EMPLOYMENT AGREEMENT
Exhibit
10.3
THIS
EMPLOYMENT AGREEMENT dated effective as of July 1, 2006, between Perficient,
Inc. a Delaware corporation (the “Company”), and Xxxxxxx X. Xxxxx (“Employee”).
WITNESSETH:
WHEREAS,
the Company desires that Employee continue to be employed by it and render
services to it, and Employee is willing to be so employed and to render such
services to the Company, all upon the terms and subject to the conditions
contained herein.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT.
Subject to and upon the terms and conditions contained in this Agreement, the
Company hereby agrees to continue to employ Employee and Employee agrees to
continue in the employ of the Company, for the period set forth in paragraph
2
hereof, to render to the Company, its affiliates and/or subsidiaries the
services described in paragraph 3 hereof.
2. TERM.
Employee’s term of employment under this Agreement shall be three years,
commencing as of the date hereof and continuing through and including June
30,
2009, unless extended in writing by mutual agreement of the parties or earlier
terminated pursuant to the terms and conditions set forth herein (the
“Employment Term”).
3. DUTIES.
(a) Employee
shall serve as the President and Chief Operating Officer of the Company,
reporting directly to the Chief Executive Officer of the Company (the “CEO”).
Employee shall perform all duties and services incident to the positions held
by
him.
(b) Employee
agrees to abide by all By-laws and policies of the Company promulgated from
time
to time by the Company.
4. BEST
EFFORTS. Employee agrees to devote his full business time and attention, as
well
as his best efforts, energies and skill to the discharge of the duties and
responsibilities attributable to his position.
5. COMPENSATION.
(a) As
compensation for his services and covenants hereunder, Employee shall receive
a
base salary (“Base Salary”), payable pursuant to the Company’s normal payroll
procedures in place from time to time, at the rate of $250,000 per annum, less
all necessary and required federal, state and local payroll deductions. The
CEO
may decide, in his sole discretion, to increase Employee’s Base Salary from time
to time during the term of this Agreement.
(b) Each
year, Employee shall be eligible to receive a bonus of up to two-hundred percent
(200%) of his Base Salary (“Target Bonus”), less all necessary and required
federal, state and local payroll deductions. The criteria for determining the
amount of the bonus, and the conditions that must be satisfied to entitle
Employee to receive the bonus for any year during the term of this Agreement
shall be determined by the CEO, in his sole discretion but in a manner
consistent with that used to determine Employee’s bonus in prior years. Payment
of any bonus to Employee shall be in accordance with bonus policies established
from time to time by the Company.
6. EXPENSES.
Employee shall be reimbursed for business expenses incurred by him which are
reasonable and necessary for Employee to perform his duties under this Agreement
in accordance with policies established from time to time by the Company.
Employee shall receive reimbursement for other expenses consistent with past
practice and as approved by the CEO.
7. EMPLOYEE
BENEFITS.
(a) During
the Employment Term and any severance period hereunder, Employee shall be
entitled to participate in such insurance, disability, health and medical
benefits and retirement plans or programs as are from time to time generally
made available to executive employees of the Company pursuant to the policies
of
the Company; provided that Employee shall be required to comply with the
conditions attendant to coverage by such plans and shall comply with and be
entitled to benefits only to the extent former employees are eligible to
participate in such arrangements pursuant to the terms of the arrangement,
any
insurance policy associated therewith and applicable law, and, further, shall
be
entitled to benefits only in accordance with the terms and conditions of such
plans. The Company may withhold from any benefits payable to Employee all
federal, state, local and other taxes and amounts as shall be permitted or
required to be withheld pursuant to any applicable law, rule or regulation.
(b) Employee
shall be entitled to vacation in accordance with the Company’s policies as may
be established from time to time by the Company for its executive staff, which
shall be taken at such time or times as shall be mutually agreed upon with
the
Company.
8. DEATH
AND
DISABILITY.
(a) The
Employment Term shall terminate on the date of Employee’s death, in which event
the Company shall, within 30 days of such termination, pay to his estate,
Employee’s Base Salary, any unpaid cash bonus awards, reimbursable expenses and
benefits owing to Employee through the date of Employee’s death together with a
lump-sum equal to one year’s Base Salary and Target Bonus. Except as otherwise
contemplated by this Agreement, Employee’s estate will not be entitled to any
other compensation upon termination of this Agreement pursuant to this
subparagraph 8(a).
