EMPLOYMENT, NON-DISCLOSURE AND NON-COMPETITION AGREEMENT
Exhibit
10.40
This
EMPLOYMENT, NON-DISCLOSURE NON-COMPETITION AGREEMENT (this “Agreement”) is made
and entered into as of March 04, 2008 (the “Effective Date”), by and
between INTERACTIVE INTELLIGENCE, INC., an Indiana corporation having its
principal place of business in Indianapolis, Indiana ("Interactive"), and
Xxxxxxx Xxxxxx III (“Employee”).
Recitals
A. For
purposes of this Agreement, the term the “Company” means Interactive and/or each
of its direct or indirect subsidiaries and/or any affiliate entity in which
Interactive directly or indirectly owns a controlling interest or that
Interactive otherwise controls provided that Employee is employed by, provides
services for the benefit of, or receives or has access to confidential
information concerning such subsidiary or affiliate at any time from the date of
this Agreement until Employee is no longer employed with any Interactive-related
entity.
B. Employee
desires to be employed or to continue to be employed by the
Company. The Company desires to employ or to continue to employ
Employee provided it is afforded the protections of this
Agreement. In the course of Employee’s employment by the Company,
Employee (i) will have access to and will acquire certain trade secrets and
confidential information of the Company, (ii) may create inventions,
developments or works relating to the Company’s business and (iii) will
help develop and maintain goodwill with the Company’s customers.
C. To induce
the Company to employ or to continue to employ Employee and give Employee access
to certain of the Company’s trade secrets, confidential information and customer
relationships, Employee is willing to enter into this Agreement for the
protection of the Company’s trade secrets, confidential information,
intellectual property and goodwill.
Agreement
In
consideration of the foregoing recitals, the Company’s employment of Employee,
and the promises and covenants contained in this Agreement, Interactive and
Employee agree as follows:
1. Employment. Pursuant
to the terms and conditions of this Agreement, the Company agrees to employ
Employee and Employee agrees to be employed by the Company for a period
commencing on the Effective Date and continuing until terminated by either
party. Employee will serve initially in the position designated in
the Initial Position, Compensation and Benefits Schedule attached hereto as
Schedule A ("Schedule A") and will have those duties and responsibilities that
the Company assigns to Employee from time to time. The Company shall
have the right in its sole discretion to assign Employee a different position or
title, or new or different duties and responsibilities, during Employee's
employment with the Company.
2. Compensation. As
remuneration for all services to be rendered by Employee during Employee's
employment under this Agreement, and as consideration for complying with the
covenants herein, the Company will pay and provide to Employee the
following:
a. Salary. During
Employee's employment, the Company shall pay Employee a salary or other base
rate compensation. Employee's initial salary or other base rate
compensation as of the Effective Date is set forth in
Schedule A. The Company and Employee acknowledge and agree that
the Company, in its sole discretion, may adjust the amount of Employee's salary
or other base rate compensation (or any other elements of compensation) from
time to time during Employee's employment with the Company. The
salary or base rate compensation shall be paid to Employee consistent with the
customary payroll practices of the Company.
b. Benefits. During
Employee's employment, Employee will be entitled to participate in the Company's
employee benefit plans to which other employees of the Company are generally
entitled to participate; provided, however, Employee's entitlement to
participate in such benefit plans is subject to the eligibility requirements and
other provisions of such benefit plans. The employee benefit plans in
which Employee will initially be entitled to participate, subject to the
eligibility requirements and other provisions of such plans, are identified in
Schedule A. Employee understands and agrees that the Company, in its
sole discretion, may change, amend or discontinue any of its employee benefit
plans or programs at any time during Employee's employment with the Company, and
nothing contained in this Agreement shall obligate the Company to institute,
maintain or refrain from changing, amending or discontinuing any benefit plan or
program.
3. Termination. The
Company and Employee acknowledge and agree that Employee's employment is on an
at-will basis, and, accordingly, either the Company or Employee may terminate
the employment relationship at any time for any reason, or no reason, with or
without cause, and with or without advance notice. This Agreement
does not guarantee employment for any specific duration.
