Exhibit 10.3
INTERVOICE, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") executed as of September
5, 2003, and effective as of August 27, 2003, by and between Intervoice, Inc., a
Texas corporation with its principal executive offices at 00000 Xxxxxxxxx
Xxxxxxx, Xxxxxx, Xxxxx 00000 (the "Company"), and Xxxxx X. Xxxxxx (the
"Employee").
W I T N E S S E T H:
WHEREAS, the Employee and the Company desire to enter into this
Agreement to provide for certain terms and conditions of Employee's employment
by the Company.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and subject to the
terms and conditions hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS.
In addition to the words and terms elsewhere defined in this Agreement,
the following words and terms as used herein shall have the following meanings,
unless the context or use indicates a different meaning:
"Cause" means (a) any act by the Employee that is materially adverse to
the best interests of the Company and which, if the subject of a criminal
proceeding, could result in a criminal conviction for a felony or (b) the
willful failure by the Employee to substantially perform his duties hereunder,
which duties are within the control of the Employee (other than the failure
resulting from the Employee's incapacity due to physical or mental illness),
provided, however, that the Employee shall not be deemed to be terminated for
Cause under this subsection (b) unless and until (1) after the Employee receives
written notice from the Company specifying with reasonable particularity the
actions of Employee which constitute a violation of this subsection (b) and (2)
within a period of 30 days after receipt of such notice (and during which the
violation is within the control of the Employee), Employee fails to reasonably
and prospectively cure such violation.
"Common Stock" means the Company's common stock, no par value per
share.
An "Event of Default" means the occurrence of any of the following
events, unless remedied or otherwise cured within 30 days after the Company's
receipt of written notice from the Employee of such event, (a) a breach by the
Company of any of its express or implied obligations under this Agreement, (b)
without his prior concurrence, the Employee is assigned any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status at the commencement of the term of this Agreement, or
his reporting responsibilities or titles in effect at such time are changed, (c)
the Employee's base compensation is reduced or any other failure by the Company
to comply
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with Section 4, or (d) any change in any employee benefit plans or arrangements
in effect on the date hereof in which the Employee participates (including
without limitation any pension and retirement plan, savings and profit sharing
plan, stock ownership or purchase plan, stock option plan, or life, medical or
disability insurance plan), which would adversely affect the Employee's rights
or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Company.
2. EMPLOYMENT.
The Company hereby employs the Employee and the Employee hereby accepts
employment on the terms and conditions set forth herein.
3. TERM.
The initial term of this Agreement shall be from August 27, 2003 until
August 31, 2005 unless sooner terminated in accordance with the provisions
herein regarding termination. Subject to earlier termination as provided herein,
the initial term of this Agreement shall be automatically extended for one (1)
year from September 1, 2005, unless either the Employee or the Company gives
written notice to the other of its intention not to extend this Agreement six
months or more prior to August 31, 2005.
4. COMPENSATION.
(a) Base Salary. For all services rendered by the Employee under this
Agreement, the Company shall pay the Employee a base salary of $225,000 per
year. Such salary shall be payable in equal semi-monthly installments in
accordance with the customary payroll policies of the Company in effect at the
time such payment is made, or as otherwise mutually agreed upon. Effective as of
March 1 of each year during the term hereof, the Company's Chief Executive
Officer, in consultation with the Compensation Committee of the Company, shall
review Employee's performance for the prior fiscal year and make such
adjustments in base salary from time to time at their discretion as the Employee
and the Company may agree.
(b) Annual Bonus. As of the date this Agreement is executed, the
Company's executive officers are not eligible to earn a cash bonus as part of
their compensation. If and when all of the Company's other executive officers
become eligible to earn a cash bonus for any fiscal year or years, the Employee
will also become eligible to earn a cash bonus for the same fiscal year or
years. The terms of any plan for a cash bonus for any fiscal year during the
term of this Agreement will be structured by the Company such that if the plan
objectives are achieved at 100% (as 100% achievement is defined or otherwise
described under the terms of any such plan for a cash bonus), Employee will earn
a cash bonus equal to 50% of Employee's base salary for the full fiscal year, if
the cash bonus plan is in effect for the full fiscal year, or, if the cash bonus
plan is in effect for less than a full fiscal year, 50% of Employee's base
salary for the number of months during the fiscal year that the cash bonus plan
is in effect.
