EMPLOYMENT AGREEMENT
AGREEMENT by and between XXXXX SYSTEMS CORPORATION, a Delaware corporation
(the "Company"), and XXXX XXXXX ("Associate"), dated as of the 14th day of March
2003.
1. Employment Period. Associate's employment hereunder shall commence on
April 7, 2003 (the "Commencement Date") and shall continue until Associate's
employment terminates pursuant to this Agreement (the "Employment Period").
2. Position and Duties.
(a) Associate agrees to serve as the Vice President for Worldwide
Sales and Marketing for the Company and perform such duties, which shall
not be inconsistent with his position as Vice President , as are assigned
to him from time to time.
(b) During the Employment Period, and excluding any periods of
vacation, holiday, personal leave and sick leave to which Associate is
entitled, the Associate agrees to serve the Company faithfully and to the
best of his ability and to devote the Associate's full business time,
attention and efforts to the business and affairs of the Company.
(c) Associate's primary office shall be located in Xxxxx Systems
offices in Plano, Texas.
3. Compensation.
(a) Base Salary. As his initial base compensation for all services he
renders under this Agreement, Associate shall receive an annualized base
salary ("Annual Base Salary") of $250,000. The Annual Base Salary shall be
paid in accordance with the Company's normal payroll procedures and
practices. The Annual Base Salary shall be reviewed, at least annually, and
adjusted (upward only) in the sole discretion of the Company.
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(b) Incentive Compensation. Associate shall be eligible to participate
in the annual incentive plan according to applicable corporate and/or
individual targets and goals. Such bonus shall nevertheless be payable in
the sole discretion of the Company and shall be paid only if Associate is
employed on the payment date. Associate's target incentive compensation
shall be not less than one hundred percent (100%) of the Annual Base Salary
("Target Incentive"). The maximum amount of any annual incentive plan award
shall be two times the Base Salary.
(c) Signing Bonus. Associate will receive a signing bonus of forty
thousand dollars ($40,000) paid on or before 30 days after the Commencement
Date.
(d) Guaranteed Bonus. For the first calendar year the guaranteed
minimum bonus shall be seventy-five thousand dollars ($75,000) and such sum
shall be paid at the same time as bonuses are normally paid to senior
executives, provided Associate is employed by the Company on the date of
payment.
(e) Benefit Plans. During the Employment Period, Associate shall be
entitled to participate in the employee benefits and perquisites offered
generally by the Company.
(f) Stock Options. As a long-term incentive, the Company will grant to
Associate an option, vesting over five years, to purchase 75,000 shares of
the Company's common stock with an exercise price equal to the fair market
value of the stock on the Commencement Date pursuant to and in accordance
with the terms of the Company's standard stock option agreement under the
Company's 2001 Long-Term Incentive Plan (the "Plan", copies of the Plan and
form agreement are attached as Exhibit A).
(g) In each of the first two years following the year of the
Commencement Date, the Company anticipates that it will award Associate, if
Associate meets the criteria established by the Company, an additional
stock option ("Merit Option") to purchase a total of 10,000 shares of
Company stock, but whether the Merit Option is awarded is in the sole
discretion of the Company. The Merit Option would vest over 5 years and
will
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be pursuant to and in accordance with a stock option agreement as
determined by the Company and the Plan or a successor plan.
(h) Expenses. During the Employment Period, Associate shall be
entitled to reimbursement for all reasonable business expenses he incurs in
carrying out his duties under this Agreement in accordance with the
policies and practices of the Company.
4. Termination of Employment. Associate's employment under this Agreement
may be terminated during the Employment Period as described in this Section 4.
(a) Death or Disability. Associate's employment shall terminate
automatically upon Associate's death. Associate's employment shall
terminate for "Disability" if Associate, due to illness or physical or
mental incapacity, is unable to perform the duties of Associate's position
under this Agreement for a period of six (6) consecutive months.
