Exhibit 10.3
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AGREEMENT AND NON-COMPETITION AGREEMENT
("Agreement") is made and entered into as of the 4th day of December, 1999,
by and between PRIMIS, INC., a Georgia corporation (the "Company"), and XXXXX
X. XXXXXX, an individual ("Employee").
RECITAL:
Employee desires to be employed by the Company and the Company desires
to employ Employee on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed by and between the
parties hereto as follows:
1. EMPLOYMENT. The Company hereby employs Employee and Employee
accepts employment by the Company and agrees to serve the Company, upon the
terms and conditions hereinafter set forth.
2. TERM. Employee's employment shall be for a term commencing
on the date hereof and ending on December 4, 2003, unless Employee's
employment terminates prior thereto as provided in Section 7 (the "Term").
Thereafter, this Agreement shall continue in full force and effect, except
that Section 7 shall no longer be applicable, and either party hereto may
terminate Employee's employment hereunder upon ninety (90) days prior written
notice to the other.
3. DUTIES. Employee shall be employed by the Company as Vice
President of Operations. So long as he is employed hereunder, Employee agrees to
devote his full business time and energy to the business and affairs of the
Company, to perform his duties hereunder to the best of his ability and at a
level of competency consistent with the position occupied, to act on all matters
in a manner he reasonably believes to be in and not opposed to the best
interests of the Company, to use his best efforts, skill and ability to promote
the profitable growth of the Company, and to perform such other duties as may be
assigned to him by the Company's Chief Executive Officer, Chairman or by the
Company's Board of Directors ("Board") from time to time.
Employee may volunteer his service to charitable, business and
other public service agencies, clubs or organizations; provided, however, that
such volunteer activities shall not involve substantial amounts of Employee's
time and shall in no way interfere or detract from the performance of Employee's
duties to be performed hereunder.
4. COMPENSATION AND BENEFITS. For all services rendered by
Employee, the Company shall pay compensation and provide benefits to Employee as
follows:
A. SALARY. The Company shall pay Employee an annual
salary ("Salary") of One Hundred Seventy-Five Thousand Dollars ($175,000),
payable not less frequently than monthly. At least once every twelve (12) months
the Board shall review Employee's Salary and make such adjustments to the Salary
as it reasonably deems appropriate, provided that the Salary shall not be
reduced.
B. INCENTIVE CASH BONUS. Within seventy-five (75) days
after the end of fiscal year 2000 of the Company, the Company shall determine,
and if appropriate, pay Employee a cash bonus (the "Incentive Cash Bonus"), in
an amount not to exceed One Hundred Five Thousand Dollars ($105,000), prorated
for the portion of such fiscal year that Employee was employed by the Company,
if, and only if, Employee achieves specific goals concerning the financial or
other performance of the Company as established by the Board after consultation
with the Employee within sixty (60) days from the later of the date of this
Agreement or the start of such fiscal year. Within seventy-five (75) days after
the end of each fiscal year thereafter, Company shall determine, and if
appropriate, pay Employee an Incentive Cash Bonus, in an amount not to exceed
One Hundred Five Thousand Dollars ($105,000), determined by and in the
reasonably exercised discretion of the Board and based upon the Employee's
achievement of specific goals concerning the financial or other performance of
the Company for such fiscal year, previously established by the Board after
consultation with the Employee.
C. SIGNING BONUS. Within forty-five (45) days after the
date Employee first begins employment with the Company hereunder, the Company
shall pay Employee a cash bonus of Twenty Thousand Dollars ($20,000).
D. BUSINESS EXPENSES. The Company shall reimburse
Employee for his reasonable direct out-of-pocket ordinary and necessary
expenses, including trade association dues, if any, incurred by Employee in the
performance of his services hereunder and for which Employee properly accounts
in accordance with the Company's regulations and procedures in effect from time
to time.
E. ADDITIONAL BENEFITS. Employee shall be entitled to
participate on the same terms and conditions as employees similarly situated in
any and all employee retirement, medical, life and disability insurance,
vacation and other benefits plans and perquisites as may be established and in
effect from time to time and made available to employees of the Company.
