Exhibit 10.20
EXECUTION COPY
AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of February 2,
2000, between OPUS360 CORPORATION, a Delaware corporation (the "Company"), and
XXXXXXX X. XXXXXX (the "Employee").
WHEREAS, the Company and the Employee are parties to an existing
employment agreement, dated January 21, 2000 (the "Existing Employment
Agreement"), pursuant to which the Company agreed to employ the Employee as of
the Start Date (as defined below) and to grant to the Employee an option to
purchase shares of the Company's common stock. The parties hereto desire to
amend and restate the Existing Employment Agreement to provide for, among other
things, (i) the amendment of the number of Options (as defined below) granted to
the Employee and (ii) the modification and amendment of certain other terms and
conditions of the Existing Employment Agreement. The Company and the Employee
desire and have agreed to amend and restate the Existing Employment Agreement in
its entirety as and pursuant to this Agreement.
WHEREAS, the Company desires to employ the Employee as the President
and Chief Operating Officer of the Company; and
WHEREAS, the Employee desires to accept such employment by the
Company, on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Employee hereby agree as follows:
Section 1. Employment.
The Company hereby employs the Employee, and the Employee hereby
accepts employment by the Company, upon the terms and subject to the conditions
hereinafter set forth.
Section 2. Term of Employment.
The Employee's employment hereunder shall be for the period
commencing on February 1, 2000 (the "Start Date") and ending on the day
immediately prior to the third anniversary of the Start Date (the "Base Term");
provided, however, unless earlier terminated pursuant to the provisions of
Sections 6, 7, 8 or 9 hereof, the Base Term shall be automatically renewed and
extended for successive one-year terms without further act of the parties (each,
a "Renewal Term" and together with the Base Term, collectively, the "Employment
Period"), unless either the Company or the Employee gives the other party hereto
at least 45 days prior written notice before the end of the Employment Period of
such party's intent not to renew this Agreement (each, a "Right Not To Extend").
Section 3. Duties.
The Employee shall be employed as the President and Chief Operating
Officer of the Company or in such other position as the Company and the Employee
shall agree in writing. The Employee shall report to the Chairman of the Board
of Directors of the Company (the "Board"). The Chief Executive Officer of the
Company, pursuant to the authority granted to the Chief Executive Officer of the
Company in Section 7(iii) of the Stockholders' Agreement, dated as of December
24, 1998, as amended and extended, shall use his best efforts to appoint the
Employee as a Tranche 3 Director of the Company prior to a Qualified Offering
(as such term is defined in the Company's Second Amended and Restated
Certificate of Incorporation). The Employee shall perform such duties and
services as are appropriate and commensurate with the Employee's position as
President and Chief Operating Officer of the Company and as are otherwise
consistent in stature and prestige with the position of President and Chief
Operating Officer of a corporation with similar operations as the Company, and
shall perform such additional duties and services which are similarly consistent
with such position as may reasonably be assigned to him from time to time by the
Board. The Employee shall be based in the New York City metropolitan area.
Section 4. Time to be Devoted to Employment.
(a) Except for three weeks vacation during each 12-month period
worked (in addition to public holidays), absences due to temporary illness and
time spent as a director in respect of a directorship held by the Employee on or
prior to the Start Date, the Employee shall devote substantially all of his
business time, attention and energies to the business and affairs of the Company
during the Employment Period.
(b) During the Employment Period, the Employee shall not engage in
any other business activity which conflicts with the duties of the Employee
hereunder, whether or not such activity is pursued for gain, profit or other
pecuniary advantage; provided, however, to the extent not in conflict with this
Section 4, the
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Employee shall not be prohibited from (i) serving as an officer, director,
trustee or otherwise participating in purely educational, welfare, social,
charitable, religious and civic organizations, or (ii) managing personal and
family investments, in each case to the extent such activities (A) do not
interfere or conflict in any material respect with the performance of his duties
and responsibilities hereunder and (B) are conducted in accordance with the
limitations of Section 11. Except with the prior written approval of the Board
(excluding the Employee if he should be a member of the Board at the time of
such determination), which the Board may grant or withhold in its sole and
absolute discretion, the Employee, during the Employment Period, will not serve
on the board of directors or similar body of any business entity other than the
Company or any subsidiary thereof (other than with respect to any directorship
held by the Employee on or prior to the Start Date, which directorships, if any,
have been disclosed in writing by the Employee to the Company).
Section 5. Compensation; Reimbursement.
(a) During the Employment Period, the Company (or at the Company's
option, any subsidiary or affiliate thereof) shall pay to the Employee an annual
salary (the "Base Salary") of not less than $250,000, payable semi-monthly. Such
Base Salary will be reviewed at least annually and may be increased by the Board
or the Board's designee (excluding the Employee if he should be a member of the
Board at the time of such determination) in its sole discretion. Effective as of
any such increase, the Base Salary as so increased shall be considered the new
Base Salary for all purposes of this Agreement and may not thereafter be
reduced.
