Xxxxx Xxx Employment Agreement
EMPLOYMENT AGREEMENT
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This Employment Agreement ("Agreement") is made as of the 15th day of June,
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2004 by and between Charys Holding Company Inc, a Delaware corporation located
at 0000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxx X 000, Xxxxxxx Xxxxxxx 00000 (the
"Company"), and Xxxxx X. Xxx (hereinafter, the "Executive").
R E C I T A L S
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A. The Board of Directors of the Company (the "Board") recognizes
the Executive's potential contribution to the growth and success of the Company,
and desires to assure the Company of the Executive's employment in an executive
capacity and to compensate him therefore, and has approved the provisions of
this Agreement and has authorized the officers of the Company to execute the
Agreement on behalf of the Company.
B. The Executive is willing to make his services available to the
Company and on the terms and conditions hereinafter set forth.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:
1. Employment.
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1.1. Employment and Term. The Company hereby agrees to employ the
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Executive and the Executive hereby agrees to serve the Company on the terms and
conditions set forth herein.
1.2. Duties of Executive. During the Term of Employment under this
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Agreement, the Executive shall serve as the Chief Executive Officer of the
Company. The Executive shall be accountable only to the Board of Directors
(the "Board"), and, subject to the authority of the Board, shall have
supervision and control over, and responsibility for the overall operations of
the Company. He also shall have such other powers and duties as may from time to
time be prescribed by the Board, provided that such duties are consistent with
the Executive's position as CEO of a company the size and type of the Company.
The Executive shall devote the necessary time and attention to the business and
affairs of the Company, render such services to the best of his ability, and use
his reasonable best efforts to promote the interests of the Company.
Notwithstanding the foregoing or any other provision of this Agreement, it shall
not be a breach or violation of this Agreement for the Executive to (i) serve on
corporate (subject to approval of the Board), civic or charitable boards or
committees, (ii) deliver lectures, fulfill speaking engagements or teach at
educational institutions, or (iii) manage personal investments, so long as such
activities do not significantly interfere with or significantly detract from the
performance of the Executive's responsibilities to the Company in accordance
with this Agreement. The Executive may continue to serve out the remaining term
as a board member on any corporate board on which he serves as of the
Commencement Date.
2. Term.
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2.1. Term. The term of employment under this Agreement (the "Term
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of Employment") shall commence as of the 15th day of June 2004 (the
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"Commencement Date") and shall continue for a period ending Three (3) years from
any date as of which the Term of Employment is being determined, subject to
earlier termination pursuant to Section 5 hereof. This agreement shall
automatically renew for an additional 3 year term at the conclusion of the
initial or successive 3 year terms. The date on which the Term of Employment
shall expire is sometimes referred to in this Agreement as the "Expiration
Date".
3. Compensation.
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3.1. Base Salary. The Executive shall receive a base salary at the
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annual rate of "see attachment A" (the "Base Salary") during the Term of
Employment, with such Base Salary payable in installments consistent with the
Company's normal payroll schedule, subject to applicable withholding and other
taxes. The Base Salary shall be reviewed, at least annually, for merit increases
and may, by action and in the discretion of the Board, be increased at any time
or from time to time. The Executive's Base Salary at any point in time shall not
be decreased for any reason.
3.2. Bonuses. In addition to Base Salary the Executive shall be
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eligible to receive a bonus (the "Annual Bonus") payable in such amount and at
such times as may be recommended by the Compensation Committee of the Board of
Directors in its sole discretion.
4. Expense Reimbursement and Other Benefits.
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4.1. Reimbursement of Expenses. Upon the submission of
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proper substantiation by the Executive, and subject to such rules and guidelines
as the Company may from time to time adopt with respect to the reimbursement of
expenses of executive personnel, the Company shall reimburse the Executive for
all reasonable expenses actually paid or incurred by the Executive during the
Term of Employment in the course of and pursuant to the business of the Company.
The Executive shall account to the Company in writing for all expenses for which
reimbursement is sought and shall supply to the Company copies of all relevant
invoices, receipts or other evidence reasonably requested by the Company.
4.2. Compensation/Benefit Programs. During the Term of Employment, the
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Executive shall be entitled to participate in all medical, dental,
hospitalization, accidental death and dismemberment, disability, travel and life
insurance plans and all other plans as are presently and hereinafter offered by
the Company to its executive personnel, including savings, pension,
profit-sharing and deferred compensation plans.