(b) Termination By the Company. The Company may terminate Associate's
employment at any time for Cause or without Cause. For purposes of this
Agreement, "Cause" shall mean Associate's (i) conviction of or plea of nolo
contendre to a felony or to any crime involving moral turpitude; (ii)
willful misconduct that causes, or creates a significant risk of,
substantial injury to the Company; (iii) repeated failure to undertake
communicated directives on substantial business matters issued through
written instruction to do so; and (iv) any willful breach of this Agreement
that causes or creates a significant risk of substantial injury to the
Company.
(c) Termination By the Associate. Associate may terminate his
employment for Good Reason or without Good Reason. "Good Reason" will exist
in the event that the Company, without curing after notice provided in the
next sentence or without Associate's written consent: (i) institutes a
material adverse change in Associate's title or in the duties assigned to
Associate; (ii) requires Associate to relocate his principal residence to a
location other than the Dallas metropolitan area; (iii) reduces the amount
of
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Associate's salary; or (iv) substantially fails to comply with the
provisions of this Agreement. Associate shall have Good Reason to terminate
his employment if (i) within forty-five (45) days following Associate's
actual knowledge of the event which Associate determines constitutes Good
Reason, he notifies the Company in writing that he has determined a Good
Reason exists and specifies the event creating Good Reason, and (ii)
following receipt of such notice, the Company fails to remedy such event
within forty-five (45) days.
(d) Date of Termination. "Date of Termination" means (i) if
Associate's employment is terminated by the Company (other than for death
or Disability) or by Associate the day after the mailing or otherwise
providing the notice of termination or (ii) if Associate's employment
terminates by reason of death, the date of death of Associate, or if by
reason of Disability, the date of the determination of Disability by the
Company as set forth in Section 4(a).
5. Compensation and Payments upon Termination.
(a) Without Cause; Good Reason. Subject to Section 6, if, during the
Employment Period, the Company terminates Associate's employment without
Cause, or if Associate terminates employment for Good Reason, or if
Associate's employment is terminated by Disability, then the Associate
shall be entitled to receive the following severance benefits for
termination occurring during the first twelve (12) months of this
agreement:
(i) payment of an amount which is 50% of the sum of the
Associate's then Annual Base Salary for the current fiscal year, less
all required withholding and deductions, to be paid in one lump cash
sum; and
(ii) payment of the Associate's Annual Base Salary earned through
the Date of Termination, and any Incentive Plan incentive earned and
due, but not yet paid, less all required withholding and deductions,
to be pain in one lump cash sum.
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The Associate shall also receive for such termination other benefits
and perquisites to be paid or provided to the Associate in accordance with
generally applicable plans and programs of the Company.
(b) Cause; Without Good Reason. If Associate's employment is
terminated by the Company for Cause or Associate voluntarily terminates his
employment without Good Reason, or Associate dies while an employee, the
Company shall pay to Associate (or his estate) any Annual Base Salary
earned through the Date of Termination. The Company shall have no further
obligations under this Agreement.
6. Confidential Information. Associate acknowledges that Associate will
receive confidential information and training from Company, its affiliates,
customers and suppliers because of Associate's relationship of mutual confidence
and trust. This confidential information will include all business, financial
and technical information, including information that Associate develops,
relating to the business activities, products or services of Company, its
customers or suppliers, whether or not such information is identified as
confidential. Confidential information does not include any information that
Company approves for unrestricted public disclosure or is otherwise in the
public domain. Associate agrees not to disclose or use, and will take reasonable
precautions to prevent the disclosure or use of, any of this confidential
information, except in the good faith performance of Associate's duties, or as
required by law, and Associate agrees to return all confidential information to
Company at its request.
