1
EXHIBIT 10.8
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of
January 1, 2000, between Cysive, Inc., a Delaware corporation (the "COMPANY"),
and Xxxxxx X. Xxxxxx ("EXECUTIVE").
The parties hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive and Executive
accepts such employment for the period beginning as of the date hereof and
ending on the fourth anniversary of the date hereof or upon Executive's earlier
separation pursuant to SECTION 1(d) hereof (the "EMPLOYMENT PERIOD"); provided,
however, that the Employment Period shall automatically be renewed for an
additional two year period commencing on the fourth anniversary of the date
hereof unless either the Company or the Executive gives the other at least 60
days written notice prior to the fourth anniversary of its desire to terminate
this Agreement.
(a) POSITION AND DUTIES. During the Employment Period,
Executive shall serve as Vice President, Sales of the Company and shall have the
normal duties, responsibilities and authority of the Vice President, Sales,
subject to the power of the Chief Executive Officer or the Company's board of
directors (the "BOARD") to expand or limit such duties, responsibilities and
authority and to override actions of the Vice President, Sales. Executive shall
report to the Chief Executive Officer and Executive shall devote his best
efforts and of his full business time and attention to the business and affairs
of the Company and its Subsidiaries.
(b) SALARY, BONUS AND BENEFITS. The Company will pay Executive
a base salary to be determined by the Chief Executive Officer, subject to any
annual increase during the Employment Period as determined by the Chief
Executive Officer based upon the Company's achievements of budgetary and other
objectives set by the Board (the "ANNUAL BASE SALARY"). Executive shall also be
eligible to receive a bonus (the "BONUS") determined in accordance with the
Company's compensation plan, as established from time to time by the
compensation committee of the Board, and the Executive shall be eligible to
participate in the Company's split-dollar insurance policy in accordance with
SECTION 1(c) below. Executive's Annual Base Salary and Bonus for any partial
year will be prorated based upon the number of days elapsed in such year. In
addition, during the Employment Period, Executive will be entitled to such other
benefits approved by the Chief Executive Officer and made available to the
Company's senior executives, including, but not limited to, vacation time,
tuition reimbursement, reimbursement of business expenses, car allowance and
healthcare benefits.
(c) SPLIT DOLLAR INSURANCE AGREEMENT. The Executive, the
Company and the Insurer (as defined in the Split Dollar Insurance Agreement)
shall execute a Split-Dollar Insurance Agreement whereby the Company and the
Executive shall agree to "split" the premiums and benefits under a life
insurance policy. Pursuant to the Split-Dollar Insurance Agreement, the Company
shall procure a ten year life insurance policy naming the Executive as Owner and
as the Insured. The Company shall pay to the Insurer the premiums for such
insurance policy, subject to repayment by the Executive in accordance with the
terms of the Split-Dollar Insurance Agreement. The Executive shall have the
option to pay additional amounts as premiums. As security for the repayment of
the premiums by the Company, the
- 1 -
2
Executive shall execute the Split-Dollar Collateral Assignment whereby the
Executive shall grant the Company a security interest in the life insurance
policy. Executive hereby agrees that all premiums paid on Executive's behalf,
and all additional contributions made by Executive, during the period ending on
January 1, 2004 (such period being referred to as the "VESTING PERIOD"), shall
be forfeited to the Company in the event Executive is no longer employed or
engaged with the Company, provided, however, that if during the Vesting Period
(A) an event constituting a Change of Control (as defined herein) of the Company
occurs and (B)(i) the Executive's employment is terminated without Cause (as
defined herein) or (ii) the Executive terminates his employment with Good Reason
(as defined herein), in either case where such termination occurs within one (1)
year of the date of Change of Control takes place, then Executive shall be
entitled to receive all premiums paid and all additional contributions made with
respect to such Split-Dollar Agreement.
During the period beginning at the end of the Vesting Period
and ending on the termination date of the Split Dollar Agreement, portions of
the cash surrender value of the life insurance policy shall be included in
Executive's form W-2 as compensation for services. The Company shall provide
Executive an additional cash bonus in order to compensate Executive for
additional income tax liability resulting from the inclusion of the cash
surrender value of the life insurance policy in Executive's form W-2.