4.3. Working Facilities. During the Term of Employment, the Company
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shall furnish the Executive with an office, secretarial help and such other
facilities and services suitable to his position and adequate for the
performance of his duties hereunder.
4.4. Automobile. During the Term of Employment, the Company shall, at
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the Company's election, either (i) pay to the Executive a non-accountable
automobile allowance of
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$500 per month or (ii) provide the Executive with a mid-size automobile (which
initially shall be new and shall be replaced not less frequently than every
three (3) years), and reimburse the Executive for the costs of gasoline, oil,
repairs, maintenance, insurance and other expenses incurred by Executive by
reason of the use of the automobile. (This provision shall become effective when
the company has funded it's initial operations and such formal program is
instituted in the Company)
4.5. Stock Options.
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a. Initial Grant. As of the Commencement Date, the Company
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shall grant to the Executive, an option to purchase 10,000 shares of common
stock of the Company (the "Initial Options") (these options shall be granted in
post 1 for 10 reverse split shares created during the merger with Spiderboy,
International, Inc.) at the closing price on the Commencement Date. This option
shall be immediately exercisable in full and shall remain exercisable for a
period of ten (10) years, whether or not the Executive continues to be employed
by the Company during that period. The parties intend that the Initial Options
be granted pursuant to the Company's stock option plan (the "Stock Option Plan")
and shall be incentive stock options to the extent allowable under the Stock
Option Plan and applicable laws; provided, however, in the event that the
Initial Options may not be granted under the Stock Option Plan due to the
failure of the Company to obtain shareholder approval of an increase in the
number of shares available for grant thereunder, the Initial Options shall be
granted to the Executive outside of the Stock Option Plan.
b. Future Grants. In addition, during the Term of Employment,
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the Executive shall be eligible to be granted options (the "Stock Options") to
purchase common stock (the "Common Stock") of the Company under (and therefore
subject to all terms and conditions of) the Company's Stock Option Plan, and any
successor plan thereto (the "Stock Option Plan"); provided, however, that the
Stock Options shall become immediately exercisable in full upon termination of
the Executive's employment with the Company for any reason other than
termination by the Company for Cause under Section 5.1 hereof or termination by
the Executive without Good Reason under Section 5.5b hereof. The number of Stock
Options and terms and conditions of the Stock Options shall be determined by the
committee of the Board appointed pursuant to the Stock Option Plan, or by the
Board of Directors of the Company, in its discretion and pursuant to the Stock
Option Plan.
4.6. Other Benefits. The Executive shall be entitled to six (6)
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weeks of paid vacation each calendar year during the Term of Employment, to be
taken at such times as the Executive and the Company shall mutually determine
and provided that no vacation time shall significantly interfere with the duties
required to be rendered by the Executive hereunder. Any vacation time not taken
by Executive during any calendar year may be carried forward into any succeeding
calendar year. The Executive shall receive such additional benefits, if any, as
the Board of the Company shall from time to time determine.
5. Termination.
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5.1. Termination for Cause. The Company shall at all times have
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the right, upon written notice to the Executive, to terminate the Term of
Employment, for Cause as defined below. For purposes of this Agreement, the term
"Cause" shall mean (i) an action or omission of the Executive which constitutes
a willful and material breach of, or a willful and material failure or refusal
(other than by reason of his disability or incapacity) to perform his duties
under, this Agreement which is not cured within fifteen (15) days (or if the
Executive is acting diligently to effect a cure, such longer time as shall be
reasonably necessary to effect the cure) after receipt by the Executive of
written notice of same, (ii) fraud, embezzlement, misappropriation of funds or
breach of trust in connection with his services hereunder, or (iii) a conviction
of any crime which involves dishonesty or a breach of trust. Any termination for
Cause shall be made in writing by notice to the Executive, which notice shall
set forth in reasonable detail all acts or omissions upon which the Company is
relying for such termination. The Executive (and his legal representative) shall
have the right to address the Board regarding the acts set forth in the notice
of termination. Upon any termination pursuant to this Section 5.1, the Company
shall (i) pay to the Executive any unpaid Base Salary through the date of
termination and (ii) pay to the Executive accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the date of the
termination of Executive's employment with the Company. Upon any termination
effected and compensated pursuant to this Section 5.1, the Company shall have no
further liability hereunder (other than for (x) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs).