(b) The Employee shall be eligible to receive an annual bonus of no
less than one hundred thousand dollars ($100,000) during each calendar year of
the Employment Period (pro-rated for partial calendar years of employment by the
Company for calendar years after 2000) based upon his achievement of performance
criteria mutually agreed upon by the Employee and the Company. The performance
criteria for the first year of the Employment Period shall be satisfied in the
event that the Company achieves gross revenue of $15 million for calendar year
2000. With respect to subsequent calendar years, it is expected that the
performance criteria will be based on increasing gross revenue targets to be
agreed upon within thirty (30) days after each anniversary of this Employment
Agreement and that such targets shall be consistent with and no higher than the
performance targets established for the Chief Executive Officer of the Company
for such calendar year.
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(c) During the Employment Period and to the extent available to
senior executive officers of the Company, the Employee shall be entitled to
participate in all of the Company's benefit plans, pension and retirement plans,
life insurance, hospitalization and surgical and major medical coverages, sick
leave, vacation and holiday policies, long-term disability coverage and such
other fringe benefits enjoyed by other senior executive officers of the Company.
Notwithstanding anything to the contrary contained in this Section 5(c), at no
time during the Employment Period shall the long-term disability coverage and
life insurance benefits that the Company provides to the Employee be reduced to
a level below that being provided to the Employee as of the Start Date.
(d) The Company shall reimburse the Employee, in accordance with the
practice from time to time for other senior executive officers of the Company,
for all reasonable and necessary traveling expenses, disbursements and other
reasonable and necessary incidental expenses incurred by him for or on behalf of
the Company in the performance of his duties hereunder upon presentation by the
Employee to the Company of appropriate vouchers.
(e) The Company shall grant the Employee, on the date of grant, (i)
an option (the "ISO") to purchase up to 21,945 shares (as adjusted pursuant to
the Stock Option Agreements (as defined below)) of common stock of the Company
(the "Common Stock") pursuant to the terms and conditions of a written option
agreement between the Company and the Employee, the form of which is attached
hereto as Exhibit A (the "ISO Agreement"), which shall contain all of the terms
and conditions of the ISO, and (ii) an option (the "NSO" and together with the
ISO, "Options") to purchase up to 983,055 shares (as adjusted pursuant to the
Stock Option Agreements) of Common Stock pursuant to the terms and conditions of
a written option agreement between the Company and the Employee, the form of
which is attached hereto as Exhibit B (the "NSO Agreement" and together with the
ISO Agreement, the "Stock Option Agreements"), which shall contain all of the
terms and conditions of the NSO. 200,000 of Options shall vest on the date of
grant and the remaining 805,000 of Options shall vest over three years, 6/36 of
such amount shall vest on the six month anniversary of the date of grant and
1/36 of such amount shall vest each month thereafter. The Company shall at least
once each year commencing in 2001 consider the Employee for future annual or
other grants of stock options and other equity awards on at least the same basis
as such options and equity awards are granted to other senior executive
officers.
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(f) The Employee authorizes the Company to deduct from any amounts
payable to him hereunder such sums as may be required to be deducted or withheld
under the provisions of any federal, state or local law or regulation now in
effect or hereafter put into effect during the term of this Agreement,
including, without limitation, social security and income withholding taxes.
Section 6. Involuntary Termination.
(a) If the Employee is incapacitated or disabled by accident,
sickness or other cause so as to render him mentally or physically incapable of
performing the services required to be performed by him under this Agreement for
a period of 120 consecutive days or longer, or 150 days or longer during any 200
day period (such condition being herein referred to as a "Disability"), prior to
the Employee resuming the performance of his duties as contemplated herein, the
Company may terminate the employment of the Employee under this Agreement (an
"Involuntary Termination"). Until the Company or the Employee shall have
terminated the Employee's employment hereunder, the Employee shall be entitled
to receive his compensation and other benefits as set forth in this Agreement
notwithstanding any such Disability.
(b) Any determination as to whether the Employee is subject to a
physical or mental incapacity shall first be made by the Board (excluding the
Employee if he should be a member of the Board at the time of such
determination) in its good faith judgment; provided, however, if any such
determination is disputed by the Employee, the matter shall be referred to a
licensed physician practicing within New York, New York or a 50-mile radius
thereof and selected by the Board and the Employee, and the determination of
Disability made by such physician shall be final and binding on both the
Employee and the Company. The Employee represents and warrants to the Company
that, to the best of his knowledge, he does not have a Disability as of the date
hereof.
(c) If the Employee dies during the Employment Period, his
employment hereunder shall be deemed to cease as of the date of his death, and
the termination of his employment occasioned thereby shall be deemed an
Involuntary Termination.
Section 7. Termination for Cause or Without Cause.