(b) The
Employment term shall terminate upon Employee’s Disability. For purposes of this
Agreement, “Disability” shall mean the CEO’s reasoned and good faith judgment
that Employee is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or can by expected to last for a continuous period
of not less than 12 months. The reasoned and good faith judgment of the CEO
as
to Disability shall be based on such competent medical evidence as shall be
presented to it by Employee and/or by any physician or group of physicians
or
other competent medical experts employed by Employee or the Company to advise
the CEO. In case of such termination, Employee shall be entitled to receive
his
Base Salary, any unpaid bonus awards, reimbursable expenses and benefits owing
to Employee through the date of termination. In addition, the Company shall
pay
to Employee an amount equal to one year’s Base Salary and Target Bonus, payable
in installments through regular payroll over the one year period commencing
on
the termination date. Except as otherwise contemplated by this Agreement,
Employee will not be entitled to any other compensation upon termination of
his
employment pursuant to this subparagraph 8(b).
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9. TERMINATION.
(a) The
Company shall have the right, upon delivery of written notice to the Employee,
to terminate the Employee’s employment hereunder prior to the expiration of the
Employment Term (i) pursuant to a Termination for Cause or (ii) pursuant to
a
Without Cause Termination. The Employee shall have the right, upon delivery
of
written notice to the Company, to terminate his employment hereunder prior
to
the expiration of the Employment Term by providing the Company with not less
than 30 days prior written notice.
(b) In
the
event that the Company terminates the Employee’s employment pursuant to a
Without Cause Termination or, if at any time prior to a Change of Control,
Employee voluntarily terminates his employment pursuant to a Constructive
Termination, the Company shall be obligated to pay Employee, within 30 days
of
the date of Employee’s termination or such later date as required by applicable
law, in a lump-sum, his Base Salary, any unpaid bonus awards, reimbursable
expenses and benefits owing to Employee through the day on which Employee is
terminated, together with a severance payment to the Employee in an amount
equal
to one year’s Base Salary and Target Bonus. Employee shall also be entitled to
benefits pursuant to paragraph 7 hereof for the one year period commencing
on
the termination date. No other cash payments shall be made, or benefits
provided, by the Company under this Agreement in the event of a Without Cause
Termination or a Constructive Termination; provided that all stock option grants
and/or restricted stock grants previously awarded to Employee shall immediately
vest in their entirety, regardless of the satisfaction of any conditions
contained therein, in the event of a Without Cause Termination (but not a
Constructive Termination). Except as otherwise contemplated by this Agreement,
Employee will not be entitled to any other compensation upon termination of
this
Agreement pursuant to this subparagraph 9(b).
(c) In
the
event that the Company terminates the Employee’s employment hereunder due to a
Termination for Cause or the Employee voluntarily terminates employment with
the
Company for any reason other than a Constructive Termination, the Employee
shall
not be entitled to any severance, except that the Company shall be obligated
to
pay Employee his Base Salary, any unpaid bonus awards, reimbursable expenses
and
benefits owing to Employee through the day on which Employee is terminated.
Except as otherwise contemplated by this Agreement, Employee will not be
entitled to any other compensation upon termination of this Agreement pursuant
to this subparagraph 9(c).
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(d) For
purposes of this Agreement, the following terms have the following meanings:
(i) The
term
“Termination for Cause” means, to the maximum extent permitted by applicable
law, a termination of the Employee’s employment by the Company attributed to (a)
the repeated or willful failure of Employee to substantially perform his duties
hereunder (other than any such failure due to physical or mental illness) that
has not been cured reasonably promptly after a written demand for substantial
performance is delivered to Employee by the CEO, which demand identifies the
manner in which the CEO believes that Employee has not substantially performed
his duties hereunder; (b) conviction of, or entering a plea of guilty or
nolo
contendere
to a
crime involving moral turpitude or dishonesty or to any other crime that
constitutes a felony; (c) Employee’s intentional misconduct, gross negligence or
material misrepresentation in the performance of his duties to the Company;
or
(d) the material breach by Employee of any written covenant or agreement with
the Company under this Agreement or otherwise, including, but not limited to,
an
agreement not to disclose any information pertaining to the Company or not
to
compete with the Company, including (without limitation) the covenants and
agreements contained in paragraph 11 hereof.
