Exhibit 10.36
INDUS INTERNATIONAL, INC.
CHANGE OF CONTROL SEVERANCE AGREEMENT
This Change of Control Severance Agreement (the "Agreement") is made and
entered into by and between Xxxxxx X. Xxxxxxx (the "Executive") and Indus
International, Inc., a Delaware Corporation (the "Company"), effective as of May
5, 2005 (the "Effective Date").
RECITALS
1. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Executive and can cause the Executive
to consider alternative employment opportunities. The Board has determined that
it is in the best interests of the Company and its stockholders to assure that
the Company will have the continued dedication and objectivity of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined herein) of the Company.
2. The Board believes that it is in the best interests of the Company and
its stockholders to provide the Executive with an incentive to continue his or
her employment and to motivate the Executive to maximize the value of the
Company upon a Change of Control for the benefit of its stockholders.
3. The Board believes that it is imperative to provide the Executive with
certain severance benefits upon the Executive's termination of employment
following a Change of Control. These benefits will provide the Executive with
enhanced financial security and incentive and encouragement to remain with the
Company notwithstanding the possibility of a Change of Control.
4. Certain capitalized terms used in the Agreement are defined in Section 5
below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and the continued employment of Executive by the Company, the parties agree as
follows:
1. Term of Agreement. This Agreement shall be for a one year term;
provided, however, that the Compensation Committee may affirmatively extend the
term of the Agreement at any time. The Executive may, by notice to the Company
given not less than 60 days, but not more than 90 days, prior to the expiration
of the then-current term, cause the term of this Agreement not to be extended.
In the event that the Compensation Committee does not extend the term of the
Agreement, or upon such notice of non-renewal by the Executive, the term of this
Agreement shall terminate upon the expiration of the then-current term,
including any prior extensions.
2. At-Will Employment. This Agreement is not an employment agreement and
does not guarantee any specific term of employment. The Company and the
Executive acknowledge
that the Executive's employment is and shall continue to be at-will, as defined
under applicable law, except as may otherwise be specifically provided under the
terms of any written formal employment agreement between the Company and the
Executive (an "Employment Agreement").
3. Severance Benefits.
(a) Involuntary Termination Following a Change of Control. If within
twenty-four (24) months following a Change of Control (A) the Executive
terminates his or her employment with the Company (or any parent or subsidiary
of the Company) for "Good Reason" (as defined herein) or the Company (or any
parent or subsidiary of the Company) terminates the Executive's employment for
other than "Cause" (as defined herein), and (B) the Executive signs the
Company's standard separation agreement and release of claims with the Company,
then the Executive shall be entitled to receive the following severance benefits
from the Company: (i) a lump sum amount equal to three-fourths (0.75) times the
sum of (x) Executive's then-current base salary plus (y) a payment equal to
Executive's annual bonus target for the performance year in which the Change in
Control occurs, or if such amount is not determinable, Executive's annual bonus
paid or payable, including any bonus or portion thereof which has been earned
but deferred, for the most recently completed fiscal year; and (ii)
reimbursement for full COBRA (for the Executive and any of Executive's
dependents that Executive had elected to cover by Company's benefit plans during
Executive's employment at the Company) expenses for the earlier of eighteen (18)
months or until Executive receives health, medical and/or dental benefits,
respectively, from a new employer. In addition, Executive's outstanding options
to purchase shares of the Company's Common Stock (the "Options") shall
immediately vest and become exercisable. In all other respects the Options shall
continue to be bound by and subject to the terms of their respective agreements.
(b) Timing of Severance Payments. The severance payments to which the
Executive is entitled shall be paid by the Company to the Executive in a lump
sum in cash within 30 days after the date of termination.
(c) Voluntary Resignation; Termination For Cause. If the Executive's
employment with the Company terminates (i) voluntarily by the Executive or (ii)
for Cause by the Company, then the Executive shall not be entitled to receive
severance or other benefits except for those (if any) as may then be established
under the Company's then-existing severance and benefits plans and practices or
pursuant to his or her Employment Agreement or other written agreements, if any,
with the Company.
