this Agreement, Employee will fully support and
cooperate with Company's efforts to develop its markets, expand its business,
and operate profitably and in conformity with business and strategic plans
approved from time to time by Company's Board of Directors.
2.2 Direction from Board of Directors. Employee will look primarily to
the Board of Directors for direction and guidance as to the performance of
Employee's duties under this Agreement. To facilitate communication between
Employee and the Board of Directors, Employee will report on the status of
Employee's activities and the performance of Employee's duties to the Board of
Directors at such times as he may be requested to do so by the Board of
Directors.
2.3 Employees Authority. In performing his duties under this Agreement,
Employee will have such authority as is necessary for him to implement the
directives of, and policies and procedures adopted by the Board of Directors.
2.4 Time and Attention to Services. Employee will devote substantially
all of his time and attention to the performance of his duties to Company during
the term of this Agreement. Company, however, recognizes that Employee may be
engaged in other non-conflicting passive business investments and in community
activities unrelated to his duties under this Agreement that will require some
portion of his time, and Company hereby consents to Employee's attention to such
other activities so long as such activities (a) do not hinder Employee's ability
to perform his duties under this Agreement and (b) do not represent a conflict
of interest in contravention of the agreements contained in paragraph 7 or a
competitive activity in contravention of the agreements contained in paragraph
5.5 of this Agreement.
3. Term and Termination.
3.1 Term. This Agreement is effective as of the Effective Date and will
continue in effect through February 27, 2003, (the "Initial Term") unless it is
(a) terminated in accordance with paragraph 3.2 or (b) extended in accordance
with paragraph 3.3.
3.2 Termination. This Agreement may be terminated prior to February 27,
2003, or during any extension provided by paragraph 3.3, as follows:
(a) Termination by Mutual Consent. This Agreement may be terminated at
any time by the written mutual consent of Company and Employee.
(b) Termination by Company for Cause. This Agreement may be terminated
by Company at any time for Cause by the delivery to Employee of a written notice
of termination stating the effective date of termination and the basis upon
which this Agreement is being terminated. As used in this Agreement, the term
"Cause" means (a) a material default in the performance of Employees duties
under this Agreement, or (b) Employee's dishonesty, willful misconduct, breach
of fiduciary duty involving personal profit, willful violation of any law, rule,
or regulation, action (or omission) involving moral turpitude and reflecting
unfavorably upon the public image of Company or its Affiliates, or action (or
omission) abiding or abetting a competitor, supplier or customer of Company or
its Affiliates to the material disadvantage of Company or its Affiliates; and
the term Affiliates means any other person or entity who directly controls, is
controlled by, or is under common control with Company or any Affiliate of
Company (means possession, directly or indirectly, of power to direct or cause
the direction of management or policies, whether through ownership of voting
securities or otherwise). In the event of termination for Cause, Employee will
be entitled to such salary and benefits as have accrued under this Agreement
through the effective date of termination, but will not be entitled to any other
salary, benefits, or other compensation after such date.
(c) Termination by Company Without Cause. This Agreement may be
terminated by Company at any time without Cause by the delivery to Employee of a
written notice of termination not less than two weeks prior to the effective
date of termination. Upon such termination, Employee will be paid (I) such
salary, vacation, and other benefits as have accrued under this Agreement
through the effective date of termination and (ii) for a period of thirty-six
(36) months after the date of termination, Company shall pay Employee the
equivalent of Employee's monthly base annual salary plus most recent annual
bonus (the "Severance Payment") provided that employee complies with the
provisions of paragraphs 5 and 7 of this Agreement. The Severance Payment less
applicable withholding for federal taxes shall be paid in semi-monthly
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installments or otherwise in such manner as the salaries of other executive
officers of the company paid in accordance with Company policy.
(d) Termination by Employee. This Agreement may be terminated by
Employee at any time, with or without Cause, by the delivery to Company of a
written notice of termination not less than two weeks prior to the effective
date of termination. In the event of termination by Employee, Employee will be
paid such salary, vacation and other benefits as have accrued under this
Agreement through the effective date of termination, but will not be entitled to
any other salary, benefits, or other compensation after such date.
