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EXHIBIT 10.36.1
EMPLOYMENT AGREEMENT
[Conformed Copy]
THIS EMPLOYMENT AGREEMENT (this "Agreement"), effective as of October 30, 2000
(the "Effective Date"), is between APERIAN, INC., a Delaware corporation (the
"Company"), and XXXXXX X. XXXXX ("Xxxxx"). The Company and Xxxxx are
collectively referred to in this Agreement as the "Parties."
BACKGROUND
The Company and Xxxxx are parties to an Employment Agreement dated as of June
29, 1999 (the "Prior Agreement") providing for the employment of Xxxxx as
President and Chief Executive Officer of the Company. The Company and Xxxxx wish
to modify the terms and conditions of the employment of Xxxxx commencing on the
Effective Date in accordance with the terms of this Agreement.
TERMS OF AGREEMENT
The Parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxx to devote his personal services
to the business and affairs of the Company, and Xxxxx hereby accepts such
employment, on the terms and conditions stated in this Agreement.
1.1. DUTIES. Xxxxx' title and position shall be Chairman and Chief
Executive Officer of the Company. Xxxxx' duties will be those customarily
performed by persons acting in that capacity and those that may be designated by
the Board of Directors of the Company consistent with the titles and positions
of Chairman and Chief Executive Officer of the Company. Xxxxx shall report
directly to the Board of Directors of the Company. Xxxxx shall also serve, upon
request and without additional compensation, as a director of the Company or as
an officer or a director, or both, of any subsidiary, division, or affiliate of
the Company or any other entity in which the Company holds an equity interest or
which it sponsors. Throughout the Term (as defined below), the Company shall
cause Xxxxx to be nominated to serve on the Board of Directors and will use
reasonable efforts to secure Xxxxx' election to the Board of Directors. It is
the intention of the parties that Xxxxx will be elected to and will serve on the
Board of Directors while serving hereunder as Chairman and Chief Operating
Officer of Company.
1.2. FULL-TIME EMPLOYEE. Xxxxx shall devote his full time (except for
reasonable vacation time and absence for any disability), attention, and best
efforts to the performance of his duties described in Article 1.1.
1.3 PRIOR AGREEMENT. From and after the Effective Date, the Prior
Agreement shall be cancelled and of no effect.
2. TERM. The term of Xxxxx' employment under this Agreement (the "Term") shall
be as follows:
2.1. INITIAL TERM. The initial term shall commence on the date of this
Agreement and shall expire at 11:59:59 p.m., Central Time, on the day preceding
the third anniversary of the date of this Agreement, unless terminated earlier
pursuant to Article 5.
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2.2. EXTENDED TERMS. Beginning with the third anniversary of the date
of this Agreement, the Term shall be extended automatically for an additional
successive one-year period as of each anniversary date of the date of this
Agreement that occurs while this Agreement is in effect; provided, however, that
if either party shall give written notice to the other not less than ninety
days' prior any such anniversary the that no such automatic extension shall
occur, then Xxxxx' employment shall terminate on the anniversary date of the
date of this Agreement that next occurs after such notice is given.
3. COMPENSATION. As compensation for the services rendered by Xxxxx under this
Agreement, the Company shall, during the Term, pay or provide Xxxxx during the
Term the following:
3.1. BASE SALARY. The Company shall pay Xxxxx during the Term an annual
base salary equal to at least Two Hundred Fifty Thousand Dollars ($250,000)
during the remainder of the current fiscal year, Three Hundred Thousand
($300,000) during the next fiscal year and Three Hundred Fifty Thousand
(350,000) during the remainder of the Term, including any extension of the Term
described in Article 2.2, unless the Parties otherwise agree. The annual amount
of base salary in effect at the time is referred to in this Agreement as "Base
Salary." The Base Salary shall be paid in equal installments semi-monthly, in
arrears, at the Company's regular and routine payroll dates, or at such
intervals as may otherwise be agreed upon by the Parties, and in accordance with
any other payroll procedures of the Company. The Base Salary shall be prorated
(on a daily basis) for any partial payroll period of employment under this
Agreement.
3.2. ANNUAL BONUS OPPORTUNITY. During the Term, Xxxxx shall be eligible
to earn and receive from the Company an annual incentive bonus based upon
satisfaction of certain goals. Bonuses shall be determined with respect to
during each fiscal year of the Company during the Term, with the first bonus
period being the fiscal year ending March 31, 2001. Xxxxx target bonus for each
fiscal year shall consist of two components, each having a target of 50% of
Xxxxx' salary during that fiscal year. One component shall be based on
shareholder value, and the other shall be based on Company performance, in each
case based on such metrics with respect to the fiscal year as the Compensation
Committee and Xxxxx shall determine at or about the beginning of each fiscal
year of the Company during the Term (or as expeditiously as is practicable in
the case of the current fiscal year). The bonus, if any, with respect to a
fiscal year will be payable to Xxxxx no later than thirty (30) days after
completion of the audit for that fiscal year. Unless otherwise determined by the
Compensation Committee of the Board or as provided in this Agreement, no annual
incentive bonus shall be payable to Xxxxx unless he is employed by the Company
on the day the bonus is paid.