5. STOCK OPTIONS. Subject to approval of the Company's Board of
Directors, Company shall grant to Employee, pursuant to the terms of the Stock
Option Agreement to be entered into by the Company and Employee as of the date
hereof substantially in the form attached hereto as EXHIBIT A, an option to
purchase 150,000 shares of common stock of the Company at an exercise price of
$10.00 per share, to vest as follows: 37,500 of the option shares shall vest and
Employee may exercise his option to purchase such shares on and after one (1)
year from the date hereof; 37,500 of the option shares shall vest and
Employee may exercise his option to purchase such shares on and after two (2)
years from the date hereof; 37,500 of the option shares shall vest and
Employee may exercise his option to purchase such shares on and after three
(3) years from the date hereof; 37,500 of the option shares shall vest and
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Employee may exercise his option to purchase such shares on and after four
(4) years from the date hereof.
Without any representation or warranty by or on the part of the
Company, to the extent any of the option shares of the options granted or
potentially granted to Employee pursuant to this Section 5 can, by the terms set
forth above, qualify as incentive stock options under the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the parties hereto
intend that the same shall be treated as incentive stock options, and to the
extent any or all of the options shares cannot qualify as incentive stock
options under the Code, the parties hereto intend that the same shall be treated
as nonstatutory options.
6. WITHHOLDING. The Company shall be authorized to deduct and
withhold from Employee's compensation such sums as are required by law to be
deducted and withheld.
7. EVENTS CAUSING TERMINATION OF EMPLOYMENT. Employee's
employment with the Company shall terminate prior to the expiration of the Term,
without further obligation on the part of the Company, except as provided in
this Agreement, upon the occurrence of any of the following events:
A. The voluntary resignation of Employee;
B. The death of Employee;
C. The discharge of Employee for neglect injurious to
the Company, breach of fiduciary duty to the Company involving personal profit,
misconduct, dishonesty or fraud on Employee's part in connection with the
performance of any duties hereunder;
D. The discharge of Employee for a material breach by
Employee of any of the terms of Sections 9, 10, 12 or 14 of this Agreement;
E. The discharge of Employee upon a determination by the
Board, acting in good faith and with reasonable justification, that Employee's
performance in his position as Vice President of Operations of the Company has
been unsatisfactory, after first having given written notice to the Employee
that his performance has been unsatisfactory (which notice shall set forth in
reasonable detail the nature of the unsatisfactory performance), and Employee
having failed to cure such unsatisfactory performance within thirty (30) days
thereafter to the reasonable satisfaction of the Company;
F. The discharge of Employee upon a determination of the
Board, acting in good faith, that Employee has been unable, for any continuous
period of at least three (3) months, or for shorter periods aggregating three
(3) months during any 12-month period, to perform his duties hereunder by reason
of injury, illness or other physical or mental disability; or
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G. The discharge of Employee for conviction of Employee
of a crime involving moral turpitude.
8. PAYMENTS TO EMPLOYEE UPON TERMINATION OF EMPLOYMENT.
A. Subject to the provisions of Sections 8(B) and 8(C)
below, in the event Employee's employment with the Company shall terminate
during the Term for any of the reasons set forth in Section 7, or thereafter
pursuant to Section 2: [i] Employee's Salary shall be prorated and paid through
the date of termination; and [ii] all unvested options to purchase common stock
of the Company shall cease and terminate as of the date of termination.
B. In the event of Employee's termination pursuant to
Section 7(B) or 7(F) hereof, Employee shall be entitled to receive, at such time
as it would otherwise be payable, any Incentive Cash Bonus which would have been
payable, based upon the Company's performance over the full fiscal year,
prorated for that portion of the fiscal year during which the Employee was
employed by the Company.
C. In the event of Employee's termination pursuant to
Section 7(F), the Company agrees to continue to pay Employee his full Salary
during such period of disability, said payments to continue for a maximum of six
(6) months. Thereafter, Employee shall be paid disability benefits pursuant to
the disability insurance, if any, established by the Company and in which
Employee participates pursuant to Section 4(E) of this Agreement.
