Exhibit 10.6
AGREEMENT
EMPLOYMENT, CONFIDENTIALITY, AND NON-COMPETITION
THIS AGREEMENT, entered into this ___ day of July, 1999 by and between
TANNING TECHNOLOGY CORPORATION, a Delaware corporation doing business at 0000
Xxxxx Xxxxxx Xx., Xxxxx 000, Xxxxxx, Xxxxxxxx 00000 (hereafter referred to as
"Employer") and Xxxxx Xxxxxxx (hereafter referred to as "Employee"), is made
upon the following terms and conditions:
RECITALS:
Employer is willing to accept and engage Employee to work for the Employer
for an indeterminate period of time solely at the Employer's will, and during
such period of employment Employer will provide Employee with certain salary,
benefits, training, workspace, and guidance in return for the full and faithful
performance by the Employee of those duties and responsibilities of the job as
identified in this Agreement and by the Employer from time to time.
Employee understands that significant assets of the Employer consist of
data, code, programs, software, processes, client contacts and lists, and other
technical, business, and financial information of all types developed by the
Employer and the Employer's employees for itself as well as clients and
customers, which assets are held by the Employer as trade secrets (hereinafter,
the "Trade Secrets").
Employee understands that certain information and data may be provided to
the Employer from time to time by clients and customers of the Employer, on the
understanding and condition that such data and information (hereinafter, the
"Third Party Information") will be protected by the Employer and its Employees
as confidential information, and as such will not be disclosed to any entity or
person not authorized by the client or customer.
Employee understands that in the course of performing work for the
Employer that he or she will develop from time to time ideas, processes, codes,
applications, information, data, and other items that will be the work product
of the employment relationship (hereinafter, the "Employment Work Product"), and
that any and all such Employment Work Product shall be and remain the property
of the Employer.
Employee understands that the Employer will invest substantial time and
money into the further training, education, and skill development of the
Employee, both by formal guidance and informal logistical and technical support,
and that such investment in the Employee is also a substantial asset of the
Employer which the Employer is entitled to protect.
Employee understands and agrees that all present and future information
and know-how regarding Employer's business, financial affairs, services,
products, ideas, techniques, processes, plans, technology, codes, clients and
customers, whether or not in writing, and including all Trade Secrets, Third
Party Information, and Employment Work Product (collectively "Confidential
Information") will not be disclosed by the Employee to any person or entity
without the specific authorization of the Employer.
THEREFORE, for and in consideration of the recitals, covenants,
conditions, duties, and forbearances set forth in this document, the Employer
and Employee agree as follows:
1. Period of Employment and the Term of this Agreement. Unless otherwise
---------------------------------------------------
clearly specified in the document entitled "Employee Specific Terms"
(which document is attached to this Agreement and fully incorporated into
this Agreement by this reference), the Employee shall be employed by and
work for the Employer on an "at will" basis. Employment "at will" means
that both the Employer and Employee are given the full right to terminate
the employment relationship at any time, with or without cause to do so,
provided that the obligations set forth hereafter regarding "Termination
of Employment" are met. The provisions of Sections 5, 6, 7, 8, 10, and
14, hereafter, shall survive the termination of this Agreement.
2. Services of the Employee. During the "Period of Employment", the Employee
------------------------
agrees to devote his full time and attention to the business of the
Employer and those duties and obligations entrusted to the Employee as
specified in the Employee Specific Terms document and as specified by the
Employee's supervisor or superiors from time to time. "Period of
Employment" shall mean that period of time that the Employee provides
labor and/or services for the Employer, which may be prior to and after
the date of this Agreement. This obligation shall not prohibit the
Employee from engaging in charitable activities or passive investments on
the Employee's own time. The Employee's primary place of work shall be as
specified in the Employee Specific Terms document.
3. Wage or Salary, Benefits, Vacation, and Other Compensation. Employee
----------------------------------------------------------
shall be paid in the fashion, and at such rate or sum, as are more
particularly set forth in the Employee Specific Terms document. The
Employee shall be eligible for such benefits and Vacation as are also set
forth in the Employee Specific Terms document. The Employer agrees to
reimburse the Employee for all reasonable expenses incurred by the
Employee in connection with the Employee's services to Employer,
consistent with Employer's policies and procedures for reimbursement of
such expenses, as such policies and procedures may exist from time to
time.