3.3. INCENTIVE PLANS AND RESTRICTED STOCK. Xxxxx shall participate in
any stock option, performance share, phantom stock, or similar long-term
stock-based incentive plan adopted by the Company for its executive employees in
effect during the Term, including the Company's 2000 Stock Option Plan (the
"Option Plan"). Except as described in the remainder of this paragraph, the
extent to which Xxxxx shall participate in any such plan will be determined by
the Board or the Compensation Committee of the Board, but in no event shall
Xxxxx' participation be less than that of the President of the Company. On the
date of this Agreement, Xxxxx will be granted 245,000 shares of restricted stock
in accordance with the Option Plan and the Restricted Stock Agreement attached
hereto as Exhibit A.
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3.4. SAVINGS AND RETIREMENT PLANS. Xxxxx shall be eligible to
participate in any long-term bonus, savings, deferred compensation, retirement
or pension, or death benefit plan adopted by the Company for its executive
employees generally in effect during the Term.
3.5. WELFARE BENEFIT PLANS. Xxxxx shall be eligible to participate in
any life insurance, medical, dental, and hospitalization insurance, disability
insurance benefit, or other similar employee welfare benefit plan or program
adopted by the Company covering its executive employees generally in effect
during the Term.
3.6. VACATION. Xxxxx shall be entitled to twenty (20) days of paid
vacation per fiscal year. Such vacation time shall, however, be prorated in any
fiscal year during which Xxxxx is employed by the Company for less than the
entire fiscal year, in accordance with the number of days in that fiscal year
during which Xxxxx is so employed. Such vacation time shall be in addition to
any paid time off ("PTO") to which Xxxxx may be entitled under the Company's PTO
policy in effect during the Term.
3.7. TRANSPORTATION ALLOWANCE. During the Term, the Company shall pay
Xxxxx a transportation allowance equal to One Thousand Dollars ($1,000.00) per
month ("Transportation Allowance"). The Transportation Allowance shall be
payable in equal installments together with the payments of Base Salary.
3.8. TAX WITHHOLDING. The Company may deduct from any compensation or
other amount payable to Xxxxx under this Agreement (including under Article 5)
social security (FICA) taxes and all federal, state, municipal, and other taxes
or governmental charges as may, in the Company's judgment, be required. The
Company will consult with Xxxxx as to amounts to be withheld in this regard.
3.9. PARTICIPATION IN COMPENSATION AND BENEFIT PLANS. Xxxxx'
participation during the Term in any or all of the plans or programs adopted by
the Company described in Articles 3.3 through 3.6 ("Compensation and Benefit
Plans") will be subject to the terms and conditions of those Compensation and
Benefit Plans as they now exist or may hereafter be adopted, amended, restated,
or discontinued by the Company, including the satisfaction of all applicable
eligibility requirements and vesting provisions of those Compensation and
Benefit Plans. The Company shall have no obligation under this Agreement to
continue any or all of the Compensation and Benefit Plans that now exist or are
hereafter adopted. To the extent that Xxxxx is eligible to participate in any
Compensation and Benefit Plan existing on the date of this Agreement for which a
plan description or plan materials are available, the Company has provided to
Xxxxx.
4. EXPENSE REIMBURSEMENT. During the Term, Xxxxx may incur, and shall be
reimbursed by the Company for, reasonable, ordinary and necessary, and
documented business expenses to the extent that Xxxxx complies with, and
reimbursement is permitted by, the Company's policies, practices, and
procedures.
5. EMPLOYMENT TERMINATION. Either Party may terminate Xxxxx' employment under
this Agreement by giving written notice of termination to the other Party. If
the Company is terminating, it shall include in that notice a statement whether
the termination is because of Disability or for Cause or without Cause. The
Parties' respective rights and obligations upon the termination of Xxxxx'
employment under this Agreement are as follows:
5.1. TERMINATION GENERALLY. Upon any termination of Xxxxx' employment
under this Agreement, the Company shall pay or provide Xxxxx the following:
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5.1.a. Any amount of Base Salary and Transportation Allowance
earned by, but not yet paid to, Xxxxx through the effective date of
termination of employment, as further described below (the "Termination
Date");
5.1.b. All benefits that have been earned by or vested in, and
are payable to, Xxxxx under, and subject to the terms (including all
eligibility requirements) of, the Compensation and Benefit Plans in
which Xxxxx participated through the Termination Date;
5.1.c. All reimbursable expenses due, but not yet paid, to
Xxxxx as of the Termination Date under Article 4; and
5.1.d. An amount equal to all accrued and unused PTO,
calculated in accordance with the Company's PTO policies, practices,
and procedures (including authorized deductions and the deductions
required by law), through the Termination Date.