(d) Disability; Death. If the Company terminates the Executive's
employment as a result of the Executive's Disability, or the Executive's
employment terminates due to his or her death, then the Executive shall not be
entitled to receive severance or other benefits except for those (if any) as may
then be established under the Company's then-existing written severance and
benefits plans and practices or pursuant to his or her Employment Agreement or
other written agreements, if any, with the Company.
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(e) Termination Apart from Change of Control. In the event the
Executive's employment is terminated for any reason, either prior to the
occurrence of a Change of Control or after a twenty-four (24) month period
following a Change of Control, then the Executive shall not be entitled to
receive any payments, benefits, damages, awards, or compensation other than as
provided under the Company's then-existing written severance and benefits plans
and practices or pursuant to his or her Employment Agreement or other written
agreements with the Company.
(f) Exclusive Remedy. In the event of a termination of Executive's
employment within twenty-four (24) months following a Change of Control, the
provisions of this Section 3 are intended to be and are exclusive and in lieu of
any other rights or remedies to which the Executive or the Company may otherwise
be entitled, whether at law, tort or contract, in equity, or under this
Agreement. The Executive shall be entitled to no benefits, compensation or other
payments or rights upon termination of employment within twenty-four (24) months
following a Change in Control other than those benefits expressly set forth in
this Section 3.
4. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Executive
(i) constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Section 4, would be subject to the excise tax imposed by Section 4999 of the
Code, then the Executive's severance and benefits shall be either:
(a) delivered in full, or
(b) delivered as to such lesser extent which would result in no
portion of such severance benefits being subject to excise tax under Section
4999 of the Code, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the excise tax imposed by
Section 4999, results in the receipt by the Executive on an after-tax basis, of
the greatest amount of severance benefits, notwithstanding that all or some
portion of such severance benefits may be taxable under Section 4999 of the
Code. Unless the Company and the Executive otherwise agree in writing, any
determination required under this Section 4 shall be made in writing by the
Company's independent public accountants immediately prior to Change of Control
(the "Accountants"), whose determination shall be conclusive and binding upon
the Executive and the Company for all purposes. For purposes of making the
calculations required by this Section 4, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this Section. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 4.
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5. Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:
(a) Cause. "Cause" means (i) an act of dishonesty made by the
Executive in connection with such Executive's responsibilities as an Executive,
(ii) the Executive's indictment for, conviction of, or plea of guilty or nolo
contendre to, a felony which the Board reasonably believes had or will have a
material detrimental effect on the Company's reputation or business, (iii) the
Executive's gross misconduct, (iv) the Executive's continued substantial failure
to perform such Executive's duties after the Executive has received a written
demand for performance from the Company which specifically sets forth the
factual basis for the Company's belief that the Executive has not substantially
performed such Executive's duties, (v) the willful and continued material
violation of written Company policies or procedures by Executive, after a
written demand for substantial compliance with such policies or procedures is
delivered to Executive by the Compensation Committee of the Board of Directors
of the Company which specifically identifies the manner in which such Committee
or the Board believes that Executive has not substantially complied with the
same, or (vi) Executive's breach of any of the provisions of Sections 7 through
12 of this Agreement.
(b) Change of Control. "Change of Control" means the occurrence of any
of the following:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; or
(ii) A change in the composition of the Board occurring within a
two-year period, as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board with the affirmative votes of at least a
majority of the Incumbent Directors at the time of such election or nomination
(but shall not include an individual whose election or nomination is in
connection with an actual or threatened proxy contest relating to the election
of directors to the Company); or
(iii) The date of the consummation of a merger or consolidation
of the Company with any other corporation that has been approved by the
stockholders of the Company, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete
liquidation of the Company; or
(iv) The date of the consummation of the sale or disposition by
the Company of all or substantially all the Company's assets.