4. Best Efforts and Duty of
Loyalty. During Employee’s employment with the Company,
Employee will: (a) devote Employee’s best efforts to the
furtherance of the business of the Company; (b) will not engage, directly
or indirectly, in any activity, employment or business venture, whether or not
for remuneration, that is competitive with the Company’s business in any
respect; and (c) will not take any action, or make any omission, that
deprives the Company of any business opportunities or otherwise act in a manner
that conflicts with the best interest of the Company or is detrimental to the
business of the Company.
5. Company
Property. Employee acknowledges and agrees that all tangible
materials, equipment, documents, copies of documents, data compilations (in
whatever form), and electronically created or stored materials that Employee
receives or makes in the course of Employee’s employment with the Company are
and shall remain the property of the Company, and Employee shall immediately
return such property to the Company upon the Company’s request or upon
termination of Employee’s employment with the Company.
6. Intellectual
Property.
a. As used
in this Agreement, the term “Inventions” means any and all discoveries,
inventions, developments, concepts, ideas and improvements related to Company’s
business, actual or contemplated, whether patentable or not, including, but not
limited to, business processes and methods, product concepts, product line
extensions, new product formulations as well as improvements to any of the
foregoing or know-how related thereto. All Inventions made or
conceived by Employee, either solely or jointly with others, during Employee’s
employment by the Company, which are (1) related to the Company’s present
business or future business which the Company had under consideration while
Employee was employed by the Company, or (2) made by Employee in the course
of Employee’s employment or with the use of the Company’s facilities, materials
or personnel, and whether patented or not, are solely the property of the
Company. Employee will, without royalty or other
consideration: (i) inform the Company promptly and fully of such
Inventions by written reports, setting forth in detail the procedures employed
and the results achieved, (ii) assign, and does hereby assign, to the Company
all Employee’s right, title and interest in and to such Inventions and
applications for United States and foreign Letters Patent, any United States and
foreign Letters Patent and renewals thereof granted upon such Inventions, (iii)
assist the Company or its nominees, at the expense of the Company, to obtain
such United States and foreign Letters Patent for such Inventions as the Company
may elect and (iv) execute, acknowledge and deliver to the Company at its
expense such written documents and instruments and do such other acts as may be
necessary in the opinion of the Company to obtain and maintain United States and
foreign Letters Patent upon such Inventions and to vest the entire right and
title thereto in the Company and to confirm the complete ownership by the
Company of such Inventions.
b. As used
in this Agreement, “Works” means all works of authorship fixed in a tangible
medium of expression by Employee which are made during Employee’s employment by
the Company and which (1) are made by Employee during the course of or which
result from Employee’s employment by the Company, or (2) relate to the Company’s
present business or future business which the Company had under consideration
while Employee was employed by the Company including, but not limited to, flow
charts, algorithms, computer programs, computer source codes and object codes,
notes, drawings, memoranda, correspondence, documents, records and
notebooks. All Works created by Employee are and will remain
exclusively the property of the Company. Each such Work is a “work
made for hire,” and the Company may file applications to register copyright as
author thereof. To the extent such Work cannot be a “work made for
hire” under the U.S. Copyright Act, all of Employee's right, title and interest
in any such Work shall be and hereby is assigned and transferred to
Company. Employee will do whatever reasonable acts the Company
requests to secure or aid in securing copyright protection and will assist the
Company or its nominees in filing applications to register claims or copyright
in such Works. Except in connection with the performance of
Employee's duties for the Company, Employee will not reproduce, distribute,
display publicly or perform publicly, alone or in connection with any data
processing system, any Works of the Company without written permission from the
Company to do so. Upon the Company’s request or upon termination of
Employee’s employment, Employee will immediately deliver to the Company all
Works and copies thereof then in Employee’s possession or under Employee’s
control.
c. Employee
hereby assigns and transfers to the Company any “moral” rights Employee may have
in any Inventions or Works under any copyright, patent or other law, whether
United States or foreign. Employee agrees to waive and never assert
any such “moral” rights in any Inventions or Works during or after the
termination of employment with the Company. Employee agrees that the
Company and its licensees have sole discretion with regard to how and for what
purposes, if any, any Inventions or Works are used or distributed
d. In the
event the Company is unable, for any reason whatsoever, to secure Employee’s
signature to any lawful or necessary documents required to apply for, prosecute,
perfect, or assign any United States or foreign application for Letters Patent,
trademark or copyright registration, Employee hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Employee’s
agent and attorney in fact, to act for and on Employee’s behalf, to execute and
file any such application and to do all other lawfully permitted acts to further
the prosecution, issuance or assignment of Letters Patent on such Developments,
or registrations for trademark or copyright on such Developments, with the same
force and effect as if executed by Employee. Employee hereby waives
and quitclaims to Company any and all claims, of any nature whatsoever, which
Employee may now have or may hereafter have for infringement of any patent,
trademark, or copyright resulting from any such application.
