Exhibit 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of the 16th day of
March, 1998, by and between Sky Alland Research, Inc., d/b/a Sky Alland
Marketing a Maryland corporation (the "Company"), and Xxxxxx X. Xxxxxxxxxx (the
"Employee").
W I T N E S S E T H:
The Company desires to employ the Employee and the Employee is willing to accept
such employment with the Company on the terms and subject to the conditions and
limitations contained in this Agreement. Accordingly, in consideration of the
mutual promises and covenants contained in this Agreement, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs the Employee and the Employee
hereby accepts employment with the Company on the terms and conditions
set forth in this Agreement.
2. DUTIES. The Employee shall perform, under the direction of the
President and the Board of Directors, the duties of Senior Vice
President and General Manager of the Database Technologies Unit for the
Company. The Employee agrees to be so employed and shall devote his
best efforts and substantially all of his business time to advance the
interests of the Company, subject to reasonable vacations compatible
with his position. The Employee shall perform his duties hereunder in
compliance with all Company policies applicable thereto.
3. EMPLOYMENT TERM. The term of the Employee's employment hereunder (the
"Employment Term") shall commence as of the date hereof and, unless
extended by the terms of this Paragraph 3 or otherwise modified by
separate agreement signed by all parties hereto, or terminated as
otherwise provided herein, shall terminate on March 16, 1999. The term
of the Employee's employment shall be renewed and extended
automatically for additional one-year periods thereafter (each, an
"Extended Employment Term"), until terminated pursuant to Paragraph 6
hereof. Paragraphs 8, 9, and 10 shall continue in force in accordance
with
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provisions therein and shall survive the expiration of the Employment
Term and each Extended Employment Term.
4. COMPENSATION. During the Employment Term and each Extended Employment
Term under this Agreement, the Employee shall be paid his entire
compensation for services performed under this Agreement as follows:
a. SALARY. The Employee shall receive a salary ("Salary") paid at
a rate of $12,500 per month, which shall be reviewed at least
annually by the Board of Directors and adjusted by the Board
of Directors in its sole discretion. The Salary shall be paid
in such increments as are established by the Company, but in
no event less frequently than once per calendar month.
b. INCENTIVE COMPENSATION. The Employee will have the ability to
earn a first year success fee of $15k based on accomplishing
mutually agreed upon objectives for the Database Unit. The
Employee will participate in the executive bonus plan, which
will enable him to earn up to 25% of his 1998 base pay if the
Company achieves its 1998 objectives. In accordance with Sky
Alland's Employee Stock Option Plan and subject to Board
approval, the Employee will receive 40,000 options at the
"current market" exercise price of S6.00 per share.
5. OTHER BENEFITS.
a. In addition to the compensation set forth in Paragraph 4. the
Company shall provide for the Employee, during the Employment Term
and each Extended Employment Term, the following benefits:
(i) payment of premiums for a medical insurance plan
covering the Employee, including hospitalization, major
medical, dental and prescriptions, and payment of the
premiums for his dependents for inclusion in such
medical insurance plan, in such amounts which the
Company will pay on behalf of its other management
officials, if at all;
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(ii) disability and life insurance, if any, upon the same
terms and conditions which the Company will grant to
other management officials, if at all;
(iii) the same or similar leave or absence from work on
account of personal illness as is the policy of the
Company to grant to other management officials;
(iv) such number of days of vacation per each calendar year
as the Company grants to other management officials, or
such greater number of days of vacation as may be
determined in the discretion of the Board of Directors.
It is the intention of the parties that the Employee
take all vacation allotted to him within the calendar
year for which the vacation is awarded, consistent with
his duties and the demands on his time made from the
ongoing operation of the Company's business. Should the
Employee not take all of the allotted days of vacation
in a given calendar year which he is entitled to take,
he will lose that vacation time and will not be entitled
either to carry over the unused vacation to succeeding
years or to receive payment in respect of such unused
vacation; and
b. REIMBURSEMENT FOR REASONABLE BUSINESS EXPENSES. The Company shall
reimburse the Employee for reasonable ordinary and necessary
expenses incurred by him in connection with the performance of his
duties pursuant to this Agreement.
6. TERMINATION OF EMPLOYMENT.
a. TERMINATION UPON DEATH OR DISABILITY. The Employee's employment
and this Agreement shall terminate immediately upon the Employee's
death or upon the certification by a duly licensed physician that
the Employee is mentally or physically incapable of performing his
duties hereunder. He, or his estate or heirs, as the case may be,
shall be entitled to receive his rights vested as of the date of
such termination, prorated to that date, and, in the case of
termination on account of disability, he, or his estate or heirs,
as the case may be, shall be entitled to receive disability
benefits as provided under Paragraph 5a(ii), if any.
b. TERMINATION FOR CAUSE. At any time during the Employment Term or
any Extended Employment Term hereunder, the Company shall be
entitled to terminate the Employee's
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employment for Cause. Such Termination for Cause shall be
effective immediately following the delivery by the Company to the
Employee of a written notice thereof specifying the Cause. For
this purpose, "Cause" shall mean: (i) fraud or embezzlement by the
Employee in the course of employment; (ii) conviction of a felony
or of any crime involving moral turpitude; or (iii) willful
misconduct or gross negligence in the performance of his duties
hereunder. In the event of such termination, the Company shall pay
the Employee his Salary through the date of such termination plus
one week's severance for each month of employment not to exceed 24
weeks, and the Employee on account of such termination shall
automatically be divested of any Incentive Compensation accruing
or owed as of the date of such termination.