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(a) The Company may terminate the Employee's employment hereunder at
any time during the Employment Period for "Cause" (a "Termination for Cause").
Prior to, and in connection with, any Termination for Cause, (1) the Chief
Executive Officer of the Company or his designee shall give written notice to
the Employee of the specific circumstances which may constitute the basis for a
Termination for Cause, (2) the Employee shall be provided with ten (10) days to
cure the basis for a Termination with Cause (but only if such basis is capable
of cure), and (3) the Board shall have determined, in its sole discretion (so
long as not arbitrary or capricious), by a vote of not less three-fourths (3/4)
of the Board (excluding the Employee if he should be a member of the Board at
the time of such determination) at a meeting called and held for such purpose,
after reasonable notice to the Employee and an opportunity for the Employee,
together with his counsel, to be heard before the Board, that the Company has
Cause to terminate the Employee's employment. For purposes of this Agreement,
"Cause" shall be limited to:
(i) the gross negligence or willful refusal or failure by the
Employee to attempt to substantially perform the duties described in
Section 3 (other than any failure resulting from an illness or other
similar incapacity or disability);
(ii) the Employee's conviction of, or plea of nolo contendere
to, misappropriation of funds, properties or assets of the Company, or any
other act of fraud, theft or financial dishonesty involving the Company or
its subsidiaries, or slander or libel concerning the Company or a material
tort relating to his office or employment with the Company that has a
material adverse effect on the Company;
(iii) the material breach by the Employee of the provisions of
this Agreement including, without limitation, the covenants set forth in
Sections 11 and 12 hereof;
(iv) the Employee's conviction of, or plea of nolo contendere
to, a crime constituting a felony (other than a traffic violation) or any
criminal act involving moral turpitude; or
(v) the Employee's inability to perform his duties as a result
of alcohol or drug abuse, chronic alcoholism or drug addiction.
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(b) The Company may terminate the Employee's employment hereunder at
any time during the Employment Period without "Cause" by providing written
notice of such termination to the Employee (a "Termination Without Cause") at
least five days prior to such Termination Without Cause or pay in lieu of such
notice.
Section 8. Termination for Poor or Incompetent Performance.
The Company may not terminate the Employee's employment hereunder at
any time during the first year of the Base Term for the Employee's poor or
incompetent performance of his duties or responsibilities hereunder. Thereafter,
the Company may terminate the Employee's employment hereunder at any time for
poor or incompetent performance ("Termination for Poor or Incompetent
Performance"); provided that the Board shall have determined, in its sole
discretion (so long as not arbitrary or capricious), by a vote of not less
three-fourths (3/4) of the Board (excluding the Employee if he should be a
member of the Board at the time of such determination) at a meeting called and
held for such purpose, after reasonable notice to the Employee and an
opportunity for the Employee, together with his counsel, to be heard before the
Board, that the Employee's performance hereunder has been poor or incompetent.
Section 9. Termination for Good Reason or by Resignation.
(a) The Employee may terminate his employment hereunder at any time
during the Employment Period for "Good Reason."
(b) For purposes of this Agreement:
(i) "Good Reason" means (A) a reduction in the title or any
material reduction in the authority, duties, responsibilities,
compensation, benefits or reporting line of the Employee from those on the
Start Date, where such reduction or material reduction is not cured within
10 days after written notice thereof by the Employee to the Company, (B) a
Change of Control, if (1) within one (1) year of such Change of Control
the employment of the Employee is terminated by the Company for any
reason, or (2) during the 30-day period commencing 6 months after a Change
of Control the Employee terminates his employment for any or no reason,
(C) a material breach
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by the Company of this Agreement, which breach is incurable or otherwise
not cured within 10 days after written notice thereof by the Employee to
the Company, (D) the failure of the Employee to be elected as a member of
the Board or the removal of the Employee as a member of the Board (other
than in connection with a Termination for Cause), (E) the failure of the
Company to grant the Employee the Options pursuant to the Stock Option
Agreements provided for in Section 5(e) of this Agreement, or (F) the
failure of the Company to obtain a satisfactory agreement from any
successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business and/or assets of
the Company to assume and agree to perform this Agreement to the same
extent that the Company is required to perform it, in each case without
the prior written consent or waiver of the Employee.
(ii) the Employee's continued employment shall not constitute
consent to or a waiver of rights with respect to, any circumstances
constituting Good Reason hereunder.
(iii) "Change in Control" of the Company shall be deemed to
have occurred if:
(A) there shall be consummated (x) any consolidation or
merger of the Company in which the Company is not the continuing or
surviving corporation or pursuant to which shares of Common Stock would be
converted into cash, securities or other property, other than a merger of
the Company in which the holders of Common Stock immediately prior to the
merger own a majority of the common stock of the surviving corporation
immediately after the merger, or (y) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company;
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(B) the stockholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company; or
(C) any person (as such term is used in Sections 13(d)
and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), other than Xxx X. Xxxxxxxx, shall become the beneficial
owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or
more of the outstanding Common Stock.