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(c) Bonus. In addition to the Employee's annual base salary and other
benefits provided for in this Agreement, the Company may pay to the Employee on
an annual basis a discretionary bonus in an amount to be approved by the Board
of Directors of the Company; provided, however, in no event shall the bonus
payable hereunder, if any, exceed Employee's annual base salary provided for in
Section 4(a).
(d) Benefits. The Employee shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made available
by the Company in the future to its executive officers and key management
personnel, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement. Nothing paid to the Employee
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary and bonuses (if any) payable
to the Employee pursuant to Subsections 4(a), (b) and (c).
(e) Stock Option. In consideration of the Employee's execution of this
Agreement, the Company has granted effective August 27, 2003 an option to
purchase an aggregate of 100,000 shares of the Company's Common Stock to the
Employee pursuant to the Company's 2003 Stock Option Plan (the "Stock Option").
The exercise price per share for the Stock Option is based on the arithmetic
average of the high and low trading prices for the Company's Common Stock on the
Nasdaq National Market on August 27, 20003. The Stock Option will vest in three
equal amounts on each of the first three anniversaries of the date the Stock
Option was granted. The Stock Option will be subject to the terms and conditions
of the stock option agreement attached as Exhibit A to this Agreement (the
"Stock Option Agreement").
(f) Expenses. Upon receipt of itemized vouchers, expense account
reports, and supporting documents submitted to the Company in accordance with
the Company's procedures from time to time in effect, the Company shall
reimburse Employee for all reasonable and necessary travel, entertainment, and
other reasonable and necessary business expenses incurred ordinarily and
necessarily by Employee in connection with the performance of his duties
hereunder.
(g) Vacation. For vacation purposes, the Employee shall be subject to
the Company's standard vacation policy based on his years of employment with the
Company.
5. POSITION, DUTIES, EXTENT OF SERVICES AND SITUS.
(a) Position and Duties. Employee shall serve as the Executive Vice
President and Chief Financial Officer of the Company, and report directly to the
Company's Chief Executive Officer and, subject to the authority of the Company's
Chief Executive Officer and Board of Directors, shall have such powers and
duties as may from time to time be prescribed by the Company's Chief Executive
Officer and/or Board of Directors, provided that such duties are reasonable and
customary for an Executive Vice President and Chief Financial Officer of a
public company.
(b) Extent of Services and Situs. The Employee shall devote
substantially all of his business time, attention, and energy to the business
and affairs of the Company and shall not during the term of his employment under
this Agreement engage in any other business activity which could
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constitute a conflict of interest, whether or not such business activity is
pursued for gain, profit, or other pecuniary advantage. This shall not be
construed as preventing the Employee from managing his current investments or
investing his assets in such form or manner as will not require any services on
the part of the Employee in the operation and the affairs of the companies in
which such investments are made, subject to the provisions of Sections 6 and 27.
The Employee shall not be required to change the principal place of his
employment to a location which is more than 15 miles further away from his
principal residence than such principal place of employment at the time of the
execution of this Agreement:
6. COVENANT NOT TO COMPETE.
(a) The Employee acknowledges that (i) as a result of his position and
tenure with the Company he will receive specialized and unique training and
knowledge concerning the Company, its business, its customers and the industry
in which it competes, (ii) the Company's business, in large part, depends upon
its exclusive possession and use of the Proprietary Information (as defined in
Section 27), (iii) the Company is entitled to protection against the
unauthorized disclosure or use by Employee of the Proprietary Information or the
training and knowledge received by the Employee and (iv) he has received in this
Agreement good and valuable consideration for the covenants he is making in this
Section 6 and in Section 27. The Company and the Employee acknowledge and agree
that the covenants contained in this Section 6 and in Section 27 are reasonably
necessary for the protection of the Company and are reasonably limited with
respect to the activities they prohibit, their duration, their geographical
scope and their effects on the Employee and the public. The parties acknowledge
that the purpose and effect of the covenants are to protect the Company from
unfair competition by the Employee.