(ii) The
term
“Without Cause Termination” means a termination of the Employee’s employment by
the Company other than due to (a) a Termination for Cause, (b) Disability,
(c)
the Employee’s death, or (d) the expiration of this Agreement.
(iii) The
term
“Change of Control” means a Change of Control as defined in the Company’s
Amended and Restated 1999 Stock Option/Stock Issuance Plan.
(iv) The
term
“Constructive Termination” means Employee’s voluntary termination of his
employment with the Company within 30 days of the appointment by the Board
of
Directors of the Company of a person other than Xxxx X. XxXxxxxx or the Employee
as the Chief Executive Officer of the Company, provided that such appointment
occurs prior to a Change of Control.
10. CHANGE
IN
CONTROL - TERMINATION OF EMPLOYMENT AND COMPENSATION IN EVENT OF
TERMINATION.
(a) Upon
the
occurrence of a Change in Control, 50% of all unvested stock option grants
and/or restricted stock grants previously awarded to Employee shall immediately
vest, regardless of the satisfaction of any conditions contained therein. In
addition, if the Company (or any successor thereto) terminates Employee’s
employment with the Company pursuant to a Without Cause Termination in
connection with or following a Change in Control, Employee shall be entitled
to
all the benefits set forth in subparagraph 9(b).
(b) In
the
event that any part of any payment or benefit received (including, without
limitation, granting of and/or acceleration of vesting of stock options and
restricted stock) pursuant to the terms of subparagraph 10(a) (the “Change of
Control Payments) would be subject to the Excise Tax determined as provided
below, then
the
Employee may elect, in the sole discretion of the Employee, to receive in-lieu
of the amounts payable pursuant to paragraph 10(a) a lesser amount equal to
$100
less than 3.00 times the Employee’s “Annualized Includable Compensation” (within
the meaning of Section 280G(d)(1) of the Code) (such amount the “Cut-Back
Amount”) by eliminating the accelerated vesting to the extent necessary to
reduce the payments and benefits under subparagraph 10(a) to the Cut-Back
Amount. Any
amounts paid as a result of an election by the Employee pursuant to this
subparagraph 10(b) will be in full satisfaction of the amounts otherwise payable
to the Employee pursuant to subparagraph 10(a) hereof. For
purposes of determining whether any of the Change of Control Payments will
be
subject to the Excise Tax and the amounts of such Excise Tax; (1) the total
amount of the Change of Control Payments shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess
parachute payments” within the meaning of Section 280G(b)(1) of the Code shall
be treated as subject to Excise Tax, except to the extent that, in the opinion
of independent counsel selected by the Company and reasonably acceptable to
the
Employee (“Independent Counsel”), a Change of Control Payment (in whole or in
part) does not constitute a “parachute payment” within the meaning of Section
280G(b)(2) of the Code, or such “excess parachute payments” (in whole or in
part) are not subject to the Excise Tax, (2) the amount of the Change of Control
Payments that shall be treated as subject to the Excise Tax shall be equal
to
the lesser of (A) the total amount of the Change of Control Payments or (B)
the
amount of “excess parachute payments” within the meaning of Section 280G(b)(1)
of the Code (after applying clause (1) hereof), and (3) the value of any noncash
benefits or any deferred payment or benefit shall be determined by Independent
Counsel in accordance with the principles of Sections 280G(d)(3) and (4) of
the
Code.
4
(c) In
the
event of any change in, or further interpretation of, Sections 280G or 4999
of
the Code and the regulations promulgated thereunder, the Employee shall be
entitled, by written notice to the Company, to request an opinion of Independent
Counsel regarding the application of such change or interpretation to any of
the
foregoing, and the Company shall use its best efforts to cause such opinion
to
be rendered as promptly as practicable. Any fees and expenses of Independent
Counsel incurred in connection with this Agreement shall be borne by the
Employee.
11. DISCLOSURE
OF TRADE SECRETS AND OTHER PROPRIETARY INFORMATION; RESTRICTIVE
COVENANTS.
(a) Employee
acknowledges that he is bound by the terms of the Company’s Confidentiality and
Intellectual Property Agreement. The Company will provide Employee with valuable
confidential information belonging to the Company or its subsidiaries or its
affiliates above and beyond any confidential information previously received
by
Employee and will associate Employee with the goodwill of the Company or its
subsidiaries or its affiliates above and beyond any prior association of
Employee with that goodwill. In return, Employee promises never to disclose
or
misuse such confidential information and never to misuse such goodwill. To
enforce Employee’s promises in this regard, Employee agrees to comply with the
provisions of this paragraph 11.