(c) The Employee may terminate his employment hereunder at any time
during the Employment Period without "Good Reason" by providing written notice
of such termination to the Company (a "Resignation") at least five days prior to
such Resignation.
Section 10. Effect of Termination of Employment.
(a) Termination For Cause or by Resignation. Upon the termination of
the Employee's employment hereunder pursuant to a Termination For Cause or a
Resignation, neither the Employee nor his beneficiary or estate shall have any
further rights or claims against the Company under this Agreement except to
receive:
(i) any unpaid portion of the Base Salary provided for in
Section 5(a), computed on a pro rata basis to the date of termination;
(ii) cash compensation equal to the product of (A) the number
of days of accrued vacation, if any, accumulated by the Employee to the
date of termination divided by 365 multiplied by (B) the Base Salary;
(iii) reimbursement for any expenses for which the Employee
shall not have theretofore been reimbursed as provided in Section 5(d);
(iv) any bonus from the prior calendar year which has been
earned but not yet paid; and
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(v) all vested benefits under any compensation or employee
benefit plan maintained by the Company, whether funded or unfunded,
accrued through the date of termination.
(b) Involuntary Termination. Upon the termination of the Employee's
employment hereunder pursuant to an Involuntary Termination, neither the
Employee nor his beneficiary or estate shall have any further rights or claims
against the Company under this Agreement except the right:
(i) to receive the payments and benefits, if any, equal to
those provided for in Section 10(a) hereof;
(ii) to receive monthly cash severance payments in an amount
equal to one-twelfth of the cash compensation (including Base Salary and
bonus) received by the Employee during the 12-month period immediately
prior to the date of termination under this subsection; provided, however,
that if such termination occurs prior to the date of payment of any bonus
for calendar year 2000, the bonus amount for such calculation shall be
deemed to be $100,000 (such monthly payments, "Monthly Severance"), for a
period of twelve (12) months;
(iii) to be credited with one additional year of employment
for purposes of calculating the Employee's vested interest in the Options
and any other stock options and equity awards granted to the Employee
during the Employment Period, which Options and other options shall vest
according to their original schedule as if the Employee's employment
hereunder had continued for twelve (12) months from the date of
Involuntary Termination, and all such Options and other options shall be
exercisable by the Employee for their full remaining term; and
(iv) in the case of termination due to a Disability, to
receive all benefits pursuant to Section 5(c) above for a period of twelve
(12) months following the date of such termination.
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(c) Termination Without Cause or With Good Reason. Upon the
termination of the Employee's employment hereunder pursuant to a Termination
Without Cause or With Good Reason, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
(i) to receive the payments and benefits, if any, equal to
those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period lasting the
longer of (A) twelve (12) months, or (B) the remainder of the Base Term;
provided, however, that the Employee will not be entitled to any such
payments in the event that the Employee becomes employed by another entity
during the period that such payments would otherwise be due;
(iii) to become fully vested in all of the Options and any
other stock options and equity awards granted to the Employee during the
Employment Period, which Options and other options shall vest according to
their original schedule as if the Employee's employment hereunder had
continued until all such Options and other options had fully vested, and
all such Options and other options shall be exercisable by the Employee
for their full remaining term; and
(iv) to receive all benefits pursuant to Section 5(c) above
for a period lasting the longer of (A) twelve (12) months from the date of
Termination Without Cause or With Good Reason, or (B) the remainder of the
Base Term; provided, however, that the Employee will not be entitled to
any such benefits in the event that the Employee becomes employed by
another entity during the period that such benefits would otherwise be
due.
(d) Termination for Poor or Incompetent Performance. Upon
termination of the Employee's employment hereunder pursuant to a Termination for
Incompetence or Non-Performance, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right:
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(i) to receive payments and benefits, if any, equal to those
provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period of twelve (12)
months; provided, however, that the Employee will not be entitled to any
such payments in the event that the Employee becomes employed by another
entity during the period that such payments would otherwise be due; and
(iii) to be credited with twelve (12) additional months of
employment for purposes of calculating the Employee's vested interests in
the Options and any other stock options and equity awards granted to the
Employee during the Employment Period, which options shall vest according
to their original schedule as if the Employee's employment hereunder had
continued for twelve (12) months from the date of the Termination for Poor
or Incompetent Performance, and all such Options and other options shall
be exercisable by the Employee for their full remaining term.
(iv) to receive all benefits pursuant to Section 5(c) above
for a period of twelve (12) months following the date of such Termination
for Poor or Incompetent Performance; provided, however, that the Employee
will not be entitled to any such benefits in the event that the Employee
becomes employed by another entity during the period that such benefits
would otherwise be due.