The amount of Base Salary and Transportation Allowance due under
Section 5.1.a shall be paid no later than thirty (30) business days after the
Termination Date; the amounts or benefits due under Section 5.1.b shall be paid
or provided in accordance with the terms of the Compensation and Benefit Plans
under which such amounts or benefits are due to Xxxxx; and the amounts due under
Sections 5.1.c and 5.1.d shall be paid in accordance with the terms of the
Company's policies, practices, and procedures regarding reimbursable expenses
and PTO, respectively. Except as expressly provided below in this Article 5,
upon paying or providing Xxxxx the preceding amounts or benefits, the Company
shall have no further obligation or liability under this Agreement for Base
Salary or any other cash compensation or for any benefits under any of the
Compensation and Benefit Plans. Upon termination of Xxxxx' employment, Xxxxx
shall be deemed to have resigned from any position as a director of the Company
or as an officer or director, or both, of any subsidiary, division, or affiliate
of the Company or any other entity in which the Company holds an equity interest
or which it sponsors that Xxxxx then holds; no written resignation need be given
or delivered to the Company.
In this Agreement, the Termination Date shall be (i) the date of Xxxxx'
death, (ii) the third business day after the date on which the Company gives
notice of termination because of Disability, or (iii) the date of termination
specified in any other notice of termination, or if not specified in the notice
of termination, the date that notice of termination is given.
In this Agreement, "Disability" means Xxxxx' permanent and total
disability, which shall be deemed to exist if he is unable reasonably to perform
his duties under this Agreement because of any medically determinable physical
or mental impairment which can be expected to result in death or which has
lasted or can be expected to last for at least ninety (90) consecutive days. Any
Disability shall be determined by the Board or an authorized committee or
representative thereof ("Representative"), in its sole and absolute discretion,
upon receipt of competent medical advice from a qualified physician selected by
or acceptable to the Board or its Representative. Xxxxx shall, if there is any
question about his Disability, submit to a physical examination by a qualified
physician selected by the Board or its Representative.
In this Agreement, "Cause" means any of the following: (i) Xxxxx'
willful failure to substantially perform his duties under this Agreement without
legal cause, other than any such failure resulting from his incapacity due to
physical or mental illness or Disability; (ii) Xxxxx' engaging willfully in any
action which, or omitting to engage in any action the omission of
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which, he knows or should know is, or is reasonably expected to be substantially
injurious (monetarily or otherwise) to the Company or its business or
reputation; (iii) Xxxxx' performance of any illegal conduct or act or omission
constituting serious dishonesty that results, directly or indirectly, in
significant gain or enrichment of Xxxxx or his family or affiliates at the
expense of the Company or which adversely affects, or reasonably could in the
future adversely affect, Xxxxx' value, reliability, or performance in a material
manner; or (iv) any deliberate breach by Xxxxx of any material obligation under
any of Articles 6, 7, 8 or 9. Whether an event or circumstance constituting
Cause exists will be determined in good faith the Board of Directors but only if
such termination is approved by at least two-thirds of the members of the Board
of Directors after Xxxxx has been given written notice by Company of the
specific reason for such termination and an opportunity, together with his
counsel, to be heard before the Board of Directors. Members of the Board of
Directors may participate in any hearing that is required pursuant to this
paragraph by means of conference telephone or similar communications equipment
by means of which all persons participating in the hearing can hear and speak to
each other; provided, however, that at least one-half of the members of the
Board of Directors (in addition to Xxxxx) shall attend the hearing in person. If
the Company determines that Cause for termination exists under clause (i) above
in this paragraph, the Company shall notify Xxxxx of that belief, and that
notice shall describe the event or circumstance believed to constitute Cause for
termination. If that event or circumstance may reasonably be remedied or
corrected, Xxxxx shall have thirty (30) days to effect that correction or
remedy. If not corrected or remedied within that thirty (30) day period (as
determined by at least two-thirds the members of the Board after opportunity for
a hearing as described above), Cause for termination shall immediately be deemed
to exist, and Xxxxx' employment shall be deemed terminated. If the Company
determines, as provided above, that Cause for termination exists under any of
clauses (ii), (iii), and (iv) above in this paragraph, the Company shall notify
Xxxxx of that belief, and that notice shall constitute immediate termination of
Xxxxx' employment.
