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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, is made and entered into as of the 24th day of
October, 1996, by and between TEMPLATE SOFTWARE, INC., a Virginia corporation
(the "Company") and Xxxxxx X. Xxx (the "Executive").
RECITALS
A. The Company desires to retain Executive to provide the services
hereinafter set forth.
B. Executive is willing to provide such services to the Company on
the terms and conditions hereinafter set forth.
AGREEMENT
In consideration of the promises and the terms and conditions set forth in
this Agreement, the parties agree as follows:
1. EMPLOYMENT AND TERM. The Company agrees to employ the Executive and
the Executive agrees to work for the Company, subject to the terms and
conditions below, for a term of two years, beginning October 24, 1996, and
ending October 23, 1998.
2. COMPENSATION; BENEFITS. Subject to the terms and conditions of this
Agreement, the Company shall pay to the Executive a base salary as set forth on
Schedule A, attached hereto and made a part hereof, payable in accordance with
the Company's regular payroll policies. In addition to this base salary, the
Executive shall be entitled to the benefits and bonuses described on Schedule
A, subject to the terms and conditions described therein. In addition, the
Executive shall be entitled to receive such other benefits including, but not
limited to, vacation, holidays and sick leave, as the Company generally
provides to its employees holding similar positions as that of the Executive.
Notwithstanding the foregoing, the Company reserves the right to adopt, amend
or discontinue any employee benefit plan or policy in accordance with
then-applicable law.
3. DUTIES. The Executive shall initially be employed as Chairman. The
Executive shall diligently and conscientiously devote his full time and
attention and his best efforts to discharge the duties assigned to him by the
Company. The Executive shall perform such duties as may be assigned to him
from time to time by the Company's Board of Directors.
4. RIGHT TO CONTRACT; CONFLICT OF INTEREST. The Executive hereby
represents and warrants to the Company that (i) he has full right and authority
to enter into this Agreement and to perform his obligations hereunder, and (ii)
the execution and delivery of this Agreement by the Executive and the
performance of the Executive's obligations hereunder will not conflict with or
breach any agreement, order or decree to which the Executive is a party or by
which he is bound. During the term of this Agreement, the Executive shall not
directly or indirectly consult, advise, be retained or employed by, or in any
manner perform any service with any other business or entity engaged in a like
or competing business to that of the Company without first obtaining consent in
writing from the Company.
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5. TRANSFER BY COMPANY. If at any time during the term of this Agreement,
the Company transfers the Executive to another location, the Company will
reimburse the Executive for all reasonable moving expenses incurred as a result
of such transfer. In the event that the Executive terminates this Agreement
without cause pursuant to Section 8 hereof within one year after any such
transfer, the Executive shall refund to the Company all amounts paid to him by
the Company as moving expenses (including temporary housing and incidental
expenses) pursuant to this Section 5. The Executive agrees that any amounts
owing to the Company under this Section 5 may be deducted from any salary,
bonuses or other amounts owed to him by the Company, consistent with applicable
law.
6. TERMINATION BY THE COMPANY.
(a) The Company shall have the right to terminate this Agreement with
or without cause at any time during the term of this Agreement by giving
written notice to the Executive. The termination shall become effective on the
date specified in the notice, which termination date shall not be a date prior
to the date 5 days following the date of the notice of termination itself. In
the event that the Executive is terminated for cause, the Company shall pay the
Executive salary through the day on which such termination is effective. In
the event that the Executive is terminated without cause, the Company shall pay
to the Executive compensation equal to the greater of (i) the compensation due
to Executive through the end of the term of this Agreement, and (ii) twelve
(12) months of the Executive's salary and bonus accrued of the effective date
of termination.
(b) For purposes of this Section 6, "cause" shall mean (i) a material
breach by the Executive of any covenant or condition hereunder; (ii) a material
neglect of duty by the Executive; or (iii) the commission by the Executive of
any act or omission constituting gross negligence, dishonesty, fraud, immoral
or disreputable conduct which is, or in the reasonable opinion of the Company's
Board of Directors is likely to be, harmful to the Company or its reputation.