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(c) Disability. If the Company determines in good faith that the
Disability of Executive has occurred, it may give to Executive written notice of
its intention to terminate Executive's employment. In such event, Executive's
employment with the Company shall terminate effective on the 30th day after
receipt of such written notice by Executive, provided that, within the 30 days
after such receipt, Executive shall not have returned to full-time performance
of Executive's duties. For purposes of this Agreement, "Disability" shall mean
the inability of Executive, as determined by the Board, to perform the essential
functions of his regular duties and responsibilities, with or without reasonable
accommodation, due to a medically determinable physical or mental illness which
has lasted (or can reasonably be expected to last) for 90 consecutive days or an
aggregate of 180 days in a 12-month period. At the request of Executive or his
personal representative, the Board's determination that the Disability of
Executive has occurred shall be certified by a physician mutually agreed upon by
Executive, or his personal representative, and the Company. Failing such
independent certification (if so requested by Executive), Executive's
termination shall be deemed a termination by the Company without Cause and not a
termination by reason of his Disability.
(d) Good Reason. "Good Reason" means without the Executive's consent
(i) a significant reduction or elimination of the Executive's duties or
responsibilities, unless the Executive is provided with a comparable position
(i.e., a position of equal or greater duties, compensation and status),
excluding for this purpose an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by Executive; (ii) a reduction by the Company in the
base compensation of the Executive as in effect immediately prior to such
reduction other than in connection with a generally applicable reduction in
executive officer compensation; (iii) the involuntary relocation of the
Executive to a facility or a location more than fifty (50) miles from such
Executive's then current location; (iv) any failure by the Company to comply
with and satisfy Section 6(a) of this Agreement; or (v) the material breach by
the Company of any provision of this Agreement.
Good Reason shall not include Executive's death or Disability.
Executive's continued employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder. Any
good faith determination of Good Reason made by Executive shall be conclusive,
but the Company shall have an opportunity to cure any claimed event of Good
Reason within 30 days of notice from Executive and the Board's good faith
determination of cure shall be binding. The Company shall notify Executive of
the timely cure of any claimed event of Good Reason and the manner in which such
cure was effected, and any notice of termination delivered by Executive based on
such claimed Good Reason shall be deemed withdrawn and shall not be effective to
terminate the Agreement.
6. Successors.
(a) The Company's Successors. Any successor to the Company (whether
direct or indirect and whether by purchase, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession. For all purposes under this Agreement, the term
"Company" shall
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include any successor to the Company's business and/or assets which executes and
delivers the assumption agreement described in this Section 6(a) or which
becomes bound by the terms of this Agreement by operation of law.
(b) The Executive's Successors. The terms of this Agreement and all
rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
7. Nondisclosure of Trade Secrets and Confidential Information.
(a) Trade Secrets Defined. As used in this Agreement, the term "Trade
Secrets" shall mean all secret, proprietary or confidential information
regarding Company or Company activities that fits within the definition of
"trade secrets" under the Georgia Trade Secrets Act. Without limiting the
foregoing or any definition of Trade Secrets, Trade Secrets protected hereunder
shall include all source codes and object codes for Company software and all
website design information to the extent that such information fits within the
Georgia Trade Secrets Act. Nothing in this Agreement is intended, or shall be
construed, to limit the protections of the Georgia Trade Secrets Act or any
other applicable law protecting trade secrets or other confidential information.
"Trade Secrets" shall not include information that has become generally
available to the public by the act of one who has the right to disclose such
information without violating any right or privilege of Company. This definition
shall not limit any definition of "trade secrets" or any equivalent term under
the Georgia Trade Secrets Act or any other state, local or federal law.
(b) Confidential Information Defined. As used in this Agreement, the
term "Confidential Information" shall mean all information regarding Company,
Company's activities, Company's business or Company's clients that is not
generally known to persons not employed (as employees or independent agents) by
Company, that is not generally disclosed by Company practice or authority to
persons not employed by Company and is the subject of reasonable efforts to keep
it confidential. Confidential Information shall include, but not be limited to
product code, product concepts, production techniques, technical information
regarding Company products or services, production processes and product/service
development, operations techniques, product/service formulas, information
concerning Company techniques for use and integration of its website and other
products/services, current and future development and expansion or contraction
plans of Company, sale/acquisition plans and contacts, marketing plans and
contacts, information concerning the legal affairs of Company and certain
information concerning the strategy, tactics and financial affairs of Company.