-2-
4. Termination of Employment. Unless provided otherwise in the Employee
-------------------------
Specific Terms document, this Agreement, together with the employment
relationship and the Period of Employment shall terminate under certain
circumstances as follows. The termination of the employment relationship
and the Period of Employment shall not terminate the obligation of the
parties to comply with those terms of this Agreement intended to extend
beyond the termination of the Period of Employment, including, without
limitation, those obligations with respect to confidentiality and non-
competition.
A. Death. This Agreement and the Period of Employment shall
-----
automatically terminate upon the death of the Employee.
B. Disability. This Agreement and the Period of Employment shall
----------
automatically terminate in the event of the Disability of the
Employee, subject to any limitations imposed by applicable law, upon
30 days' prior written notice by Employer. "Disability" shall have
the meaning given to such term in the Employer's disability insurance
policies as in effect from time to time.
C. Cause. This Agreement and the Period of Employment shall terminate at
-----
the option of the Employer immediately upon delivery by Employer of
written notice to Employee that:
i. the Employee has acted or failed to act in such a fashion as to
constitute dishonesty, fraud, or other serious misconduct
deemed by Employer to have a material adverse effect upon the
operation of the Employer's business, or
ii. the Employee has willfully failed to follow the lawful
instructions of his or her superiors, or
iii. the Employee has failed to comply with the requirements of
this Agreement and/or any workplace or job performance rule set
forth under the authority of this Agreement, or
iv. the Employee has failed to successfully or adequately perform
his or her work obligations as the same have been delegated to
him or her.
D. Not for Cause. Because the employment relationship created by this
-------------
Agreement is expressly understood to be "at will", of both parties,
this Agreement and the Period of Employment shall terminate upon at
least 14 days' written notice by either party to the other, unless
provided otherwise in the Employee Specific Terms document. In such
event, the Employer shall have the option, in its sole discretion, to
relieve the Employee of his or
-3-
her work obligations and to deny the employee access to the Employer's
place of business for any reason other than to retrieve the Employee's
personal property.
E. Constructive Termination The Period of Employment shall terminate at
------------------------
the option of the Employee, upon at least 14 days' written notice by
the Employee, in the event that there is:
(i) a reduction in the Employee's Base Salary as set forth in the
Employee Specific Terms; or
(ii) a change in the location of Employee's employment outside the
metropolitan Denver area; or
(iii) a material decrease in Employee's benefits (other than a
decrease in benefits that is (a) Company-wide or (b) applicable
generally to senior executives of the Company); or
(iv) a material decrease in the Employee's responsibilities; or
(v) a material decrease in the Employee's title or reporting line.
In the event of any termination pursuant to paragraphs A, B, or C
above, the Employee shall be entitled to receive his or her salary and/or
other compensation as identified in the Employee Specific Terms document
through the effective date of termination. In the event of termination
pursuant to paragraphs A or B above, the Employee shall be entitled to
any benefits payable under any health, welfare or insurance plan
maintained by the Employer which covers such event. In the event of
termination pursuant to paragraphs A, B, or C above, the employee shall
not be entitled to any severance or other compensation except as provided
above, or except as may be provided otherwise in the Employee Specific
Terms document.
In the event of termination pursuant to paragraph D above, upon
notice by the Employee, the Employee shall be entitled to receive his or
her other salary or other compensation due prior to termination so long
as Employee continues to effectively perform his or her job obligations.
In the event of termination pursuant to paragraph D above, upon notice by
the Employer, or E above, the Employee shall be entitled to severance in
an amount equal to one year of the base salary in effect at the time of
termination, payable on a pro rata basis during the twelve months
--- ----
following termination, plus a pro rata portion of his bonus for the year
--- ----
of termination. The Employee Specific Terms document and/or any written
agreement between the parties subsequent to the date of this
-4-
Agreement may specify additional or lesser payments or benefits due to
the Employee by reason of termination not for cause.