(D) SEPARATION. Executive's employment by the Company during
the Employment Period will continue until Executive's resignation at any time or
until Executive's disability or death or until the Chief Executive Officer
terminates Executive's Employment at any time during the Employment Period (the
"SEPARATION"). If the Employment Period is terminated by the Executive without
Good Reason, then the termination will be effective thirty (30) days after the
date of delivery of written notice of termination. If the Employment Period is
terminated by the Board or the Chief Executive Officer without Cause or by the
Executive with Good Reason, then the termination will be effective fifteen (15)
days after the date of delivery of written notice of termination. If the
Employment Period is terminated by the Board or the Chief Executive Officer with
Cause, termination will be effective fifteen (15) days after the date of
delivery of written notice of termination. If the Employment Period is
terminated by the Board or the Chief Executive Officer with Cause or by the
Executive without Good Reason, then the Executive shall be entitled to receive
his Annual Base Salary and all fringe benefits only through the effective date
of termination. If the Employment Period is terminated by the Board or the Chief
Executive Officer without Cause or by the Executive with Good Reason, then the
Executive shall be entitled to receive his Annual Base Salary and all fringe
benefits for one year from the effective date of termination (such payments and
fringe benefits are referred hereinafter as the "SEVERANCE PAYMENT") payable
over time in accordance with normal payroll practices. If the Employment Period
is terminated due to death, then the Annual Base Salary and medical insurance
will be continued through the next full calendar month following the month in
which the Executive died. If the Employment Period is terminated due to
Disability (as defined herein), then the Annual Base Salary, medical insurance
and disability insurance will be continued until the last day of the six-month
period following the Disability; provided, however, that such Annual Base Salary
shall be reduced by the amount of any disability income payments made to the
Executive during such six-month period from any insurance or other policies
provided by the Company. In the event Executive is owed amounts under this
SECTION 1(d), such amounts may be withheld by the Company upon a breach or
threatened breach of the terms and conditions of
- 2 -
3
SECTION 3 below.
2. CONFIDENTIAL INFORMATION
(a) Executive acknowledges that the Company is engaged in the
business of software engineering and it builds and implements complex and highly
customized systems supporting large scale electronic commerce businesses (the
"BUSINESS"). Executive further acknowledges that the Business and its continued
success depend upon the use and protection of a large body of confidential and
proprietary information, and that he holds a position of trust and confidence by
virtue of which he necessarily possesses, has access to and, as a consequence of
his signing this Agreement, will continue to possess and have access to, highly
valuable, confidential and proprietary information of the Company not known to
the public in general, and that it would be improper for him to make use of this
information for the benefit of himself and others. All of such confidential and
proprietary information now existing or to be developed in the future will be
referred to in this Agreement as "CONFIDENTIAL INFORMATION." This includes,
without limitation, information relating to the nature and operation of the
Business or any other business conducted by the Company, the persons, firms and
corporations which are customers or active prospects of the Company during
Executive's employment by the Company, the Business' development transition and
transformation plans, methodology and methods of doing business, strategic,
acquisition, marketing and expansion plans, including plans regarding planned
and potential acquisitions and sales, financial and business plans, employee
lists, numbers and location of sales representatives, new and existing programs
and services (and those under development), prices and terms, customer service,
integration processes requirements, costs of providing service, support and
equipment and equipment maintenance costs. Confidential Information shall not
include any information that has become generally known to, and available for
use by, the public other than as a result of Executive's acts or omissions in
contravention of the terms and provisions of this Agreement.
(b) Disclosure of any Confidential Information of the Company
shall not be prohibited if such disclosure is directly pursuant to a valid and
existing order of a court or other governmental body or agency within the United
States; provided, however, that (i) Executive shall first have given prompt
notice to the Company of any such possible or prospective order (or proceeding
pursuant to which any such order may result) and (ii) Executive shall afford the
Company a reasonable opportunity to prevent or limit any such disclosure.
(c) During the Employment Period and for a period of three (3)
years thereafter, Executive will preserve and protect as confidential all of the
Confidential Information known to Executive or at any time in Executive's
possession. In addition, during the Employment Period and at all times
thereafter, Executive will not disclose to any unauthorized person or use for
his own account any of such Confidential Information without the Board's or the
Chief Executive Officer's written consent. Executive agrees to deliver to the
Company at a Separation, or at any other time the Company may request in
writing, all memoranda, notes, plans, records, reports and other documents (and
copies thereof) containing or otherwise relating to any of the Confidential
Information (including, without limitation, all acquisition prospects, lists and
contact information) which he may then possess or have under his control.