9. COVENANTS NOT TO SOLICIT OR COMPETE.
A. NON-COMPETITION. Employee recognizes one of the
inducements for the Company to enter into this agreement of employment is the
understanding that there will be no competition or interference, directly or
indirectly, for a period of time after the termination of his employment with
the Company. Employee further recognizes and acknowledges that, in consideration
of the scope of the business of the Company and the nature of the services
Employee provides to the Company as its Vice President of Operations, and in
order to protect the Company's legitimate interests, Employee's covenant not to
compete must include each of the areas where the Company currently does
business, which areas include Alabama, Arizona, California, District of
Columbia, Florida, Georgia, Maryland, Michigan, North Carolina, Nevada, Ohio,
Oregon, Texas, Virginia, and Washington (collectively, the "Territory"), to the
extent Employee hereafter actively performs, supervises or assists in the
Company's business in such areas or has material contact with customers of the
Company within such areas. In consideration of the covenants herein, Employee
agrees that for the period he is employed by the Company (whether during the
Term or after the Term ends) and for a two-year period immediately following the
termination of his employment with the Company for any reason whatsoever, he
shall not, within the Territory, in any manner, directly or indirectly or by
assisting others, engage in any business which is the same or essentially the
same as the business of the Company, such business being the business of real
estate information services, including commercial and residential real estate
appraisals, title exams, flood certifications and credit
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reports, as an operations manager or as a supervisor, administrator, executive,
senior or management level employee, owner, proprietor, shareholder or
consultant; provided that Employee shall not be restricted from owning less than
3% of the outstanding shares of a company whose shares are publicly traded.
B. NON-SOLICITATION. Employee agrees that for the period
he is employed by the Company (whether during the Term or after the Term ends)
and for a two-year period immediately following the termination of his
employment with the Company for any reason whatsoever, he shall not (other than
in the regular course of the Company's business), within the Territory, solicit,
directly or indirectly, business of the type then being performed therein by the
Company from any person, partnership, corporation or other entity which [a] is a
customer of the Company within the Territory at the time Employee's employment
with the Company terminates, including an actively-sought prospective customer,
or [b] was such a customer within the two-year period immediately prior thereto,
provided that in the case of either [a] or [b], Employee had material contact
with such customer during and as a part or result of his employment with the
Company.
10. NON-INDUCEMENT AND NON-DISCLOSURE.
A. NON-INDUCEMENT. Employee agrees that for the period
he is employed by the Company (whether during the Term or after the Term ends)
and for a two-year period immediately following the termination of his
employment with the Company for any reason whatsoever, he shall not directly or
indirectly, individually or on behalf of persons not parties to this Agreement,
aid or endeavor to solicit or induce any of the Company's employees to leave
their employment with the Company in order to accept employment with Employee or
another person, partnership, corporation or other entity.
B. NON-DISCLOSURE. At no time shall Employee divulge,
furnish or make accessible to anyone (other than in the regular course of the
Company's business) any knowledge or information with respect to confidential
information or data of the Company, or with respect to any confidential
information or data of any of the customers of the Company, or with respect to
any other confidential aspect of the business or products or services of the
Company or its customers.
11. INJUNCTIVE RELIEF FOR BREACH: ENFORCEABILITY. Employee agrees
that Company may not be adequately compensated by damages for a breach by
Employee of any of the covenants contained in Sections 9 and 10, and that, in
addition to all other remedies, the Company shall be entitled to injunctive
relief and specific performance. In such event, the periods of time referred to
in Sections 9 and 10 shall be deemed extended for a period equal to the
respective period during which Employee is in breach thereof, in order to
provide for injunctive relief and specific performance for a period equal to the
full term thereof. The covenants contained in Sections 9 and 10 shall be
construed as separate covenants, and if any court shall finally determine that
the restraints provided for in any such covenants are too broad as to the
geographic area, activity or time covered, said area, activity or time covered
may be reduced to whatever extent the court deems reasonable and such covenants
shall be enforced as to such reduced area,
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activity or time and Employee expressly agrees that this Agreement, as so
amended, shall be valid and binding.