In this Agreement, "Good Reason" means any of the following: (i) a
significant reduction in the nature or scope of Xxxxx authorities or duties from
those customarily performed by persons acting in the capacity of chief executive
officer, (ii) a change in Xxxxx' reporting relationship so that Xxxxx reports to
anyone other than the Board of Directors of the Company, (iii) a reduction in
Xxxxx' annual base salary or target opportunity under any applicable bonus or
incentive compensation plan or arrangement, (iv) a diminution in Xxxxx'
eligibility to participate in bonus, stock option, incentive award and other
compensation plans which provide opportunities for compensation which are at
least equivalent to the opportunities afforded by the Company (including its
subsidiaries) to its most senior executives; (v) a diminution in employee
benefits (including but not limited to medical, dental, life insurance, and
long-term disability plans) and perquisites applicable to Xxxxx from the
employee benefits and perquisites provided by the Company (including its
subsidiaries) to its most senior executives; or (ii) a change, without Xxxxx'
consent, in the location of Xxxxx' principal place of employment by the Company
by more than 50 miles from the location where Xxxxx was principally employed
prior to such change. If Xxxxx determines that an event constituting Good Reason
has occurred, Xxxxx shall notify the Company and the Chairman of the
Compensation Committee of the Board of Directors of that belief, which notice
shall set forth the bases for that belief. The Company shall have 30 days after
receipt of such notice in which to either (a) rectify such event to Xxxxx'
reasonable satisfaction or (b) determine, in accordance with the standards and
procedures described in the preceding sentence that an event constituting Cause
exists. If the Company does not take either of such actions within such 30-day
period, Xxxxx may terminate his employment for Good Reason immediately by giving
written notice to the Company. Any termination by Xxxxx under this paragraph
shall for all purposes of this Agreement be deemed a termination of Xxxxx'
employment by the Company without Cause.
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In this Agreement "Change of Control" means the first to occur of the
following events: (i) any sale, lease, exchange, or other transfer (in one
transaction or series of related transactions) of all or substantially all of
the assets of the Company to any person or group of related persons for purposes
of Section 13(d) of the Exchange Act, (ii) a majority of the Board of Directors
of the Company shall consist of persons who are not Continuing Directors (as
defined below); (iii) the acquisition after the date of this Agreement by any
person or group of related persons of the power, directly or indirectly, to vote
or direct the voting of securities having more than 50% of the ordinary voting
power for the election of directors of the Company, or (iv) the approval by the
stockholders of the Company of a merger or consolidation of the Company with any
other entity, 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 or such surviving entity's
parent) at least fifty percent (50%) of the total voting power represented by
the voting securities of the Company or such surviving entity or such surviving
entity's parent outstanding immediately after such merger or consolidation. A
"Continuing Director" means, as of the date of determination, any person who (i)
was a member of the Board of Directors of the Company on the date of this
Agreement or (ii) was nominated for election or elected to the Board of
Directors of the Company with the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election.
Xxxxx may voluntarily terminate his employment under this Agreement
only by giving at least thirty (30) days' prior written notice to the Company.
Xxxxx shall not be liable to the Company for breach of this Agreement because of
his termination of employment in accordance with the preceding sentence.
5.2. TERMINATION UPON DEATH OR DISABILITY. If Xxxxx' employment is
terminated by death or by the Company because of Disability, Xxxxx (or his legal
representative, estate, or heirs) shall be entitled to receive from the Company:
5.2.a. The payment of a total Three Hundred Thousand Dollars
($300,000.00), in a lump sum (the "Termination Payment"); and
5.2.b. if Xxxxx elects and maintains continued coverage under
the Consolidated Omnibus Benefits Reconciliation Act of 1985 and
corresponding regulations ("COBRA"), then for up to the twelve (12)
consecutive months immediately after the Termination Date, payments in
an amount equal to the difference between (i) the premiums paid or
payable by Xxxxx for coverage under COBRA for himself and his
dependents (if any) and (ii) the premiums that he would have paid for
comparable coverage under the Company's then current group insurance
plan or plans if his employment under this Agreement had not ceased
(the "Insurance Payments"); except that the Insurance Payments shall
expire or terminate immediately upon Xxxxx' becoming eligible for
coverage under another employer's plan or policy.
In addition, subject to and upon the release executed and delivered
pursuant to Article 5.4 becoming irrevocable, (a) all shares of restricted stock
granted to Xxxxx as described in Section 3.4 will vest and become
non-forfeitable and (b) each stock option granted to Xxxxx, whether now
outstanding or granted in the future, shall vest and shall be exercisable until
the earlier of (x) one year from the date of such termination or (y) the
expiration of the option in accordance with its terms.
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The Company will make the Termination Payment and commence the
Insurance Payments within ten (10) business days after the first business day on
which the release executed and delivered in accordance with Section 5.4.a
becomes irrevocable by Xxxxx (or his legal representative, estate, or heirs).