(b) Employee
will not, during the Employment Term, directly or indirectly, as an employee,
employer, consultant, agent, principal, partner, manager, stockholder, officer,
director, or in any other individual or representative capacity, engage in
or
participate in any other business that is competitive with the business of
providing information technology software consulting services. The ownership
by
Employee of 5% or less of the issued and outstanding shares of a class of
securities which is traded on a national securities exchange or in the
over-the-counter market, shall not cause Employee to be deemed a stockholder
under this subparagraph 11(b) or constitute a breach of this subparagraph 11(b).
5
(c) Employee
will not, during the Employment Term and for a period of 60 months thereafter,
directly or indirectly, work in the United States as an employee, employer,
consultant, agent, principal, partner, manager, stockholder, officer, director,
or in any other individual or representative capacity for any person or entity
who is competitive with the business of providing information technology
software consulting services. The ownership by Employee of 5% or less of the
issued and outstanding shares of a class of securities which is traded on a
national securities exchange or in the over-the-counter market, shall not cause
Employee to be deemed a stockholder under this subparagraph 11(c) or constitute
a breach of this subparagraph 11(c).
(d) Employee
will not, during the Employment Term and for a period of 60 months thereafter,
on his behalf or on behalf of any other business enterprise, directly or
indirectly, under any circumstance other than at the direction and for the
benefit of the Company, (i) solicit for employment or hire any person employed
by the Company or any of its subsidiaries, or (ii) call on, solicit, or take
away any person or entity who was a customer of the Company or any of its
subsidiaries or affiliates during Employee’s employment with the Company, in
either case for a business that is competitive with the business of providing
information technology software consulting services.
(e) It
is
expressly agreed by Employee that the nature and scope of each of the provisions
set forth above in this paragraph 11 are reasonable and necessary. If, for
any
reason, any aspect of the above provisions as it applies to Employee is
determined by a court of competent jurisdiction to be unreasonable or
unenforceable under applicable law, the provisions shall be modified to the
extent required to make the provisions enforceable. Employee acknowledges and
agrees that his services are of unique character and expressly grants to the
Company or any subsidiary or affiliate of the Company or any successor of any
of
them, the right to enforce the above provisions through the use of all remedies
available at law or in equity, including, but not limited to, injunctive
relief.
12. COMPANY
PROPERTY.
(a) Any
patents, inventions, discoveries, applications or processes designed, devised,
planned, applied, created, discovered or invented by Employee during the
Employment Term, regardless of when reduced to writing or practice, which
pertain to any aspect of the Company’s or its subsidiaries’ or affiliates’
business as described above shall be the sole and absolute property of the
Company, and Employee shall promptly report the same to the Company and promptly
execute any and all documents that may from time to time reasonably be requested
by the Company to assure the Company the full and complete ownership
thereof.
(b) All
records, files, lists, including computer generated lists, drawings, documents,
equipment and similar items relating to the Company’s business which Employee
shall prepare or receive from the Company shall remain the Company’s sole and
exclusive property. Upon termination of this Agreement, Employee shall promptly
return to the Company all property of the Company in his possession. Employee
further represents that he will not copy or cause to be copied, print out or
cause to be printed out any software, documents or other materials originating
with or belonging to the Company. Employee additionally represents that, upon
termination of his employment with the Company, he will not retain in his
possession any such software, documents or other materials.
6
13. EQUITABLE
RELIEF. It is mutually understood and agreed that Employee’s services are
special, unique, unusual, extraordinary and of an intellectual character giving
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law. Accordingly, in the event of any
breach of this Agreement by Employee, including, but not limited to, the breach
of any of the provisions of paragraphs 11 or 12 hereof, the Company shall be
entitled to equitable relief by way of injunction or otherwise in addition
to
any damages which the Company may be entitled to recover.
14. CONSENT
TO TEXAS JURISDICTION AND VENUE. The Employee hereby consents and agrees that
state courts located in Xxxxxx County, Texas and the United States District
Court for the Western District of Texas each shall have personal jurisdiction
and proper venue with respect to any dispute between the Employee and the
Company. In any dispute with the Company, the Employee will not raise, and
hereby expressly waives, any objection or defense to any such jurisdiction
as an
inconvenient forum.