7. TERMINATION BY DEATH OR DISABILITY OF THE EXECUTIVE.
(a) In the event of the Executive's death during the term of this
Agreement, all obligations of the parties hereunder shall terminate
immediately, and the Company shall pay to the Executive's beneficiary or
estate, the salary and other compensation due the Executive through the day on
which his death shall have occurred.
(b) If the Executive is unable to perform his duties hereunder due to
mental, physical or other disability for a period of 90 consecutive business
days, as determined by the Company, or for 90 business days in any period of 12
consecutive months, this Agreement may be terminated by the Company, at its
option, by written notice to the Executive, effective on the termination date
specified in such notice, provided such termination date shall not be a date
prior to the date of the notice of termination itself. In this case, the
Company will pay the Executive the salary and other compensation due him
through the day on which such termination is effective.
8. TERMINATION BY THE EXECUTIVE.
(a) The Executive may voluntarily terminate this Agreement at any
time, with or without cause, by giving 30 days written notice to the Company.
Any such termination, if without cause, shall become effective on the date
specified in such notice, provided that the Company may elect to have such
termination become effective on a date after, but not more than 14 days after,
the date of the notice. If
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such termination is with cause, it shall become effective on the 30 days after
the date of such notice, provided the Company has failed to cure the cause
specified in the notice.
(b) After the date of any such termination, the Executive shall be
entitled to the salary due him through the day on which such termination
becomes effective, unless such termination was for cause, in which case he
shall be entitled to receive from the Company compensation equal to the
compensation the Executive would have received had the Company terminated this
Agreement without cause pursuant to Section 6(a).
(c) In the event the Executive terminates this Agreement without
cause, or the Company terminates this Agreement with cause, in either case
within one year after the commencement of the Executive's employment with the
Company, the Executive shall refund to the Company all amounts, if any, paid
him by the Company as moving expenses (including temporary housing and
incidental expenses). The Executive agrees that any amounts owing to the
Company as moving expenses under this Section 8 may be deducted from any salary
or bonuses owed to him by the Company, consistent with applicable law.
(d) For purposes of this Section 8, "cause" shall mean a material
failure by the Company to perform its obligations under this Agreement.
9. SUSPENSION. In the event the Company has reasonable cause to believe
that there exists cause for termination of this Agreement as defined in Section
6, immediately upon written notice to the Executive, the Company may but shall
not be obligated to suspend the Executive, with pay, for a period not to exceed
four (4) weeks, either as a disciplinary measure or in order to investigate the
Company's belief that such cause exists. No such suspension shall prevent the
Company from thereafter exercising its rights to terminate this Agreement in
accordance with its terms.
10. NON-COMPETITION AND NON-SOLICITATION.
(a) Non-Competition. The Executive agrees that, during his employment
hereunder, and for a period of two (2) months after the later of (i) the
effective date of termination of this Agreement, (ii) the date on which the
Executive's period of compensated severance hereunder expires, or (iii) the
date of entry by a court of competent jurisdiction of a final judgment
enforcing this covenant, he will not, in any geographic area where the Company
engages in its Business (as defined below) or maintains sales or service
representatives or employees:
(A) compete with the Company, or any subsidiary or affiliate of
the Company;
(B) interfere with or disrupt, or attempt to interfere with or
disrupt, the relationship, contractual or otherwise, between the Company, or
any subsidiary or affiliate of the Company, and any customer, supplier or
employee of the Company, or any such subsidiary or affiliate;
(b) Non-Solicitation. The Executive agrees that, during his
employment hereunder, and for a period of two (2) years after the later of (i)
the effective date of termination of this Agreement, (ii) the date on which the
Executive's period of compensated severance hereunder expires, or (iii) the
date of entry by a court of competent jurisdiction of a final judgment
enforcing this covenant, he will not offer employment to any current employee
of the Company or solicit (directly or indirectly, either individually
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or in connection with any employer or other business partner) any current
employee of the Company to accept employment elsewhere.