The Company's obligations for the Insurance Payments are not intended to negate
or impair any obligation of the Company or right of Xxxxx under COBRA. The
Severance Payment and the Insurance Payments shall be in addition to the amounts
or benefits to which Xxxxx is entitled under Article 5.1. Any Severance Payment
or Insurance Payments (or both) under this Article 5.2 shall not be deemed the
continuation of Xxxxx' employment for any purpose.
5.3 TERMINATION WITHOUT CAUSE. If Xxxxx' employment is
terminated by the Company without Cause or by Xxxxx for Good Reason, Xxxxx (or
his legal representative, estate, or heirs) shall be entitled to receive from
the Company (except if and to the extent waived by Xxxxx in accordance with
Article 7), as liquidated damages:
5.3.a. The payment, in the manner provided below, of all
remaining amounts of salary under Section 3.1 hereof and bonus (based
on targeted amounts) under Section 3.2 hereof payable during the
remainder of the Term (including the pro rata portion of the fiscal
year in which the Term ends), provided that the Company shall pay at
least one year's salary and provided further that if such termination
shall occur on or within two years following the date of a Change of
Control, the payment shall not be less than the amount of salary and
bonus (based on targeted amounts) that would have been payable
hereunder for the two years following the date of such termination had
this Agreement continued in effect throughout such period (the
"Severance Payment"); and
5.3.b. if Xxxxx elects and maintains continued coverage under
the Consolidated Omnibus Benefits Reconciliation Act of 1985 and
corresponding regulations ("COBRA"), then for up to the twenty-four
(24) consecutive months immediately after the Termination Date,
payments in an amount equal to the difference between (i) the premiums
paid or payable by Xxxxx for coverage under COBRA for himself and his
dependents (if any) and (ii) the premiums that he would have paid for
comparable coverage under the Company's then current group insurance
plan or plans if his employment under this Agreement had not ceased
(the "Insurance Payments"); except that the Insurance Payments shall
expire or terminate immediately upon Xxxxx' becoming eligible for
coverage under another employer's plan or policy.
One-half the Severance Payment shall be paid in a lump sum, and shall pay the
remaining one-half of the Severance Payment in equal semi-monthly installments
over a period not greater than the remainder of the Term.
Notwithstanding the foregoing, if prior to April 1, 2001 (and only if a Change
of Control has not occurred) every member of the Board of Directors of the
Company who is not also an employee of the Company votes to terminate Xxxxx'
employment without Cause then the amount of the Severance Payment the Company
shall be required to pay Xxxxx pursuant to Section 5.3.a shall be one-half the
amount provided in such Section, which amount shall be paid in a lump sum within
ten (10) business days after the first business day on which the release
executed and delivered in accordance with Section 5.4.a becomes irrevocable by
Xxxxx. Any vote under this paragraph shall take place at a meeting of the Board
of Directors for which notice has been properly given to all directors
(including Xxxxx) stating the purpose of the meeting. Members of
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the Board of Directors may participate in the meeting means of conference
telephone or similar communications equipment by means of which all persons
participating in the hearing can hear and speak to each other; provided,
however, that at least one-half of the members of the Board of Directors (in
addition to Xxxxx) shall attend the meeting in person.
In addition, subject to and upon the release executed and delivered
pursuant to Article 5.4 becoming irrevocable, (a) all shares of restricted stock
granted to Xxxxx as described in Section 3.4 will vest and become
non-forfeitable and (b) each stock option granted to Xxxxx, whether now
outstanding or granted in the future, shall vest and shall be exercisable until
the earlier of (x) one year from the date of such termination or (y) the
expiration of the option in accordance with its terms.
The Company will make the first payment of the Severance Payment (that
is, the amount payable in a lump sum) and commence the Insurance Payments within
ten (10) business days after the first business day on which the release
executed and delivered in accordance with Section 5.4.a becomes irrevocable by
Xxxxx (or his legal representative, estate, or heirs). The Company's obligations
for the Insurance Payments are not intended to negate or impair any obligation
of the Company or right of Xxxxx under COBRA. The Severance Payment and the
Insurance Payments shall be in addition to the amounts or benefits to which
Xxxxx is entitled under Article 5.1. Any Severance Payment or Insurance Payments
(or both) under this Article 5.3 shall not be deemed the continuation of Xxxxx'
employment for any purpose.
5.4. CONDITIONS TO SEVERANCE BENEFITS. Except as provided in Section
5.2.b or 5.3.b, none of the Termination Payment, Severance Payment or the
Insurance Payments under Articles 5.2 and 5.3 will be subject to reduction as
the result of future compensation earned or received by Xxxxx (including by
self-employment), and Xxxxx shall have no duty to mitigate his damages. The
Severance Payment and the Insurance Payments and the vesting of restricted
stock, shall, however, be conditioned upon the Company's receipt of a Settlement
Agreement, General Release, and Covenant Not to Xxx executed and performed by
Xxxxx (or his legal representative, estate, or heirs) in substantially the form
of Exhibit B to this Agreement (the "Release Agreement").