(e) Termination Upon Death or Disability of Employee This Agreement will
be terminated immediately upon the death or permanent disability (which shall be
determined in good faith by Company's Board of Directors as such time as
Employee becomes physically or mentally incapable of properly performing his
duties under this Agreement and such incapacity will exist or can reasonably be
expected to exist for a period of one hundred and twenty days or more) of
Employee. Upon such determination the employee or his beneficiary will be paid
(I) such salary, vacation, and other benefits as have accrued under this
Agreement through the effective date of termination and (ii) for a period of
twenty four (24) months after the date of termination, Company shall pay
Employee or his beneficiary the equivalent of Employee's monthly base annual
salary provided that employee complies with the provisions of paragraphs 5 and 7
of this Agreement. In addition, Employee or his beneficiary as designated in
writing to Company (or his estate, if no such beneficiary has been designated)
will be entitled to such benefits (I) as are consistent with Company policy then
if in effect or (ii) as are determined by Company's Board of Directors in its
sole discretion.
3.3 Extension of Term. The term of this Agreement may be extended beyond
the Initial Term, by the mutual agreement of Employee and Company and on such
basis as employee and Company shall agree. Each such extension, unless expressly
agreed otherwise by Employee and Company, will be for one (1) year commencing on
June 1 of the year following the expiration of the Initial Term or any renewal
term. Mutual agreement to extend the term of this Agreement shall be evidenced
by either (a) a written agreement executed by Company and Employee or (b) the
continuation of Employee's performance of services under this Agreement with the
approval of Company and without notice of termination given by Company or
Employee. Any extended term of this Agreement may be terminated as set forth in
paragraph 3.2 above, unless otherwise agreed in writing by Company and Employee.
3.4 Salary, Performance Award and Bonus Payments. In the event of a
Change of Control (other than as a consequence of his death or disability, or of
his normal retirement under the company's retirement plans and practices) at the
employee's option the Employee may elect to terminate his services and be
entitled to receive from the Company, the following:
(b) Base Salary and Annual Bonus. The Employee's annual base salary
as in effect at the date of termination, plus the previous year's annual bonus
multiplied by three, shall be paid on the date of termination;
(a) Stock Options. Unvested stock options will vest and be
exercisable immediately upon the date of termination and the exercise period
will be a minimum of five years or the term of the option, whichever is greater.
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(c) Noncompetition/Nonsolicitation Period: In the event of a
termination under the circumstances described in Paragraph 3.4, the provisions
of Paragraphs 5 and 6 shall be without force and effect and shall not apply to
the Employee.
(d) For purposes of this Agreement, the term "change of control"
shall mean:
(i) The acquisition, other than from the Company, by any
Individual, entity or group (within the meaning of Rule 13d-3 promulgated under
the Exchange Act or any successor provision) (any of the foregoing described in
this Paragraph 9.c.i hereafter a "Person") of 33% or more of either (a) the then
outstanding shares of Capital Stock of the Company (the "Outstanding Capital
Stock") or (b) the combined voting power by the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Voting Securities"), provided, however, that any acquisition by
(x) the company or any of its subsidiaries, or any the Employee benefit plan (or
related trust) sponsored or maintained by the Company or any of its subsidiaries
or (y) any Person that is eligible, pursuant to Rule 13d-1(b) under the Exchange
Act, to file a statement on Schedule 13G with respect to its beneficial
ownership of Voting Securities, whether or not such Person shall have filed a
statement on Schedule 13G, unless such Personal shall have filed a statement on
Schedule 13D with respect to beneficial ownership of 33% or more of the Voting
Securities or (z) any corporation wit respect to which, following such
acquisition, more than 60% of, respectively, the then outstanding shares of
common stock of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Capital Stock and Voting Securities
immediately prior to such acquisition in substantially the same proportion as
their ownership, immediately prior to such acquisition of the Outstanding
Capital Stock and Voting Securities, as the case may be, shall not constitute a
Change of Control; or
ii. Individuals who, as of the Effective Date, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any individual becoming a director
subsequent to the Effective Date whose election or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company (as such terms are used in Rule 14a-11 of Regulation
14A, or any successor section, promulgated under the Exchange Act); or
iii. Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a "Business Combination"), in each
case, with respect to which all or substantially all holders of the Outstanding
Capital Stock and Voting Securities immediately prior to such Business
Combination do not, following such Business Combination, beneficially own,
directly or indirectly, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from the Business Combination; or
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iv. (a) a completed liquidation or dissolution of the Company or
(b) a sale or other disposition of all or substantially all of the assets of the
Company other than to a corporation with respect to which, following such sale
or disposition, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors is then owned
beneficially, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively of the
Outstanding Capital Stock and Voting Securities immediately prior to such sale
or disposition in substantially the same proportion as their ownership of the
Outstanding Capital Stock and Voting Securities, as the case may be, immediately
prior to such sale or disposition.
