Exhibit 10.1
AGREEMENT
This Agreement is made as of the latest date indicated below "Effective
Date" between Mastech Systems Corporation, a Pennsylvania corporation
(hereinafter called the "Company") and the undersigned employee (hereinafter
called the "employee"). This Agreement is entered into contemporaneously with
Employee's commencement of employment with the Company and receipt of certain
stock options offered by Company.
WHEREAS, Employee is employed by the Company as an at-will employee whose
employment may be terminated by either party with or without reason or cause and
without any liability for such termination;
WHEREAS, this Agreement is necessary for the protection of Company's
legitimate and protectible business interests in its customers, prospective
customers, accounts and confidential, proprietary and trade secret
information; and
WHEREAS, this Agreement is a term and condition of Employee's employment
and is made in consideration for certain stock options offered to Employee
contemporaneously with this Agreement as well as Employee's continued
employment and access to Company's customers, prospective customers, accounts,
and confidential, proprietary and trade secret information.
NOW THEREFORE, for the consideration set forth herein, the receipt and
sufficiency of which is acknowledged by the parties, Company and Employee agree
as follows:
1. DEFINITIONS. As used herein:
(a) "Company" shall mean Mastech Systems Corporation and any
affiliate of Mastech Systems Corporation, including any direct or indirect
parent or subsidiary of Mastech Systems Corporation, as well as their
respective operating divisions.
(b) "Confidential Information" shall include, but is not necessarily
limited to, any information which may include, in whole or part, information
concerning the Company's accounts, sales, sales volume, sales methods, sales
proposals, customers and prospective, prospect lists, identity of purchasing
personnel in the employ of customers and prospective customers, amount or kind
of customer's purchases from the Company, the
Company's source of supply of products and/or personnel, sources of
consultants, Company manuals, formulae, products, processes, methods,
machines, compositions, ideas, improvements, inventions, research, computer
programs, system documentation, software products, patented products,
copyrighted information, know how and operating methods and any other trade
secret or proprietary information belonging to the Company or relating to the
Company's affairs that is not public information.
(c) "Customers(s)" shall mean any individual, corporation,
partnership, business or other entity (i) whose existence and business is
known to Employee as a result of Employee's access to the Company's customer
lists or Customer account information; or (ii) that is an entity with whom the
Company has contracted or negotiated during the two (2) year period preceding
the termination of Employee's employment.
(d) "Competing Business" shall mean any individual, corporation,
partnership, business or other entity which provides or attempts to provide
any products or services that directly compete with products or services
offered by the Company, i.e., information technology services, including
software applications solutions and services, and which were sold by the
Company at any time and from time to time during the last two (2) years prior
to Employee's termination of employment. Notwithstanding the foregoing, the
term Competing Business does not include a corporation that derives at least
$500 million of its revenues from the sale of information technology services.
2. DUTIES. Employee, who is employed in the position set forth on
Schedule A hereof as of the date of this Agreement, agrees to be responsible
for such duties as are commensurate with and required by such position and any
other duties as may be assigned to Employee by Company from time to time.
Employee further agrees to perform his or her duties in a diligent,
trustworthy, loyal, businesslike, productive, and efficient manner and to use
Employee's best efforts to advance the business and goodwill of Company.
Employee further agrees to devote all of his or her business time, skill,
energy and attention exclusively to the business of the Company and to comply
with all rules, regulations and procedures of the Company. During the term of
this Agreement, Employee will not engage in any other business for Employee's
own account or accept any employment from any other business entity, or render
any services, give any advice or serve in a consulting capacity, whether
gratuitously or otherwise, to or for any other person, firm or corporation,
other than as a volunteer for charitable organizations, without the prior
written approval of the Company.
2
3. COMPENSATION. Employee's annual bas salary as of the date of this
Agreement is as set forth on Schedule A hereto. As compensation for Employee's
employment by the Company, the Company will pay the Employee during the period
of employment hereunder such remuneration as is determined to be appropriate
by the Company from time to time in its discretion.
4. BENEFITS. Employee will receive the standard Company benefits
described in the Company benefits described in the Company Handbook that is
incorporated as though fully set forth in this Agreement and which may be
modified at any time by the Company.
5. STOCK OPTIONS. Employee shall receive that number of stock options
covering the Company's shares as is set forth on Schedule A hereto. Such
options shall be granted under the Company's Stock Incentive Plan as then in
effect and shall be subject to the Stock Option Agreement evidencing such
stock options. The effective price shall be decided by the board.