5.5. TERMINATION FOR CAUSE OR BY XXXXX. If Xxxxx' employment is
terminated by the Company for Cause or is voluntarily terminated by Xxxxx, then
Xxxxx shall not be entitled to any payments under this Agreement other than the
amounts or benefits to which he is entitled under Article 5.1.
5.6 FAILURE TO EXTEND. If at any time, the Company elects not to extend
the Term as described in Article 2.1, then Xxxxx shall continue to perform under
this Agreement until the expiration of the Term and shall then be entitled to
continued payment of the Base Salary then in effect for an additional six (6)
months after the expiration date. The obligation of the Company to make such
payments under this Article 5.6 shall be subject to the same conditions, and
shall have the same effect, as Severance Payment under this Agreement.
5.7. POST-TERMINATION SURVIVAL. The provisions of this Article 5 shall
survive the termination of Xxxxx' employment by the Company and its subsidiaries
to the extent necessary to effect the post-termination payments or benefits to
which Xxxxx is entitled under the terms of this Article 5.
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6. CONFIDENTIAL INFORMATION. The Company shall provide to Xxxxx, during the
Term, access to various trade secrets, confidential information, and proprietary
information of the Company (which, in this Article 6 as well as in Articles 7, 8
and 9, shall include the Company's subsidiaries and affiliates) which are
valuable and unique to the Company ("Confidential Information"). Confidential
Information includes the Company's plans, policies, and procedures relating to
its BBN Certification as well as the terms of, and the Company's plans,
policies, and procedures relating to, the Company's relationships with any
supplier of telecommunications services, network services or other services, and
other persons having relationships that are material to the Company's business
and affairs. Xxxxx shall not, either while in the employ of the Company or at
any time thereafter, (i) use any of the Confidential Information, or (ii)
disclose any of the Confidential Information to any person not an employee of
the Company or not engaged to render services to the Company, except (in either
case) to perform his duties under this Agreement or otherwise with the Company's
prior written consent. Nothing in this Article 6 shall preclude Xxxxx from the
use or disclosure of information generally known to the public or not considered
confidential by the Company or from any disclosure to the extent required by law
or court order (though Xxxxx must give the Company prior notice of any such
required disclosure and must cooperate with any reasonable requests of the
Company to obtain a protective order regarding, or to narrow the scope of, the
Confidential Information required to be disclosed). All files, records,
documents, information, data, and similar items relating to the business or
affairs of the Company, whether prepared by Xxxxx or otherwise coming into his
possession, shall remain the exclusive property of the Company and shall not be
removed from the premises from the Company, except in the ordinary course of
business as part of Xxxxx' performance of his duties under this Agreement, and
(in any event) shall be promptly returned or delivered to the Company (without
Xxxxx' retaining any copies) upon the termination of employment under this
Agreement.
7. NONCOMPETITION. Xxxxx acknowledges that, in addition to his access to and
possession of Confidential Information, during the Term he will acquire valuable
experience and special training regarding the Company's business and that the
knowledge, experience, and training he will acquire would enable him to injure
the Company if he were to engage in any business that is competitive with the
business of the Company. Therefore, Xxxxx shall not, at any time during the Term
and for the twelve (12) consecutive months immediately after the Termination
Date, directly or indirectly (as an employee, employer, consultant, agent,
principal, partner, shareholder, officer, director, or manager or in any other
individual or representative capacity), engage, invest, or participate in any
business in direct competition with the business of the Company within a fifty
(50)-mile radius of each location, or set or group of locations, (i) at, from,
or to which the Company conducts or has conducted business or renders, provides,
or delivers, or has rendered, provided, or delivered, services or products
during the Measurement Period (as defined below) or (ii) that is or has been,
during the Measurement Period, the subject of a Proposal (as defined below) to
conduct business or render, provide, or deliver services or products thereat,
therefrom, or thereto. "Measurement Period" means, with respect to Xxxxx'
activity (A) at any time during the Term, the Term and (B) at any time on or
after the termination of Xxxxx' employment, the six (6) consecutive months
preceding, and including, the date of such termination. "Proposal" means a
written or formal proposal, bid, arrangement, understanding, or agreement by the
Company to or with another person that reflects or contains negotiated or
substantive terms, but does not include any marketing contact by the Company
where the other person has not solicited that contact or indicated any interest
in doing business with the Company. (Xxxxx shall not be prohibited, however,
from owning, as a passive investor, less than five percent (5%) of the publicly
traded stock or other securities of any entity engaged in a business competitive
with that of the Company.) Xxxxx represents and agrees that (x) the Company has
agreed to provide him, and he will receive from the Company, special experience
and knowledge, including Confidential Information, (y) because the Confidential
Information is valuable to the
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Company, its protection (particularly from any competitive business) constitutes
a legitimate interest to be protected by the Company by enforcement of the
restriction in this Article 7, and (z) the enforcement of the restriction in
this Article 7 would not be unduly burdensome to Xxxxx and that, in order to
induce the Company to enter into this Agreement (which contains various benefits
to Xxxxx and obligations of the Company with respect to Xxxxx' employment),
Xxxxx is willing and able to engage, invest or participate in business after the
termination of his employment so as not to violate this Article 7. The parties
agree that the restrictions in this Article 7 regarding scope of activity,
duration, and geographic area are reasonable; however, if any court should
determine that any of those restrictions is unenforceable, that restriction
shall not thereby be terminated, but shall be deemed amended to the extent
required to render it enforceable. The post-employment restrictions in this
Article 7 will not apply, however, (i) if the Company terminates Xxxxx'
employment for Disability or (ii) in the case of a termination by the Company
without Cause or by Xxxxx for Good Reason, if and from the date Xxxxx waives all
right to the remaining unpaid severance benefits provided within this Agreement.