5.2. Disability. The Company shall at all times have the right, upon
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written notice to the Executive, to terminate the Term of Employment, if the
Executive shall as the result of mental or physical incapacity, illness or
disability, become unable to perform his obligations hereunder for a period of
180 days in any 12-month period. The determination of whether the Executive is
or continues to be disabled shall be made in writing by a physician selected by
the Board and reasonably acceptable to the Executive. Upon any termination
pursuant to this Section 5.2, the Company shall (i) pay to the Executive any
unpaid Base Salary through the effective date of termination specified in such
notice, (ii) pay to the Executive accrued but unpaid Incentive Compensation, if
any, for any Bonus Period ending on or before the date of termination of the
Executive's employment with the Company, (iii) pay to the Executive his
Termination Year Bonus, if any, at the time provided in Section 3.2f hereof, and
(iv) pay to the Executive any then unpaid Additional Bonuses at the time
provided in Section 3.2(c). Upon any termination effected and compensated
pursuant to this Section 5.2, the Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however to the provisions of
Section 4.1, and (y) payment of compensation for unused vacation days that have
accumulated during the calendar year in which such termination occurs).
5.3. Death. Upon the death of the Executive during the Term of
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Employment, the Company shall (i) pay to the estate of the deceased Executive
any unpaid Base Salary through the Executive's date of death, (ii) pay to the
estate of the deceased Executive accrued but unpaid Incentive Compensation, if
any, for any Bonus Period ending on or before the Executive's date of death,
(iii) pay to the estate of the deceased Executive, the Executive's Termination
Year Bonus,
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if any, at the time provided in Section 3.2f hereof, and (iv) pay to the
Executive's estate any then unpaid Additional Bonuses at the time provided in
Section 3.2(c). Upon any termination effected and compensated pursuant to this
Section 5.3, the Company shall have no further liability hereunder (other than
for (x) reimbursement for reasonable business expenses incurred prior to the
date of the Executive's death, subject, however to the provisions of Section
4.1, and (y) payment of compensation for unused vacation days that have
accumulated during the calendar year in which such termination occurs).
5.4. Termination Without Cause. The Company shall have the right to
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terminate the Term of Employment by written notice not less than thirty (30)
days prior to the termination date, to the Executive. Upon any termination
pursuant to this Section 5.4 (that is not a termination under any of Sections
5.1, 5.2, 5.3 or 5.5, the Company shall (i) pay to the Executive on the
termination date unpaid Base Salary, if any, through the date of termination
specified in such notice, (ii) pay to the Executive the accrued but
unpaid Incentive Compensation, if any, for any Bonus Period ending on or before
the date of the termination of the Executive's employment with the Company, at
the time provided in Section 3.2a, (iii) pay to the Executive on the termination
date a lump sum payment equal to three (3) times the sum of (x) his Base Salary,
if any as of the date of his termination and (y) the accrued but unpaid Bonus
for the year in which such termination occurs, (iv) continue to provide the
Executive with the benefits under Sections 4.2 and 4.4 hereof (the "Benefits")
for a period of three (3) years immediately following the date of his
termination in the manner and at such times as the Benefits otherwise would have
been provided to the Executive; (v) pay to the Executive as a single lump sum
payment, within 30 days of the date of termination, a lump sum benefit equal to
the value of the portion of his benefits under any savings, pension, profit
sharing or deferred compensation plans that are forfeited under such plans but
that would not have been forfeited if the Executive's employment had contained
for an additional three (3) years. In the event that the Company is unable to
provide the Executive with any Benefits required hereunder by reason of the
termination of the Executive's employment pursuant to this Section 5.4, then the
Company shall promptly reimburse the Executive for amounts paid by the Executive
to acquire comparable coverage. Upon any termination effected and compensated
pursuant to this Section 5.4, the Company shall have no further liability
hereunder (other than for (x) reimbursement for reasonable business expenses
incurred prior to the date of termination, subject, however, to the provisions
of Section 4.1, and (y) payment of compensation for unused vacation days that
have accumulated during the calendar year in which such termination occurs).
