EXHIBIT 10.2
FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement") dated
as of December 31, 1996, by and between TIER TECHNOLOGIES, INC., a California
corporation (the "Company") and XXXXX X. XXXXXXX ("Xxxxxxx").
In consideration of the mutual benefits derived from this Agreement and
of the agreements, covenants and provisions hereof, the parties hereto agree as
follows:
1. EMPLOYMENT
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1.1. Position. During the Term (as hereinafter defined) of this
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Agreement and subject to the terms and conditions set forth herein, the Company
agrees to employ Xxxxxxx as its Chairman of the Board and Chief Executive
Officer, reporting only to the Board of Directors of the Company.
1.2. Election to Office. During the Term of this Agreement, the Company
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shall use its best efforts to sustain and continue Xxxxxxx'x position and
designation as Chairman of the Board and Chief Executive Officer.
1.3. Fulfillment of Duties. As long as the Company sustains and
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continues Xxxxxxx'x position and designation as Chairman and Chief Executive
Officer of the Company, Xxxxxxx shall (i) devote his full-time efforts during
normal business hours to the performance of his services hereunder, except
during vacation periods and periods of illness or incapacity and except that
nothing in this Agreement shall preclude Xxxxxxx from devoting reasonable
periods required for serving as a director, or member of a committee of, or
holding other positions, in any organization involving no conflict of interest
with the interests of the Company and (ii) perform his services hereunder
faithfully, diligently and to the best of his skill and ability.
1.4. Location. During the Term of this Agreement, Xxxxxxx will perform
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his duties and services at such locations as he shall deem appropriate, except
that Xxxxxxx agrees to make such business trips to the Company's principal
executive offices and to other locations as may be reasonable and necessary in
the performance of his services hereunder.
2. COMPENSATION AND BENEFITS
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2.1. Salary. In consideration of and as compensation for the services
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agreed to be performed by Xxxxxxx hereunder, the Company agrees to pay Xxxxxxx
during the Term of this Agreement a base salary (the "Base Salary") of not less
than $325,000 per year, payable semi-monthly in accordance with the Company's
regular payroll practices. The Company may review Xxxxxxx'x Base Salary and
other compensation (including bonuses) from time to time during the Term of this
Agreement and, at the discretion of the Board of Directors of the Company, may
increase his Base Salary or other compensation (including bonuses) from time to
time. Any increase in Base Salary or other compensation (including bonuses)
shall in no way limit or reduce any other obligation of the Company hereunder
and, once established at an increased rate, Xxxxxxx'x Base Salary hereunder
shall not be reduced.
2.2. Incentive Compensation. During the term of this Agreement, in
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addition to the base salary provided in Section 2.1 above, Xxxxxxx shall be
eligible to receive additional incentive compensation upon achievement of the
targeted levels of earnings before interest, taxes, depreciation and
amortization ("EBITDA") of the Company as set forth in Exhibit A.
2.3. Stock Option. Xxxxxxx shall receive, within forty-five (45) days
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following execution of this Agreement, an option (the "Option") to purchase five
thousand (5,000) shares of Company common stock at an exercise price which shall
be at least the minimum exercise price required by law, pursuant to an option
agreement on the Company's standard form. Subject to the terms of the Option,
forty percent of the option (i.e. 2,000 shares) shall vest immediately.
One-third of the remainder of the Option (i.e. 1,000 shares) shall vest on each
of the first, second and third anniversary dates of this Agreement; provided,
however, that one-third of the remainder of the Option (i.e. 1,000 shares) shall
vest as provided in Section 4.2 or upon the last day of the month of the closing
of an underwritten public offering of the Company's securities and as otherwise
set forth in the option agreement, with the remaining unvested Option vesting
ratably over the remaining anniversary dates of this Agreement.
2.4. Participation in Benefit Plans. During the Term of this Agreement,
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Xxxxxxx shall be entitled to participate in any pension plans, profit-sharing
plans and group insurance, medical, hospitalization, disability and other
benefit plans presently in effect (a partial list of which is attached hereto as
Exhibit B) or hereinafter adopted, which plans are generally applicable to the
most senior executives of the Company and to the extent he is eligible under the
general provisions thereof.