7. Non-Disclosure of Confidential
Information. As used in this Agreement, the term “Confidential
Information” means any and all of the Company’s trade secrets, confidential and
proprietary information and all other non-public information and data of the
Company or its businesses, including, without limitation, lists of customers,
information pertaining to customers, information received from customers,
information pertaining to business partners, information received from business
partners, information received from any third parties that the Company is
obligated to keep confidential, marketing plans and strategies, information
pertaining to suppliers, pricing information, cost information, research and
development information, processes, programs, inventions, business plans,
financial information, data compilations, personnel information and information
about prospective customers or prospective products and services, whether or not
reduced to writing or other tangible medium of expression, including work
product created by Employee in rendering services for the
Company. During Employee’s employment with the Company and
thereafter, Employee will not use or disclose to others any of the Confidential
Information, except as authorized in writing by the Company or in the
performance of work assigned to Employee by the Company. Employee
agrees that the Company owns the Confidential Information and Employee has no
rights, title or interest in any of the Confidential
Information. Additionally, Employee will abide by the Company’s
policies protecting the Confidential Information. At the Company’s
request or upon termination of Employee’s employment with the Company, Employee
will immediately deliver to the Company any and all materials (including copies
and electronically stored data) containing any Confidential Information in
Employee’s possession, custody or control. Upon termination of
Employee’s employment with the Company for any reason, Employee will, if
requested by the Company, provide the Company with a sworn written statement
disclosing whether Employee has returned to the Company all materials (including
all copies and electronically stored data) containing any Confidential
Information previously in Employee’s possession, custody or
control. Employee’s confidentiality obligations shall continue as
long as the Confidential Information remains confidential, and shall not apply
to information which becomes generally known to the public through no fault or
action of Employee or others who were under confidentiality obligations as to
such information.
8. Non-Competition
Covenants. Employee agrees to the following non-competition
covenants:
a. During
Employee's employment with the Company and for a period of twelve (12) months
immediately after the termination of such employment, Employee will not provide,
sell, market, assist in the provision, selling or marketing of, or
attempt to provide, sell or market any Competing Products/Services to any of the
Company’s Customers or otherwise solicit or communicate with any of the
Company’s Customers for the purpose of selling, providing or servicing or
attempting to sell, provide or service any Competing
Products/Services. For purposes of this Agreement, the term
“Competing Products/Services” means products and/or services that are similar to
and competitive with the products and/or services that are offered, sold or
provided by the Company at the time of the termination of Employee’s employment
with the Company or within twenty-four (24) months immediately prior to such
termination. For purposes of this Agreement, the term “Company’s
Customers” means any person or entity to whom the Company sold or provided any
products and/or services at any time during the twenty-four (24) months
immediately preceding the termination of Employee’s employment with the
Company.
b. During
Employee's employment with the Company and for a period of eighteen (18) months
immediately after the termination of such employment, Employee will not provide,
sell, market, assist in the provision, selling or marketing of, or attempt to
provide, sell or market any Competing Products/Services to any of the Company's
Customers to whom Employee made (or assisted in) sales or provided (or assisted
in the provision of) services on behalf of the Company, with whom Employee had
business contact on behalf of the Company, for whom Employee had any sales or
service or product responsibility (including without limitation any supervisory
or managerial responsibility) on behalf of the Company or about whom Employee
acquired or had access to any Confidential Information concerning the Company’s
business with such customer at any time during the twenty-four (24) months
immediately preceding the termination of Employee's employment with the Company,
or otherwise solicit or communicate with any such customers for the purposes of
selling, providing or servicing any Competing Products/Services.
