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EXHIBIT 10.1.3
MANAGEMENT
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 2nd day of June, 1997, by and between SPR
INC., a Delaware corporation ("Employer" or "Corporation") and Xxxxxxx X. Xxxxx
("Employee").
I. ACKNOWLEDGEMENTS OF THE PARTIES
A. Employer is presently engaged in the business of developing,
renovating, implementing and maintaining computer programs and software
products and is headquartered in Chicago, Illinois.
B. Employer desires to hire and retain Employee to be a member of the
management team of Employer. Employer and Employee, therefore, wish to enter
into an employment agreement (hereinafter "Agreement") which sets forth the
specific terms and conditions of Employee's employment with Employer.
C. Employee, in the course of his employment with Employer, will
frequently come into contact with Employer's clients to such an extent that he
might be able to control, in whole or in part, the business and relationships
between Employer and its clients and unless prevented from doing so could take
with him or otherwise appropriate such business and relationships.
D. Employee, during the course of his employment, will have frequent and
often close contact with Employer's corporate management staff, Professional
Technical Representatives, Account Managers, Technical Service Managers, and
other of Employer's staff and executive employees. Employee, during the course
of his employment, will also make frequent and often close contact with
prospective clients and prospective employees. Solely as a result of
Employee's position, he will gain confidential information concerning and
relating to the aforestated corporate management staff, Account Managers,
Professional Technical Representatives, other of Employer's staff and executive
employees, prospective clients and prospective employees, which information is
not generally available to Employer's competitors.
E. Employer will expend considerable time, money and other resources
recruiting, training, making instructions available to and compensating its
employees and potential employees, representatives and contractors, and the
loss of their services or potential services would constitute a substantial and
irreparable injury to Employer. Employer will expend considerable time and
money locating and establishing contacts and business relationships with
prospective clients, and
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the loss of the potential benefits of such efforts would constitute a
substantial and irreparable injury to Employer.
F. Employee acknowledges that during the course of his employment, he will
have access to certain secret and confidential matters belonging to Employer
including, but not limited to, Employer's marketing and financial plans and
strategies, market surveys and analyses; Employer and customer technical
information; Employer's financial statements, personnel records, and other
confidential books and records; private and confidential discussions and
discussions of the Board of Directors; plans and strategies for new services
and product development; employee and independent contractor performance
evaluations; contracts with customers, suppliers and others; business
opportunities, capital financing, litigation; lists of customers and potential
customers; promotional materials; internal operating reports; employee and
potential employee names and addresses; account projections; customer strategy
information; confidential employment and payroll data; marketing information;
employee manuals, recruiting manuals, personnel policy manuals and expense
policy manuals; billing reports, pricing information and strategies; management
methods and systems; contracts with clients, subcontractors and others; client
correspondence; resumes of existing and potential employees; customer bids and
proposals; customer expense manuals; other of Employer's confidential books and
records; client systems documentation, information concerning talents and
capabilities of client personnel and other confidential and sensitive client
information.
G. Employer will, in its business, develop commercially valuable technical
and non-technical information, the safeguarding of which, by holding the same
secret and confidential, is necessary and Employer must be protected from the
divulgence by Employee either directly or indirectly of any such information.
H. Employer's relationship with its clients, its ongoing service to them,
and the protection of confidential, unique and secret information belonging to
both Employer and its clients are vital to the continued operation of
Employer's business. The divulgence of any of the above stated information
would constitute an irreparable injury to Employer and for its clients.
I. Employee (1) acknowledges (a) that he has received and will receive
substantial and adequate additional monetary consideration and benefits,
pursuant to this Agreement for entry into this Agreement; (b) that the terms of
this Agreement were set by mutual negotiations between Employee and Employer;
and (c) that he understood the terms of this Agreement and agreed to be bound
by same at the time he accepted employment with Employer; (2) understands that
he need not accept employment with Employer; that he has freely chosen to enter
into the terms of this Agreement because of his desire to take advantage of the
specific and unique employment opportunities available with Employer, and that
entry into, adherence to and compliance with this Agreement and its terms are
conditions of his employment with Employer. Employee acknowledges that the
position which he is accepting with the Corporation is one of great trust and
confidence requiring on his part the highest degrees of loyalty, trust, honesty
and integrity.