2.5. Reimbursement of Expenses. The Company will reimburse Xxxxxxx for
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all business expenses, including, without limitation, traveling, entertainment
and similar expenses, incurred by Xxxxxxx on behalf of the Company during the
Term of this Agreement if such expenses are ordinary and necessary business
expenses incurred on behalf of the Company pursuant to the Company's standard
expense reimbursement policy, provided that Xxxxxxx shall provide the Company
with such itemized accounts, receipts or documentation for such expenses as are
required under the Company's policy regarding the reimbursement of such
expenses.
2.6. Vacation and Sick Leave. During the Term of this Agreement,
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Xxxxxxx will be entitled to three weeks of paid vacation per year. Xxxxxxx shall
also be entitled to paid sick leave in accordance with the policy applicable to
the other senior executives of the Company.
2.7. Relocation Loan and Housing Allowance.
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(a) Concurrent with the execution of this Agreement, the
Company will fund an unsecured loan to Xxxxxxx in the principal amount of
$50,000 bearing simple interest at 5.75% per annum (the "Relocation Loan").
Repayment of the principal amount of the Relocation Loan and any interest
payable thereon shall be forgiven, as follows: (i) on a pro rata basis, during
Xxxxxxx'x employment with the Company, upon the close of business on the last
business day of each month commencing with the month ending December 31, 1996
and ending November 30, 1999 and (ii) in
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its entirety under the circumstances set forth in Section 4.2 hereof. In the
event that Xxxxxxx'x employment under this Agreement is terminated by Xxxxxxx
without Good Reason (as defined herein) or for Cause as defined in Section
4.1(iii)(C), Xxxxxxx shall pay the total of unforgiven principal and interest
due under the Relocation Loan within ninety (90) days of the occurrence of such
event. The Relocation Loan shall be evidenced by a promissory note in form
acceptable to Xxxxxxx and the Company and consistent with the terms of this
Agreement.
(b) During each month of the Term of his employment under this
Agreement, Xxxxxxx shall be entitled to receive a housing allowance of $2,750
per month, which amount may be issued on a monthly basis, or at the option of
Xxxxxxx, in advance (the "Housing Allowance"). If the Housing Allowance is paid
in advance, and thereafter Xx. Xxxxxxx'x employment hereunder shall terminate
for any reason whatsoever during the Term of his employment under this
Agreement, Xx. Xxxxxxx shall pay the Company, within ninety (90) days of such
termination, an amount equal to $2,750 for each complete month remaining of his
Term of employment under this Agreement.
3. TERM
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3.1. Term. The "Term" of employment under this Agreement means the
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period commencing on the date hereof and expiring on December 31, 1999 or the
earlier termination hereof pursuant to Section 4.1.
4. TERMINATION OF EMPLOYMENT
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4.1. Events of Termination. Upon the occurrence of any of the
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events described in this Section 4.1 during the Term of this Agreement,
Xxxxxxx'x employment hereunder shall terminate and Xxxxxxx shall be entitled to
the benefits provided in Section 4.2 hereof.
(i) Termination of Xxxxxxx'x employment with the Company
due to Xxxxxxx'x death.
(ii) If, as a result of Xxxxxxx'x incapacity due to physical
or mental illness, injury or disability, Xxxxxxx shall have been absent from his
duties with the Company on a full-time basis for three consecutive months, and
within thirty days after the receipt of written Notice of Termination (as
hereinafter defined) he shall not have returned to the full-time performance of
his duties, the Company may terminate Xxxxxxx'x employment for "Disability."
"Absent from his duties" means, for the purposes of this Section 4.1( ii ), that
Xxxxxxx is devoting less than 40 hours per week to his duties under this
Agreement.
(iii) The Company shall be entitled to terminate Xxxxxxx'x
employment for Cause. For purposes of this Agreement, "Cause" shall mean:
(A) the willful and continued failure by Xxxxxxx to
substantially perform his duties with the Company in good faith
(other than any such failure resulting from his incapacity due to
physical or mental illness, injury or disability or any such
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actual or anticipated failure resulting from his termination for
Good Reason (as hereinafter defined)), after a demand for
substantial performance is delivered to him by the Board of
Directors of the Company which identifies, in reasonable detail,
the manner in which the Board of Directors believes that Xxxxxxx
has not substantially performed his duties in good faith;
(B) the willful engaging by Xxxxxxx in conduct which causes
material harm to the Company, monetarily or otherwise; or
(C) Xxxxxxx'x conviction of a felony arising from conduct
during the Term of this Agreement.