c. During
Employee's employment with the Company and for a period of twelve (12) months
immediately after the termination of such employment, Employee will not provide,
sell, market, assist in the provision, selling or marketing of, or attempt to
provide, sell or market any “Competing Products/Services” to any of the
Company’s “Active Prospects,” or otherwise solicit or communicate with any of
the Company’s “Active Prospects” for the purpose of selling or providing any
Competing Products/Services. For purposes of this Agreement, the term
“Active Prospects” means any potential customers with which the Company has
communicated and (1) to which the Company has submitted a proposal or quote
for the sale or provision of goods or services, (2) for whom the Company has
begun formulating or preparing a proposal or quote for the sale or provision of
goods or services or (3) for which the Company has received a response or
inquiry requesting either a proposal, quote or additional information relating
to the Company’s products and/or services, within the six (6) month period
immediately preceding the termination of Employee’s employment with the
Company.
d. During
Employee's employment with the Company and for a period of eighteen (18) months
immediately after the termination of such employment, Employee will not solicit,
recruit, hire, employ or attempt to hire or employ, or assist any person or
entity in the recruitment or hiring of, any person who is an employee of the
Company, or otherwise urge, induce or seek to induce any person to terminate
his/her employment with the Company.
e. During
Employee's employment with the Company and for a period of eighteen (18) months
immediately after the termination of such employment, Employee will not urge,
induce or seek to induce any of the Company’s independent contractors,
subcontractors, business partners, distributors, brokers, consultants, sales
representatives, vendors or suppliers to terminate their relationship with, or
representation of, the Company or to cancel, withdraw, reduce, limit or in any
manner modify any such person’s or entity’s business with, or representation of,
the Company for whatever purpose or reason.
f. During
Employee's employment with the Company and for a period of eighteen (18) months
immediately after the termination of such employment, Employee will before
commencing employment with or providing services to any other business
enterprise, whether as an employee, independent contractor,
consultant, advisor or otherwise: (1) notify the Company in
writing of the proposed employment or services engagement, including the details
concerning the identity of the business enterprise and the nature of the
proposed employment or services engagement; and (2) notify such business
enterprise of this Agreement and provide such business enterprise with a copy of
this Agreement.
g. Employee
acknowledges and agrees that the covenants contained in this Section 8
prohibit Employee from engaging in certain activities directly or indirectly,
whether on Employee’s own behalf or on the behalf of any other person or entity,
and regardless the capacity in which Employee is acting, including without
limitation as an employee, independent contractor, owner, partner or
advisor.
h. In the
event Employee violates any of the non-competition covenants contained in this
Section 8, the duration of all such non-competition covenants shall
automatically be extended by the length of time during which Employee was in
violation of any such covenant.
i. The
Company and Employee agree that for purposes of the non-competition covenants
set forth in Section 8 of this Agreement, the term “Employee’s employment
with the Company” includes not only the period during which Employee is directly
employed by the Company, but also any period thereafter during which Employee
provides services to the Company in any manner whatsoever, including without
limitation as a consultant, independent contractor or leased
employee. Accordingly, all post-employment restrictions shall begin
to run from the time at which Employee ceases to provide services to the Company
in any manner whatsoever, including without limitation as an employee,
consultant, independent contractor or leased employee.
9. Severability; Reformation of
Restrictions. The covenants and restrictions in this Agreement
are separate and divisible, and to the extent any covenant, provision or portion
of this Agreement is determined to be unenforceable or invalid for any reason,
such unenforceability or invalidity shall not affect the enforceability or
validity of the remainder of this Agreement. If any particular
covenant, provision or portion of this Agreement is determined to be invalid or
unenforceable for any reason, including, but not limited to, the time period,
geographic area and/or scope of activity covered by any non-competition
covenant, such covenant, provision or clause shall automatically be deemed
reformed such that the contested covenant, provision or portion will have the
closest effect permitted by applicable law to the original form and shall be
given effect and enforced as so reformed to whatever extent would be reasonable
and enforceable under applicable law. The Company and Employee agree
that any court interpreting any non-competition or non-disclosure provision of
this Agreement shall, if necessary, reform any such provision to make it
enforceable under applicable law.