7. Proprietary Rights. All copyrights, patent rights and other intellectual
property rights in and to all works of authorship, including software programs,
and inventions that Associate produces, working alone or jointly with others,
while employed by Company, together with all related ideas, know-how and
techniques will be owned solely by Company, except for
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works of authorship or inventions that both (i) Associate develops on
Associate's own time without using Company's resources or confidential
information, and (ii) does not relate to Associate's work for the Company or the
Company's business or actual or demonstrably anticipated research or
development. Associate agrees to disclose and assign to the Company, and waive
(to the maximum extent permitted by law) all moral or similar rights in, all
such works of authorship and inventions, and will sign, without additional
compensation, all necessary documents and otherwise assist the Company, at its
expense, to register and enforce all copyrights, patents and other intellectual
property rights. Associate appoints the Company as Associate's attorney-in-fact
for the sole purpose of executing all necessary documents relating to the
registration or enforcement of the Company's copyrights, patents and other
intellectual property rights. The Company can waive its rights in any work of
authorship or invention only through a written instrument signed by an officer
of the Company after Associate has fully disclosed in writing the existence and
nature of that work of authorship or invention.
8. No Competition. Because of Associate's access to Confidential
Information, for one year after Associate's employment by the Company ends for
any reason, Associate agrees not to solicit or perform services as an employee,
independent contractor or otherwise, for any person (including any affiliates or
subsidiaries of that person) that is or was a customer or prospect of Company
during the one (1) year period prior to that date if Associate solicited
business from or performed services for that customer or prospect while employed
by Company. If a court finds this paragraph to be unreasonable, then this
paragraph will be amended to provide the broadest scope of protection to Company
that such court will allow.
9. No Solicitation. For one year after Associate's employment with the
Company ends, for any reason, Associate agrees not to recruit, hire or help
anyone to recruit or hire anyone who was an employee of the Company or any of
its customers within the six months before
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Associate's employment by the Company ended. The parties agree that this
paragraph shall not be violated by the general advertising for employees or the
hiring of employees by institutions with which Associate is employed so long as
he is not involved in recruiting, soliciting or the inducing of any employee to
leave the Company and joining any entity to which Employee is employed. If a
court finds this paragraph to be unreasonable, then this paragraph will be
amended to provide the broadest scope of protection to Company that such court
will allow.
10. Outside Activities. Associate shall not serve on any Board of Directors
(other than a non-profit Board) without obtaining the consent of the Company.
Associate represents to the best of his knowledge and belief that the
performance of Associate's duties will not violate any obligations that
Associate has to any former employer or other person.
11. Policies. As an employee of the Employer, Associate agrees to read,
review, and comply with all written policies of Company, including its Standards
and Ethical Principles and all other policies published on The Real Time
Associate Network (TRAIN).
12. Notice. Any notice, demand or request required or permitted to be given
or made under this Agreement will be in writing and will be deemed given or made
when delivered in person, when sent by United States registered or certified
mail, or postage prepaid, or when telecopied to a party at its address or
telecopy number specified below:
If to the Company:
Xxxxx Systems Corporation
Attention: Chief Executive Officer
0000 Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Telecopy number: (000) 000-0000
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With a copy to:
Xxxxx Systems Corporation
Attention: General Counsel
0000 Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Telecopy number: (000) 000-0000
If to Employee:
Xxxx Xxxxx
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The parties to this Agreement may change their addresses for notice in the
manner provided above.
13. RETURN OF PROPERTY/OFFSETS. AT THE END OF ASSOCIATE'S EMPLOYMENT,
ASSOCIATE WILL PROMPTLY RETURN ALL THE COMPANY'S PROPERTY AND CONFIDENTIAL
INFORMATION TO THE COMPANY. ASSOCIATE AUTHORIZES COMPANY TO OFFSET, TO THE
MAXIMUM EXTENT PERMITTED BY LAW, ANY AMOUNTS THAT ASSOCIATE OWES COMPANY
AGAINST, AND TO WITHHOLD SUCH AMOUNTS FROM, ANY AMOUNTS, INCLUDING SALARY,
BONUSES, COMMISSIONS AND EXPENSE REIMBURSEMENTS, COMPANY OWES ASSOCIATE.