8. NONSOLICITATION. Xxxxx shall not, at any time within the twelve (12)
consecutive months immediately after the Termination Date, either directly or
indirectly:
8.1. DISCLOSE CONTACT INFORMATION. Make known to any person the names
and addresses, or other contact information, of any of the customers, suppliers,
or other persons having significant business relationships with the Company
within the information technology industry, so that such person could affect, or
attempt to affect, any of those relationships to the detriment of the Company;
or
8.2. SOLICIT EMPLOYEES. Solicit, recruit, or hire, or attempt to
solicit, recruit, or hire, any employee or consultant of the Company, or in any
other manner attempt to induce any employee or consultant of the Company to
leave the employ of the Company or cease his or her consulting or similar
business relationship with the Company. References in this Article 8.2 to "any
employee or consultant" shall include any person who was an employee or
consultant of the Company at any time within the six (6) consecutive months
preceding, and including, the Termination Date.
9. DEVELOPMENTS. Xxxxx shall promptly disclose to the Company all inventions,
discoveries, improvements, processes, formulas, ideas, know-how, methods,
research, compositions, and other developments, whether or not patentable or
copyrightable, that Xxxxx, by himself or in conjunction with any other person,
conceives, makes, develops, or acquires during the Term which (i) are or relate
to the properties, assets, or existing or contemplated business or research
activities of the Company, (ii) are suggested by, arise out of, or result from,
directly or indirectly, Xxxxx' association with the Company, or (iii) arise out
of or result from, directly or indirectly, the use of the Company's time, labor,
materials, facilities, or other resources ("Developments").
Xxxxx hereby assigns, transfers, and conveys to the Company, and hereby agrees
to assign, transfer, and convey to the Company during or after the Term, all of
his right and title to and interest in all Developments. Xxxxx shall, from time
to time upon the request of the Company during or after the Term, execute and
deliver any and all instruments and documents and take any and all other actions
which, in the judgment of the Company or its counsel, are or may be necessary or
desirable to document any such assignment, transfer, and conveyance to the
Company or to enable the Company to file and process applications for, and to
acquire, maintain, and enforce, any and all patents, trademarks, registrations,
or copyrights with respect to any of the Developments, or to obtain any
extension, validation, re-issue, continuance, or renewal of any
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such patent, trademark, registration, or copyright. The Company will be
responsible for the preparation of any such instrument or document and for the
implementation of any such proceedings and will reimburse Xxxxx for all
reasonable expenses incurred by him in complying with this Article 9.
10. INDEMNIFICATION. To the extent Xxxxx is an officer or director of the
Company, the Company shall include Xxxxx under any existing or future (i)
directors' and officers' liability insurance policy that the Company obtains and
maintains or (ii) indemnification agreements between the Company and other
executives of the Company. Subject to the foregoing sentence, the Company will
indemnify Xxxxx to the fullest extent permitted by the laws of the Company's
state of incorporation in effect at that time or by the articles or certificate
of incorporation and by-laws of the Company, whichever affords the greater
protection to Xxxxx.
11. CERTAIN REMEDIES. Any breach or violation by Xxxxx of any of Articles 6, 7,
8 and 9 shall entitle the Company, as a matter of right, to an injunction issued
by any court of competent jurisdiction, restraining any further or continued
breach or violation, or to specific performance requiring the compliance with
Xxxxx' covenants. This right to an injunction or other equitable relief shall be
in addition to, and not in lieu of, any other remedies to which the Company may
be entitled. The existence of any claim or cause of action of Xxxxx against the
Company, or any subsidiary or affiliate of the Company, whether based on this
Agreement or otherwise, shall not constitute a defense to the enforcement by the
Company of Xxxxx' covenants in any of Articles 6, 7, 8 and 9. The covenants in
Articles 6, 7,8 and 9 and in this Article 11 shall survive the termination of
Xxxxx' employment under this Agreement.