5.5. Termination by Executive.
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a. The Executive shall at all times have the right, by written
notice not less than (30) days prior to the termination date, to terminate the
Term of Employment.
b. Upon termination of the Term of Employment pursuant to this
Section 5.5 by the Executive without Good Reason (as defined below), the Company
shall (i) pay to the Executive upon the termination date any unpaid Base Salary
through the effective date of termination specified in such notice or otherwise
mutually agreed and (ii) pay to the Executive any accrued but unpaid Incentive
Compensation, if any, for any Bonus Period ending on or before the termination
of Executive's employment with the Company, at the time provided in
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Section 3.2. Upon any termination effected and compensated pursuant to this
Section 5.5(b), the Company shall have no further liability hereunder (other
than for (x) reimbursement for reasonable business expenses incurred prior to
the date of termination, subject, however, to the provisions of Section 4.1, and
(y) payment of compensation for unused vacation days that have accumulated
during the calendar year in which such termination occurs).
c. Upon termination of the Term of Employment pursuant to this
Section 5.5 by the Executive for Good Reason, the Company shall pay to the
Executive the same amounts, and shall continue or compensate for Benefits in the
same amounts, that would have been payable or provided by the Company to the
Executive under Section 5.4 of this Agreement if the Term of Employment had been
terminated by the Company without Cause. In addition, if the termination of the
Term of Employment occurs after a Change in Control, and as a result of the
Change in Control, the Executive would be entitled to a reduction in the option
price for any options granted to the Executive, or any cash payments from the
Company, (other than those provided under this Agreement) in addition to those
specified in Section 5.4, under any plan or program maintained by the Company
(the "Additional Benefits"), then the Company shall provide the Executive with
those Additional Benefits, if and only to the extent that such Additional
Benefits, when added to the amounts payable and the Benefits provided by the
Company to the Executive hereunder, will not constitute excess parachute
payments with the meaning of Section 280G of the Code. Upon any termination
effected and compensated pursuant to this Section 5.5(c), the Company shall have
no further liability hereunder (other than for (x) reimbursement for reasonable
business expenses incurred prior to the date of termination, subject, however,
to the provisions of Section 4.1, and (y) payment of compensation for unused
vacation days that have accumulated during the calendar year in which such
termination occurs.)
d. For purposes of this Agreement, "Good Reason" shall mean (i)
the assignment to the Executive of any duties inconsistent in any respect with
the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Section
1.2 of this Agreement, or any other action by the Company which results in a
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt of notice
thereof given by the Executive; (ii) any failure by the Company to comply with
any of the provisions of Article 3 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; (iii) the Company's requiring the Executive to be based at any office
or location, that is not within 50 miles of Atlanta, GA except for travel
reasonably required in the performance of the Executive's responsibilities; (iv)
any purported termination by the Company of the Executive's employment other
than for Cause pursuant to Section 5.1, or because of the Executive's disability
pursuant to Section 5.2 of this Agreement; or (v) the occurrence of a Change in
Control. For purposes of this Section 5.5(d), the Executive acknowledges that
the Company's holding company functions are headquartered and centralized in
Atlanta, Georgia. For purposes of this Section 5.5(d), any good faith
determination of "Good Reason" made by the Executive shall be conclusive;
provided that the Executive shall not exercise his right to terminate his
employment for Good Reason without first giving sixty (60) days written notice
to the Company of the factual basis constituting Good Reason. The Company shall
have the right
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to cure the problem(s) noted by the Executive, before the Executive may
terminate his employment for Good Reason.
e. For purposes of this Agreement, the term "Change in Control"
shall mean:
(i) Approval by the shareholders of the Company of (x) a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, consolidation or other
transaction, or (y) a liquidation or dissolution of the Company or (z) the sale
of all or substantially all of the assets of the Company (unless such
reorganization, merger, consolidation or other corporate transaction,
liquidation, dissolution or sale is subsequently abandoned);
(ii) A new Board member is elected without the approval of
at least two of the persons who, as of the Commencement Date of this Agreement,
constitute the Board (the "Incumbent Board"); or
(iii) the acquisition (other than from the Company) by any
person, entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act, of beneficial ownership within the meaning of Rule
13-d promulgated under the Securities Exchange Act of more than 50% of either
the then outstanding shares of the Company's Common Stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally in the election of directors (hereinafter referred to as the ownership
of a "Controlling Interest") excluding, for this purpose, any acquisitions by
(1) the Company or its Subsidiaries, (2) any person, entity or "group" that as
of the Commencement Date of this Agreement owns beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act) of a
Controlling Interest or (3) any employee benefit plan of the Company or its
Subsidiaries;
(iv) provided that, with respect to this Section 5.5(e), a
Change in Control shall not be deemed to have occurred should any of the
contingencies referred to in this Section involve any of those companies,
persons or other legal entities with whom the Company is negotiating on or
before the Commencement Date and which are communicated, in writing, by the
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Company to the Executive upon execution of this Agreement.