6. POLICIES AND PROCTICES. Employee agrees to abide by all rules,
regulations and instruments established by the Company including the policies,
practices and procedures contained in the Company Employee Handbook which
Employee has received and which is incorporated by reference as though fully
set forth herein. The Company reserves the right to disregard the Company
Employee Handbook in the event that a particular portion of the Company
Employee Handbook conflicts with this Agreement or is deemed by the Company to
be incompatible with Employee's position in the Company, and the Company may
amend the Handbook from time to time in its sole discretion.
7. AGREEMENT NOT TO COMPETE. In order to protect the business interest
and good will of the Company in respect to customers and accounts, and to
protect Confidential Information, Employee covenants and agrees that for the
entire period of time that this Agreement remains in effect, and for a period
of two (2) years after termination of Employee's employment for any reason he
or she will not:
(a) directly or indirectly contact any Customer of the Company for the
purpose of soliciting such Customer to purchase, lease or license a product or
service that is the same as, similar to, or in competition with those products
and/or services made, rendered, offered or under development by the Company;
3
(b) engage in any activity or business as a consultant, independent
contractor, agent, employee, employer, officer, partner, director or
otherwise, alone or in association with any other person, corporation or other
entity, in any Competing Business operating in the United States of America or
any other country where the Company has conducted business within the two (2)
year period prior to the termination of Employee's employment; provided,
however, that this subsection (b) shall not apply if the Employee is
terminated by the Company without cause after the sale of substantially all of
the business or assets of Mastech Systems Corporation to an unaffiliated third
party for fair value;
(c) directly or indirectly employ, or knowingly permit any company or
business directly or indirectly controlled by Employee to employ, any person
who is employed by the Company at any time during the term of this Agreement,
or in any manner to seek to induce any such person to leave his or her
employment with the Company; or
(d) directly or indirectly interfere with or attempt to disrupt the
relationship, contractual or otherwise, between the Company and any of its
employees or solicit, induce, or attempt to induce employees of the Company
and any of its employees or solicit, induce, or attempt to induce employees of
the Company to terminate employment with the Company and become self-employed
or employed with others in the same of similar business or any product line or
service provided by Company. Employee acknowledges that the Company is engaged
in business throughout the United States as well as in other countries and
that the marketplace for the Company's products and services is worldwide.
Employee further covenants and agrees that the geographic, length of term and
types of activities restrictions (non-competition restrictions) contained in
this Agreement are reasonable and necessary to protect the legitimate business
interests of the Company because of the scope of the Company's business. In
the event that a court of competent jurisdiction shall determine that one or
more of the provisions of this Section 7 is so broad as to be unenforceable,
then such provision shall be deemed to be reduced in scope or length, as the
case may be, to the extent required to make this Paragraph enforceable. If the
Employee violates the provisions of this Section 7, the periods described
therein shall be extended by that number of days which equals the aggregate of
all days during which at any time any such violations occurred.
8. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION.
The Employee covenants and agrees during Employee's employment or any
time after the Termination of such employment, not to communicate or divulge
to any person, firm or corporation, either directly or indirectly, and to hold
in strict confidence for the benefit of the
4
Company, all Confidential Information except that employee may disclose such
Information to person, firms or corporations who need to know such Information
during the course and within the scope of Employee's employment. Employee will
not use any Confidential Information for any purpose or for his or her
personal benefit other than in the course and within the scope of Employee's
employment.
(a) Work Made for Hire. Employee recognizes and understands that is or
her duties at Company have included and may continue to include the
preparation of materials, including computer software and other written or
graphic materials, and that any such materials conceived or written by him or
her were done and shall continue to be done as "work made for hire" as defined
and used in the Copyright Act of 1976, 17 USC 1 et seq. In the event of
publication of such materials, Employee understands that since the work is a
"work made for hire," the Company will solely retain and own all rights in all
such materials, including the right to copyright.
(b) Disclosure of Discoveries, Ideas and Inventions. Employee
represents that he does not have any right, title or interest in, nor has he
made or conceived wholly or in part prior to the commencement of his
employment by the Company any discovery, idea and invention.