Employee shall indemnity and hold Company harmless from any
liability, loss, damage, judgment, cost, or expense (including reasonable
attorneys' fees and expenses) arising out of any claim or suit resulting from
Employee's breach of these covenants, any representation or warranty contained
herein or his failure to perform a duty hereunder.
12. PROPRIETARY RIGHTS.
A. RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At
all times during the term of his employment and thereafter, Employee will hold
in strictest confidence and will not disclose, use, lecture upon or publish any
of the Company's Proprietary Information (defined below), except as such
disclosure, use or publication may be required in connection with his work for
the Company, or unless the Chief Executive Officer or the Board of Directors of
the Company expressly authorizes such in writing. Employee shall and hereby does
assign to the Company any rights he may have or acquire in such Proprietary
Information and recognizes that all Proprietary Information shall be the sole
property of the Company and its assigns and that the Company and its assigns
shall be the sole owner of all patent rights, copyrights, trade secret rights
and all other rights throughout the world (collectively, "Proprietary Rights")
in connection therewith. The term "Proprietary Information" shall mean trade
secrets, confidential knowledge, data or any other proprietary information of
the Company which the Company treats as confidential with respect to the general
public. By way of illustration but not limitation, "Proprietary Information"
includes (a) inventions, trade secrets, ideas, processes, formulas, data,
programs, computer software (including source code), other works of authorship,
know-how, improvements, discoveries, developments, modifications, designs and
techniques relating to the business or proposed products of the Company or which
refer to, are suggested by, or result from any work which Employee may do during
his employment and which were made, conceived, expressed, developed, actually or
constructively reduced to practice, learned or discovered by Employee, solely or
jointly with others, during the term of his employment with the Company
(hereinafter collectively referred to as "Inventions"); and (b) information
regarding plans for research, development, new products and services, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers which were learned or
discovered by him during the term of his employment with the Company, and
information regarding the skills and compensation of other employees of the
Company. For purposes of this Agreement, the term "Proprietary Information"
shall not include information that Employee can show by competent proof (i) was
known to Employee prior to disclosure by the Company; (ii) was generally known
to the public at the time Company disclosed the information to Employee; (iii)
became generally known to the public after disclosure by the Company through no
act or omission of Employee; or (iv) was disclosed to Employee by a third party
having a bona fide right both to possess the information and to disclose it to
Employee.
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B. THIRD PARTY INFORMATION. Employee understands, in
addition, that the Company may from time to time receive from third parties
confidential or proprietary information ("Third Party Information") subject to a
duty of the Company's part to maintain the confidentiality of such information
and to use it only for certain limited purposes. During the term of his
employment and thereafter, Employee will hold Third Party Information in the
strictest confidence and will not disclose (to anyone other than Company
personnel who need to know such information in connection with their work for
the Company) or use, except in connection with his work for the Company, Third
Party Information unless expressly authorized by the Chairman or Chief Executive
Officer of the Company in writing.
C. ASSIGNMENT OF INVENTIONS.
[1] Employee shall and hereby does assign to the
Company all his right, title and interest in and to any and all Inventions (and
all Proprietary Rights with respect thereto) whether or not patentable or
registrable under copyright or similar statutes that were made or conceived or
reduced to practice or learned by him, either alone or jointly with others,
during the period of his employment with the Company. The Company shall have the
exclusive right to use the Inventions, whether original or derivative, for all
purposes without additional compensation to Employee, except as may be required
pursuant to Section 12.D below.
[2] Employee shall and hereby does acknowledge
that all original works of authorship which are made by him (solely or jointly
with others) during the term of his employment with the Company and that are
within the scope of his employment and which are protectable by copyright are
"works made for hire," as that term is defined in the United States Copyright
Act (17 U.S.C., Section 1201). To the extent any of the same, under applicable
law, may not be considered "works made for hire" by Employee for the Company,
Employee agrees to assign, and upon its creation, automatically assign the
ownership of the same, including any copyright or other intellectual property
rights in the same, without the necessity of any further consideration.