(b) Except as provided in the last sentence of this Section 6(b),
during the period in which the Employee renders services to the Company under
this Agreement and for twelve (12) months thereafter, the Employee shall not,
without the written consent of the Company, own, manage, operate, control, serve
as an officer, director, employee, partner or consultant of or be connected in
any way with or have any interest in any corporation, partnership,
proprietorship or other entity which carries on business activities in
competition with the Company's activities in any state of the United States or
in any foreign country in which the Company has sold or installed its products
or systems or has definitive plans to sell or install its products at any time
prior to or at the time of the date of termination of the Employee's employment;
except that the Employee may own up to 1% of the shares of any publicly-owned
corporation, provided that none of his other relationships with such corporation
violates such covenant. Notwithstanding the foregoing, the provisions of this
Section 6 shall not apply if the Employee's employment with the Company is
terminated during the term of this Agreement by the Company, unless the Employee
is terminated in accordance with Section 7 or for Cause in accordance with
Subsection 9(a).
(c) The Company and the Employee hereby agree that in the event that
the noncompetition covenants contained herein should be held by any court or
other constituted legal authority of competent jurisdiction to be effective in
any particular area or jurisdiction only if said covenants are modified to limit
their duration, geographical area or scope, then the parties hereto will
consider Section 6 to be amended and modified with respect to that particular
area or jurisdiction so
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as to comply with the order of any such court or other constituted legal
authority and, as to all other jurisdictions or political subdivisions thereof,
the noncompetition covenants contained herein will remain in full force and
effect as originally written. The Company and the Employee further agree that in
the event that the noncompetition covenants contained herein should be held by
any court or other constituted legal authority of competent jurisdiction to be
void or otherwise unenforceable in any particular area or jurisdiction
notwithstanding the operation of this Section 6(c), then the parties hereto will
consider this Section 6 to be amended and modified so as to eliminate therefrom
that particular area or jurisdiction as to which such noncompetition covenants
are so held void or otherwise unenforceable, and, as to all other areas and
jurisdictions covered by the noncompetition covenants, the terms and provisions
hereof shall remain in full force and effect as originally written.
(d) Employee recognizes and acknowledges that the Company would suffer
irreparable harm and substantial loss if Employee violated any of the terms and
provisions of this Section 6 or Section 27 and that the actual damages which
might be sustained by the Company as the result of any breach of this Section 6
or Section 27 would be difficult to ascertain. Employee agrees, at the election
of the Company and in addition to, and not in lieu of, the Company's right to
terminate Employee's employment and to seek all other remedies and damages which
the Company may have at law and/or equity for such breach, that the Company
shall be entitled to an injunction restraining Employee from breaching any of
the terms or provisions of this Section 6 or Section 27.
7. COMPENSATION IN THE EVENT OF DISABILITY.
(a) Disability. If the Employee becomes disabled during the term of
this Agreement the Company shall cause to be paid to the Employee an amount
equal to his base salary in effect at the time of disability under Subsection
4(a), for the shorter of the duration of the disability or the remainder of the
term of this Agreement and, subject to the provisions of Sections 22 and 25,
with no liability on its part for further payments to the Employee during the
duration of the disability. Subject to Subsection 7(b) below, full compensation
shall be reinstituted upon his return to employment and resumption of his
duties. For purposes of this Subsection 7(a) the Employee shall be deemed
"disabled" when he is unable, for a period of 90 consecutive days, to perform
his normal duties of employment due to bodily injury or disease or any other
physical or mental disability.