Executive acknowledges that all such memoranda, notes, plans, records, reports
and other documents are, and at all times shall be and shall remain, the
property of the Company.
- 3 -
4
(d) Executive will fully comply with any agreement reasonably
required by any of the Company's customers, both actual and potential, business
partners, suppliers or contractors with respect to the protection of the
confidential and proprietary information of such persons or entities.
3. NONCOMPETITION AND NONSOLICITATION. Executive acknowledges that in
the course of his employment with the Company, he will become familiar with the
Confidential Information concerning the Company and the Business, including
without limitation customer lists and contacts, and that his services will be of
special, unique and extraordinary value to the Company. Executive agrees that
the Company has a protectable interest in the Confidential Information acquired
by Executive during the course of his employment with the Company. Therefore,
Executive agrees to the following:
(a) Noncompetition. So long as Executive is employed or
affiliated with the Company and for an additional one (1) year thereafter, he
shall not, anywhere within 50 miles of any of the Company's offices in the
United States, directly or indirectly own, manage, control, participate in,
consult with, render services for, or in any manner engage in, any customer or
any business actually competing with the Business of the Company, in whole or in
part, at the time of termination.
(b) Nonsolicitation. So long as Executive is employed or
affiliated with the Company and for an additional two (2) years thereafter, the
Executive shall not directly or indirectly through another entity (i) induce or
attempt to induce any employee of the Company to leave the employ of the
Company, or in any way interfere with the relationship between the Company and
any employee thereof, (ii) hire any person who was an employee of the Company
within one year prior to the time such employee was hired by the Executive,
(iii) induce or attempt to induce any owner of a customer, supplier, licensee or
other business relation of the Company to cease doing business with the Company
or in any way interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company, or (iv) directly or
indirectly acquire or attempt to acquire an interest in any business relating to
the Business of the Company and with which, to Executive's knowledge, the
Company has entertained discussions or has requested and received information
relating to the acquisition of such Business by the Company in the one-year
period immediately preceding a Separation.
(c) Enforcement. If, at the time of enforcement of SECTION 2
or SECTION 3 of this Agreement, a court holds that the restrictions stated
herein are unreasonable under the circumstances then existing, the parties
hereto agree that the maximum duration, scope or geographical area reasonable
under such circumstances shall be substituted for the stated period, scope or
geographical area and that the court shall be allowed to revise the restrictions
contained herein to cover the maximum duration, scope and geographical area
permitted by law. Because Executive's services are unique and because Executive
has access to Confidential Information, the parties hereto agree that money
damages would be an inadequate remedy for any breach of this Agreement.
Therefore, in the event of a breach or threatened breach of SECTION 2 or SECTION
3 of this Agreement, the Company or any of its successors or assigns shall, in
addition to other rights and remedies existing in its favor, be entitled to
specific performance and/or injunctive or other relief in order to enforce, or
prevent any violations of, the provisions of SECTION 2 or SECTION 3 from any
court of competent jurisdiction.
- 4 -
5
(d) Additional Acknowledgments. Executive acknowledges that
the provisions of this Section are in consideration of: (i) employment with the
Company and (ii) additional good and valuable consideration as set forth in this
Agreement. Executive expressly agrees and acknowledges that the restrictions
contained in SECTION 2 and SECTION 3 do not preclude Executive from earning a
livelihood, nor does it unreasonably impose limitations on Executive's ability
to earn a living. In addition, Executive agrees and acknowledges that the
potential harm to the Company of its non-enforcement outweighs any harm to the
Executive of its enforcement by injunction or otherwise. Executive acknowledges
that he has carefully read this Agreement and has given careful consideration to
the restraints imposed upon the Executive by this Agreement, and is in full
accord as to their necessity for the reasonable and proper protection of the
Confidential Information. Executive expressly acknowledges and agrees that each
and every restraint imposed by this Agreement is reasonable with respect to
subject matter, time period and geographical area.
(e) Executive's Representations and Warranties. Executive
represents and warrants that he has full right and authority to enter into this
Agreement and fully perform his obligations hereunder, that he is not subject to
any non-competition agreement that would prevent or restrict him in any way from
rendering the services hereunder anywhere in the world, and that his past,
present and anticipated future activities have not, and will not, infringe on
the proprietary rights of others. Executive further represents and warrants that
he is not obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment,
decree or order of any court or administrative agency which would conflict with
his obligation to use his best efforts to promote the interests of the Company
or which would conflict with the Company's business as conducted or proposed to
be conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business as an officer, director or employee by
Executive, will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which Executive is now obligated.