10. Remedies. Employee
recognizes that a breach or threatened breach by Employee of this
Agreement will give rise to irreparable injury to the Company and that money
damages will not be adequate relief for such injury, and, accordingly, agrees
that the Company shall be entitled to obtain injunctive relief, including, but
not limited to, temporary restraining orders, preliminary injunctions and/or
permanent injunctions, without having to post any bond or other security, to
restrain or prohibit such breach or threatened breach, in addition to any other
legal remedies which may be available, including the recovery of monetary
damages from Employee. In addition to all other relief to which it
shall be entitled, the Company shall be entitled to recover from Employee all
litigation costs and attorneys’ fees incurred by the Company in any action or
proceeding relating to this Agreement in which the Company prevails in any
respect, including, but not limited to, any action or proceeding in which the
Company seeks enforcement of this Agreement or seeks relief from Employee’s
violation of this Agreement.
11. Survival of
Obligations. Employee acknowledges and agrees that certain of
Employee’s obligations under this Agreement, including, without limitation,
Employee’s non-disclosure and non-competition obligations, shall survive the
termination of Employee’s employment with the Company, whether or not such
termination is with or without cause or whether or not it is voluntary or
involuntary. Employee further acknowledges and agrees that Employee’s
intellectual property, non-disclosure and non-competition covenants set forth in
Sections 6, 7 and 8 of this Agreement shall be construed as independent
covenants and that no breach of any contractual or legal duty by the Company
shall be held sufficient to excuse or terminate Employee’s obligations under
Sections 6, 7 and 8 of this Agreement or to preclude the Company from
obtaining injunctive relief for Employee’s violation or threatened violation of
such covenants.
12. No Conflicting Agreements; No Use of
Others’ Trade Secrets. Employee represents and warrants to the
Company that: (a) Employee’s employment by the Company and the
performance of Employee’s employment duties will not constitute a breach of any
agreements to which Employee is a party, including without limitation any
employment or non-competition agreement with any former employer; and
(b) Employee has not brought and will not bring to the Company and will not
use or disclose during the performance of Employee’s employment services for the
Company any documents, materials or information subject to any legally
enforceable restrictions or obligations as to confidentiality or
secrecy.
13. Reasonableness of
Terms. The Company and Employee acknowledge and agree that the
restrictions imposed upon Employee under this Agreement are reasonable and
necessary for the protection of the Company’s legitimate interest, including
without limitation for the protection of the Company’s trade secrets,
confidential information and good will, particularly given
that: (a) the Company is engaged in a highly competitive
business; and (b) Employee will have access to and will help develop
Confidential Information and/or will help develop goodwill with the Company’s
customers. Employee further acknowledges and agrees that the
restrictions set forth in this Agreement will not pose any substantial hardship
on Employee and that Employee will reasonably be able to earn a livelihood
without violating any provision of this Agreement.
14. Governing Law; Choice of
Forum. The Company and Employee acknowledge and agree that
this Agreement shall be interpreted and enforced in accordance with the laws of
the State of Indiana, without giving effect to any choice or conflict of law
rule or principle (whether the State of Indiana or any other jurisdiction) that
would cause the application of the law of any jurisdiction other than the State
of Indiana. The Company and Employee further acknowledge and agree
that this Agreement is intended, among other things, to supplement the
provisions of the Uniform Trade Secrets Act, as amended from time to time, and
the duties Employee owes to the Company under the common law, including, but not
limited to, the duty of loyalty, and this Agreement does not nullify any legal
duties or obligations Employee owes to the Company under the common law or
applicable statutes. The Company and Employee agree that any legal
action relating to this Agreement shall be commenced and maintained exclusively
before any appropriate state court of record in Xxxxxx County, Indiana, or in
the United States District Court for the Southern District of Indiana,
Indianapolis Division; further, the parties hereby irrevocably consent and
submit to the jurisdiction and venue of such courts and waive any right to
challenge or otherwise object to personal jurisdiction or venue (including,
without limitation, any objection based on inconvenient forum grounds) in any
action commenced or maintained in such courts.
15. Employment
Policies. Employee acknowledges that not all rules and
policies applicable to Employee’s employment are contained in this Agreement,
and Employee agrees to abide by any employment or work rules and/or policies
that the Company currently has or may adopt, amend or implement from time to
time during Employee’s employment with the Company.
16. Successors and
Assigns. The Company shall have the right to assign this
Agreement. This Agreement shall inure to the benefit of, and may be
enforced by, any and all successors and assigns of the Company, including
without limitation by asset assignment, stock sale, merger, consolidation or
other corporate reorganization, and shall be binding on Employee, Employee’s
executors, administrators, personal representatives or other successors in
interest. Employee shall not have the right to assign this
Agreement.