(b) Complete Disability. The Company shall have the right to terminate
the Employee's employment under this Agreement prior to the expiration of the
term upon the "Complete Disability" of the Employee as hereinafter defined
(provided, however, that upon any termination by the Company for Complete
Disability the Company shall comply with its obligations pursuant to Section 10
of this Agreement). The term "Complete Disability" as used in this Subsection
7(b) shall mean (i) the total inability of the Employee, despite any reasonable
accommodations required by law, due to bodily injury or disease or any other
physical or mental incapacity, to perform the services provided for hereunder
for a period of 120 days, in the aggregate, within any given period of 180
consecutive days during the term of this Agreement in addition to any
statutorily required leave of absence, and (ii) where such inability will, in
the opinion of a qualified physician (reasonably acceptable to Employee), be
permanent and continuous during the remainder of his life.
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8. COMPENSATION IN THE EVENT OF DEATH.
If the Employee dies during the term of this Agreement, the Company
shall pay to such person as the Employee shall designate in a notice filed with
the Company, or, if no such person shall be designated, to his estate as a death
benefit, the Remaining Compensation, and otherwise, comply with the Company's
obligations under Section 10 (other than the Company's obligations under
subsection 10(ii)), in addition to any payments the Employee's spouse,
beneficiaries, or estate may be entitled to receive pursuant to any pension or
employee benefit plan or life insurance policy maintained by the Company, and,
except for any obligations of the Company under Sections 22 and 25, all other
obligations of the Company hereunder shall cease at the time of the Employee's
death.
9. TERMINATION.
(a) Upon at least 30 days' prior written notice to the Employee, the
Company may terminate the Employee's employment with the Company under this
Agreement only for Cause or in accordance with Section 7 and, subject to the
provisions of Sections 7, 22 and 25 (and Section 10 solely with respect to a
termination pursuant to Section 7), with no liability on its part for further
payments to the Employee. The Company may effect a termination for Cause
pursuant to this Subsection 9(a) only by the affirmative vote of a majority of
the members of the Board of Directors of the Company. In voting upon such
termination for Cause, if the Employee is later elected as a member of the Board
of Directors of the Company, then he may not vote on, and will not be considered
present for any purpose with respect to, a matter presented to the Board of
Directors of the Company pursuant to this Subsection 9(a).
(b) The Employee may terminate his employment with the Company under
this Agreement by giving at least 90 days' prior written notice of his desire to
terminate employment to the Board of Directors of the Company. If the Employee's
employment with the Company under this Agreement is terminated pursuant to this
Subsection 9(b), the Employee will continue to accrue and receive his base
salary in effect at the time pursuant to Subsection 4(a) through the date of
termination with no liability on the part of the Company for further payments to
the Employee, subject to the provisions of Sections 22 and 25.
(c) If the Employee's employment with the Company is terminated by the
Company without Cause or if the Employee terminates his employment with the
Company following the occurrence of an Event of Default which has not been
waived in writing by the Employee, the Employee will continue to accrue and
receive his base salary in effect at the time pursuant to Subsection 4(a)
through the date of termination and will be entitled to receive the benefits
provided for under Section 10 with no liability on the part of the Company for
further payments to the Employee, subject to the provisions of Sections 7, 22
and 25.
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10. COMPENSATION AFTER CERTAIN TERMINATIONS.