5.6. Certain Additional Payments by the Company. Anything in this
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Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment, distribution or other action by the Company to or for the
benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, including
any additional payments required under this Section 5.6) (a "Payment") would be
subject to an excise tax imposed by Section 4999 of the Internal Revenue Code of
1986, as
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amended (the "Code"), or any interest or penalties are incurred by the Executive
with respect to any such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), the Company shall make a payment to the Executive (a "Gross-Up Payment")
in an amount such that after payment by the Executive of all taxes (including
any Excise Tax) imposed upon the Gross-Up Payment, the Executive retains (or has
had paid to the Internal Revenue Service on his behalf) an amount of the
Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the
Payments and (y) the product of any deductions disallowed because of the
inclusion of the Gross-Up Payment in the Executive's adjusted gross income and
the highest applicable marginal rate of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made. For purposes of determining
the amount of the Gross-Up Payment, the Executive shall be deemed to (i) pay
federal income taxes at the highest marginal rates of federal income taxation
for the calendar year in which the Gross-Up Payment is to be made, and (ii) pay
applicable state and local income taxes at the highest marginal rate of taxation
for the calendar year in which the Gross-Up Payment is to be made, net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes.
5.7. Resignation. Upon any termination of employment pursuant to
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this Article 5, the Executive shall be deemed to have resigned as an officer,
and if he or she was then serving as a director of the Company, as a director,
and if required by the Board, the Executive hereby agrees to immediately execute
a resignation letter to the Board.
5.8. Survival. The provisions of this Article 5 shall survive the
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termination of this Agreement, as applicable.
6. Restrictive Covenants.
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6.1. Non-competition. In order to fully protect the Company's
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Proprietary Information, at all times during the Restricted Period, the
Executive shall not, directly or indirectly, perform or provide managerial or
executive services on behalf of any person, entity or enterprise which is
engaged in, or plans to engage in, any business in the United States that
directly or indirectly competes with the Company's Business (for this purpose,
the "Company's Business" is the business of telephone and telecommunication
installation and service.) During the Executive's employment with the Company,
the Executive shall not, directly or indirectly, have any interest in any
business (other than the Company) that competes with the Company's Business,
provided that this provision shall not apply to the Executive's ownership or
acquisition, solely as an investment, of securities of any issuer that is
registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934,
as amended, and that are listed or admitted for trading on any United States
national securities exchange or that are quoted on the National Association of
Securities Dealers Automated Quotations System, or any similar system or
automated dissemination of quotations of securities prices in common use, so
long as the Executive does not control, acquire a controlling interest in or
become a member of a group which exercises direct or indirect control of, more
than five percent of any class of capital stock of such corporation. For
purposes of this Agreement the "Restricted Period" shall be the period during
which the Executive is employed by the Company and, if the Executive's
employment with the Company is either terminated by the Company without Cause
pursuant to Section 5.4, or
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by the Executive for Good Reason pursuant to Section 5.5c, and the Company has
paid to the Executive all of amounts then payable to the Executive pursuant to
Sections 5.4 or 5.5c, as applicable, the one (1) year period immediately
following the termination of the Executive's employment with the Company.
6.2. Confidential Information. The Executive recognizes and
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acknowledges that the Trade Secrets (as defined below) and Confidential
Information (as defined below), of the Company and all physical embodiments
thereof, as they may exist from time-to-time, collectively, the "Proprietary
Information" are valuable, special and unique assets of the Company's business.