12. BINDING AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, and shall inure to the benefit of, the Company and Xxxxx and their
respective legal representatives, heirs, executors, administrators, and
successors and assigns (as permitted by this Article 12), including any
successor to the Company by merger, consolidation, or reorganization and any
other person that acquires all or substantially all of the business and assets
of the Company. The rights, benefits, remedies, and obligations of Xxxxx under
this Agreement are personal to Xxxxx and may not be assigned or delegated by
him; except that this shall not preclude (i) Xxxxx from designating one or more
beneficiaries to receive any amount or benefit that may be paid or provided
after Xxxxx' death or (ii) the legal representative of Xxxxx' estate from
assigning any right or benefit under this Agreement to the person or persons
entitled thereto under Xxxxx' will or the laws of intestacy applicable to Xxxxx'
estate, as the case may be.
13. SEVERABILITY. If any provision of this Agreement is found to be invalid or
unenforceable for any reason, then (i) that provision shall be severed from this
Agreement, (ii) this Agreement shall be construed and enforced as if that
invalid or unenforceable provision never constituted a part of this Agreement,
and (iii) the remaining provisions of this Agreement shall be unaffected thereby
and shall remain in full force and effect to the fullest extent permitted by
applicable law. Further, in lieu of that invalid or unenforceable provision,
there shall be added to this Agreement a provision as similar in its terms to
that invalid or unenforceable provision as may be possible and be valid and
enforceable.
14. NOTICES. Any notice, request, or other communication to be given by either
Party under this Agreement by to the other shall be in writing and either (i)
delivered in person, (ii) delivered by prepaid same-day or overnight courier
service, (iii) sent by certified mail, postage prepaid with return receipt
requested, or (iv) transmitted by facsimile, in any case addressed to the other
Party as follows:
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To the Company:
Aperian, Inc.
0000 Xxxx 0xx Xxxxxx
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Chairman of the Compensation Committee
with a copy (which shall not constitute notice) to:
Aperian, Inc.
00000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Attention: Corporate Secretary
To Xxxxx:
Xxxxxx X. Xxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
or to such other address or facsimile number as the Party to be notified may
have designated by notice previously given in accordance with this Article 13.
Communications delivered in person or by courier service or transmitted by
facsimile shall be deemed given and received as of actual receipt (or refusal)
by the addressee. Communications mailed as described above in this Article 14
shall be deemed given and received three (3) business days after mailing or upon
actual receipt, whichever is earlier.
15. CERTAIN DEFINED TERMS. In this Agreement, (i) "person" means an individual
or any corporation, partnership, trust, unincorporated association, limited
liability company, or other legal entity, whether acting in an individual,
fiduciary, or other capacity, and any government, court, or governmental agency,
(ii) "include" and "including" do not signify any limitation, (iii) "Article"
and "Section" means any Article and any Section, respectively, of this
Agreement, unless otherwise indicated, (iv) an "affiliate" of a person means any
other person controlling, controlled by, or under common control with that
person, and (v) "business day" means any Monday through Friday, other than any
such weekday on which the executive offices of the Company are closed. In
addition, the use in this Agreement of "year," "annual," "month," or "monthly"
(or similar terms) to indicate a measurement period shall not itself be deemed
to grant rights to Xxxxx for employment or compensation for that period.
16. ENTIRE AGREEMENT. This Agreement, with Exhibits "A" and "B", constitutes the
entire agreement between the Company and Xxxxx with respect to the subject
matter hereof and supersedes any prior agreement between the Company and Xxxxx
with respect to the same subject matter.
17. MODIFICATION AND WAIVER. No amendment to or modification of this Agreement,
or waiver of any term, provision, or condition of this Agreement, will be
binding upon a Party unless the amendment, modification, or waiver is in writing
and signed by the Party to be bound. Any waiver by a Party of a breach or
violation of any provision of this Agreement by the other Party shall not be
deemed a waiver of any other provision or of any subsequent breach or violation.
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18. GENDER. Whenever the context requires in this Agreement, words denoting
gender in this Agreement include the masculine, feminine, and neuter.
19. GOVERNING LAW; VENUE. This Agreement, and the rights, remedies, obligations,
and duties of the Parties under this Agreement, shall be governed by, construed
in accordance with, and enforced under the laws of the State of Texas. The
exclusive venue of any action or proceeding relating to this Agreement or its
subject matter shall be in Dallas County, Texas.
19. COUNTERPARTS. This Agreement may be executed in counterparts, each of which
constitutes an original, but all of which constitute one and the same document.
The Parties have executed this Agreement to be effective as of the date stated
in the first paragraph.
APERIAN, INC.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Vice President,
General Counsel and Secretary
XXXXXX X. XXXXX
/s/ Xxxxxx X. Xxxxx
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