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II. EMPLOYMENT
A. DUTIES. Employee shall serve as Executive Vice President - Finance and
Business Development of the Corporation and in such position shall perform such
executive duties and functions as are assigned by Employer. The specific
function and responsibilities of Employee shall be designated by Employer.
Further, the precise services which Employee shall perform for Employer or
Employer's clients may be extended or curtailed from time to time by Employer
and Employee shall, at all times, be subject to the orders, advice and
direction of Employer. Employee's compensation shall not be affected by any
such change, extension or curtailment of such services.
B. COMPENSATION AND OTHER TERMS AND CONDITIONS OF EMPLOYMENT.
1. Salary. During the period of Employee's employment hereunder,
Employer shall pay to Employee a salary which shall be established and reviewed
annually by Employer. Employee's initial salary shall be $150,000.00 per year.
Employee's salary may be increased or decreased as a result of such annual
reviews; provided, however, that Employee's annual salary shall not be
decreased unless the annual salaries of all of Employer's executive officers
are so decreased and, in such event, such decrease shall be on the same
percentage basis as that of such other executive officers. Compensation of
Employee by salary payments shall not be deemed exclusive and shall not prevent
Employee from participating in any other compensation or benefit plan of
Employer. The salary payments (including any increased salary payments)
hereunder shall not in any way limit or reduce any other obligation of Employer
hereunder, and no other compensation, benefit or payment hereunder shall in any
way limit or reduce the obligation of Employer to pay Employee's salary
hereunder.
2. Expenses. During the term of Employee's employment hereunder,
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Employee in performing services hereunder, including all
expenses of travel and living expenses while away from home on business or at
the request of and in the service of Employer, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
presently established by Employer.
In the event that Employee is required by the Corporation to relocate
his residence to a different metropolitan area than that in which he resides as
of the date of this Agreement, Employer shall promptly reimburse Employee for
all reasonable and necessary expenses related to the relocation, which expenses
shall include all realtor fees, moving and storage fees and costs, the costs of
travel and lodging for Employee and his spouse for up to two house-hunting
trips, temporary lodging expenses for Employee and his family during any wait
required for the purchase and/or closing of a new home, and the costs for
Employee to travel home to visit his family from the relocated area up to once
per month.
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3. Other Benefits. Employer shall provide and maintain in full force
and effect, and Employee shall be entitled to participate in, employee benefit
plans and arrangements which are substantially equivalent to those in effect on
the date hereof in which Employee participates (including without limitation
each pension and retirement plan and arrangement, life insurance and
health-and-accident plan and arrangement, medical insurance plan, and
disability plan). Employer shall not make any changes in such plans or
arrangements which would materially and adversely affect Employee's rights or
benefits thereunder, unless such change occurs pursuant to a program applicable
to all executives of Employer and does not result in a proportionately greater
reduction in the rights of or benefits to Employee as compared with any other
executive of Employer. Employee shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement made available by
Employer in the future to its executives and key management employees, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Any payments or benefits
payable to Employee hereunder in respect of any calendar year during which
Employee is employed by Employer for less than the entire year shall, unless
otherwise provided in the applicable plan or arrangement, be prorated in
accordance with the number of days in such calendar year during which he is so
employed.
4. Bonuses. Employee shall be entitled to receive annual bonus
compensation, which bonus compensation shall be paid in the discretion of
Employer's Board of Directors upon Employee's achievement of certain specified
performance criteria. Employer and Employee anticipate that such bonus
compensation shall approximate 33 percent of Employee's annual salary, but may
be greater or less than 33 percent of Employee's annual salary. Any bonus
compensation to which Employee may be entitled under this Agreement shall be
prorated for any partial year of employment. Employee shall also be entitled
to participate in other bonus plans or programs offered by Employer for
executives who are members of the Corporation's senior management, in accord
with the requirements of said plans or programs. Notwithstanding anything to
the contrary contained in this Agreement, Employer shall pay to Employee as a
one-time signing bonus the sum of $10,416.67 upon the execution of this
Agreement.