For purposes of this Subsection 4.1(iii), no act, or failure to
act, on Xxxxxxx'x part shall be considered "willful" unless done, or omitted to
be done, by him not in good faith and without reasonable belief that his action
or omission was in the best interest of the Company or its shareholders.
Notwithstanding the foregoing, Xxxxxxx shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by the affirmative vote of not less than two-
thirds of the entire membership of the Board of Directors at a meeting of the
Board of Directors called and held for such purpose (after ten days notice to
him and an opportunity for him, together with his counsel, to appear before the
Board of Directors), finding that Xxxxxxx was guilty of conduct set forth above
in clauses (A), (B) or (C) of this Subsection 4.1(iii) and setting forth, in
reasonable detail, the basis for such finding.
(iv) Xxxxxxx shall be entitled to terminate his employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall, without
Xxxxxxx'x express written consent, mean:
(A) the assignment to Xxxxxxx of any duties substantially
inconsistent with his status as Chairman and Chief Executive
Officer of the Company;
(B) a reduction by the Company in Xxxxxxx'x Base Salary as
in effect on the date hereof or as the same may be increased from
time to time;
(C) the relocation of the Company's principal executive
offices to a location not approved by Xxxxxxx or the Company's
requiring Xxxxxxx to be based in a location not approved by
Xxxxxxx;
(D) the failure by the Company to continue in effect any
pension, health, compensation or other benefit plan in which
Xxxxxxx participates (including those listed on Exhibit B), or any
similar plans hereafter adopted, unless an equitable arrangement
(as determined by an employee benefit consultant of national
standing selected by the Company and reasonably satisfactory to
Xxxxxxx), embodied in an ongoing substitute or alternative plan,
has been made with respect to such plan, or the failure by the
Company to continue his participation therein, or the taking of
any action by the Company which would directly or indirectly
materially reduce any of
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such benefits or deprive Xxxxxxx of any material fringe benefit
presently enjoyed by him;
(E) the failure of the Company to obtain a satisfactory
agreement from any successor (by means of merger, consolidation,
sale of assets or otherwise) to assume and agree to perform this
Agreement as contemplated by Section 5 hereof; or
(F) any purported termination of Xxxxxxx'x employment
which is not effected pursuant to a Notice of Termination
satisfying the requirements of Subsection (v) of this Section 4.1
(and, if applicable, Subsection (iii) of this Section 4.1); and
for purposes of this Agreement, no such purported termination
shall be effective.
Xxxxxxx'x right to terminate his employment pursuant to this
Subsection 4.1(iv) shall not be affected by his incapacity due to
physical or mental illness, injury or disability. The Company may,
solely during the period of such incapacity, make arrangements for
the discharge of any of Xxxxxxx'x duties hereunder by another
officer of the Company, but any such arrangement shall not affect
or in any way diminish Xxxxxxx'x rights hereunder.
(v) Any purported termination by the Company or by Xxxxxxx shall
be communicated by written Notice of Termination to the other party hereto in
accordance with Sections 4.3 and 8.1 hereof.
(vi) Notwithstanding the pendency of a Notice of Dispute (as
hereinafter defined), the Company will continue to pay Xxxxxxx his full
compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, Base Salary) and continue his participation in
all compensation, bonus, benefit and insurance plans in which he was
participating when the notice giving rise to the dispute was given (or provide
Xxxxxxx with benefits substantially similar, as determined by an employee
benefit consultant of national standing selected by the Company and reasonably
satisfactory to Xxxxxxx, to those under such plans), until the dispute is
finally resolved. Amounts paid under this Section 4.1 (vi) are in addition to
all other amounts due under this Agreement and shall not be offset against or
reduce any other amounts due under this Agreement or otherwise. If it is finally
determined that Xxxxxxx terminated his employment for other than Good Reason or
the Company rightfully terminated Xxxxxxx'x employment for Cause, Xxxxxxx shall
reimburse the Company for all amounts paid to him under this Section 4.1(vi)
(less any amounts determined to be owing to Xxxxxxx under any other provision of
this Agreement), with interest thereon calculated at a rate of six percent per
annum.