(e) Termination Based on the Employee's Right Not To Extend. Upon
the termination of the Employee's employment hereunder pursuant to the
Employee's Right Not To Extend, neither the Employee nor his beneficiary or
estate shall have any further rights or claims against the Company under this
Agreement except the right to receive the payments and benefits, if any, equal
to those provided for in Section 10(a) hereof.
(f) Termination Based on the Company's Right Not To Extend. Upon the
termination of the Employee's employment hereunder pursuant to the Company's
Right Not To Extend, neither the Employee nor his beneficiary or estate shall
have any further rights or claims against the Company under this Agreement
except the right:
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(i) to receive the payments and benefits, if any, equal to
those provided for in Section 10(a) hereof;
(ii) to receive Monthly Severance, for a period of twelve (12)
months; provided, however, that the Employee will not be entitled to any
such payments in the event that the Employee becomes employed by another
entity during the period that such payments would otherwise be due;
(iii) to become fully vested in all of the Options and any
other stock options and equity awards granted to the Employee during the
Employment Period, which Options and other options shall vest according to
their original schedule for twelve (12) months from the date of
Termination Based on the Company's Right Not To Extend, and all such
Options and other options shall be exercisable by the Employee for their
full remaining term; and
(iv) to receive all benefits pursuant to Section 5(c) above
for a period of twelve (12) months following the date of the termination
of the Employee's employment hereunder pursuant to the Company's Right Not
To Extend; provided, however, that the Employee will not be entitled to
any such benefits in the event that the Employee becomes employed by
another entity during the period that such benefits would otherwise be
due.
(g) If the Employee's employment with the Company hereunder is
terminated pursuant to Sections 2, 6, 7, 8 or 9, the Employee shall not have the
obligation to mitigate his damages as a result of such termination.
(h) Any obligations of the Company to provide payments and benefits
to the Employee under this Section 10 are expressly conditioned on the
Employee's compliance with Sections 11 and 12 of this Employment Agreement.
(i) Except to the extent requested by the Board, upon the date of
termination, the Employee shall immediately resign all positions and
directorships with the Company and each subsidiary thereof.
Section 11. Non-Competition; Non-Solicitation.
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(a) In consideration of the compensation and other benefits to be
provided to the Employee hereunder, the Employee shall not, directly or
indirectly, for any reason whatsoever, during the Employment period and for a
period of one year following the Employee's Termination for any reason,
including without limitation Termination for Cause, Termination for Poor or
Incompetent Performance, Termination without Cause, Termination by Employee with
Good Reason, or Employee's Resignation:
(i) engage, become involved or acquire an interest in any
Competitive Business (as hereinafter defined), whether such engagement,
interest or involvement shall be as an employee, employer, manager,
material investor, owner, consultant, lender, partner or other participant
in any Competitive Business;
(ii) assist others in engaging in any Competitive Business in
the manner described in the foregoing clause (i);
(iii) solicit or induce, or attempt to solicit or induce,
employees of, consultants to, or independent contractors of, the Company
or its subsidiaries to terminate their employment, engagement or
affiliation with the Company or in any way interfere with the relationship
between the Company or any of its subsidiaries, on the one hand, and any
such employee of, consultant to, or independent contractor of the Company
or any of its subsidiaries, on the other hand; or
(iv) knowingly employ or retain any such employee of,
consultant to, or independent contractor of the Company or any of its
subsidiaries during his or her employment, engagement or affiliation with
the Company or any of its subsidiaries for a period of three months after
the termination of such employee's, consultant's or independent
contractor's employment, engagement or affiliation with the Company or any
of its subsidiaries unless such retainer is not competitive, and does not
interfere with, the simultaneous retention of such consultant or
independent contractor by the Company.
(v) induce customers or vendors of the Company; or any
independent knowledge workers or other information technology
professionals, or end user organizations that have a business
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relationship with the Company, to alter or terminate their business
relationship with the Company or any of its subsidiaries; provided,
however, that nothing contained in this Section 11 shall be deemed to
prohibit the Employee from acquiring, directly or indirectly, solely as a
passive investment, securities of any Competitive Business traded on any
national securities exchange if the Employee is not a controlling person
of, nor a member of a group which controls such person and does not,
directly or indirectly, own 5% or more of any class of securities of such
person. As used herein, the term "Competitive Business" shall mean any
business which competes with the Company in the business of primarily
providing labor resource management services or products relating to
information technology professionals by means of business-to-business
electronic commerce or any business or activity that is substantially the
same as any business or activity conducted by the Company at any time
during the Employee's employment with the Company within the geographic
area that the Company is engaged in such business or activity as of the
Start Date or upon such date that the Employee ceases to receive salary or
severance payments from the Company (including, without limitation, any
subsidiary thereof).