4. Compensation.
4.1 Base Annual Salary. In consideration for the performance of his
duties under this Agreement, Employee will be paid a base annual salary of Three
Hundred Twenty Five Thousand Dollars ($325,000.00), which shall be payable (less
applicable withholding for federal taxes) in semi-monthly installments or
otherwise in such manner as the salaries of other executive officers of Company
are paid in accordance with Company policy.
4.2 Annual Salary Review. Company's Compensation Committee will review
Employee's base annual salary level on an annual basis and may elect, on the
basis of such review, to increase Employee's base annual salary and award a
performance bonus on the basis of Company's profitability and Employee's
individual performance; but any such increase in Employee's base annual salary
or the awarding of a bonus will be made solely at the discretion of Company's
Board of Directors.
4.3 Expenses and Reimbursements. Employee will be entitled to
reimbursement for reasonable out-of-pocket expenses incurred by Employee that
are directly attributable to the performance of Employee's duties under this
Agreement. Employee will adhere to Company's customary practices and procedures
with respect to incurring out-of-pocket expenses and will present such expense
statements, receipts, vouchers, or other evidence supporting expenses incurred
by Employee as Company may from time to time request. Employee will be
reimbursed for car expenses including lease payments, parking and insurance.
4.4 Benefits. During the term of this Agreement, Employee will be
entitled to the benefits generally provided or made available to other executive
officers of Company, including, but without limitation, such group medical
(including dental) insurance and life insurance benefits as are made available
to employees of Company generally and participation in any "cafeteria" plan or
retirement plan that may be available to employees of Company (subject, however,
to (i) eligibility and (ii) modification or elimination in accordance with
Company's standard policies as in effect from time to time) and to the following
specific benefits:
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(a) Vacation. Employee will be entitled to six weeks vacation.
(b) Sick Leave. Employee will be entitled to six months sick leave.
(c) Financial Planning and Tax Preparation.
4.5 Stock Options. As a material inducement to Employee to enter into
this Agreement, and subject to approval of the Board of Directors, Company
agrees that it will grant an option (the "Option") to Employee to purchase up to
65,000 shares of common capital stock of Company (the "Option Shares") pursuant
to the terms of the Company's stock option plan (the "Option Plan"). The Option
will be evidenced by a written agreement (the "Option Agreement") executed by
Company and Employee. The Option Agreement (a) will specify the purchase price
to be paid by Employee for the Option Shares upon his exercise of the Option;
(b) will provide that Employee may exercise the option over a three year period
and, (c) will provide for such restrictions on transferability as may be
reasonably required by Company; and (d) will set forth other terms and
conditions related to the Option agreed upon by Company and Employee. If
Employee is terminated without cause, or there is a change of control, all
option shares will vest and be exercisable for a minimum of five years.
4.6 Relocation Reimbursement. Upon Company's request to Employee to
relocate, Company shall reimburse
Employee for reasonable relocation expenses.
5. Confidentiality and Non-Disclosure.
5.1 Detrimental Statements. For so long as this Agreement remains in
effect and for a period of 18 months after the date of termination or expiration
of this Agreement (the "Applicable Period"), Employee will not, directly or
indirectly, in any individual or representative capacity whatsoever, make any
statement, oral or written, or perform any act or omission which is or could be
detrimental in any material respect to the goodwill of Company, provided that
any truthful statement made by Employee in good faith shall not violate this
subparagraph.