4.2. Effect of Termination.
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(i) Upon the termination of Xxxxxxx'x employment as a result
of his Disability, Xxxxxxx shall be entitled to receive:
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(A) for an additional twenty-four months after the date of
such termination, his Base Salary and any and all benefits to
which he is entitled on the date of such termination under the
Company's pension, life, disability, accident and health and other
benefit plans in accordance with the provisions of such plans; and
(B) one hundred percent (100%) of the maximum amount of incentive
compensation for which Xxxxxxx could have become eligible during
the year in which such termination occurs.
(B) the Option, together with any other options to purchase
stock (common or otherwise) in the Company granted pursuant to any
plan or otherwise, or any equivalent or similar rights which
appreciate or tend to appreciate as the value of the Company's
stock appreciates, shall become immediately accelerated and fully
vested and any restrictions on such options or equivalent or
similar rights shall, to the extent permissible under applicable
securities laws, fully lapse; and the Company shall endeavor to
cause any restrictions on such options or equivalent or similar
rights not lapsed by operation of this clause to so lapse.
(C) forgiveness of any then outstanding principal amount
plus accrued interest of the Relocation Loan in its entirety.
(D) the indemnity described in Section 4.2(vi) hereto.
(ii) Upon the termination of Xxxxxxx'x employment as a result of
his death, Xxxxxxx'x heirs, devisees, executors or other legal representatives
shall receive:
(A) for an additional twenty-four months from the date of
such termination, his Base Salary and any and all benefits to
which he is entitled on the date of such termination under the
Company's pension, life, disability, accident and health and other
benefit plans in accordance with the provisions of such plans; and
(B) one hundred percent (100%) of the maximum amount of incentive
compensation for which Xxxxxxx could have become eligible during
the year in which such termination occurs.
(B) the Option, together with any other options to purchase
stock (common or otherwise) in the Company granted pursuant to any
plan or otherwise, or any equivalent or similar rights which
appreciate or tend to appreciate as the value of the Company's
stock appreciates, shall become immediately accelerated and fully
vested and any restrictions on such options or equivalent or
similar rights shall, to the extent permissible under applicable
securities laws, fully lapse; and the Company shall endeavor to
cause any restrictions on such options or equivalent or similar
rights not lapsed by operation of this clause to so lapse.
(C) forgiveness of any then outstanding principal amount
plus accrued interest of the Relocation Loan in its entirety.
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(D) the indemnity described in Section 4.2(vi) hereto.
(iii) Subject to Section 4.l (vi) hereof: (a) if Xxxxxxx'x
employment shall be terminated for Cause as described in Section 4.1(iii)(A) or
(B) hereto, the Company shall pay Xxxxxxx his full Base Salary and other
benefits to which he is entitled for a period of twenty-four months, and shall
continue to provide the indemnity described in Section 4.2(vi) hereto; and (b)
if Xxxxxxx'x employment shall be terminated for Cause as described in Section
4.1(iii)(C) hereto, the Company shall pay Xxxxxxx his full Base Salary and other
benefits to which he is entitled, through the Date of Termination at the rate in
effect at the time the Notice of Termination is given, and the Company shall
have no further obligations to him under this Agreement, with the exception of
the indemnity described in Section 4.2(vi) hereto. Upon any such termination for
Cause, the outstanding principal amount of the Relocation Loan plus accrued
interest shall be due and payable in full.