15. NOTICE.
Except as otherwise expressly provided, any notice, request, demand or other
communication permitted or required to be given under this Agreement shall
be in
writing, shall be sent by one of the following means to the Employee at his
address set forth on the signature page of this Agreement and to the Company
at
1120 South Capital of Xxxxx Xxxxxxx, Xxxxxxxx 0, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Chief Executive Officer (or to such other address as shall be
designated hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt), and shall be deemed conclusively to
have
been given: (a) on the first business day following the day timely deposited
with Federal Express (or other equivalent national overnight courier) or United
States Express Mail, with the cost of delivery prepaid or for the account of
the
sender; (b) on the fifth business day following the day duly sent by certified
or registered United States mail, postage prepaid and return receipt requested;
or (c) when otherwise actually received by the addressee on a business day
(or
on the next business day if received after the close of normal business hours
or
on any non-business day).
16. INTERPRETATION;
HEADINGS. The parties acknowledge and agree that the terms and provisions of
this Agreement have been negotiated, shall be construed fairly as to all parties
hereto, and shall not be construed in favor of or against any party. The
paragraph headings contained in this Agreement are for reference purposes only
and shall not affect the meaning or interpretation of this
Agreement.
17. SUCCESSORS
AND ASSIGNS; ASSIGNMENT; INTENDED BENEFICIARIES. Neither this Agreement, nor
any
of Employee’s rights, powers, duties or obligations hereunder, may be assigned
by Employee. This Agreement shall be binding upon and inure to the benefit
of
Employee and his heirs and legal representatives and the Company and its
successors. Successors of the Company shall include, without limitation, any
corporation or corporations acquiring, directly or indirectly, all or
substantially all of the assets of the Company, whether by merger,
consolidation, purchase, lease or otherwise, and such successor shall thereafter
be deemed “the Company” for the purpose hereof.
7
18. NO
WAIVER
BY ACTION. Any waiver or consent from the Company respecting any term or
provision of this Agreement or any other aspect of the Employee’s conduct or
employment shall be effective only in the specific instance and for the specific
purpose for which given and shall not be deemed, regardless of frequency given,
to be a further or continuing waiver or consent. The failure or delay of the
Company at any time or times to require performance of, or to exercise any
of
its powers, rights or remedies with respect to, any term or provision of this
Agreement or any other aspect of the Employee’s conduct or employment in no
manner (except as otherwise expressly provided herein) shall affect the
Company’s right at a later time to enforce any such term or
provision.
19. COUNTERPARTS;
TEXAS GOVERNING LAW; AMENDMENTS; ENTIRE AGREEMENT; SURVIVAL OF TERMS. This
Agreement may be executed in two counterpart copies, each of which may be
executed by one of the parties hereto, but all of which, when taken together,
shall constitute a single agreement binding upon all of the parties hereto.
This
Agreement and all other aspects of the Employee’s employment shall be governed
by and construed in accordance with the applicable laws pertaining in the State
of Texas (other than those that would defer to the substantive laws of another
jurisdiction). Each and every modification and amendment of this Agreement
shall
be in writing and signed by the parties hereto, and any waiver of, or consent
to
any departure from, any term or provision of this Agreement shall be in writing
and signed by each affected party hereto. This Agreement contains the entire
agreement of the parties and supersedes all prior representations, agreements
and understandings, oral or otherwise, between the parties with respect to
the
matters contained herein. In the event of any conflict between this Agreement
and any Award Agreement, this Agreement shall control. Paragraphs 9 through
13
hereof (and paragraphs 14 through 19 hereof as they may apply to such
paragraphs) shall survive the expiration or termination of this Agreement for
any reason.
[Signature
page follows.]
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IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as of
the
date first above written.
|
PERFICIENT,
INC.
|
||
| |
|
|
| By: | /s/ Xxxx X. XxXxxxxx | |
|
Name: Xxxx X. XxXxxxxx |
||
| Title: Chief Executive Officer | ||
| /s/ Xxxxxxx X. Xxxxx 8/3/06 | ||
|
Xxxxxxx X. Xxxxx, Individually
|
||
|
Address:
|
Xxx Xxxx Xxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
|
|
| Telephone: | (000) 000-0000 | |
| Facsimile: | (000) 000-0000 | |
SIGNATURE
PAGE
TO XXXXX
EMPLOYMENT
AGREEMENT