"Confidential Information" shall not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right or privilege of Company.
This definition shall not limit any definition of "confidential information" or
any equivalent term under the Georgia Trade Secrets Act or any other state,
local or federal law.
(c) Nondisclosure of Confidential Information. During Executive's
employment hereunder and for a period of one (1) year after Executive's
employment with Company terminates for any reason, Executive shall not directly
or indirectly transmit or disclose
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any Trade Secrets or Confidential Information to any person, concern or entity,
or make use of any such Confidential Information, directly or indirectly, for
himself or for others, without the prior express written consent of the Chief
Executive Officer of Company; provided, however, that during the term of this
Agreement and perpetually thereafter, for so long as the information remains a
Trade Secret, Executive shall not directly or indirectly, for himself or for
others, without the prior express written consent of the Chief Executive Officer
of Company, transmit or disclose any Trade Secrets to any person, concern or
entity, or make use of any such Trade Secrets. Executive warrants that he has
not disclosed or used for his own benefit or the benefit of anyone other than
Company any Confidential Information or Trade Secrets prior to the execution of
this Agreement.
(d) Enforceability of Covenants. Executive and Company agree that
Executive's obligations under these nondisclosure covenants are separate and
distinct from other provisions of this Agreement, and a failure or alleged
failure of Company to perform their obligations under any provision of this
Agreement or other agreements with Company shall not constitute a defense to the
enforceability of these nondisclosure covenants. Nothing in this provision or
this Agreement shall limit any rights or remedies otherwise available to Company
under federal, state or local law.
8. Nonrecruitment and Nonsolicitation Covenants.
(a) Nonrecruitment of Employees. In consideration of the compensation
and benefits being paid and to be paid by Company to Executive hereunder,
Executive hereby agrees that, during employment with Company and for one (1)
year after the termination of Executive's employment, Executive shall not,
directly or indirectly solicit or recruit for employment or encourage to leave
employment with Company, on his own behalf or on behalf of any other person or
entity other than Company or any affiliate of Company, any person with whom
Executive worked, or about whom Executive gained Confidential Information,
during Executive's employment and who performed services for Company clients or
worked on Company products or services while employed by Company and who has not
thereafter ceased to be employed by Company for a period of at least one (1)
year. Executive agrees to exercise his best efforts to prevent any of the
activities listed in this section from occurring.
(b) Nonsolicitation of Customers. In consideration of the compensation
and benefits being paid and to be paid by Company to Executive hereunder,
Executive hereby agrees that, during his employment with Company and for one (1)
year after the termination of Executive's employment, Executive shall not,
directly or indirectly, on behalf of himself or of anyone other than Company,
solicit, divert away, take away or attempt to solicit or take away any Customer
or Potential Customer of Company for purposes of providing or selling products
or services that are competitive with those provided by Company, if Company is
then still engaged in the provision or sale of that type of good or service. For
purposes of this covenant, "Customer" means any individual or entity to whom
Company has provided goods or services and with whom Executive had, alone or in
conjunction with others, Material Contact during the one (1) year prior to the
termination of Executive's employment and "Potential Customer" means any
individual or entity to whom the Company has actively sought to sell products or
services within the one (1) year immediately prior to the termination of
Executive's employment
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and with whom Executive had Material Contact on the Company's behalf during that
same time period. For purposes of this covenant, Executive had "Material
Contact" with a customer if (i) Executive had business dealings with the
customer on the Company's behalf; (ii) Executive was responsible for supervising
or coordinating the dealings between the customer and the Company; or (iii)
Executive obtained Trade Secrets or Confidential Information (such terms having
the same meanings as defined in Section 7 above, but in each case relating to
the Customer or Potential Customer) about the customer as a result of
Executive's association with the Company.