(iv) If Xxxxxxx'x employment by the Company shall be terminated
(a) by the Company other than for Cause, Death or Disability, or (b) by Xxxxxxx
for Good Reason, then Xxxxxxx shall be entitled to the benefits provided below:
(A) the Company shall pay Xxxxxxx, not later than the fifth
day following the Date of Termination, a lump sum in cash equal to
the sum of (i) twenty-four months of Base Salary, at the rate of
Xxxxxxx'x Base Salary on the Date of Termination, discounted to
the then present value at a discount rate of ten percent per annum
applied to each future payment from the time it would have become
payable; and (ii) one hundred percent (100%) of the maximum amount
of incentive compensation for which Xxxxxxx could have become
eligible during the year in which such termination occurs;
(B) the Option, together with any other options to purchase
stock (common or otherwise) in the Company granted pursuant to any
plan or otherwise, or any equivalent or similar rights which
appreciate or tend to appreciate as the value of the Company's
stock appreciates, shall become immediately accelerated and fully
vested and any restrictions on such options or equivalent or
similar rights shall, to the extent permissible under applicable
securities laws, fully lapse; and the Company shall endeavor to
cause any restrictions on such options or equivalent or similar
rights not lapsed by operation of this clause to so lapse; and
(C) forgiveness of the then outstanding principal balance
plus accrued interest of the Relocation Loan in its entirety.
(D) the indemnity described in Section 4.2(vi) hereto.
(v) Xxxxxxx shall not be required to mitigate the amount of
any payment provided for in this Section 4.2 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section 4.2 be subject to set-off or reduced by any
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compensation earned by him as the result of employment by another employer or by
benefits after the Date of Termination, or otherwise.
(vi) In connection with the termination of Xxxxxxx'x employment
for any reason, the Company will take all necessary action to release Xxxxxxx
from any obligations under any guarantees by Xxxxxxx of the Company's corporate
debt. Xxxxxxx'x employment shall not be terminated until such time as he is
removed or replaced with respect to any such guarantee. In addition, after the
Date of Termination, the Company will indemnify Xxxxxxx for any claims,
including all legal fees and expenses associated therewith, made by any lender
with respect to any such guarantee.
4.3. Certain Definitions. For the purposes of this Section 4, the
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following terms shall have the meanings set forth in this Section 4.3:
(i) "Notice of Termination" means a written notice which shall
indicate the specific termination provision in this Agreement relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision so indicated.
(ii) "Date of Termination" means (i) if employment is
terminated for Disability, thirty days after Notice of Termination is given
(provided that Xxxxxxx shall not have returned to the performance of his duties
on a full-time basis during such thirty-day period), and (ii) if employment is
terminated pursuant to Subsection (iii) or (iv) of Section 4.1 or for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination pursuant to Subsection (iii) of Section 4.1, shall not be less than
ten days and, in the case of a termination pursuant to Subsection (iv) of
Section 4.1, shall not be more than sixty days, respectively, from the date such
Notice of Termination is given); provided that if within thirty days after any
Notice of Termination is given, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination (a
"Notice of Dispute"), the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award, or by a final judgment, order or decree
of a court of competent jurisdiction (the time for appeal therefrom having
expired and no appeal having been perfected); and provided further that the Date
of Termination shall be extended by a Notice of Dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence.
5. SUCCESSORS
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5.1. Assumption by Successors. The Company shall require any successor
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(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Xxxxxxx to compensation from the Company in the same
amount and on the same terms as
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he would be entitled hereunder if he terminates his employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "Company" shall mean the Company as hereinbefore defined
and any successor to its business or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
6. NON-COMPETITION AND CONFIDENTIALITY
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6.1. Non-Competition. During Xxxxxxx'x employment by the Company
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hereunder and during the period of one year after the termination of Xxxxxxx'x
employment hereunder by the Company for Cause or by Xxxxxxx for other than Good
Reason:
(i) Xxxxxxx will not directly compete with the business of the
Company so as to cause the Company to lose material revenue from any client
account which is in existence on the Date of Termination.
(ii) Xxxxxxx will not directly or indirectly employ or solicit
for employment any person whom he knows to be an employee of the Company or any
subsidiary of the Company.
6.2. Confidential Information.
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(a) Xxxxxxx agrees and acknowledges that the Confidential
Information of the Company (as hereinafter defined) is valuable, special and
unique to its business; that such business depends on such Confidential
Information; and that the Company wishes to protect such Confidential
Information by keeping it confidential for the use and benefit of the Company.