In order to obtain and/or maintain access to such Proprietary Information, which
employee acknowledges is essential to the performance of his duties under this
Agreement, the Executive agrees that, except with respect to those duties
assigned to him by the Company, the Executive shall hold in confidence all
Proprietary Information and the Executive will not reproduce, use, distribute,
disclose, or otherwise misappropriate any Proprietary Information, in whole or
in part, and will take no action causing, or fail to take any action necessary
to prevent causing, any Proprietary Information to lose its character as
Proprietary Information, nor will the Executive make use of any such Information
for the Executive's own purposes or for the benefit of any person, business or
legal entity (except the Company) under any circumstances, except that the
Executive may disclose such Proprietary Information to the extent required by
law, provided that, prior to any such disclosure, the Company be provided an
opportunity to contest such disclosure.
For purposes of this Agreement, the term "Trade Secrets" means
information belonging to or licensed to the Company, regardless of form,
including, but not limited to, any technical or non-technical data, formula,
pattern, compilation, program, device, method, technique, drawing, financial,
marketing or other business plan, lists of actual or potential customers or
suppliers, or any other information similar to any of the foregoing, which
derives economic value, actual or potential, from not being generally known to,
and not being readily ascertainable by proper means by, other persons who can
derive economic value from its disclosure or use. The term "Confidential
Information" means any information belonging to or licensed to the Company,
regardless of form, other than Trade Secrets, which is valuable to the Company
and not generally known to competitors of the Company.
The provisions of this Section 6.2 will apply to Trade Secrets for as
long as such information remains a Trade Secret and to Confidential Information
during the Executive's employment with the Company and for a period of two (2)
years following the termination of the Executive's employment with the Company
for whatever reason.
6.3. Non-solicitation of Employees and Customers. At all times during
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the Restricted Period, as defined in Section 6.1 hereof, the Executive shall
not, directly or indirectly, for himself or for any other person, firm,
corporation, partnership, association or other entity (a) employ, solicit,
recruit or attempt to employ, solicit, or recruit any employee of the Company to
leave the Company's employment, or (b) solicit or attempt to solicit any of the
actual or targeted prospective customers or clients of the Company with whom the
Executive had material contact or about whom the Executive learned Confidential
Information on behalf of any person or entity in connection with any business
that competes with the Company's Business.
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6.4. Ownership of Developments. All copyrights, patents, trade
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secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by Executive during the course of performing work for the Company or its
clients (collectively, the "Work Product") shall belong exclusively to the
Company and shall, to the extent possible, be considered a work made by the
Executive for hire for the Company within the meaning of Title 17 of the United
States Code. To the extent the Work Product may not be considered work made by
the Executive for hire for the Company, the Executive agrees to assign, and
automatically assign at the time of creation of the Work Product, without any
requirement of further consideration, any right, title, or interest the
Executive may have in such Work Product. Upon the request of the Company, the
Executive shall take such further actions, including execution and delivery of
instruments of conveyance, as may be appropriate to give full and proper effect
to such assignment.
6.5. Books and Records. All books, records, and accounts relating in
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any manner to the customers or clients of the Company, whether prepared by the
Executive or otherwise coming into the Executive's possession, shall be the
exclusive property of the Company and shall be returned immediately to the
Company on termination of the Executive's employment hereunder or on the
Company's request at any time.
6.6. Definition of Company. Solely for purposes of this Article 6, the
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term "Company" also shall include any existing or future subsidiaries of the
Company that are operating during the time periods described herein and any
other entities that directly or indirectly, through one or more intermediaries,
control, are controlled by or are under common control with the Company during
the periods described herein.
6.7. Acknowledgment by Executive. The Executive acknowledges
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and confirms that (a) the restrictive covenants contained in this Article 6 are
reasonably necessary to protect the legitimate business interests of the
Company, and (b) the restrictions contained in this Article 6 (including without
limitation the length of the term of the provisions of this Article 6) are not
overbroad, overlong, or unfair and are not the result of overreaching, duress or
coercion of any kind. The Executive further acknowledges and confirms that his
full, uninhibited and faithful observance of each of the covenants contained in
this Article 6 will not cause him any undue hardship, financial or otherwise,
and that enforcement of each of the covenants contained herein will not impair
his ability to obtain employment commensurate with his abilities and on terms
fully acceptable to him or otherwise to obtain income required for the
comfortable support of him and his family and the satisfaction of the needs of
his creditors. The Executive acknowledges and confirms that his special
knowledge of the business of the Company is such as would cause the Company
serious injury or loss if he were to use such ability and knowledge to the
benefit of a competitor or were to compete with the Company in violation of the
terms of this Article 6. The Executive further acknowledges that the
restrictions contained in this Article 6 are intended to be, and shall be, for
the benefit of and shall be enforceable by, the Company's successors and
assigns.