(c) Enforceability of Covenants. Executive acknowledges that the
Company has a present and future expectation of business from the present and
proposed customers of the Company. Executive acknowledges the reasonableness of
the term and scope of the covenants set forth in this Agreement, and agrees that
he will not, in any action, suit or other proceeding, deny the reasonableness
of, or assert the unreasonableness of, the premises, consideration or scope of
the covenants set forth herein. Executive further acknowledges that complying
with the provisions contained in this Agreement will not preclude him from
engaging in a lawful profession, trade or business, or from becoming gainfully
employed. Executive and Company agree that Executive's obligations under the
above covenant are separate and distinct under this Agreement, and the failure
or alleged failure of Company to perform its obligations under any other
provisions of this Agreement shall not constitute a defense to the
enforceability of this covenant. Executive agrees that any breach of this
covenant will result in irreparable damage and injury to Company and that
Company will be entitled to injunctive relief in any court of competent
jurisdiction without the necessity of posting any bond. Executive also agrees
that he shall be responsible for all damages incurred by Company due to any
breach of the restrictive covenants contained in this Agreement and that Company
shall be entitled to have Executive pay all costs and attorneys' fees incurred
by Company in enforcing the restrictive covenants in this Agreement.
9. Ownership of Protected Works.
(a) Protected Works. The term "Protected Works" as used in this
Agreement means any and all ideas, inventions, formulas, source codes, object
codes, techniques, processes, concepts, systems, programs, software, software
integration techniques, hardware systems, schematics, flow charts, computer data
bases, client lists, trademarks, service marks, brand names, trade names,
compilations, documents, data, notes, designs, drawings, technical data and/or
training materials, including improvements thereto or derivatives therefrom,
whether or not patentable, or subject to copyright or trademark or trade secret
protection, developed and produced by Executive pursuant to this Agreement or
other agreements between Executive and Company and used or intended for use by
or on behalf of Company, or Company's clients. Protected Works does not include
an invention that Executive developed entirely on his or her own time without
using Company's equipment, supplies, facilities, or trade secret information
except for those inventions that either: (i) relate at the time of conception or
reduction to practice of the invention to Company's business, or actual or
demonstrably anticipated research or development of Company; or (ii) result from
any work performed by Executive for Company.
(b) Ownership and Assignment of Protected Works. Executive agrees that
any and all Protected Works developed by Executive during his employment or
other engagement
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with Company under this Agreement and during his employment with, or other
engagement by Company prior to the execution of this Agreement (whether as
employee or independent contractor) are the sole property of Company, and that
no compensation in addition to the amounts set forth in Section 2 of this
Agreement is due to Executive for development or transfer of such Protected
Works. Executive hereby assigns and agrees to assign all of his respective
rights, title and interest in Protected Works, including all patents or patent
applications, and all copyrights therein, to Company. Executive further agrees
at Company's request and without further consideration, but at the expense of
Company, that Executive will communicate to Company any facts known to Executive
and testify in any legal proceedings, sign all lawful papers, make all rightful
oaths, execute all divisional, continuing, continuation-in-part, or reissue
applications, all assignments, all registration applications and all other
instruments or papers to carry into full force and effect, the assignment,
transfer and conveyance hereby made or intended to be made and generally do
everything possible for title to the Protected Works and all patents or
copyrights or trademarks or service marks therein to be clearly and exclusively
held by Company. Executive agrees that he will not apply for any state, federal,
or other jurisdiction's registration of rights in any of the Protected Works and
that he will not oppose or object in any way to applications for registration of
same by Company or others designated by Company. Executive agrees to exercise
reasonable care to avoid making the Protected Works available to any third
party. Executive also agrees that he shall be liable to Company for all damages,
including reasonable attorneys' fees and other expenses of litigation, if the
Protected Works are made available to third parties in any manner by Executive
without the express written consent of Company.
(c) Executive agrees to disclose and describe to Company, as soon as
possible after their creation, (i) all inventions, ideas, copyrightable works,
databases, data and other "Protected Works," as defined in subsection (a) above,
which are created by Executive, either alone or with others, during the term of
Executive's employment, or in connection with the formation of Company, and (ii)
all Protected Works which are based in whole or in part upon Confidential
Information or Trade Secrets and are created by Executive, either alone or with
others, within one (1) year after Executive's leaving Company's employ.