If the Employee's employment with the Company is terminated at any time
for any reason during the term of this Agreement other than (a) termination by
the Company for Cause in accordance with Subsection 9(a) or (b) termination at
the election of the Employee pursuant to Subsection 9(b), then, (i) within five
days after the date of such termination, the Remaining Compensation (as herein
defined) shall become due and payable and shall be paid to the Employee in a
single lump sum in cash, and (ii) except for a termination of this Agreement
caused by the Employee's death and subject to the last sentence of this Section
10, thirty-three thousand three hundred thirty three (33,333) shares of Common
Stock covered by the Stock Option described in subsection 4(e), that are not
then exercisable by the Employee shall, notwithstanding the provisions of any
other agreement, become immediately exercisable at the close of business on such
date of termination and remain exercisable until they are exercised or otherwise
would expire in accordance with the terms of the Stock Option Agreement. For
purposes of this Section 10, the "Remaining Compensation" shall mean the annual
base salary payable to the Employee for one calendar year pursuant to Subsection
4 (a) at the time of termination. For any termination for which the Remaining
Compensation becomes due and payable to Employee or his estate, the Company will
pay, for a period of twelve (12) months following the month in which the
termination of employment occurs, for the Company's group health insurance
coverage for Employee and any covered dependents as in effect on such date of
termination, to the same extent as if the Employee had continued as an employee;
provided, however, that the Company's obligation in this regard shall terminate
at such earlier date as the Employee and the Employee's family members who are
then under the Company's coverage have become eligible and qualified for
comparable coverage (including any preexisting-condition requirements) under
another employer's plan. To receive this coverage, the Employee must make a
COBRA election in accordance with the Company's policy for COBRA elections. The
Company may, in its sole discretion, and in lieu of accelerating the date that
33,333 shares of Common Stock become exercisable under the Stock Option pursuant
to subsection 10 (ii) above, send a written notice to Employee on such date of
termination that it will pay, and pay, within five (5) business days of such
date of termination, the Employee an amount in a single lump sum in cash equal
to the annual base salary payable to the Employee for one calendar year pursuant
to subsection 4(a), which payment will be in addition to the Company's
obligation to pay the Employee the Remaining Compensation.
11. MITIGATION.
The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Agreement be reduced by
any compensation earned by the Employee as the result of employment by another
employer after the date of termination of Employee's employment with the
Company, or otherwise.
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12. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior negotiations, agreements, and understandings relating to such subject
matter, and may be modified or amended only by an instrument in writing signed
by the parties hereto.
13. LAW TO GOVERN.
This Agreement is executed and delivered in the State of Texas and
shall be governed, construed and enforced in accordance with the laws of the
State of Texas.
14. ASSIGNMENT.
This Agreement is personal to the parties, and neither this Agreement
nor any interest herein may be assigned (other than by will or by the laws of
descent and distribution) without the prior written consent of the parties
hereto nor be subject to alienation, anticipation, sale, pledge, encumbrance,
execution, levy, or other legal process of any kind against the Employee or any
of his beneficiaries or any other person. Notwithstanding the foregoing, the
Company shall be permitted to assign this Agreement to any corporation or other
business entity succeeding to substantially all of the business and assets of
the Company by merger, consolidation, sale of assets, or otherwise, if the
Company obtains the assumption of this Agreement by such successor.
15. BINDING AGREEMENT.
Subject to the provisions of Section 14 of this Agreement, this
Agreement shall be binding upon and shall inure to the benefit of the Company
and the Employee and their respective representatives, successors, and assigns.
16. REFERENCES AND GENDER.
All references to "Sections" and "Subsections" contained herein are,
unless specifically indicated otherwise, references to sections and subsections
of this Agreement. Whenever herein the singular number is used, the same shall
include the plural where appropriate, and words of either gender shall include
the other gender where appropriate.
17. WAIVER.
No waiver of any right under this Agreement shall be deemed effective
unless the same is set forth in writing and signed by the party giving such
waiver, and no waiver of any right shall be deemed to be a waiver of any such
right in the future.
18. NOTICES.
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Except as may be otherwise specifically provided in this Agreement, all
notices required or permitted hereunder shall be in writing and will be deemed
to be delivered when deposited in the United States mail, postage prepaid,
registered or certified mail, return receipt requested, or deposited with
Federal Express courier service for next day delivery, addressed to the party or
parties at 00000 Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000, or at such other
addresses as may have theretofore been specified by written notice delivered in
accordance herewith.
19. OTHER INSTRUMENTS.
The parties hereto covenant and agree that they will execute such other
and further instruments and documents as are or may become necessary or
convenient to effectuate and carry out the terms of this Agreement.