5. Stock Option and Purchase Plans. Employee shall receive options to
purchase an aggregate of 315,000 shares of Employer's common stock pursuant to
the option agreements in the forms attached hereto as Exhibits A-1 and A-2.
Employee shall also be entitled, in the discretion of the Board of Directors,
to participate in stock option and purchase plans or programs established by
Employer for executives who are members of the Corporation's senior management,
in accord with the requirements of said plans or programs.
6. Vacations. During the term of this Agreement, Employee shall be
entitled to vacation periods, in accordance with Employer's vacation policy as
may be in effect from time to time, during which his compensation shall be paid
in full. Such vacations may be taken at such
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time or times as Employee may choose, but shall be scheduled in such manner as
to avoid unreasonable interference with the performance of his duties and
obligations to Employer.
7. Automobile Allowance. During his employment with the
Corporation, Employer may provide Employee with the use of a company vehicle
and an additional allowance to cover related insurance, maintenance and
operation expenses for the vehicle, up to a reasonable amount per year as
established by Employer.
8. Facilities Furnished. Employer shall furnish Employee with
space, stenographic assistance and such other facilities and services as shall
be suitable to Employee's position and adequate for the performance of his
duties.
9. Consideration. It is expressly agreed and understood that
Employee's employment, all of the compensation and benefits set forth above,
and the stock in the Corporation being provided to Employee is consideration
for his agreement to all the terms of this Agreement, including, specifically,
his agreement to the restrictive covenants set forth in sub-paragraphs II. D.,
II. E., II. F. and II. G. below.
C. BEST EFFORTS. Employee agrees that he will at all times faithfully and
industriously perform all of his duties that may be required of and from him by
Employer, that he will devote substantially his full time during regular
business hours and exert his best efforts in the performance of his duties and
functions for the Corporation, and that he will perform such other reasonable
duties as are assigned to him pursuant to the express and implicit terms and
conditions of this Agreement to the reasonable satisfaction of Employer.
Employee further agrees that during the term of this Agreement he will not
engage in or become interested in any other business, calling or enterprise
which is or may be contrary to or in competition with the interest, welfare or
benefit of Employer.
D. NON-SOLICITATION OF BUSINESS. In addition to any obligation under any
other Paragraph of this Agreement, during the term of Employee's employment
with Employer and for a period of twelve (12) months after the date of
termination of employment with Employer, regardless of who initiated such
termination, Employee will not, directly or indirectly, whether as an
individual or for his own account or with any other person or entity of any
kind whatsoever solicit, interfere with, or endeavor to entice away or divert
from Employer any client, or any business Employer had enjoyed or solicited
from its clients during the three year period prior to termination of his
employment.
E. NON-COMPETE. In addition to any obligation under any other Paragraph
of this Agreement, during the term of Employee's employment with Employer and
for a period of twelve (12) months after the date of termination of employment
with Employer, regardless of who initiated such termination, Employee shall
not, alone, or as a member, employee or agent of any partnership,
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or as an officer, agent, employee, director, stockholder (except stockholder of
not more than five percent (5%) of the outstanding stock of any company listed
on a national securities exchange or traded over the counter) or investor of
any other corporation, directly or indirectly, (i) own, manage, operate, join,
control or participate in the ownership, management, operation or control of,
or (ii) become employed by, consult or advise, or (iii) be connected in any
manner with, any business or activity which involves or relates to the sale or
marketing of products or services which are substantially similar to, the same
as, or serve the same function as, those sold or marketed by Employer, and
which business or activity is conducted within a 50 mile radius of any office
of Employer. Notwithstanding anything to the contrary contained in this
Agreement, in the event Employer terminates Employee for reasons not set forth
in sub-paragraph IV.A and where a Change in Control has not occurred, the
duration of the non-competition period set forth in this sub-paragraph II.E
shall not exceed that number of months equal to the number of months of
severance compensation to which Employee is entitled under sub-paragraph IV.B.1
hereof.