5. Non-Competition Covenant and Agreement. The Employee acknowledges and
--------------------------------------
understands that his or her position with the Employer will be as an
officer of Employer, a member of executive or management personnel of the
Employer, or as a member of the professional staff of such executive or
management personnel. The Employer has invested and/or will invest
considerable time and money in the development and enhancement of the
Employee's skills and knowledge of the Employer's unique business and
unique type of business, which business is worldwide in scope and market.
This enhanced skill and knowledge will be the principal reason that the
Employer continues the employment relationship and continues to compensate
the Employee for his or her work. In addition, the Employee has or will
become aware of the Trade Secrets and trade practices of the Employer
which secrets and practices in the hands of a competitor or potential
competitor would cause substantial loss and damage to the Employer and/or
its customers and clients. Finally, the Employee has had close customer
contact, which would enable him or her to divert customer trade. In
consideration of all of the above identified matters, the Employee agrees
and acknowledges that it is appropriate to accept restrictions on his or
her right to work or be employed in a fashion which will compete with the
Employer's business and type of business.
Therefore Employee covenants, agrees to, and accepts the following
restrictions:
A. Employee will not, without the prior written consent of an authorized
officer of the Employer, during the Period of Employment, and for one
year after the termination of employment for any reason, alone or in
concert or cooperation with any other person or entity, as principal,
employee, shareholder, consultant, or any other type of advisor,
directly or indirectly develop, seek to develop, market, produce or
provide any commercial product or service in the nature of those
provided by or under development by the employer or any of its
affiliates during the Period of Employment. This non-competition
obligation shall apply to North America, Europe and any other country
where Employer or any of its subsidiaries or affiliates are actively
engaged in or pursuing business during the Employee's Period of
Employment. This paragraph A shall not prohibit the ownership by
Employee of less than 5% of any publicly traded corporation.
B. During the period that Employee is subject to the restrictions set
forth in A above, he or she shall not (1) hire or solicit the
employment or services of any person who is an employee or consultant
of the Employer or its
-5-
successors or assigns, or any former employee of the Employer whose
employment has been terminated for less than six (6) months; or (2)
directly or indirectly solicit business competitive with the
Employer's then current business from any customer or client which has
done business with the Employer or from which the Employer has
solicited business at any time or from time to time within two (2)
years from the date of such solicitation. The above shall not prohibit
the Employee from using the services of any such person in a way that
clearly does not compete with the business of Employer.
C. The time periods of the restrictions set forth in A and B above shall
be extended for any period of time that Employee is found to be in
violation of any provision of this Section 5.
6. Confidentiality, Non-Disclosure, and Proprietary Rights. Employee
-------------------------------------------------------
understands and acknowledges that all present and future information and
know-how regarding the Confidential Information, whether or not created by
the Employee, whether or not formally marked or identified as
confidential, are and shall remain the exclusive property of the Employer.
Any material, ideas and information which is generally known to the public
will not be deemed Confidential Information. Employee understands that
such Confidential Information and the proprietary rights contained therein
are substantial and essential assets of Employer's business, and as such,
it is essential that the same be protected. In order to meet this goal,
the Employee covenants and promises to the Employer as follows:
A. During Employee's Period of Employment by the Employer, and
thereafter, the Employee will not use, disclose, or permit access to
any Confidential Information, and will take all reasonable precautions
to prevent any person or entity access to any of the Confidential
Information other than as required in the performance of Employee's
duties with the Employer. In order to satisfy the needs of Employer's
clients and customers, Employee will sign any confidentiality
agreement reasonably requested by such third parties and/or Employer.
Employee understands that he or she is not permitted to sell, license,
market or otherwise exploit any products, services or other
Confidential Information, in whole or in part, including software or
code in any form.
B. At the end of the Employee's Period of Employment, Employee will
deliver to the Employer all tangible materials embodying the
Confidential Information, including, without limitation, any computer
software, input sheets and descriptions, code, code libraries,
electronic storage disks, practice aids and practice aid materials
(worksheets, schedules, tables,
-6-
brochures, manuals, etc.), documentation, records, listings, notes,
data, sketches, drawings, memoranda, models, accounts, reference
materials, samples, human or machine-readable media and equipment, and
any other material which is or in any way relates to the Confidential
information, to the businesses of the Employer, to the representation
of the Employer, or to the clients, customers, suppliers vendors, or
similar contacts of the Employer. Employee further agrees not to
retain any copies of the above-described materials.