(b) Notwithstanding any other provision of this Agreement to the
contrary, any business activities engaged in by the Employee on behalf of, or in
connection with the Employee's employment by, or service as a director or
consultant to, any subsidiary or affiliate of the Company or in connection with
a directorship held by the Employee on or prior to the Start Date, shall not be
deemed to violate the provisions of this Agreement.
(c) The Employee is aware that the services performed by him for the
Company are of a special, unique and intellectual character and understands that
the foregoing restrictions may limit his ability to earn a livelihood in a
Competitive Business, but he nevertheless believes that he has received and will
receive sufficient consideration and other benefits in connection with his
employment to clearly justify such restrictions which, in any event, the
Employee does not believe would prevent him from earning a living. Nothing
herein contained shall prohibit the Employee from engaging in a business that is
not a Competitive Business.
Section 12. Non-Disclosure of Information.
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The Employee understands that he will have access to Confidential
Information relating to the Company and agrees that he will not, at any time
during or after the Employment Period, disclose to any person, firm, corporation
or other entity, except as required by law, any Confidential Information
concerning the business, clients or affairs of the Company or any subsidiary or
affiliate thereof, or of any person which the Company or any of its subsidiaries
is under an obligation to keep secret or confidential, for any reason or purpose
whatsoever other than in furtherance of the Employee's good faith performance of
his duties as an employee of the Company, nor shall the Employee make use of any
of such Confidential Information for his own purpose or for the benefit of any
person, firm, corporation or other business entity except the Company or any
subsidiary or affiliate thereof. For purposes of this Agreement, "Confidential
Information" shall include, without limitation, products or services, fees,
costs, pricing schedules, designs, analyses, drawings, photographs, reports,
computer software and hardware (including operating systems, applications and
program listings), customers and clients, customer and client lists, marketing
plans and related information, sales plans and related information, operating
policies and manuals, business plans, financial records or practice management
methods, inventions, devices, new developments, methods and processes,
technology or trade secrets, know-how or techniques, whether patentable or
unpatentatable and whether or not reduced to practice, and all similar and
related information in whatever form.
Section 13. Company Right to Inventions and Business Opportunities.
(a) The Employee shall promptly disclose, grant and assign to the
Company for its sole use and benefit any and all (i) discoveries, developments,
designs, improvements, inventions, formulae, processes, techniques, computer
programs, strategies, know-how and data, whether or not patentable or
registerable under patent, copyright, trademark or similar statutes, together
with all patent applications, patents, copyrights, copyright applications,
trademarks, trademark applications and any reissues thereof that may at any time
be granted for or upon any such inventions (the "Inventions") or (ii) business
opportunities relating to the actual or anticipated business of the Company or
any of its subsidiaries ("Business Opportunity"), presented to or learned by the
Employee during the period of the Employee's employment with the Company prior
to any termination of employment (whether or not during usual working hours).
(b) The Employee shall promptly, without charge and at the expense
of the Company, at all times hereafter execute and deliver such applications,
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assignments, descriptions and other instruments as may be reasonably necessary
or proper in the reasonable opinion of the Company to (i) vest title to and
enforce patents, copyrights, trademarks, improvements, technical information and
methods and other rights and protections relating to the Inventions and (ii) to
assign or otherwise establish such ownership of the Company in all rights in or
to such Business Opportunities, and to enable the Company to obtain and maintain
the entire right and title thereto in any and all countries; and
(c) The Employee shall render to the Company at its expense
(including a reasonable payment for the time involved in case he is not then in
its employ) all such assistance as it may reasonably require at times and
locations agreed to by the Company and the Employer in the (i) prosecution of
applications for the Inventions, in the prosecution or defense or interferences
which may be declared involving the Inventions and in any litigation in which
the Company may be involved relating to the Inventions, each including, without
limitation, the execution of assignments, consents, powers of attorney,
applications and other instruments and the giving of testimony in support
thereof or (ii) confirmation and protection of such ownership of the Company in
all rights in or to any Business Opportunities, provided, however, that such
assistance shall not interfere with the Employee's employment or business
activities.
(d) The Employee shall deliver to the Company at the termination of
the Employment Period, or upon the request of the Company, at any time, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Inventions, Business Opportunities or the business of the Company
or any of its subsidiaries, which he may then possess or have under his control,
regardless of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
Section 14. Enforcement.
It is the desire and intent of the parties hereto that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such amendment to apply
17
only with respect to the operation of such provision in the particular
jurisdiction in which such adjudication is made; provided, however, that if any
one or more of the provisions contained in this Agreement shall be adjudicated
to be invalid or unenforceable because such provision is held to be excessively
broad as to duration, geographical scope, activity or subject, such provision
shall be deemed amended by limiting and reducing it so as to be valid and
enforceable to the maximum extent compatible with the applicable laws of such
jurisdiction, such amendment to apply only with respect to the operation of such
provision in the particular jurisdiction in which such adjudication is made.
Section 15. Excise Taxes.