F. NON-ENTICEMENT. In addition to any obligation under any other
Paragraph of this Agreement, during the term of Employee's employment with
Employer and for a period of twelve (12) months after the date of termination
of employment with Employer, regardless of who initiated such termination,
Employee shall not, directly or indirectly, whether as an individual or for his
own account or for or with any other person or entity of any kind whatsoever
hire, or solicit or endeavor to entice away, from Employer or any client of
Employer, any person who was employed by Employer or any client of Employer at
any time during Employee's employment with Employer, in order for such person
to accept employment or association with another person, or entity of any kind
whatsoever, and Employee shall not approach any such person for any such
purpose or authorize or knowingly cooperate with the taking of any such action
by any other individual, person or entity. Employer's clients are third-party
beneficiaries of aforestated covenants and shall have standing to enforce the
terms of this sub-paragraph II. F., and to seek and obtain whatever equitable
or legal remedies are necessary to make them whole, including but not limited
to all remedies provided to Employer under this Agreement.
G. CONFIDENTIALITY. In addition to any obligation under any other
Paragraph of this Agreement, Employee shall not at any time during the term of
his employment with Employer or at any time thereafter communicate, divulge or
disclose for use by himself or others any information or knowledge, disclosed
or otherwise obtained by him during his employment by Employer (including but
not limited to information and knowledge conceived, discovered or developed by
Employee) which is not generally known in the computer programming, renovation
and computer software products industry and which relates to the business of
Employer or the business of Employer's customers or is in the nature of a trade
or business secret of Employer, or Employer's customers. Confidential
information shall include, in addition to the specific items so identified in
this Agreement, all information and matters designated by Employer during the
term of Employee's employment as confidential. Employer's customers are
third-party beneficiaries of the aforestated covenants contained in this
sub-paragraph II. G., and shall have standing to enforce its terms and to
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seek whatever equitable or legal remedies are necessary to make them whole
including but not limited to, all remedies provided to Employer under this
Agreement or pursuant to law. Notwithstanding any other provision contained
herein, Employee shall not at any time directly or indirectly appropriate to
his own use or to the use of others any software product methodology, or
portion thereof, that Employee owned or developed during the term of Employee's
employment.
H. REASONABLENESS. Employee represents and acknowledges that the foregoing
restrictions will not prevent him from obtaining good employment in his field
of expertise or cause him undue hardship, and there are numerous other
employment opportunities available to him that are not affected by the
foregoing restrictions. Employee further acknowledges that the foregoing
restrictions are reasonable and necessary in order to protect Employer's
legitimate interests, and that any violation thereof would result in
irreparable injury to Employer.
I. DISCLOSURE. Employee shall make the terms and conditions of this
Agreement known to any business, entity, or persons engaged in activities
competitive with Employer's business, with which he becomes associated within
two years subsequent to his termination of his employment with Employer.
Employer shall have the right to make the terms of this Agreement known to
third parties during such period.
J. DEVELOPMENTS; COMPANY PROPERTY. Employee agrees that all work product,
programs, software, inventions, designs, product developments, patent
applications, trademarks, trade names, service marks, copyrights and all rights
acquired therein ("Developments") that Employee creates, conceives or develops,
whether solely or jointly with others, which are based in whole or in part upon
information Employee or any other employee of Employer gathers in the course
of, or arising from, Employee's employment with Employer, shall inure to and be
the property of Employer for its exclusive use and benefit. Employee agrees
that, during and after Employee's employment with Employer, Employee shall
fully cooperate with Employer to ensure that such Developments remain Employer
property. Such cooperation shall include, without limitation, the execution of
appropriate assignment documents, applications and other documents as Employer
requests. All documents that Employee prepares, or confidential information
that might be given to Employee in the course of Employee's employment with
Employer, are the exclusive property of Employer. On Employee's termination of
employment regardless of how termination is effected, or whenever requested by
Employer, Employee shall immediately return to Employer, without making copies,
excerpts or summaries, all of Employer's property, including, without
limitation, all equipment, materials, documents, agreements, files, vendor
lists or files, client and potential client lists or files, computer software
or hardware, computer programs (whether on floppy disks, mini disks, CDs or
hard drives), instruction manuals, proposals, reports, correspondence, records,
business cards and all other documents made available by Employer, or used by
Employee in rendering services hereunder or otherwise, that is in Employee's
possession or under Employee's control.