6.8. Reformation by Court. In the event that a court of competent
-----------------------
jurisdiction shall determine that any provision of this Article 6 is invalid or
more restrictive than permitted under the governing law of such jurisdiction,
then only as to enforcement of this Article 6 within
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the jurisdiction of such court, such provision shall be interpreted and enforced
as if it provided for the maximum restriction permitted under such governing
law.
6.9. Extension of Time. If the Executive shall be in violation of any
------------------
provision of this Article 6, then each time limitation set forth in this Article
6 shall be extended for a period of time equal to the period of time during
which such violation or violations occur. If the Company seeks injunctive
relief from such violation in any court, then the covenants set forth in this
Article 6 shall be extended for a period of time equal to the pendency of such
proceeding including all appeals by the Executive.
6.10. Survival. The provisions of this Article 6 shall survive the
--------
termination of this Agreement, as applicable.
7. Injunction. It is recognized and hereby acknowledged by the parties
----------
hereto that a breach by the Executive of any of the covenants contained in
Article 6 of this Agreement will cause irreparable harm and damage to the
Company, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and hereby acknowledges that the Company
shall be entitled to an injunction from any court of competent jurisdiction
enjoining and restraining any violation of any or all of the covenants contained
in Article 6 of this Agreement by the Executive or any of his affiliates,
associates, partners or agents, either directly or indirectly, and that such
right to injunction shall be cumulative and in addition to whatever other
remedies the Company may possess.
8. Attorney's Fees. Nothing contained herein shall be construed to
----------------
prevent the Company or the Executive from seeking and recovering from the other
damages sustained by either or both of them as a result of its or his breach of
any term or provision of this Agreement. In the event that either party hereto
brings suit for the collection of any damages resulting from, or the injunction
of any action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.
9. Assignment. Neither party shall have the right to assign or delegate
----------
his rights or obligations hereunder, or any portion thereof, to any other
person.
10. Governing Law and Venue This Agreement shall be governed by and
--------------------------
construed and enforced in accordance with the internal laws of the State of
Georgia. The venue for any action to enforce this Agreement shall be the state
or federal courts located within Xxxxxx County, Georgia.
11. Entire Agreement. This Agreement constitutes the entire agreement
------------------
between the parties hereto with respect to the subject matter hereof and, upon
its effectiveness, shall supersede all prior agreements, understandings and
arrangements, both oral and written, between the Executive and the Company (or
any of its affiliates) with respect to such subject matter. This Agreement may
not be modified in any way unless by a written instrument signed by both the
Company and the Executive.
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12. Notices: All notices required or permitted to be given hereunder
-------
shall be in writing and shall be personally delivered by courier, sent by
registered or certified mail, return receipt requested or sent by confirmed
facsimile transmission addressed as set forth herein. Notices personally
delivered, sent by facsimile or sent by overnight courier shall be deemed given
on the date of delivery and notices mailed in accordance with the foregoing
shall be deemed given upon the earlier of receipt by the addressee, as evidenced
by the return receipt thereof, or three (3) days after deposit in the U.S. mail.
Notice shall be sent (i) if to the Company, addressed to the address of the
Company in the preamble to this Agreement, Attention: Chairman of the Board, and
(ii) if to the Executive, to his address as reflected on the payroll records of
the Company, or to such other in accordance with this provision.
13. Benefits; Binding Effect. This Agreement shall be for the benefit of
--------------------------
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where permitted and
applicable, assigns, including, without limitation, any successor to the
Company, whether by merger, consolidation, sale of stock, sale of assets or
otherwise.
14. Severability. The invalidity of any one or more of the words, phrases,
------------
sentences, clauses, provisions, sections or articles contained in this Agreement
shall not affect the enforceability of the remaining portions of this Agreement
or any part thereof, all of which are inserted conditionally on their being
valid in law, and, in the event that any one or more of the words, phrases,
sentences, clauses, provisions, sections or articles contained in this Agreement
shall be declared invalid, this Agreement shall be construed as if such invalid
word or words, phrase or phrases, sentence or sentences, clause or clauses,
provisions or provisions, section or sections or article or articles had not
been inserted. If such invalidity is caused by length of time or size of area,
or both, the otherwise invalid provision will be considered to be reduced to a
period or area which would cure such invalidity.