14. Severability. The paragraphs and provisions of this Agreement shall be
considered severable and the invalidity of all, or any paragraph or provision,
shall not render invalid or impair the binding nature and effect of any other
paragraph or provision contained herein. In addition, it is agreed that any
court of competent jurisdiction may modify any unlawful provision of this
Agreement in order to make the provision valid, reasonable, and enforceable.
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15. Counterparts. This Agreement may be executed in counterparts, all of
which together will constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart.
16. Inventions; Developments. Associate agrees to notify the Company of any
discovery, invention, innovation, or improvement which is related to the
Business (collectively called "Developments") conceived or developed by
Associate during the term of the Associate's employment. All Developments,
including but not limited to, all written documents pertaining thereto, will be
the exclusive property of the Company, as the case may be, and will be
considered Confidential Information subject to the terms of this Agreement.
Associate agrees that when appropriate, and upon written request of the Company,
as the case may be, Associate will acknowledge that Developments are "works for
hire" and will file for patents or copyrights with regard to any or all
Developments and will sign documentation necessary to evidence ownership of
Developments in the Company or the Parent, as the case may be.
17. ELECTRONIC FUNDS TRANSFERS. ASSOCIATE AGREES TO DESIGNATE A CHECKING OR
OTHER BANK ACCOUNT TO ALLOW COMPANY AND ITS AFFILIATES AND AGENTS, AND TO
EXECUTE SUCH DOCUMENTS AS MAY BE NECESSARY TO AUTHORIZE COMPANY AND ITS
AFFILIATES AND AGENTS, TO INITIATE (a) DIRECT DEPOSITS (CREDIT ENTRIES) TO SUCH
ACCOUNT FOR ALL PAYROLL, EXPENSE REIMBURSEMENT AND OTHER AMOUNTS PAYABLE TO
ASSOCIATE BY THE COMPANY, AND (b) WITHDRAWALS (DEBIT ENTRIES) FROM SUCH ACCOUNT
TO CORRECT ERRONEOUS CREDIT ENTRIES OR TO COLLECT AMOUNTS PAYABLE BY ASSOCIATE
TO COMPANY.
18. ELECTRONIC NOTICES AND SIGNATURES. ASSOCIATE AGREES TO RECEIVE DELIVERY
OF ALL
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FUTURE NOTICES AND OTHER COMMUNICATIONS RELATING TO ASSOCIATE'S EMPLOYMENT AND
BENEFITS VIA E-MAIL AT THE ADDRESS ASSIGNED TO ASSOCIATE BY COMPANY, THROUGH
PUBLICATION ON TRAIN OR IN A LOCATION TO WHICH ASSOCIATE HAS ACCESS AND IS
DIRECTED BY E-MAIL OR BY COMPARABLE ELECTRONIC MEANS. ASSOCIATE AUTHORIZES THE
COMPANY AND ITS AFFILIATES (a) TO ACCEPT ASSOCIATE'S ELECTRONIC SIGNATURE AS
BINDING AND FINAL ON ALL FORMS OR AGREEMENTS RELATING TO ASSOCIATE'S EMPLOYMENT,
ASSOCIATE'S HEALTH, WELFARE OR INSURANCE BENEFITS, ASSOCIATE'S EXPENSE REPORTS,
AND ASSOCIATE'S PARTICIPATION IN ANY STOCK OPTION, STOCK PURCHASE OR OTHER
EQUITY INCENTIVE PLAN (INCLUDING ANY STOCK OPTION AGREEMENT AND ANY ENROLLMENT
OR WITHDRAWAL FORMS), AND (b) TO PROCESS ALL EMPLOYMENT-RELATED TRANSACTIONS OR
ANY OTHER ELECTRONIC SUBMISSION INITIATED USING AN ELECTRONIC SIGNATURE PROCESS.