Based on the foregoing, Xxxxxxx agrees to undertake the following obligations
with respect to such Confidential Information:
(i) Xxxxxxx agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company;
(ii) Xxxxxxx agrees that, except as required by Xxxxxxx'x
duties hereunder or authorized in writing by the Company, he will
not at any time during and for five years after the termination of
his employment with the Company, disclose or use, directly or
indirectly, any Confidential Information of the Company;
(iii) Xxxxxxx agrees to take all reasonable steps
necessary, or reasonably requested by the Company, to ensure that
all Confidential Information of the Company is kept confidential
for the use and benefit of the Company; and
(iv) Xxxxxxx agrees that, upon termination of his
employment by the Company or at any other time the Company may in
writing so request, he will promptly deliver to the Company all
materials constituting Confidential Information (including all
copies thereof) that are in the possession of or under the control
of Xxxxxxx. Xxxxxxx further agrees that, if requested by the
Company to return any
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Confidential Information pursuant to this Subsection 6.2(a) (iv),
he will not make or retain any copy of or extract from such
materials.
(b) For purposes of this Section 6.2, Confidential Information
means any and all information developed by or for the Company of which Xxxxxxx
gained knowledge by reason of his employment by the Company prior the date
hereof or his employment under this Agreement that is not generally known in any
industry in which the Company is or may become engaged. Confidential Information
includes, but is not limited to, any and all information developed by or for the
Company concerning plans, marketing and sales methods, materials, processes,
business forms, procedures, devices used by the Company, contractors and
customers with which the Company has dealt prior to Xxxxxxx'x termination of
employment with the Company, plans for development of new products, services and
expansion into new areas or markets, internal operations, and any trade secrets
and proprietary information of any type owned by the Company together with all
written, graphic and other materials relating to all or any part of the same.
In the event that Xxxxxxx is, in the opinion of his legal counsel
(which counsel shall be acceptable to the Company in its reasonable discretion),
required to disclose any Confidential Information to any federal, state, local
or foreign judicial, legislative, administrative or other authority, agency or
instrumentality or is required to disclose such Confidential Information by
reason of his fiduciary duties to the Company or its shareholders or by any
federal, state, local or foreign securities, blue-sky or other similar laws,
rules, regulations or ordinances, then, notwithstanding anything in this Section
6.2 to the contrary, Xxxxxxx may disclose such Confidential Information to the
extent, and to the persons and entities, so required without any liability
hereunder, without constituting a breach hereunder and without giving rise to a
right of the Company to terminate Xxxxxxx'x employment (for Cause or otherwise)
hereunder. Xxxxxxx shall notify the Company of any disclosure required to be
made in connection with the preceding sentence as soon as practicable after
Xxxxxxx becomes aware of such required disclosure.
7. REMEDIES
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7.1. Injunctive Relief. Xxxxxxx acknowledges and agrees that the
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covenants and obligations contained in Sections 6.1 and 6.2 relate to special,
unique and extraordinary matters and that a violation of any of the terms of
such sections will cause the Company irreparable injury for which adequate
remedy at law is not available. Therefore, Xxxxxxx agrees that the Company shall
be entitled to an injunction, restraining order, or other equitable relief from
any court of competent jurisdiction, restraining Xxxxxxx from committing any
violation of the covenants and obligations set forth in Sections 6.1 and 6.2
hereof.
7.2. Remedies Cumulative. The Company's rights and remedies under
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Section 7.1 hereof are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
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8. MISCELLANEOUS
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8.1. Notices. Any written notice, required or permitted under this
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Agreement, shall be deemed sufficiently given if either hand delivered or if
sent by fax or overnight courier. Written notices must be delivered to the
receiving party at his or its address on the signature page of this Agreement.
The parties may change the address at which written notices are to be received
in accordance with this section.
8.2. Assignment. Neither the Company nor Xxxxxxx may assign, transfer,
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or delegate its or his rights or obligations hereunder and any attempt to do so
shall be void. This Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns.
8.3. Entire Agreement. This Agreement contains the entire agreement of
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the parties with respect to the subject matter hereof, and all other prior
agreements, written or oral, are hereby merged herein and are of no further
force or effect. This Agreement may be modified or amended only by a written
agreement that is signed by the Company and Xxxxxxx. No waiver of any section or
provision of this Agreement will be valid unless such waiver is in writing and
signed by the party against whom enforcement of the waiver is sought. The waiver
by the Company of any section or provision of this Agreement shall not apply to
any subsequent breach of this Agreement. Captions to the various sections in
this Agreement are for the convenience of the parties only and shall not affect
the meaning or interpretation of this Agreement. This Agreement may be executed
in several counterparts, each of which shall be deemed an original, but together
they shall constitute one and the same instrument.