(c) The following terms, as used in this Section 10 shall have the
meanings set forth below:
(A) The term "compete" means to engage in competition, directly or
indirectly, individually or through a family member or other person acting on
the Executive's behalf, as an employee, officer, director, proprietor, partner
or stockholder or other security holder (other than of a corporation listed on
a national securities exchange or the securities of which are regularly traded
in the over-the-counter market, provided that the Executive at no time owns in
excess of 5% of the outstanding securities of such corporation entitled to vote
for the election of directors) of any firm, corporation or entity of any nature
whatsoever.
(B) The term "affiliate" means any person, firm or corporation,
directly or indirectly through one or more intermediaries, controlling,
controlled by or under common control with the Company.
(d) The Executive further acknowledges that this Section 10 is an
independent covenant within this Agreement, and that this covenant shall
survive any termination of Agreement and shall be treated as an independent
covenant for the purposes of enforcement. With respect to this covenant, the
Executive hereby acknowledges receipt of Ten Dollars ($10.00) and other good
and valuable consideration stated herein including the consideration of his
continued employment by the Company.
(e) The Executive shall, during the term of this Agreement and
thereafter, notify any prospective employer of the terms and conditions of this
Agreement regarding confidentiality, non-disclosure and non-competition.
11. CONFIDENTIALITY AND NON-DISCLOSURE
(a) The Executive shall hold in strict confidence and shall not,
either during the term of this Agreement or after the termination hereof,
disclose, directly or indirectly, to any third party, person, firm, corporation
or other entity, irrespective of whether such person or entity is a competitor
of the Company or is engaged in a business similar to that of the Company, any
trade secrets or other proprietary or confidential information of the Company
or any subsidiary or affiliate (as defined in Section 10) of the Company
obtained by the Executive from or through his employment hereunder. The
Executive hereby acknowledges and agrees that all proprietary information
referred to in this Section 11 shall be deemed trade secrets of the Company and
of its subsidiaries and affiliates, as defined in Section 10, and that the
Executive shall take such steps, undertake such actions and refrain from taking
such other actions, as mandated by the provisions hereof and by the provisions
of the Virginia Uniform Trade Secret Act. Executive further acknowledges that
the Company's products and titles consist of copyrighted material, and
Executive shall exercise his best efforts to prevent the use of such
copyrighted material by any person or entity which has not prior thereto been
authorized to use such information by the Company.
(b) The Executive further hereby agrees and acknowledges that any
disclosure of any proprietary information prohibited herein, or any breach of
the provisions of Sections 4 or 10 of this Agreement, may result in irreparable
injury and damage to the Company which will not be adequately compensable in
monetary damages, that the Company will have no adequate remedy at law
therefor, and that the Company may obtain such preliminary, temporary or
permanent mandatory or restraining
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injunctions, orders or decrees as may be necessary to protect the company
against, or on account of, any breach by the Executive of the provisions
contained in Sections 4, 10 or 11.
(c) The Executive further agrees that, upon termination of this
Agreement, whether voluntary or involuntary or with or without cause, the
Executive shall notify any new employer, partner, associate or any other firm
or corporation with whom the Executive shall become associated in any capacity
whatsoever of the provisions of this Section 11, and that the Company may give
such notice to such firm, corporation or other person.
12. ASSIGNMENT AND DISCLOSURE OF INVENTIONS.
(a) From and after the date the Executive first became employed with
the Company, the Executive hereby agrees to promptly disclose in confidence to
the Company all inventions, improvements, designs, original works of
authorship, formulas, processes, compositions of matter, computer software
programs, databases, mask works, and trade secrets ("Inventions"), whether or
not patentable, copyrightable or protectible as trade secrets, that are made or
conceived or first reduced to practice or created by the Executive, either
alone or jointly with others, during the period of the Executive's employment,
whether or not in the course of the Executive's employment.