ASSOCIATE'S ELECTRONIC SIGNATURE MAY BE REPRESENTED BY ACTIVATING, THROUGH ANY
SYSTEM OR NETWORK THAT IS PROTECTED BY A PASSWORD OR OTHER INDIVIDUAL IDENTITY
SECURITY METHOD, (1) AN ELECTRONIC "PUSH-BUTTON" DISPLAYED ON TRAIN, (2) AN
INTERACTIVE VOICE RESPONSE SYSTEM, OR (3) ANY COMPARABLE CONDUCT OR ELECTRONIC
PROCESS OR MECHANISM REASONABLY OR COMMONLY UNDERSTOOD TO REPRESENT A MEANS OF
ACKNOWLEDGEMENT OR ASSENT. WITHIN 10 BUSINESS DAYS AFTER ISSUING ASSOCIATE'S
ELECTRONIC SIGNATURE ASSOCIATE MAY REQUEST AND RECEIVE FROM COMPANY A PAPER OR
ELECTRONIC CONFIRMATION THAT ASSOCIATE'S ELECTRONIC SIGNATURE HAS BEEN RECEIVED.
ASSOCIATE AGREES THAT IT IS ASSOCIATE'S RESPONSIBILITY TO USE, PROTECT AND
UPDATE ASSOCIATE'S PASSWORD OR OTHER INDIVIDUAL IDENTITY SECURITY METHOD USED
FOR ELECTRONIC SIGNATURE PURPOSES.
19. GOVERNING LAW AND VENUE. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY RULES OF CONFLICTS OF LAW.
ANY LEGAL ACTION RELATING TO CLAIMS, INCLUDING ANY STATUTORY CLAIMS, ARISING OUT
OF OR RELATING TO ASSOCIATE'S
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EMPLOYMENT SHALL BE BROUGHT ONLY IN A COURT OF COMPETENT JURISDICTION IN DALLAS,
TEXAS, OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
TEXAS. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO
SUBMIT TO THE PERSONAL JURISDICTION OF SUCH COURTS AND WAIVE ANY OBJECTION WHICH
THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN SUCH COURTS. NEITHER
PARTY WILL BE LIABLE TO THE OTHER FOR PUNITIVE DAMAGES FOR ANY SUCH CLAIMS AND
ASSOCIATE HEREBY WAIVES ANY CLAIMS AGAINST COMPANY FOR SUCH DAMAGES. TO THE
FULLEST EXTENT PERMITTED BY LAW, THE PARTIES HERETO WAIVE ANY RIGHT TO A JURY
TRIAL AND AGREE THAT ANY ISSUES BETWEEN THEM MAY BE DECIDED BY A JUDGE WITHOUT A
JURY.
20. Continuing Obligations. Associate agrees that Associate's obligations
with respect to confidential information, proprietary rights, non-competition
and non-solicitation will continue after Associate's employment with Company
ends to the extend provided herein (one year after termination of employment).
Associate also agrees that Associate's breach of any of these obligations will
cause irreparable injury for which there are no adequate remedies at law and
that Company will be entitled to equitable relief in addition to all other
remedies that may be available.
21. Entire Agreement. This Agreement represents the entire agreement of the
parties. It supersedes any prior discussions, promises, or agreements on these
subjects. It cannot be changed except in writing signed by an officer of the
Company and Associate.
22. Miscellaneous. The captions of the Agreement are not part of the
provisions hereof and shall have no force or effect.
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IN WITNESS WHEREOF, Associate has hereunto set Associate's hand and,
pursuant to the authorization of its Board of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
Xxxxx Systems Corporation Xxxx Xxxxx
By: /s/ Xxxxx X. Xxxxxxx Signed: /s/ XXXX XXXXX
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Name: Xxxxx X. Xxxxxxx
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Date: March 26, 2003 Date: March 14, 2003
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