(f) Notwithstanding the foregoing, the terms and conditions of
SECTION 3(a) shall be inoperative and shall have no further effect, and
Executive shall have no continuing obligation with respect thereto, upon (A) the
occurrence of an event which constitutes a Change of Control (as defined herein)
of the Company and (B)(i) the termination of Executive's employment without
Cause (as defined herein) or (ii) termination of employment by Executive with
Good Reason (as defined herein), in either case within one (1) year of the date
on which the Change of Control takes place.
4. DEFINITIONS.
"BENEFICIAL OWNER" means a beneficial owner within the meaning of Rule
13d-3 under the Exchange Act.
"CAUSE" means (i) the commission of a felony or a crime involving moral
turpitude or the intentional commission of any other act or omission involving
dishonesty or fraud with respect to the Company or any of its customers or
suppliers, (ii) conduct tending to bring the Company into public disgrace or
disrepute, (iii) substantial and repeated failure to perform duties of the
office held by Executive as reasonably directed by the Board or the Chief
Executive
- 5 -
6
Officer not cured within fifteen (15) days after written notice
thereof, (iv) gross negligence or willful misconduct with respect to the
Company, its customer, suppliers or employees or (v) any breach of Section 2 or
Section 3 of this Agreement by Executive.
"CHANGE OF CONTROL" means: (A) the dissolution or liquidation of the
Company or upon a merger, consolidation, or reorganization of the Company with
one or more other entities in which the Company is not the surviving entity, (B)
the sale of substantially all of the assets of the Company to another entity or
(C) any transaction (including, without limitation, a merger or reorganization
in which the Company is the surviving entity) approved by the Board that results
in any person or entity (or person or entities acting as a group or otherwise in
concert), owning fifty percent (50%) or more of the combined voting power of all
classes of securities of the Company (other than persons who are shareholders or
affiliates of the Company at the time the Plan is approved by the Company's
shareholders.
"DISABILITY" means a physical or mental condition which, for a
continuous period of at least six (6) months, has or will prevent the Executive
from performing his duties on a full time basis and in a professional and
consistent manner. Any dispute as to the Executive's Disability shall be
referred to and resolved by a licensed physician selected and approved by the
Board.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as
amended.
"GOOD REASON" means Executive's resignation within 30 days after his
discovery of any material breach of Section 1 of this Agreement by the Company
which is not cured within thirty (30) business days after written notice thereof
from Executive.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
5. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, mailed by first class mail
(postage prepaid and return receipt requested) or sent by reputable overnight
courier service (charges prepaid) to the recipient at the address below
indicated:
If to the Company:
Cysive, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Xx. and Xxxxxx X. Xxxxx
If to the Executive:
Xxxxxx X. Xxxxxx
Cysive, Inc.
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
- 6 -
7
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement will be deemed to have been given when so delivered
or sent or, if mailed, five days after deposit in the U.S. mail.
6. GENERAL PROVISIONS.
(a) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(b) Complete Agreement. This Agreement, those documents
expressly referred to herein and other documents of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in
any way.
(c) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be enforceable
by Executive and the Company and their respective successors and assigns.
(e) Choice of Law. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits hereto will be
governed by and construed in accordance with the internal laws of the
Commonwealth of Virginia, without giving effect to any choice of law or conflict
of law provision or rule (whether of the Commonwealth of Virginia or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the Commonwealth of Virginia.
(f) Remedies. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement may
be amended and waived only with the prior written consent of the Company and the
Executive.
- 7 -
8
(h) Business Days. If any time period for giving notice or
taking action hereunder expires on a day which is a Saturday, Sunday or holiday
in the state in which the Company's principal place of business is located, the
time period shall be automatically extended to the business day immediately
following such Saturday, Sunday or holiday.
(i) Termination. This Agreement (except for the provisions of
Sections 1(a) and 1(b)) shall survive a Separation and shall remain in full
force and effect after such Separation.
[The rest of this page left blank intentionally]
- 8 -
9
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Employment Agreement on the date first written above.
CYSIVE, INC.
By: /s/ XXXXXX X. XXXXXXXXX, XX.
Name: Xxxxxx X. Xxxxxxxxx, Xx.
Title: Chairman, President and
Chief Executive Officer
EXECUTIVE
/s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
- 9 -