(b) The Executive hereby acknowledges that copyrightable works
prepared by the Executive within the scope of the Executive's employment are
"works for hire" under the Copyright Act and that the Company will be
considered the author thereof. The Executive hereby agrees that all Inventions
that (a) are developed using equipment, supplies, facilities or trade secrets
of the Company, (b) result from work performed by the Executive for the
Company, or (c) relate to the Company's business or current or anticipated
research and development, will be the sole and exclusive property of the
Company and are hereby assigned by the Executive to the Company.
13. SEVERABILITY. The Company and the Executive recognize that the laws
and public policies of the Commonwealth of Virginia are subject to varying
interpretations and change. It is the intention of the Company and of the
Executive that the provisions of this Agreement shall be enforced to the
fullest extent permissible under the laws and public policies of the
Commonwealth of Virginia, but that the unenforceability (to the modification to
conform to such laws or public policies) of any provision or provisions hereof
shall not render unenforceable, or impair, the remainder of this Agreement.
Accordingly, if any provisions of this Agreement shall be determined to be
invalid or unenforceable, either in whole or in part, this Agreement shall be
deemed amended to delete or modify, as necessary, the offending provision or
provisions and to alter the balance of this Agreement in order to render it
valid and enforceable.
14. ASSIGNMENT. Neither the rights nor obligations under this Agreement
may be assigned by either party, in whole or in part, by operation of law or
otherwise, except that it shall be binding upon and inure to the benefit of any
successor of the Company and its subsidiaries and affiliates, whether by
merger, reorganization or otherwise, or any purchaser of all or substantially
all of the assets of the Company.
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15. NOTICES. Any notice expressly provided for under this Agreement shall
be in writing, shall be given either manually or by mail and shall be deemed
sufficiently given when actually received by the party to be notified or when
mailed, if mailed by certified or registered mail, postage prepaid, addressed
to such party at their addresses as set forth below. Either party may, by
notice to the other party, given in the manner provided for herein, change
their address for receiving such notices.
(a) If to the Company, to:
Template Software, Inc.
00000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attn: President
with a copy to:
Hunton & Xxxxxxxx
0000 Xxxxxxxx Xxxxx, Xxxxx 0000
XxXxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esquire
(b) If to the Executive, to
Xxxxxx X. Xxx
c/o Template Software, Inc.
00000 Xxxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
16. GOVERNING LAW. This Agreement shall be executed, construed and
performed in accordance with the laws of the Commonwealth of Virginia without
reference to conflict of laws principles.
17. HEADINGS. The section headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
18. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes and embodies
the entire agreement between the parties in connection with the subject matter
hereof and supersedes all prior and contemporaneous agreements and
understandings in connection with such subject matter. No covenant or
condition not expressed in this Agreement shall affect or be effective to
interpret, change or restrict this Agreement. In the event of a conflict or
inconsistency between the terms of this Agreement and the Company's policies
regarding employees, the terms of this Agreement shall supersede the
conflicting or inconsistent Company policies. No change, termination or
attempted waiver of any of the provisions of this Agreement shall be binding
unless in writing signed by the Executive and on behalf of the Company by an
officer thereunto duly authorized by the Company's Board of Directors. No
modification, waiver, termination, rescission, discharge or cancellation of
this Agreement shall affect the right of any party to enforce any other
provision or to exercise any right or remedy in the event of any other default.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
TEMPLATE SOFTWARE, INC.
By: /s/ E. L. XXXXXX
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Name: E. L. Xxxxxx
-----------------------------------
Title: CEO
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Date: 11/13/96
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EXECUTIVE:
/s/ XXXXXX X. XXX
----------------------------------------
Xxxxxx X. Xxx
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SCHEDULE A
1. Salary to be established by the Board of Directors.
2. Bonus compensation in an amount to be determined annually by the Board of
Directors.
3. Current annual salary is $170,000 for FY 1996.
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