17. Standing. Employee
acknowledges that this Agreement is intended to benefit, and may be enforced by,
Interactive or any of its subsidiaries or affiliates which are included within
the definition of the Company as set forth in recital A of this
Agreement.
18. No Waiver. The
failure of the Company to insist in any one or more instances upon such
performance of any of the provisions of this Agreement or to pursue its rights
hereunder shall not be construed as a waiver of any such provisions or the
relinquishment of any such rights.
19. Entire Agreement;
Modification. This Agreement constitutes the entire agreement
of the parties with respect to the subjects specifically addressed herein, and
supersedes any prior agreements, understandings, or representations, oral or
written, on the subjects addressed herein. This Agreement may not be
amended, supplemented, or modified except by a written document signed by both
Employee and a duly authorized officer of the Company.
20. Standing. Employee
acknowledges that this Agreement is intended to benefit, and may be enforced by,
Interactive and/or any other affiliated entities as described in the
above-stated definition of the Company.
21. Counterparts. This
Agreement may be executed in one or more counterparts (or upon separate
signature pages bound together into one or more counterparts), all of which
taken together shall constitute one agreement.
IN
WITNESS WHEREOF, Interactive and Employee have executed this Agreement in
Indianapolis, Indiana, as of the date first hereinabove stated.
INTERACTIVE
INTELLIGENCE,
INC. EMPLOYEE
By:
/s/Xxxxxxx X.
Head
/s/ Xxxxxxx Xxxxxx
III
Printed
Name: Xxxxxxx X.
Head Xxxxxxx
Xxxxxx III
Title:
Chief Financial Officer
SCHEDULE
A TO EMPLOYMENT, NON-DISCLOSURE
AND
NON-COMPETITION AGREEMENT Dated March 04, 2008
BETWEEN
INTERACTIVE
INTELLIGENCE, INC.
AND
Xxxxxxx Xxxxxx
III
Initial Position,
Compensation and Benefits Schedule
1. Position/Title: Vice
President of Business Development
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2.
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Salary
or base rate: One-hundred eighty-five thousand dollars
($185,000) per year.
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3. Other
compensation: Sales bonus potential of thirty thousand dollars
($30,000) per quarter. Bonus is based on achievement of specific
objectives to be mutually agreed upon. The bonus will be prorated for
the first partial quarter from start date.
4. Stock
Options (subject to approval by Interactive’s Board of Directors):
– Plan:
2006 Equity Incentive Plan
– Number: Initial
stock option grant, Twenty-five thousand shares (25,000)
Another number of options will be
granted quarterly. The total number of quarterly options is to be the
percentage of the year (2008) that the employee is employed by Interactive
Intelligence, Inc. times 25,000, as calculated from their start
date. This total number will then be divided by the number of whole
quarters that the employee is with the company and paid quarterly using the same
bonus objectives set for the quarterly cash
bonus. (Example: If the employee joins July 1 – the
employee would get 12,500 options with half part of their Q3 bonus plan and half
part of their Q4 bonus plan).
– Exercise
Price: Market
price as of the date of grant per the plan
[Such
stock options are subject to and governed by the terms and conditions of the
applicable stock option plan, as may be amended from time to time.]
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5.
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Vacation:
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Such
vacation is earned on an accrual basis and is subject to and governed by
the Company's vacation policies, as may be amended from time to
time. Refer to Team Member
Guidebook.
|
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6.
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Other
Benefits:
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Medical,
Vision and Dental Insurance, 401k Plan, Long-Term Disability Insurance,
Cafeteria 125 Plan
|
|
|
[Such
benefits are subject to and governed by the terms and conditions of such
plans, as may be amended from time to
time.]
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The
Company may, in its sole discretion, modify, adjust or change (increase or
decrease) Employee’s compensation and benefits, including, without limitation,
the salary or base rate compensation, from time to time during Employee’s
employment with the Company.
|
EMPLOYEE
/s/ Xxxxxxx Xxxxxx III
Xxxxxxx
Xxxxxx III
|
INTERACTIVE
INTELLIGENCE, INC.
By: /s/ Xxxxxxx X. Head
Title:
Chief Financial Officer
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