20. HEADINGS.
The headings used in this Agreement are used for reference purposes
only and do not constitute substantive matter to be considered in construing the
terms of this Agreement.
21. INVALID PROVISION.
Any clause, sentence, provision, section, subsection, or paragraph of
this Agreement held by a court of competent jurisdiction to be invalid, illegal,
or ineffective shall not impair, invalidate, or nullify the remainder of this
Agreement, but the effect thereof shall be confined to the clause, sentence,
provision, section, subsection, or paragraph so held to be invalid, illegal or
ineffective.
22. RIGHTS UNDER PLANS AND PROGRAMS.
Anything in this Agreement to the contrary notwithstanding, no
provision of this Agreement is intended, nor shall it be construed, to reduce or
in any way restrict any benefit to which the Employee may be entitled under any
other agreement, plan, arrangement, or program providing benefits for the
Employee.
23. MULTIPLE COPIES.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument. The terms of this Agreement
shall become binding upon each party from and after the time that he or it
executed a copy hereof. In like manner, from and after the time that any party
executes a consent or other document, such consent or other document shall be
binding upon such parties.
24. WITHHOLDING OF TAXES.
The Company may withhold from any amounts payable under this Agreement
all federal, state, city, or other taxes as shall be required pursuant to any
law or government regulation or ruling.
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25. LEGAL FEES AND EXPENSES.
The Company shall pay and be responsible for all legal fees and
expenses which the Employee may incur as a result of the Company's failure to
perform under this Agreement or as a result of the Company or any successor
contesting the validity or enforceability of this Agreement.
26. SET OFF OR COUNTERCLAIM.
Except with respect to any claim against or debt or other obligation of
the Employee properly recorded on the books and records of the Company, there
shall be no right of set off or counterclaim against, or delay in, any payment
by the Company to the Employee or his beneficiaries provided for in this
Agreement in respect of any claim against or debt or other obligation of the
Employee, whether arising hereunder or otherwise.
27. ASSIGNMENT, PROTECTION AND CONFIDENTIALITY OF PROPRIETARY INFORMATION.
Employee acknowledges and agrees that all items of the Company's
Proprietary Information constitute valuable, special and unique assets and trade
secrets of its business, which provide to the Company a competitive advantage
over others who do not have access thereto and access to which is essential to
the performance of Employee's duties hereunder. Employee shall not, during the
term of this Agreement or thereafter, use or disclose any Proprietary
Information that is not otherwise publicly available, in whole or in part, for
his benefit or for the benefit of any other person or party, except for the
Company. As used herein, "Proprietary Information" includes, but is not limited
to, customer lists and prices, whether current or prospective, product designs
or other product information, experimental developments and other research and
development information, testing processes, marketing studies and research
activities, and any other trade secrets concerning the Company, its
shareholders, officers, directors, employees, business prospects, customers,
transactions, finances, affairs, opportunities, operations, properties or
assets. The Employee further agrees that all inventions, devices, compounds,
processes, formulas, techniques, improvements and modifications which he may
develop, in whole or in part, during the term of his employment or through or
with the facilities, equipment or resources of the Company shall be and remain
the sole and exclusive property of the Company. The Employee agrees to deliver
to the Company at any time the Company may request, all memoranda, notes, plans,
records, reports, and other documents (including copies thereof and all
embodiments thereof whether in computerized form or any other medium) relating
to the business or affairs of the Company or its subsidiaries which he may then
possess or have under his control. Employee shall maintain in good condition all
tangible and other forms of Proprietary Information in Employee's custody or
control until his obligations under the preceding sentence are satisfied.
Employee agrees to execute all documents and take such other actions as may be
required to comply with this Section.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
INTERVOICE, INC.
By: /s/ XXXXX X. XXXXXXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Chairman of the Board
and Chief Executive Officer
/s/ XXXXX X. XXXXXX
---------------------------
XXXXX X. XXXXXX
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