(c) Disclosure of Other Discoveries, Ideas and Inventions/Assignment
of Patents. Employee shall disclose promptly to the Company, any and all
works, inventions, discoveries and improvement s authored, conceived or made
by Employee during the period of employment and related to the business or
activities of the Company, solely or jointly with others, which is related to
the lines of business, work or investigation of the Company at the time of
such discovery, idea or invention or which results from, or is suggested by,
any work which the Employee may do for or on behalf of the Company, and hereby
assigns and agrees to assign all his interest therein to the Company or its
nominee. Whenever requested to do so by the Company, Employee shall execute
any and all applications, assignments or other instruments which the Company
shall deem necessary to apply for and obtain Letters Patent or Copyrights of
the United States or any foreign country or to otherwise protect the interest
therein and shall assist the Company in every proper way (entirely at the
Company's expense, including reimbursement to him for all expense and loss of
income) to obtain such patents and copyrights and to enforce them. Such
obligations shall continue beyond the termination of employment with respect
to works, inventions, discoveries and improvements authored, conceived or made
by Employee during the period of employment, and shall be binding upon
Employee's assigns,
5
executors, administrators and other legal representatives. All such works
inventions, discoveries and improvements shall remain the sole and exclusive
property of the Company, whether patentable or not.
9. RETURN OF MATERIALS. Upon termination of employment with Company for
any reason, Employee shall promptly deliver to Company the originals and
copies of all correspondence, drawings, manuals, computerized information,
letters, notes, notebooks, reports, prospect lists, flow charts, programs,
proposals, and any documents concerning Company's customers or suppliers and,
without limiting the foregoing, will promptly deliver to Company any and all
other documents or materials containing or constituting Confidential
Information.
10. TERMINATION. This Agreement may be terminated with or without cause by
either party without any liability for such termination by giving to the other
party at least fifteen (15) days prior written notice, except that the
covenants of Sections 6, 7, 8, 9, 11, 12, 13, 14, 15, 16 and 18 hereof shall
survive the termination of this Agreement. All payments due as of the date of
termination shall be paid in full within thirty (30) days of this date.
11. SEVERANCE. If the Employee's employment is at any time terminated by
the Company without cause, then the Company shall pay the Employee a severance
payment equal to three (3) times the monthly bas salary of the Employee then
in effect, payable in the form of salary continuation in accordance with the
Company's then existing payroll practices.
12. ENTIRE AGREEMENTS. This Agreement supersedes all prior agreements,
written or oral, between the parties hereto concerning the subject matter
hereof.
13. CHOICE OF LAW, JURISDICTION AND VENUE. The parties agree that this
Agreement shall be deemed to have been made and entered into in Pennsylvania
and that the Law of the Commonwealth of Pennsylvania shall govern this
Agreement. Jurisdiction and venue is proper in any proceeding by the Company
to enforce its rights hereunder filed in any court geographically located in
Allegheny County, Pennsylvania.
6
14. ACKNOWLEDGMENTS OF EMPLOYEE. Employee hereby acknowledges and agrees
that:
(a) This Agreement is necessary for the protection of the legitimate
business interests of the Company.
(b) the restrictions contained in this Agreement may be enforced in a
court of law whether or not Employee is terminated with or without cause or
for performance related reasons;
(c) The execution and delivery of this Agreement is a mandatory
condition precedent to the Employee's receipt of the consideration provided
herein;
(d) Employee has no intention of competing with the Company within the
limitations set forth above;
(e) Employee has received adequate and valuable consideration for
entering into this Agreement;
(f) Employee's covenants shall be construed as independent of any
other provision in this Agreement and the existence of any claim or cause of
action Employee may have against the Company, whether predicated on this
Agreement or not, shall not constitute a defense to the enforcement by Company
of these covenants;
(g) This Agreement does not prevent Employee from earning a livelihood
after termination of employment; and
(h) Employee further acknowledges that his or her education and
experience enables Employee to work for different types of employers, so that
it will not be necessary for Employee to violate the provisions of this
covenant not to compete in order to remain economically viable.
15. FULL UNDERSTANDING. Employee acknowledges that Employee has carefully
read and fully understands all of the provisions of this Agreement and that
Employee, in consideration for the compensation set forth herein, is
voluntarily entering into this Agreement.