C. Employee hereby agrees to assign and does hereby assign all of
Employee's right, title and interest in or to any and all ideas,
concepts, know-how, techniques, processes, inventions, discoveries,
devleopments, works of authorship, inovations and improvements
(collectively "Inventions") conceived or made by Employee, whether
alone or in concert with others whether patentable or subject to
potential copyrights or not, except those that the Employee developed
or develops entirely on his or her own time without using the
equipment, supplies, facilities, or Confidential Information of the
Employer and provided that such Inventions are unrelated to the
business of the Employer. Employee agrees to promptly inform and
disclose all Inventions to the Employer in writing and with respect to
those Inventions that Employee is required to assign to the Employer
hereunder to provide all assistance reasonably requested by the
Employer in the preservation of its interests in the Inventions (such
as by executing documents, testifying, etc.), such assistance to be
provided at the Employer's expense but without additional compensation
to the Employee.
D. Employee agrees that any work prepared by the Employee during his or
her Period of Employment which work is subject to assignment under C
above and which is eligible for United States copyright protection or
protection under the Universal Copyright Convention the Berne
Copyright Convention and/or the Buenos Aires Copyright Convention,
shall be a "work made for hire". In the event that any such work is
deemed not to be a "work made for hire". Employee hereby assigns all
right, title and interest in and to the copyright in such work to the
Employer, and agrees to provide all assistance reasonably requested in
the establishment, preservation and enforcement of the Employer's
copyright in such work, such assistance to be provided at the
Employer's expense but without any additional compensation to
Employee.
E. In the event that the Employer is unable, as a result of inability to
find the Employee after a reasonably diligent effort, as a result of
the death or incapacity of the Employee, or as a result of the
unjustifiable refusal of the Employee, to secure the Employee's
signature on any letters patent,
-7-
copyright or other analogous protection relating to Inventions or
other proprietary rights, the Employee hereby irrevocably designates
and appoints Employer, by its duly authorized officers and agents as
the Employee's agent and attorney-in-fact, to act for and on the
Employee's behalf and stead to execute and file any such application
or applications and to do all other lawfully permitted acts to further
the prosecution and issuance of letters patent, copyright, or other
analogous protection thereon with the same legal force and effect as
if executed by the Employee.
7. Employment Notification Requirement. During the Period of Employment, and
-----------------------------------
thereafter during any subsequent period of time that the Employee is
reasonably likely to be subject to a continuing obligation under the terms
of this Agreement, the Employee will notify the Employer of any change of
address, and the Employee will identify and notify the Employer of each
and any new job or other business activity in which the Employee plans to
engage, together with the name and address of the new employer and the
nature of the Employee's new position with such new employer.
8. Former Employment or Work. Employee represents, acknowledges and agrees
-------------------------
that he or she has not brought, and will not bring with him or her, or use
in the performance of his or her duties for the Employer, any materials or
documents of any former employer, person, or entity of any type, which are
not generally available to the public, unless the Employee has obtained
written authorization for the possession and use of such materials or
documents and provided such authorization to Employer. Employee also
understands and agrees, that in his or her employment with the Employer,
Employee shall not breach any obligation of confidentiality or legal duty
that Employee has to any former employer or client and agrees that he or
she will fulfill any and all such obligations during his or her Period of
Employment.
9. Assignment. This Agreement and the duties, obligations and benefits
----------
hereunder shall bind and benefit the parties hereto and to the extent
necessary to carry out its intentions, the legal and personal
representatives of the parties. This Agreement may not be assigned
without the written permission of the parties except that the Employer may
assign this Agreement to any successor of the Employer by reason of
reorganization, merger, consolidation, or the partial or complete sale of
the Employer's business and/or assets.