5.2 Covenant of Confidentiality. The Employee recognizes and
acknowledges that he will be provided access to confidential information and
trade secrets of the Company, and other entities doing business with the Company
relating to research, development, manufacturing, marketing, financial and other
business-related activities or may discover, conceive, perfect or develop,
solely or jointly with others, inventions, discoveries, improvements, know-how,
computer programs, or other technical, manufacturing, marketing, customer,
and/or financial data and information, including without limitation, access to
information regarding the upgrading of current Company products and the
development of new products (hereinafter "CONFIDENTIAL INFORMATION"). Such
CONFIDENTIAL INFORMATION constitutes valuable, special, and unique property of
the Company, and/or other entities doing business with the Company. In
consideration of such access to Confidential Information, Employee will not,
during or after the term of his employment by the Company, make any use of, or
disclose any of such CONFIDENTIAL INFORMATION to any person or firm,
corporation, association, or other entity for any reason or purpose whatsoever,
except as is generally available to the public or as specifically allowed in
writing by an authorized representative of the Company.
5.3 No Use of Confidential Information of Others. The Employee agrees
not to make use of or disclose any confidential information, including trade
secrets, of prior employers in carrying out Employee's duties for Company.
5.4 Return of Confidential Information. Upon the expiration of the term
or termination of this Agreement, Employee will surrender to Company all
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tangible Confidential Information in the possession of, or under the control of,
Employee, including, but without limitation, the originals and all copies of all
software, drawings, manuals, letters, notes, notebooks, reports and all other
media, material and records of any kind, and all copies thereof pertaining to
Confidential Information acquired or developed by the Employee during the term
of Employee's employment. Employee further agrees that upon termination of
Employee's employment, for any reason, and at the request of the Company,
Employee shall make himself available and shall meet with representatives of the
Company. At such meeting, Employee shall fully disclose and deliver any of the
above described materials in Employee's possession and, at the Company's
request, shall execute any and all documents reasonably necessary to ensure and
verify compliance with this paragraph 5.
5.5 Right to Injunctive Relief. Employee acknowledges that a violation
or attempted violation on his part of any agreement in this paragraph 5 will
cause irreparable damage to Company and its Affiliates, and accordingly Employee
agrees that Company shall be entitled as a manner of right to an injunction, out
of any court of competent jurisdiction, restraining any violation or further
violation of such agreements by Employee; such right to an injunction, however,
shall be cumulative and in addition to whatever other remedies Company may have.
Furthermore, Employee shall be entitled to seek a declaratory judgment regarding
any conduct or enterprise to determine whether or not such conduct or violation
is violative of the terms of this Agreement; provided however, that no suit
shall be filed until Employee has given Company at least 15 days to respond to
Employee's written request for permission to undertake certain requested acts.
The terms and agreements set forth in this paragraph 5 shall survive the
expiration of the term or termination of this Agreement for any reason. The
existence of any claim of Employee, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Company of the
agreements contained in this paragraph 5.
6. Conflict of Interest. In keeping with Employee's fiduciary duties to
Company, Employee agrees that while employed by Company he will not, acting
alone or in conjunction with others, directly or indirectly, become involved in
a conflict of interest or, upon discovery thereof, allow a conflict of interest
to continue. Moreover, Employee agrees that he will immediately disclose to the
Board of Directors of Company any facts which might involve any reasonable
possibility of a conflict of interest. It is agreed that any direct or indirect
interest in, connection with, or benefit from any outside activities, where such
interest might in any way adversely affect Company, involves a possible conflict
of interest. Circumstances in which a conflict of interest on the part of
Employee might arise, and which must be reported immediately by Employee to the
Board of Directors of Company, include, but are not limited to, the following:
(a) ownership of a material interest in any supplier, contractor, subcontractor,
customer, or other entity with which Company does business; (b) acting in any
capacity, including director, officer, partner, consultant, employee,
distributor, agent, or the like, for a supplier, contractor, subcontractor,
customer, or other entity with which Company does business; (c) accepting,
directly or indirectly, payment, service, or loans from a supplier, contractor,
subcontractor, customer, or other entity with which Company does business,
including, but not limited to, gifts, trips, entertainment, or other favors of
more than a nominal value; (d) misuse of Company's information or facilities to
which Employee has access in a manner which will be detrimental to Company's
interest, such as utilization for Employee's own benefit of know-how,
inventions, or information developed through Company's business activities; (e)
disclosure or other misuse of Confidential Information of any kind obtained
through Employee's connection with Company; (f) the ownership, directly or
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indirectly, of a material interest in an enterprise in competition with Company,
or acting as an owner, director, principal, officer, partner, consultant,
employee, agent, servant, or otherwise of any enterprise which is in competition
with Company; and (g) appropriation of a Corporate Opportunity, as defined in
paragraph 8 of this Agreement.