To the extent that any of the payments and benefits provided for in
this Agreement or otherwise payable to the Employee constitute "parachute
payments" within the meaning of Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and, but for this Section 15, would be subject to
the excise tax imposed by Section 4999 of the Code, then the Employee's benefits
under this Agreement shall be payable either (i) in full or (ii) to such lesser
amount as would result in no portion of severance payments being subject to
excise tax under Section 4999 of the Code, which ever of the foregoing amounts,
taking into account the applicable federal, state and local income taxes and
excise tax imposed by Section 4999, results in the receipt by the Employee on an
after tax basis of the greatest amount of severance benefits provided pursuant
to this Agreement, notwithstanding that all or some portion of such severance
benefits may be taxable under Section 4999 of the Code. Unless the Company and
the Employee otherwise agree in writing, any determination required under this
Section shall be made in writing by an independent public accounting firm
selected by the Employee and reasonably acceptable to the Company other than
that used by the Company (the Accountants), whose determination shall be
conclusive and binding upon the Employee and the Company for all purposes. For
purposes of making the calculations required by this Section 15, the Accountants
may make reasonable assumptions and approximations concerning applicable taxes
and may rely on reasonable, good faith interpretations concerning the
application of Section 280G and 4999 of the Code. The Company and the Employee
shall furnish to the Accountants such information as the Accountants may
reasonably request in order to make a determination under this Section 15 The
Company shall bear all costs the Accountants may reasonably incur in connection
with any calculations contemplated by this Section 15.
18
Section 16. Remedies; Survival.
(a) The Employee acknowledges and understands that the provisions of
this Agreement are of a special and unique nature, the loss of which cannot be
accurately compensated for in damages by an action at law, and that the breach
of the provisions of this Agreement would cause the Company irreparable harm. In
the event of a breach by the Employee of the provisions of Section 11, 12, or 13
hereof, the Company shall be entitled to an injunction restraining him from such
breach; provided, however, nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies available for any
breach of this Agreement.
(b) Notwithstanding anything contained in this Agreement to the
contrary, the provisions of Sections 9 through 18, including this Section 16,
shall survive the expiration or other termination of this Agreement until, by
their terms, such provisions are no longer operative.
(c) It is understood and agreed that the provisions of Sections 11,
12 and 13 of this Agreement are separate and distinct from any other agreement
between the parties hereto. Accordingly, in the event of a breach of such
provisions, the breaching party shall only be held responsible for damages
arising under such provisions and not for any damages which may be claimed to
arise under or with respect to any other agreement that is not separately
breached.
Section 17. Notices.
All notices, demands or other communications to be given or
delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given or made when (i) delivered
personally to the recipient, (ii) transmitted by facsimile or electronic mail
(with hard copy sent to the recipient by reputable overnight courier service
(charges prepaid) that same day and, in the latter case, with receipt
acknowledged by the recipient by return electronic mail) if faxed or e-mailed
before 5:00 p.m. (New York City time) on a Business Day, and otherwise on the
next Business Day (as hereinafter defined), (iii) two Business Days after being
sent to the recipient by reputable overnight courier service (charges prepaid),
or (iv) five Business Days after being sent to the recipient by registered or
certified mail (postage prepaid and return receipt requested). The term
"Business Day" shall mean any day, other than a Saturday, Sunday or other day on
which
19
banking institutions in the State of New York are authorized or obligated by law
or executive order to close. Such notices, demands and other communications
shall be sent to the address for such recipient as set forth below (or to such
other address or to the attention of such other person as the recipient party
has specified by like notice):
(i) if to the Company, to:
Opus360 Corporation
000 0xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxx@xxxx000.xxx
with a copy (which shall not constitute notice) to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxx@xxx.xxx
(ii) and, if to the Employee, to:
Xxxxxxx X. Xxxxxx
0 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxxxxxxxxxx@xxxxxxxx.xxx.xxx
20
with a copy to:
Xxxxxx, Xxxxxxx, Xxxxxxxxx & Green, P.C.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx-Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
E-Mail: xxxx-xxxxx@xxxx.xxx
Section 18. General Provisions.
(a) Binding Agreement. This Agreement shall inure to the benefit of
and be enforceable by the Employee's personal or legal representatives,
executors, administrators, successors, heirs, distributees and devisees. If the
Employee should die while any amount would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the beneficiary
designated by the Employee in a writing delivered to the Company, or if there be
no such designated beneficiary, to his estate.
(b) Governing Law and Choice of Jurisdiction and Venue. THE
PROVISIONS OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS ENTERED INTO AND
FULLY PERFORMED WITHIN THE STATE OF NEW YORK BY RESIDENTS OF THE STATE OF NEW
YORK. WITH RESPECT TO ANY LAWSUIT OR PROCEEDING BROUGHT WITH RESPECT TO THIS
AGREEMENT, EACH OF THE PARTIES HERETO IRREVOCABLY (I) SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK OR FEDERAL COURT OF THE
UNITED STATES OF AMERICA SITTING IN NEW YORK, (II) WAIVES ANY OBJECTION IT MAY
HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH
COURT, (III) WAIVES ANY CLAIM THAT SUCH PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM, AND (IV) FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO
SUCH PROCEEDINGS, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.