Inventions assigned to or as directed by the Company by this Section 12.C are
hereinafter referred to as 'Company Inventions."
D. ENFORCEMENT OF PROPRIETARY RIGHTS. Employee will
assist the Company in every proper way to obtain and from time to time enforce
United States and foreign Proprietary Rights relating to Company Inventions in
any and all countries. To that end he will execute, verify and deliver such
documents and perform such other acts (including appearances as a witness) as
the Company may reasonably request for use in applying for, obtaining,
perfecting, evidencing, sustaining and enforcing such Proprietary Rights and the
assignment thereof. In addition, Employee will execute, verify and deliver
assignments of such Proprietary Rights to the Company or its designee.
Employee's obligation to assist the Company with respect to Proprietary Rights
relating to such Company Inventions in any and all countries shall continue
beyond the termination of his employment, but the Company shall compensate him
at a reasonable rate after Employee's termination for the time actually spent by
him at the Company's request on such assistance. In the event the Company is
unable for any reason, after reasonable effort, to secure Employee's signature
on any document needed in connection with the actions specified in the
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preceding, Employee hereby irrevocably designates and appoints the Company and
its duly authorized officers and agents as his agent and attorney in fact, to
act for and in his behalf to execute, verify and file any such documents and to
do all other lawfully permitted acts to further the purposes of the preceding
paragraph thereon with the same legal force and effect as if executed by
Employee. Employee hereby waives and quitclaims to the Company any and all
claims, of any nature whatsoever, which he now or may hereafter have for
infringement of any Proprietary Rights assigned hereunder to the Company.
E. OBLIGATION TO KEEP COMPANY INFORMED. During the
period of his employment, Employee will promptly disclose to the Company fully
and in writing and will hold in trust for the sole right and benefit of the
Company any and all Inventions. In addition, after the termination of his
employment, Employee will disclose all patent and copyright applications filed
by him within three (3) years after termination of employment.
F. PRIOR INVENTIONS. Inventions, if any, patented or
unpatented, which Employee made prior to the commencement of his employment with
the Company are excluded from the scope of this Agreement.
G. RETURN OF COMPANY DOCUMENTS. When Employee leaves the
employ of the Company, he will deliver to the Company all drawings, notes,
memoranda, specifications, devices, formulas, and documents, together with all
copies thereof, and any other material containing or disclosing any Company
Invention, Third Party Information or Proprietary Information of the Company as
well as any equipment furnished to or prepared by Employee in the course of, or
incident to, his employment with the Company. Employee further agrees that any
property situated on the Company's premises and owned by the Company, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company personnel at any time with or without notice.
H. COMPANY RESOURCES. Employee may not use any Company
equipment for personal purposes without written permission from the Company.
Employee may not give access to Company's offices or files to any person not in
the employment of the Company without written permission of the Company.
I. LEGAL AND EQUITABLE REMEDIES. Because Employee's
services are personal and unique and because Employee may have access to and
become acquainted with the Proprietary Information of the Company, the Company
shall have the right to enforce this Section 12 of the Agreement and any of its
provisions by injunctions, specific performance or other equitable relief,
without bond, without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
13. NOTICES. All notices and other communications hereunder shall
be in writing and shall be given or made by hand delivery, or by certified or
registered mail, return receipt requested, postage prepaid, or by telegram, as
follows, or to such other person or address as shall be hereafter designated by
notice given in accordance with this Section:
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A. If to the Company: Primis, Inc.