(d) There is no other contract or duty on Executive's part now in
existence to assign Protected Works to anyone other than Company. Executive will
not disclose or induce Company to use any confidential information or material
that Executive is now or shall become aware of which belongs to anyone other
than Company. During Executive's employment by Company, Executive will not
engage in any employment, consulting or other activity in any business
competitive with Company's business as presently conducted or as conducted at
any future time during Executive's employment.
10. Rights to Materials and Return of Materials. All records, files,
software, software code, memoranda, reports, price lists, customer lists,
drawings, plans, sketches, documents, technical information, information on the
use, development and integration of software, and the like (together with all
copies of such documents and things) relating to the business of Company, which
Executive shall use or prepare or come in contact with in the course of, or as a
result of, Executive's employment or other engagement by Company shall, as
between the parties to this Agreement, remain the sole property of Company.
Laptop computers, other computers, software
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and related data, information and things provided to Executive by Company or
obtained by Executive, directly or indirectly, from Company, also shall remain
the sole property of Company. Upon the termination of Executive's employment or
upon the prior demand of Company, Executive shall immediately return all such
materials and things to Company and shall not retain any copies or remove or
participate in removing any such materials or things from the premises of
Company after termination or Company's request for return.
11. Inventions, Discoveries and Improvements.
(a) Executive will promptly disclose and describe to Company (i) all
inventions, improvements, discoveries and technical developments, whether or not
patentable, made or conceived by Executive, either alone or with others
("Inventions"), during the term of Executive's employment with Company or other
engagement with Company, provided that Company shall receive such information in
confidence and (ii) all Inventions which are based in whole or in part upon
Confidential Information or Trade Secrets and are made or conceived by
Executive, either alone or with others, within one (1) year after Executive's
leaving Company's employ. All such Inventions, whether patentable or
unpatentable, made, devised or discovered by Executive, whether by himself or
jointly with others, which relate or pertain in any way to the business of
Company, shall be used solely for the benefit of Company and become and remain
their sole and exclusive property. Executive agrees to execute an assignment to
Company or its nominee of Executive's entire right, title and interest in and to
such Inventions made or conceived by Executive, either alone or with others,
during the term of Executive's employment or within one (1) year after
Executive's leaving Company's employ, and to execute any other instruments and
documents that may be requested by Company for the purpose of applying for and
obtaining patents with respect to such Inventions in the United States and in
all foreign countries. Executive further agrees, whether or not in the employ of
Company, to cooperate to the extent and in the manner reasonably requested by
Company in the prosecution or defense of any patent claims or any litigation or
other proceedings involving any such Inventions, but all of Executive's
reasonable expenses in connection with such litigation or other proceedings
shall be paid by Company.
(b) If a patent application or copyright registration is filed by
Executive or on Executive's behalf during Executive's employment or other
engagement with Company, whether before or after execution of this Agreement, or
within one (1) year after Executive's leaving Company's employ, describing an
Invention within the scope of Executive's work for Company or which otherwise
relates to a portion of Company's business of which Executive had knowledge
during Executive's employment with Company, it is to be conclusively presumed
that the Invention was conceived by Executive during the period of such
employment.
(c) There is no other contract or duty on Executive's part now in
existence to assign Inventions other than to Company. Executive will not
disclose or induce Company to use any confidential information or material that
Executive is now or shall become aware of which belongs to anyone other than
Company. During Executive's employment by Company, Executive will not engage in
any employment, consulting or other activity in any business competitive with
Company's business as presently conducted or as conducted at any future time
during Executive's employment.
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(d) Executive warrants and represents that attached to this Agreement
as Exhibit A and incorporated in this Agreement by reference is a complete list
of all inventions, whether owned by Executive or by others, conceived by
Executive prior to Executive's employment by Company, that these are the only
inventions which are not subject to this Agreement, and that Executive has not
conceived or reduced to practice any invention not described on such Exhibit A.