21
(c) Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement by the other party must be in writing and shall not
operate or be construed as a waiver of any subsequent breach by such other
party.
(d) Complete Agreement; Amendments; Prior Agreements. This Agreement
amends and restates the Existing Employment Agreement in its entirety and this
Agreement, together with the Stock Option Agreements and the other agreements
referred to herein contain the entire agreement between the parties with respect
to the subject matter contained herein and supersede all prior agreements or
understandings written or oral between the parties with respect thereto. The
parties hereto hereby forever release any and all rights under the Existing
Employment Agreement. This Agreement may not be amended, supplemented, canceled
or discharged except by written instrument executed by both parties hereto.
(e) Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
(f) Business Days. If any time period for giving notice or taking
action hereunder expires on a day which is not a Business Day, the time period
for giving notice or taking action shall be automatically extended to the
immediately following Business Day.
(g) Headings. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(h) Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
22
(i) Assignment. With respect to the Employee, this Agreement is
personal in its nature and the Employee shall not assign or transfer this
Agreement or any rights or obligations hereunder. The Company may in its sole
discretion assign or otherwise transfer this Agreement and the provisions hereof
(including, without limitation, Sections 11, 12 and 13) shall inure to the
benefit of, and be binding upon, each successor of the Company, whether by
merger, consolidation, transfer of all or substantially all assets, or
otherwise.
(j) Nouns and Pronouns. Whenever the context may require, any
pronouns used herein shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns and pronouns shall include the
plural and vice-versa.
(k) Construction. Where specific language (such as the word
"including") is used to clarify by example a general statement contained herein,
such specific language shall not be deemed to modify, limit or restrict in any
manner the construction of the general statement to which it relates. The
language used in this Agreement shall be deemed to be the language chosen by the
parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party hereto. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto, and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
(l) Delivery by Facsimile. This Agreement, the agreements referred
to herein, and each other agreement or instrument entered into in connection
herewith or therewith or contemplated hereby or thereby, and any amendments or
supplements hereto or thereto, to the extent signed and delivered by means of a
facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal
effect as if it were the original signed version thereof delivered in person. At
the request of any party hereto or to any such agreement or instrument, each
other party hereto or thereto shall reexecute original forms thereof and deliver
them to all other parties. No party hereto or to any such agreement or
instrument shall raise the use of a facsimile machine to deliver a signature or
the fact that any signature or agreement or instrument was transmitted or
communicated through the use of a facsimile machine as a
23
defense to the formation or enforceability of a contract and each such party
forever waives any such defense.
(m) Indemnification. The Company shall indemnify the Employee to the
fullest extent permitted by applicable law and its certificate of incorporation
and by-laws against all costs, charges and expenses incurred or sustained by the
Employee in connection with his employment with the Company, other than as a
result of actions taken by him in bad faith or due to his gross negligence. This
indemnification obligation shall survive termination of this Agreement. In
addition, during the Employment Period, the Company shall continue to maintain,
and shall cover the Employee under, its Directors and Officers Liability
Insurance and Errors and Omissions Insurance at coverage levels which are no
less than those currently in effect.
(n) Costs And Expenses of Agreement. All reasonable costs and
expenses (including fees and disbursements of counsel) incurred by the Employee
in negotiating the terms and conditions of this Agreement or any agreements
ancillary to this Agreement shall be promptly reimbursed to the Employee by the
Company together with a tax gross-up payment to cover all taxes due on such
payment upon submission of an invoice therefor.
(o) Arbitration. Prior to the commencement of any legal action to
enforce any provision of this Agreement or to resolve any dispute arising under
this Agreement, the Company and the Employee agree to notify the other for the
purpose of determining whether the parties will agree to submit any such dispute
to mediation or arbitration on mutually agreeable terms; provided, however, that
the Company does not need to notify the Employee of its intent to file a legal
action for a breach of Sections 12 or 13 hereof, nor must the Company seek to
mediate or arbitrate any such dispute. Nothing in this Section 18(o) shall
require the parties to mediate or arbitrate any disputes arising under this
Employment Agreement.
* * *
24
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as of the date first above written.
OPUS360 CORPORATION
By: /s/ Xxx X. Xxxxxxxx
---------------------------
Name: Xxx X. Xxxxxxxx
Title:
/s/ Xxxxxxx X. Xxxxxx
------------------------------
XXXXXXX X. XXXXXX
25
EXHIBIT A
ISO AGREEMENT
[TO COME]
26
EXHIBIT B
NSO AGREEMENT
[TO COME]
27