Attn: C. Xxxxx Xxxxxxx
Suite 320
11475 Xxxxx Xxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxx, Tarrant & Xxxxx
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
B. If to Employee: Xxxxx X. Xxxxxx
0000 Xxxxx Xxxx Xxxx
Xxxxxx, Xxxxxxx 00000
Any notice or other communication hereunder shall be deemed to have been duly
given or made if made by hand, when delivered against receipt therefor or when
attempted delivery shall be rejected, as the case may be, if made by letter,
upon deposit thereof in the mail, postage prepaid, registered or certified, with
return receipt requested, and if made by telegram, facsimile or reputable
overnight courier when sent. Notwithstanding the foregoing, any notice or other
communication hereunder which is actually received by a party hereto shall be
deemed to have been duly given or made to such party.
14. REPRESENTATIONS AND WARRANTIES. Employee represents and
warrants that Employee is not under any obligations to any third party which
could interfere with Employee's performance under this Agreement and that
Employee's performance of his obligations to the Company during the term of his
employment with the Company will not breach any agreement by which Employee is
bound not to disclose any proprietary information, including, without
limitation, that of former employers.
15. MISCELLANEOUS.
A. ASSIGNMENT. This is a contract for personal services
by Employee and may not be assigned by Employee. This Agreement shall inure to
the benefit of and be binding upon the Company and its successors and assigns.
B. WAIVER OF BREACH. Failure or delay by either party to
insist upon compliance with any provision hereof shall not operate as, and is
not to be construed as, a waiver or amendment of such provision. The waiver by
either party of a breach of any provision of this Agreement by the other shall
not operate or be construed as a waiver of any subsequent breach, whether
occurring under similar or dissimilar circumstances.
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C. ENTIRE AGREEMENT: CANCELLATION OF PRIOR AGREEMENTS.
This Agreement contains the entire agreement of the parties with respect to the
subject matter hereof. It may not be changed orally, but only by an amendment in
writing signed by the parties hereto. All prior agreements or understandings
concerning Employee's employment by the Company are hereby canceled and
superseded by this Agreement.
D. SEVERABILITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of the remainder of this Agreement.
E. HEADINGS. The headings contained in this Agreement
are for convenience only and shall not be deemed a part of this Agreement in
construing or interpreting the provisions hereof.
F. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Georgia. In
connection with the enforcement of this Agreement, the parties consent to
jurisdiction in the courts of Georgia. The prevailing party in any action to
enforce this Agreement shall be entitled to attorneys' fees from the
non-prevailing party.
G. REMEDIES. In accordance with O.C.G.A. Section 9-9-2
(c)(9), as evidenced by the parties affixing their initials hereon next to this
Section 15.G., any controversy arising out of, or relating to, this Agreement or
any modification or extension of this Agreement, including any claim for
damages, recission, specific performance or other legal or equitable relief,
shall be settled by arbitration in the City of Atlanta, State of Georgia, in
accordance with the rules then obtaining of the American Arbitration
Association. The determination of the arbitrator when made shall be binding upon
all parties bound by the terms of this Agreement. Judgment upon the award
rendered by the arbitrator may be entered in any court of competent
jurisdiction. The foregoing notwithstanding, the Company shall have the right to
seek injunctive relief from any court of competent jurisdiction in the event of
any breach or threatened breach of Sections 9, 10 or 12 of this Agreement.
Initials: Company: ______________________; Employee: _____________________.
H. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, the undersigned has executed this
counterpart signature page to this Employment Agreement between Primis, Inc. and
Xxxxx X. Xxxxxx on the date set forth below but effective as of the day and year
first written on page 1 of this Agreement.
PRIMIS, INC.
By:___________________________________
Dated __________ ___, 1999 Title:________________________________
("Company")
[Signature Page to Employment Agreement
between Primis, Inc. and Xxxxx X. Xxxxxx]
IN WITNESS WHEREOF, the undersigned has executed this
counterpart signature page to this Employment Agreement between Primis, Inc. and
Xxxxx X. Xxxxxx on the date set forth below but effective as of the day and year
first written on page 1 of this Agreement.
Dated __________ ___, 1999 ______________________________________
XXXXX X. XXXXXX
("Employee")
[Signature Page to Employment Agreement
between Primis, Inc. and Xxxxx X. Xxxxxx]
EXHIBIT A
Stock Option Agreement