10. Indemnification and Remedy. Each party agrees to indemnify, and save
--------------------------
harmless the other against any, and all damages, claims, losses or
expenses, including reasonable attorney's fees, arising from or relating
to any breach of this Agreement. Both parties acknowledge and agree that
a breach by the Employee of the obligations set forth in Sections 5
through 9 above, will result in
-8-
immediate and irreparable harm to Employer and that Employer would have no
adequate remedy at law and that as a result, the Employer will be entitled
to specific performance as well as other appropriate injunctive and
equitable remedies such as a temporary restraining order. None of the
foregoing shall limit the Employer from seeking a legal remedy including
the recovery of monetary damages.
11. Workplace Rules. The Employer may make, adopt, and provide to the
---------------
Employee such rules as the Employer deems necessary to provide for a safe,
efficient, productive and effective workplace and work environment. Any
such rules, to the extent not violative of any legal right of the
Employee, shall be deemed to be as binding upon the employee as if they
were included in the body of this Agreement.
12. Entire Agreement and Amendment. This Agreement, together with the
------------------------------
Employee Specific Terms document, constitutes the entire agreement between
the Employer and Employee, and any verbal or written communication between
the parties prior to the adoption of this Agreement shall be deemed merged
herein and of no further force and effect. This Agreement may only be
altered or amended by a writing signed by the Employee and an authorized
officer of the Employer. This Agreement shall become effective on the
date the Employer consummates an underwritten public offering of its
shares of common stock pursuant to a registration statement declared
effective by the Securities and Exchange Commission (the "IPO Date").
13. Waiver. Neither the delay nor failure by the Employer or Employee to
------
exercise any right under this Agreement, nor partial or single exercise of
any such right, shall constitute a waiver of that or any other right.
14. Governing Law, Interpretation and Venue. This Agreement is entered into
---------------------------------------
in Denver, Colorado, and as such it shall be interpreted and enforced
under the laws of the state of Colorado applicable to contracts made to be
performed entirely within Colorado. In the event that any one or more
provision in this Agreement shall, for any reason, held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such provision had never been
contained herein. If any provision in this Agreement shall be held to be
excessively broad as to duration, activity or subject in any jurisdiction,
it shall be construed by limiting and reducing the provision which is
deemed excessively broad. A limitation or reduction in the application of
any provision in one jurisdiction shall not affect the application of the
same provision in any other jurisdiction. The proper venue for any legal
-9-
action as to the interpretation or enforcement of this Agreement shall be
a court of appropriate jurisdiction located in the City and County of
Denver, Colorado.
15. Notices. Any notice required or permitted by this Agreement shall be
-------
effective when received and shall be sufficient if in writing and
personally delivered (including by express courier) or sent by certified
mail with return receipt to the address set forth at the end of this
Agreement or at such other address as may by notice be specified by one
party to the other.
16. Counterparts. This Agreement may be executed in two or more counterparts,
------------
each of which shall be deemed an original, but all of which shall together
constitute one and the same Agreement.
-10-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above (June ___, 1999).
TANNING TECHNOLOGY EMPLOYEE
CORPORATION (Employer)
By:
---------------------------------- ---------------------------------
Printed Name: Xxxxx Xxxxxxx
------------------------
Title:
-------------------------------
0000 Xxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxx, XX 00000
000-000-0000
-11-
Employee Specific Terms
TANNING TECHNOLOGY CORPORATION
------------------------------
1999 EXECUTIVE COMPENSATION PLAN
Date: July ___, 1999
To: Xxxxx Xxxxxxx
From: Xxxxx Tanning
Tanning Technology is pleased to offer you the following Executive Compensation
plan for fiscal year 1999 (January 1 to December 31, 1999).