8.4. Severability. The provisions of this Agreement shall be deemed
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severable, and if any part of any provision is held illegal, void, or invalid
under applicable law such provision may be changed to the extent reasonably
necessary to make the provision, as so changed, legal, valid and binding. If any
provision of this Agreement is held illegal, void, or invalid in its entirety,
the remaining provisions of this Agreement shall not in any way be affected or
impaired but shall remain binding in accordance with their terms.
8.5. Continuing Obligations. Sections 4.2, 6.1 and 6.2 of this
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Agreement shall continue and survive the termination of this Agreement.
8.6. Applicable Law. This Agreement and the rights and obligations of
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the Company and Xxxxxxx thereunder shall be governed by and construed and
enforced under the laws of the State of California applicable to agreements made
and to be performed entirely within such State.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TIER TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxx
Title: Senior Vice President and Chief Financial Officer
Address: 0000 Xxxxx Xxxx., Xxx. 000
Xxxxxx Xxxxx, XX 00000
/s/ Xxxxx X. Xxxxxxx
XXXXX X. XXXXXXX
Address: 0000 Xxxxx Xxxx., Xxx. 000
Xxxxxx Xxxxx, XX 00000
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EXHIBIT A
Incentive Compensation Formula
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Xxxxxxx shall receive annual incentive compensation of at least
$100,000 per year (the "Annual Minimum") or $25,000 per quarter (the "Quarterly
Minimum"), upon the achievement of targeted level of earnings before interest,
taxes, depreciation and amortization ("EBITDA") of the Company. For calendar
1997, the targeted level of EBITDA shall be $412,500 per calendar quarter, or
$1,650,000 for the calendar year. If the targeted level of EBITDA is met for any
calendar quarter (the "Quarterly EBITDA Requirement"), the quarterly incentive
compensation payment shall be made to Xxxxxxx on or before thirty days following
the end of such quarter. However, the right to receive such payment shall be
earned by and vested in Xxxxxxx on the last day of each such quarter. Assuming
Xxxxxxx has achieved the Quarterly EBITDA Requirement, the amount to be paid to
Xxxxxxx for that quarter shall be determined by multiplying the Quarterly
Minimum by a fraction, the numerator of which is the actual EBITDA achieved for
such period and the denominator of which is the targeted level of EBITDA for the
quarter. EBITDA for any calendar quarter may not be carried over to the next
calendar quarter; provided, however, if the Quarterly EBITDA Requirement is not
met for one or more calendar quarters during any calendar year for the term of
this Agreement, but the annual target is met for such calendar year, Xxxxxxx
shall be entitled to receive the difference between the annual incentive
compensation payment,determined by multiplying the Annual Minimum by a fraction,
the numerator of which is the actual EBITDA achieved for such the calendar year
and the denominator of which is the targeted level of EBITDA for the calendar
year, and the total of all quarterly incentive compensation payments made to
Xxxxxxx during such calendar year. Such annual payment will be made to Xxxxxxx
by March 31 of the following year. However, the right to receive such payment
shall be earned by and vested in Xxxxxxx on the last day of each such calendar
year.
For subsequent calendar years during the Term, the targeted level of
EBITDA shall be fixed by the Board, in consultation with Xxxxxxx, prior to
commencement of the year in question. EBITDA will be determined by the Company's
Chief Financial Officer in accordance with the Company's normal accounting
practices consistently applied.
13
EXHIBIT B
Benefits for Xxxxxxx'x Employment Agreement
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1. Group Term and Keyman Life Insurance
2. Standard medical plan.
3. Standard three weeks vacation.
4. Standard 11 holidays.
5. Standard long term disability insurance.
6. Automobile (owned by company) or mutually acceptable allowance in
lieu thereof.
7. Pension supplement.
8. Standard defined benefit pension plan.
9. Incentive Compensation plan.
10. D & O liability insurance.
11. Annual physical examination.
12. Thrift savings (401(k) Plan.)
13. Personal liability insurance.
14. Other.
14