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III. REMEDIES
In the event of any violation of this Agreement Employer shall be
authorized and entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief as well as an equitable accounting
of all profits or benefits arising out of such violation, which rights and
remedies shall be cumulative and in addition to any other rights or remedies to
which Employer may be entitled, including the right to damages directly or
indirectly sustained by Employer, and all reasonable attorneys' fees, court
costs and litigation expenses incurred in enforcing any of the provisions of
this Agreement.
IV. TERMINATION
A. Employment of Employee under this Agreement may be terminated
immediately at any time without prior notice to the other party and without
payment of any Severance Compensation (as defined below), bonus or other
compensation, other than salary and vacation benefits earned:
1. by Employer upon the death of Employee;
2. by Employer when Employee reaches mandatory retirement age under any
retirement policy applicable to all executive members of the Corporation's
senior management team, as adopted by Employer;
3. by Employer for just cause. For purposes of this Agreement, "just
cause" shall mean any one or more of the following: (A) Employee's breach of
his obligations, duties and responsibilities under any term or provision of
this Agreement which is materially detrimental to Employer, which breach
remains uncured for a period of twenty days after written notice by Employer to
Employee; (B) Employee's gross negligence or willful misconduct in the
performance of his duties hereunder; (C) Employee's dishonesty, fraud,
misappropriation or embezzlement in the course of, related to or connected with
the business of Employer; or (D) Employee's conviction of a felony.
If Employee is advised that he is being terminated for just cause and
within fifteen (15) days thereafter submits to the Chief Executive Officer a
written objection to such a determination, this Section will not be applicable
unless the Board of Directors of Employer at or before its next regularly
scheduled meeting determines by majority vote that just cause exists.
B. Employment of Employee may also be terminated upon thirty (30) days
written notice to the other party for any reason other than those set forth in
sub-paragraph IV. A. above.
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1. Employer may terminate Employee for any reason. In the event that
Employer terminates Employee for reasons not set forth in sub-paragraph IV. A.,
and where a Change in Control has not occurred as set forth below, Employer
shall provide to Employee Severance Compensation. Severance compensation shall
equal four (4) months of Employee's effective annual salary immediately prior
to the termination date for each year of Employee's employment with Employer,
subject to a maximum severance benefit of one (1) year's annual salary.
2. In the event of a Change in Control, Employer or Employee may terminate
Employee's employment and, upon such termination of employment, the following
provisions shall apply.
A. A Change in Control shall be deemed to have occurred if (i) any
"person(s)" (as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), become(s) the
"beneficial owner(s)" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities or other interests of Employer
representing a 50 percent or greater voting or other interest in Employer, or
(ii) the stockholders of Employer approve an agreement for the sale or
disposition by Employer of all or substantially all Employer's assets.
B. In the event of a Change in Control, the following Change in Control
compensation shall be provided to Employee: (i) a sum equal to one (1) year of
Employee's effective annual salary immediately prior to the termination date
plus (ii) an amount equal to one (1) year's annual bonus compensation relating
to the then current year (calculated at 33 percent of Employee's effective
annual salary immediately prior to the termination date) plus (iii) the
equivalent cash value, at standard independent insurance premium rates, of
purchasing, as of the termination date, benefits for Employee on an individual
basis which are equal to Employee's participation (including dependent
coverage) in Employer's health insurance plan, calculated as if such benefits
were continued during the one (1) year period following the termination date,
and payable in equal semi-monthly installments over one (1) year following the
termination date.