c. TERMINATION WITHOUT CAUSE. Effective at any time from the date
hereof during the Employment Term, or at any time during any
Extended Employment Term, the Company may terminate the Employee's
employment without Cause. In the event of Termination without
Cause, the Employee shall be entitled to receive his Salary
through the date of termination, plus one week's severance for
each month, or partial month, of employment, not to exceed 24
weeks, and with a minimum of 12 weeks, and the Employee shall be
entitled to any incentive compensation earned and accrued as of
the date of such termination, pro rated through the effective date
of such termination. During the period of severance, Company shall
continue to provide all benefits to the Employee that the Employee
had been entitled to prior to Termination (defined in section 5 of
this agreement), and continue to pay for such benefits at the same
rate as before. Specifically, this is to include medical and other
such benefits as is typically provided to senior management. In
addition to the severance compensation, Employee shall be entitled
to receive compensation at his standard pay rate for any unused
but accrued vacation days through the date of termination.
In the event that Termination without Cause is due to the Company
shutting down either the Database Unit or the Company's New Jersey
Office, and that Company and Employee can not come to an agreement
as to duties following such a closure, the severance shall be set
at 24 weeks, regardless of the number of weeks otherwise accrued
in this section.
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7. DISCOVERIES. The Employee will promptly disclose to the Company each
improvement, discovery, development, idea, and invention, whether
patentable or not, directly or indirectly relating to the business or
products of the Company, made or conceived, in whole or in part, by the
Employee while employed by the Company (whether or not during Company
working hours) if such improvement, discovery, development, idea, or
invention directly or indirectly then results from or was suggested by
such employment, in whole or in part. Each such improvement, discovery,
development, idea, and invention shall be the sole and exclusive
property of, and is hereby assigned to, the Company.
8. COMPETITION. For the period following the last day of employment, and
for the entire time in which Employee shall receive Salary or Severance
compensation under this Agreement (except if Severance is a result of
shutting either the New Jersey Office or the Database Unit, as
described in section 5c), the Employee will not, without the prior
written consent of the Company, solicit or engage directly or
indirectly in any business or activity (either financially or as a
shareholder, employee, officer, partner, independent contractor,
consultant, advisor or owner, or in any other capacity, including, but
not limited to, any capacity calling for the making of any investment
or rendition of personal services or acts of management, operation or
control) which is competitive with the "Company Business" within the
geographic area in which any such Company Business is now being
conducted by the Company. For purposes of the Agreement, the term
Company Business" shall mean the business of providing integrated
customer management services, including but not limited to outsourced
telephone and Internet marketing and customer service, enhanced by
computerized database management.
9. CONFIDENTIALITY. The Employee agrees not to divulge, furnish or make
accessible to any person or entity, and to keep strictly and absolutely
confidential during the initial Employment Term, each Extended
Employment Term, if any, and forever thereafter, any confidential or
secret aspect of the business of the Company or any related company,
including, but not limited to, the finances, trade secrets, customers,
customer lists, suppliers, supplier lists, sales or
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distribution agents and representatives, sales or distribution agent
and representative lists, methods, arts or processes, and the business
plans and marketing strategies of the Company. All records, files,
drawings, documents, models, equipment, computer software and the like
relating to the business of the Company which the Employee shall
prepare or use or come into contact with shall remain the sole property
of the Company.
10. INJUNCTIVE RELIEF. The Employee acknowledges that his compliance with
his agreements in Paragraphs 8 and 9 is necessary to protect the
goodwill and other proprietary interests of the Company. The Employee
acknowledges that a breach of his agreements in Paragraphs 8 or 9 will
result in irreparable and continuing damage to the Company and the
business of the Company for which there will be no adequate remedy at
law, and agrees that, in the event of any breach of the aforesaid
agreements, the Company and its successors and assigns shall be
entitled to injunctive relief and to such other and further relief as
may be proper.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the Employee's employment by the Company and
supersedes any prior agreements between them, whether oral or written.
12. AMENDMENTS. Any amendment to this Agreement shall be made in writing
and signed by both parties hereto.
13. ENFORCEABILITY. If any provision of this Agreement shall be found by a
court with proper jurisdiction to be invalid or unenforceable, in whole
or in part, then such provision shall be deemed to be modified,
narrowed, or restricted only to the limited extent and in the manner
necessary to render the same valid and enforceable, as the case may
require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been
originally incorporated herein as so modified, narrowed, or restricted.
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall be
assignable to the successors of the business of the Company. This
Agreement is personal to the Employee and
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may not be assigned by him.
15. WAIVERS. A waiver by one party of any breach of or failure to comply
with any provision of this Agreement by the other party shall not be
construed as a waiver of any other provision, or a waiver of a breach
of any other provision, of this Agreement.
16. NOTICES. Unless otherwise notified in writing to the contrary, any
notice required or permitted by the terms hereof shall be effectively
delivered for all purposes if delivered personally, upon delivery, or
if mailed, upon deposit in the United States mail, registered or
certified, postage prepaid, and if directed to the Company' at its
principal business office and in the case of the Employee, to his
address appearing on the records of the Company, or to such other
address as he may designate in writing to the Company.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto to be
effective on the date first above written.
Sky Alland Research, Inc.
d/b/a Sky Alland Marketing
By:/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Chief Executive
/s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx
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