7
16. EQUITABLE RELIEF; FEES AND EXPENSES. Employee stipulates and agrees
that any breach of this Agreement by Employee will result in immediate and
irreparable harm to the Company, the amount of which will be extremely
difficult to ascertain, and that the Company could not be reasonably or
adequately compensated by damages in an action at law. For these reasons, the
Company shall have the right, without objection from Employee, to obtain such
preliminary, temporary or permanent injunctions or restraining orders or
decrees as may be necessary to protect the Company against, or on account of,
any breach by Employee of the provisions of this Agreement. Such right to
equitable relief is in addition to all other legal remedies the Company may
have to protect its rights. In the event the Company obtains any such
injunction, order, decree or other relief, in law or in equity, Employee shall
be responsible for reimbursing the Company for all costs associated with
obtaining the relief, including reasonable attorneys' fees, and expenses and
costs of suit. In the event that Employee is successful in defending this
matter, Company agrees to reimburse Employee for all legal expenses incurred
in such defense. Employee further covenants and agrees that any order of court
or judgment obtained by the Company which enforces the Company's rights under
this Agreement may be transferred, without objection or opposition by
Employee, to any court of law or other appropriate law enforcement body
located in any other country in the world where Company does business, and
that said court or body will give full force and effect to said order and or
judgment.
17. AMENDMENTS. No supplement, modification, amendment or waiver of the
terms of this Agreement shall be binding on the parties hereto unless executed
in writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver
of any other provisions hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided. Any
failure to insist upon strict compliance with any of the terms and conditions
of this Agreement shall not be deemed a waiver of any such terms or
conditions.
18. SUCCESSORS IN INTEREST. This Agreement shall be binding upon and shall
inure to the benefit of the successors, assigns, heirs and legal representatives
of the parties hereto. The Company shall have the right to assign this Agreement
in connection with a merger involving the Company or a sale or transfer of
substantially all of the business and assets of the Company, and Employee agrees
to be obligated by this Agreement to any successor, assign or surviving entity.
8
19. HEADINGS. The headings used in this Agreement are for convenience only
and are not to be considered in construing or interpreting this Agreement.
MASTECH SYSTEMS Xxxxx Xxxxx
CORPORATION (COMPANY) (EMPLOYEE)
By: /s/ Xxxx Xxxxxxxx /s/ Xxxxx Xxxxx
---------------------------- --------------------------
Date: 1/24/00 Date: 1/25/00
------------------------- --------------------
9
Xxxxx Xxxxx
Personal & Confidential
SCHEDULE A
January 21, 2000
Mastech is pleased to extend an offer of employment to you for the
position of Senior Vice President and Chief Financial Officer of the Holding
Company, as discussed in your conversations with Xxxxx Xxxxxxxx. In addition
to The Agreement, the terms of the offer are outlined below.
(1) Base Compensation
Your base salary will be $8,654 bi-weekly, and will be subject to all
federal, state, local taxes and withholdings
(2) Bonus
Target bonus of $75,000 based on performance and is proportional to the
percentage of goals achieved during the first year of employment with Mastech.
(3) Stock Options
A total of 250,000 stock options, vesting equally every six months over
four years, will be issued and are subject to the terms of the Stock Options
Agreement. New stock options will be issued every six months so that your
unvested options will remain constant at 250,000 for the first four years. The
strike price for your initial stock options is the closing price the day
before your date of employment. The closing price on January 18, 2000 was
$28.125. The strike price for the options issued every six months for the
first four years will be the closing price the day before they are issued.
(4) Vesting Schedule
31,250 shares shall vest on the 6 month anniversary of the Effective Date.
31,250 shares shall vest on the first anniversary of the Effective Date.
31,250 shares shall vest on the 18 month anniversary of the Effective Date.
31,250 shares shall vest on the second anniversary of the Effective Date.
31,250 shares shall vest on the 30 month anniversary of the Effective Date.
31,250 shares shall vest on the third anniversary of the Effective Date.
31,250 shares shall vest on the 42 month anniversary of the Effective Date.
31,250 shares shall vest on the fourth anniversary of the Effective Date.
10
(5) Start Date
The start date will be January 19, 2000.
(6) Outside Board Memberships
This will serve as written approval for you to continue your Board
Memberships with Infosage Inc. and CTR Systems Inc.
January 21, 2000
Xxxxx,
We look forward to you joining the senior team at Mastech and are confident that
with your contribution, we will build a thriving and successful organization.
Sincerely,
/s/ Xxxx Xxxxxxxx
--------------------------------------
Xxxx Xxxxxxxx
Director of Executive Resources
Mastech Systems Corporation
Employee Acceptance. The signing of this letter acknowledges the acceptance of
the offer contained herein.
/s/ Xxxxx Xxxxx 1/19/00
----------------------------- ---------------------------
Xxxxx Xxxxx Effective Date of Agreement
11