C. In the event that any payment received or to be received by Employee in
connection with a Change in Control of Employer or the termination of
Employee's employment (whether payable pursuant to the terms of this Agreement
or any other plan, arrangement or agreement with Employer, any person whose
actions result in a Change in Control or any person affiliated with Employer or
such person) would not be deductible by Employer (in whole or in part) as a
result of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), such payment shall be reduced until no portion of the payment is not
deductible as a result of Section 280G of the Code. For purposes of this
limitation (i) no portion of the payments the receipt or enjoyment of which
Employee shall have effectively waived in writing prior to the date of payment
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shall be taken into account; (ii) no portion of the payment shall be taken into
account which, in the opinion of tax counsel selected by Employer's independent
auditors and acceptable to Employee, does not constitute a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code, and (iii) the value of
any non-cash benefit or any deferred payment or benefit included in the payment
shall be determined by Employer's independent auditors servicing Employer
immediately prior to the time of a Change in Control of Employer in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
V. NOTICES
All notices pursuant to this Agreement must be in writing. All notices to
Employer shall be addressed to the main office of Employer, or such other
address as Employer may hereafter designate by written notice to Employee given
in accordance with this Paragraph and all notices to Employee shall be
addressed to Employee at the office in which he is based with a copy to his
home address as last indicated in the books and records of Employer or at such
other address as Employee may hereafter designate by written notice to Employer
given in accordance with this Paragraph. All notices shall be considered
effective on the earlier of: a) the date when delivered personally to Employer
or Employee or; b) two (2) days after deposit of said notice in the United
States mail, registered mail, postage prepaid, return receipt requested,
addressed to the address of the party to whom directed as hereinabove set
forth.
VI. MISCELLANEOUS
A. PRIOR AGREEMENTS. All of the terms and conditions of this Agreement
take precedence over any and all prior understandings and agreements made by
and between Employer and Employee regarding employment and the execution of
this Agreement shall constitute the termination of any and all such prior
agreements.
B. NO BREACH. Employee hereby warrants that he is not now under any legal
or contractual obligation that would conflict in any manner with the
obligations and duties he is undertaking herein, and that his execution of this
Agreement will not breach any agreement to which he is now a party.
C. SEVERABILITY. In the event any of the restrictions contained in this
Agreement are held to be in any respect an unreasonable restriction upon
Employee, then the court so holding shall alter or amend the Agreement,
including making any reduction in the territory to which it pertains and/or the
period of time in which it operates, or effect any other change to the extent
necessary to render any of the restrictions enforceable. Each of the terms and
provisions of this Agreement is and is to be deemed severable in whole or in
part and, if any term or provision or the application thereof in any
circumstances should be invalid, illegal or unenforceable, the remaining terms
and
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provisions or the application thereof to circumstances other than those as
to which it is held invalid, illegal or unenforceable, shall not be affected
thereby and shall remain in full force and effect.
D. CAPTIONS. The captions contained herein are solely for the convenience
of the parties and shall not be deemed to govern the meaning or intent of any
of the provision of this Agreement.
E. BINDING EFFECT; NO ASSIGNMENT. The rights and obligations of Employer
and Employee hereunder shall inure to the benefit of and be binding upon any
successor or assign of Employer. This Agreement is personal to Employee and
shall not be assigned by him to any other party whatsoever.
F. NO WAIVER. The waiver or non-enforcement by Employer of any breach of
any provision of this Agreement by Employee shall not operate or be construed
as a waiver of any subsequent breach by Employee. No waiver shall be legally
operative unless in writing and signed by an authorized agent of Employer.
G. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Illinois without reference to the principles governing
conflicts of laws.
H. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which when so executed and delivered shall be deemed an original, and such
counterparts together shall constitute one instrument.
I. AMENDMENTS; ENTIRE AGREEMENT. This Agreement, unless stated otherwise
herein, may only be amended by the written mutual agreement of the parties
hereto. This Agreement constitutes the entire agreement between the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
EMPLOYER:
SPR INC.
By: /s/ XXXXXX X. XXXXXXXX
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Xxxxxx X. Xxxxxxxx, President
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EMPLOYEE:
/s/ XXXXXXX X. XXXXX
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Xxxxxxx X. Xxxxx
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