12. Works Made for Hire. Company and Executive acknowledge that in the
course of Executive's employment (as employee or independent contractor) by
Company, Executive may from time to time create, and has previously created, for
Company copyrightable works. Such works may consist of manuals, pamphlets,
instructional materials, computer programs, software, software integration
techniques, software codes, and data, technical data, photographs, drawings,
logos, designs, artwork or other copyrightable material, or portions thereof,
and may be created within or without Company's facilities and before, during or
after normal business hours. All such works related to or useful in the business
of Company are specifically intended to be works made by hire by Executive, and
Executive shall cooperate with Company in the protection of Company's copyrights
in such works and, to the extent deemed desirable by Company, the registration
of such copyrights.
13. Arbitration.
(a) With the exception of any dispute arising under Section 5 of this
Agreement, the Company and Executive agree that any dispute or controversy
arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination
thereof, shall be settled by binding arbitration to be held in XXXX COUNTY,
GEORGIA in accordance with the National Rules for the Resolution of Employment
Disputes then in effect of the American Arbitration Association (the "Rules").
The arbitrator may grant injunctions or other relief in such dispute or
controversy. The decision of the arbitrator will be final, conclusive and
binding on the parties to the arbitration. Judgment may be entered on the
arbitrator's decision in any court having jurisdiction.
(b) The arbitrator(s) will apply GEORGIA law to the merits of any
dispute or claim, without reference to rules of conflicts of law. The
arbitration proceedings will be governed by federal arbitration law and by the
Rules, without reference to state arbitration law. The Executive hereby consents
to the personal jurisdiction of the state and federal courts located in GEORGIA
for any action or proceeding arising from or relating to this Agreement or
relating to any arbitration in which the parties are participants.
(c) EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION, WHICH DISCUSSES
ARBITRATION. EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION WITH
THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, PERFORMANCE,
BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT THIS ARBITRATION
CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY TRIAL AND RELATES TO
THE RESOLUTION OF ALL DISPUTES RELATING TO
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ALL ASPECTS OF THE EMPLOYER/EXECUTIVE RELATIONSHIP, INCLUDING BUT NOT LIMITED
TO, DISCRIMINATION CLAIMS.
All parties must initial here for Section 13 to be effective:
AWB
GJD
14. Notice.
(a) General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Executive, mailed
notices shall be addressed to him or her at the home address which he or she
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Chief Executive Officer.
(b) Notice of Termination. Any termination by the Company for Cause or
by the Executive for Good Reason or as a result of a voluntary resignation shall
be communicated by a notice of termination to the other party hereto given in
accordance with Section 14(a) of this Agreement. Such notice shall indicate the
specific termination provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination under the provision so indicated, and shall specify the termination
date (which shall be not more than thirty (30) days after the giving of such
notice). The failure by the Executive to include in the notice any fact or
circumstance which contributes to a showing of Good Reason shall not waive any
right of the Executive hereunder or preclude the Executive from asserting such
fact or circumstance in enforcing his or her rights hereunder.
15. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Executive may receive from any
other source.
(b) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed to in
writing and signed by the Executive and by an authorized officer of the Company
(other than the Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.
(c) Headings. All captions and section headings used in this Agreement
are for convenient reference only and do not form a part of this Agreement.
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(d) Entire Agreement. This Agreement constitutes the entire agreement
of the parties hereto and supersedes in their entirety all prior
representations, understandings, undertakings or agreements (whether oral or
written and whether expressed or implied) of the parties with respect to the
subject matter hereof.
(e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Georgia.
(f) Severability. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
(g) Withholding. All payments made pursuant to this Agreement will be
subject to withholding of applicable income and employment taxes.
(h) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
(i) Code Section 409A. This Agreement is to be construed and the
compensation and benefits provided hereunder are to be paid in such manner and
at such times as shall comply with Code Section 409A and the regulations and
guidance promulgated thereunder by the U.S. Department of the Treasury.
Notwithstanding anything to the contrary herein, such payments shall be delayed
to the extent necessary, but only to such extent, (i) to comply with Code
Section 409A and such regulations and provisions and (ii) to avoid the payment
of any penalties thereunder.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year set
forth below.
COMPANY
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
Title: President and CEO
EXECUTIVE
By: /s/ Xxxxxx x. Xxxxxxx
------------------------------------
Title:
---------------------------------
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