15. Waivers. The waiver by either party hereto of a breach or violation of
-------
any term or provision of this Agreement shall not operate nor be construed as a
waiver of any subsequent breach or violation.
16. Damages. Nothing contained herein shall be construed to prevent the
-------
Company or the Executive from seeking and recovering from the other damages
sustained by either or both of them as a result of its or his breach of any term
or provision of this Agreement. In the event that either party hereto brings
suit for the collection of any damages resulting from, or the injunction of any
action constituting, a breach of any of the terms or provisions of this
Agreement, then the party found to be at fault shall pay all reasonable court
costs and attorneys' fees of the other.
17. Section Headings. The article, section and paragraph headings
-----------------
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
18. No Third Party Beneficiary. Nothing expressed or implied in this
-----------------------------
Agreement is intended, or shall be construed, to confer upon or give any person
other than the Company, the
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parties hereto and their respective heirs, personal representatives,
legal representatives, successors and permitted assigns, any rights or remedies
under or by reason of this Agreement.
19. Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument and agreement.
20. Indemnification.
---------------
a. Subject to limitations imposed by law, the Company shall
indemnify and hold harmless the Executive to the fullest extent permitted by law
from and against any and all claims, damages, expenses (including attorneys'
fees), judgments, penalties, fines, settlements, and all other liabilities
incurred or paid by him in connection with the investigation, defense,
prosecution, settlement or appeal of any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and to which the Executive was or is a party or is threatened to
be made a party by reason of the fact that the Executive is or was an officer,
employee or agent of the Company, or by reason of anything done or not done by
the Executive in any such capacity or capacities, provided that the Executive
acted in good faith, in a manner that was not grossly negligent or constituted
willful misconduct and in a manner he reasonably believed to be in or not
opposed to the best interests of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The Company also shall pay any and all expenses (including attorney's
fees) incurred by the Executive as a result of the Executive being called as a
witness in connection with any matter involving the Company and/or any of its
officers or directors.
b. The Company shall pay any expenses (including attorneys'
fees), judgments, penalties, fines, settlements, and other liabilities incurred
by the Executive in investigating, defending, settling or appealing any action,
suit or proceeding described in this Section 20 in advance of the final
disposition of such action, suit or proceeding. The Company shall promptly pay
the amount of such expenses to the Executive, but in no event later than 10 days
following the Executive's delivery to the Company of a written request for an
advance pursuant to this Section 20, together with a reasonable accounting of
such expenses.
c. The Executive hereby undertakes and agrees to repay to the
Company any advances made pursuant to this Section 20 if and to the extent that
it shall ultimately be found that the Executive is not entitled to be
indemnified by the Company for such amounts.
d. The Company shall make the advances contemplated by this
Section 20 regardless of the Executive's financial ability to make repayment,
and regardless whether indemnification of the Indemnitee by the Company will
ultimately be required. Any advances and undertakings to repay pursuant to this
Section 20 shall be unsecured and interest-free.
e. The provisions of this Section 20 shall survive the
termination of this Agreement.
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21. Conflicts. In the event of any conflict between the terms hereof
---------
and the terms of the Stock Purchase Agreement between the Company and the
Executive, the terms of the Stock Purchase Agreement shall control.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
COMPANY:
By:/s/ Xxxxxxx X Xxxxx
--------------------------------
Name: Xxxxxxx X Xxxxx
Title:CFO
EXECUTIVE:
/s/ Xxxxx X. Xxx, Xx.
--------------------------------
Xxxxx X. Xxx, Xx.
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Appendix A
----------
Appendix A Salary levels as adjusted for Revenue
------------------------------------------------
Revenue CEO COO CFO Other Executive Officers
(Millions) (Salary in (not to exceed)
Thousands)
10-$25 $ 52 $ 47 $ 44 $ 40
25 - $35 $100 $ 90 $ 85 $ 80
35-$50 $150 $ 135 $128 $ 120
50-$75 $200 $ 180 $170 $ 160
75-$100 $225 $ 203 $191 $ 180
100+ (1) $250 . $225 $213 $ 200
(1) Set by Board with noted Minimum
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