Job Title: Senior Vice President, North America Consulting Operations
Supervisor: Xxxxx Tanning
The effective date of this compensation plan will be the IPO Date. Tanning is
pleased to provide you with the following compensation plan in recognition of
your important job responsibilities:
KEY COMPENSATION ELEMENTS
-------------------------------------------------------------------------------------------------------------
Annual Base Salary: $ 275,000 Effective Date of
Semi-monthly pay rate: $11,041.67 base salary rate: IPO Date
-------------------------------------------------------------------------------------------------------------
Part I: Global Revenue Bonus Incentive Plan
-----------------------------------------------------------------------------------------------------------------------
Global Revenue Goals $45.0 M $48.0 M $52.0 M $56.0 M $60.0 M $64.0 M $68.0 M $72.0 M
Bonus as % of Base Salary: 0.0% 5.0% 9.0% 12.0% 15.0% 18.0% 21.0% 24.0%
-----------------------------------------------------------------------------------------------------------------------
Total bonus earned: $ 0 $13,250 $23,850 $31,800 $39,750 $47,700 $55,650 $63,600
-----------------------------------------------------------------------------------------------------------------------
Part II: Global EBIT Bonus Incentive Plan
-----------------------------------------------------------------------------------------------------------------------
Global EBIT Goals: 16.0% 17.0% 18.0% 19.0% 20.0% 21.0% 22.0% 23.0%
Bonus as % of Base Salary: 0.0% 8.0% 10.0% 13.0% 15.0% 18.0% 21.0% 24.0%
-----------------------------------------------------------------------------------------------------------------------
Total bonus earned: $ 0 $21,200 $26,500 $34,450 $39,750 $47,700 $55,650 $63,600
-----------------------------------------------------------------------------------------------------------------------
Part III: Stock Appreciation Incentive Plan
-----------------------------------------------------------------------------------------------------------------------
Stock Appreciation at 12/31/99: 25.0% 30.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0%
Bonus as % of Base Salary: 0.0% 7.0% 10.0% 13.0% 15.0% 18.0% 21.0% 23.0%
-----------------------------------------------------------------------------------------------------------------------
Total bonus earned: $ 0 $18,550 $26,500 $34,450 $39,750 $47,700 $55,650 $60,950
-----------------------------------------------------------------------------------------------------------------------
-12-
Part IV: MBO Goals Bonus Incentive Plan
-----------------------------------------------------------------------------------------------------------------------
Global EBIT Goals: 1 goal 2 goals 3 goals 4 goals 5 goals 6 goals 7 goals 8 goals
Bonus as % of Base Salary: 0.0% 4.0% 6.0% 8.0% 10.0% 12.0% 15.0% 17.0%
-----------------------------------------------------------------------------------------------------------------------
Total bonus earned: $ 0 $10,600 $15,900 $21,200 $26,500 $31,800 $39,750 $45,050
-----------------------------------------------------------------------------------------------------------------------
MBO Goal Subjects:
------------------
#1: Exhibit leadership in establishing an effective, objective and supportive
senior management team
#2: Exhibit leadership in forming and instilling a high integrity, unbiased,
progressive company culture
#3: Establish 66% sales backlog by 12/31/99
#4: Commit 25% of time to customer relationship building and support by 3rd
quarter 1999
#5: Commit 25% of time to employee, organizational and communication
development by 4th quarter 1999
#6: Strengthen operational integration between U.S. and European organizations
#7: Insure positive employee relations climate and minimal involuntary turnover
levels
#8: Strengthen resource planning, deployment, utilization and development of
the Company's technical resources
#9: Exhibit leadership in strengthening the leadership and managerial
competencies of the company's supervisors
SUMMARY OF EARNINGS POTENTIAL FOR PAID COMPENSATION
Part IV: MBO Goals Bonus Incentive Plan
-----------------------------------------------------------------------------------------------------------------------
Global EBIT Goals: 1 goal 2 goals 3 goals 4 goals 5 goals 6 goals 7 goals 8 goals
Bonus as % of Base Salary: 0.0% 4.0% 6.0% 8.0% 10.0% 12.0% 15.0% 17.0%
-----------------------------------------------------------------------------------------------------------------------
Total bonus earned: $ 0 $10,600 $15,900 $21,200 $26,500 $31,800 $39,750 $45,050
-----------------------------------------------------------------------------------------------------------------------
TANNING TECHNOLOGY CORPORATION ACKNOWLEDGEMENT OF RECEIPT
AND UNDERSTANDING OF TERMS
BY:
-------------------------- --------------------------------
Xxxxx Tanning Xxxxx Xxxxxxx
President & CEO Sr. Vice President, North America
Consulting Operations
Date: Date:
-------------------- --------------------
CC: Xxxx Tanning, Xxxxx Xxxxxxx
-13-