7. Corporate Opportunities. Employee acknowledges that during the course of
his employment by Company he may be offered or become aware of business or
investment opportunities in which Company may or might have an interest (a
"Corporate Opportunity") and that he has a duty to advise Company of any such
Corporate Opportunities before acting upon them. Accordingly, Employee agrees
(a) that he will disclose to Company's Board of Directors any Corporate
Opportunity offered to Employee or of which Employee becomes aware, and (b) that
he will not act upon any Corporate Opportunity for his own benefit or for the
benefit of any person or entity other than Company without first obtaining the
consent or approval of Company's Board of Directors (whose consent or approval
may be granted or denied solely at the discretion of Company's Board of
Directors).
8. Company's Right of Offset. Should Employee at any time be indebted to
Company, or otherwise obligated to pay money to Company for any reason, Company,
at its election, may offset amounts otherwise payable to Employee under this
Agreement, including, but without limitation, salary and bonus payments, against
any such indebtedness or amounts due from Employee to Company.
9. Miscellaneous.
9.1 Governing Law. This agreement shall be governed by and construed in
accordance with the substantive laws of the State of Texas.
9.2 Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof; provided, however, that
this Agreement does not supersede or terminate the obligations and assignments
of Employee arising under the Assignment and Nondisclosure Agreement. This
Agreement may be amended or modified only in writing executed by Employee and
another officer of Company expressly authorized by Company's Board of Directors.
9.3 Notices. Any notice or other communication hereunder must be in
writing to be effective and shall be deemed to have been given when personally
delivered to Employee or Company or, if mailed, on the third day after it is
enclosed in an envelope and sent certified mail/return receipt requested in the
United States mail. Either party may from time to time change its address for
notification purposes by giving the other party written notice of the new
address and the date upon which it will become effective. The address for each
party for notices hereunder is as follows:
Employee: J. Xxxxxx Xxxxx
000 Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Company: Boundless Corporation.
Attn: President and CEO
000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
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9.4 Attorney's Fees. In the event that either party is required to
obtain the services of an attorney in order to enforce any right or obligation
hereunder, the prevailing party shall be entitled to recover reasonable
attorney's fees and court costs from the other party.
9.5 Assignability; Binding Nature. This Agreement is binding upon
Company and Employee and their respective successors, heirs and assigns. The
rights and obligations of Employer hereunder may be assigned by Employer to any
entity that succeeds to all or substantially all of the assets of Employer
through merger, consolidation, liquidation, acquisition of assets, or otherwise.
9.6 Headings. The headings of paragraphs contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
9.7 Severability. If, but only to the extent that, any provision of this
Agreement is declared or found to be illegal, unenforceable, or void, so that
both Company and Employee would be relieved of all obligations arising under
such provision, it is the agreement of Company and Employee that this Agreement
shall be deemed amended by modifying such provision to the extent necessary to
make it legal and enforceable while preserving its intent. If such amendment is
not possible, another provision that is legal and enforceable and achieves the
same objective shall be substituted therefor. If the remainder of this Agreement
is not affected by such declaration or finding and is capable of substantial
performance by both Company and Employee, then the remainder shall be enforced
to the extent permitted by law.
9.8 Arbitration. Any and all controversies, claims, disputes, or
questions arising out of or relating to this agreement shall be submitted to
binding arbitration in Austin, Texas and shall be conducted pursuant to the
commercial arbitration rules of the American Arbitration Association; provided,
however, that Company shall also be permitted to seek judicial relief as
provided in paragraph 5.6.
9.9 Survival of Terms. The terms and agreements set forth in paragraphs
5 and 7 shall survive the expiration of the term or termination of this
Agreement regardless of the reason. The existence of any claim of Employee,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Company of the agreements contained in paragraphs
5 and 7.
9.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be part of the same instrument.
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Executed as of the Effective Date set forth above by:
Boundless Technologies, Inc. Employee
By: /s/ Xxxxxx Xxxxxxx /s/ Xxxxx Xxxxxx Xxxxx
-------------------------- --------------------------
Xxxxxx Xxxxxxx Xxxxx Xxxxxx Xxxxx
Title: Vice President & CFO
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