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Exhibit 10.7
September 1, 1999
REF.NO.UBICS:GEN:501.99
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective September 1, 1999, is between UBICS, INC., a Delaware
Corporation (the "Company"), and XXXXXX X. XXXXXXX (the "Employee").
WITNESSETH:
WHEREAS, the Company is engaged in the business of providing information
technology services to various organizations:
WHEREAS, the Company desires to procure the services of Employee and Employee is
willing to be employed by the Company, upon the terms and subject to the
conditions hereinafter set forth:
Intending to be legally bound, the Company agrees to employ Employee, and
Employee hereby agrees to be employed by the Company, upon the following terms
and conditions:
ARTICLE I
EMPLOYMENT
1.01 Office. Employee is hereby employed as Senior Vice President Marketing &
Sales of the Company and to perform such duties and responsibilities as the
Company's By-laws and its management may from time to time designate.
1.02 Term. Subject to the terms and provisions of Article II hereof, Employee's
employment hereunder shall commence on September 1, 1999 at UBICS, Inc.
Canonsburg Home Office and continuing until such time as the employment is
terminated as set forth in this agreement, and subject to such other terms and
conditions as set forth in this Agreement.
1.03 Salary. A salary shall be paid to Employee by the Company during the term
of this Agreement at the rate of $165,000.00 (One-Hundred Sixty-Five Thousand
Dollars) gross, per annum, payable monthly in accordance with the Company's
normal payroll practices.
1.04 Bonus. Employee will be eligible for the payment of an annual bonus
pursuant to the terms and conditions of the Company's Executive Incentive
Compensation Plan, up to a maximum annual bonus payment equal to 100 percent of
his gross annual salary.
In order to be eligible for an annual bonus, Employee must be an Employee in
good standing with the Company. Employee will not be eligible for the payment of
an annual bonus in the event (i) he is terminated for cause due to Employee's
willful misconduct, (ii) he is terminated for cause for gross negligence, or
(iii) he resigns from the Company without Good Reason (as defined in P. 5.03
hereof). Except as otherwise provided herein, Employee is not entitled to any
bonus or other payments from the Company following any termination of his
employment hereunder.
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For the period from September 1, 1999 through December 31, 2000, Employee will
be eligible to receive a total minimum bonus payment of $135,000.00 (One Hundred
Thirty-Five Thousand Dollars) provided that he remains an Employee in good
standing with the Company during that period of time; provided, however, that
regardless of the reason for Employee's termination at any time prior to
December 31, 2000, Employee will be paid all monthly bonus payments he has
accrued or earned for services rendered through the date of termination on the
condition that (i) he is not terminated for cause due to Employee's willful
misconduct, (ii) he is not terminated for cause for gross negligence, or (iii)
he does not resign from the Company without Good Reason. For each full month of
service completed at the Company, Employee will receive one-sixteenth of that
amount, or $8,437.50. The bonus payments will effectively be earned and paid
pursuant to a) and b) below, based upon each additional month of service
provided on behalf of the Company.
a) For the period from September 1, 1999 through December 31, 1999, payment of
$8,437.50 for each month of service completed, up to a total of $33,000.00 for a
total of four months of completed service, will be made to Employee during the
first week of January 2000.
b) For the period from January 1, 2000 through December 31, 2000, payment of
$8,437.50 for each additional month of service completed, up to a total of
$102,000.00 for a total of 12 (twelve) additional months of completed service,
will be made to Employee during the first week of January 2001.
1.05 Automobile: The Company will pay the Employee an automobile allowance of
$1,000.00 (One Thousand Dollars) per month for business use of the Employee's
vehicle. The Employee shall be personally responsible for all expenses related
to his personal vehicle.
1.06 Out of Pocket Expenses. Employee shall be entitled to reimbursement for
reasonable out-of-pocket expenses incurred in performing his duties in
accordance with the general policy of Company, as it may change from time to
time, provided that Employee shall provide an itemized account together with
supporting receipts for such expenditure in accordance with the requirements set
forth in the Internal Revenue Code of 1986, as amended, and related regulations,
subject to the right of the Company at any time to place reasonable limitations
on such expenses thereafter to be incurred or reimbursed.
1.07 Employee Benefits. Subject to any limitations imposed by applicable law,
Employee shall be covered by such major medical and health insurance,
disability, pension, profit-sharing or 401(k) plans as may be available
generally to employees of the Company and shall be entitled to receive such
other benefits and perquisites as may be determined by the Board of Directors or
Compensation Committee.
1.08 Options. Employee shall be entitled to receive options to purchase 50,000
(Fifty Thousand) shares of the Company's Common Stock under the Company's 1997
Stock Option Plan in accordance with the terms of a separate Stock Option
Agreement. The cost per share made available to you will be the rate existing on
the day of the very next meeting of the Board of Directors after September 1,
1999, when this option will be ratified.
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1.09 Vacation. You will be entitled to six Company paid holidays: New Year's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas
Day. In addition, you will be entitled to 4 (four) weeks paid vacation annually,
which is vested for utilization in the first year.
1.10 Taxes. UBICS will withhold any applicable federal, state or local taxes for
compensation paid to Employee.
1.11 Compliance with Company Policies and Laws. In performing the duties and
responsibilities set forth in this Agreement, Employee shall use his best
efforts to comply with federal, state and local laws, and shall abide by all
policies, procedures and programs of UBICS.
1.12 Work Product. All work or services rendered under this Agreement, including
reports, papers, and other information ("Work Product"), are the exclusive
property of UBICS and all right, title and interest in such Work Product shall
vest in UBICS and shall be deemed to be work rendered under this agreement.
Employee agrees to assign all his right, title and interest in such Work Product
to UBICS and will otherwise cooperate as may be necessary to secure such rights
for UBICS. All files, lists, reports and other property relating to the business
of UBICS, whether prepared by the Employee or otherwise, shall remain the
exclusive property of UBICS and shall not be removed from the premises of UBICS
or UBICS's clients under any circumstances whatsoever without the prior written
consent of UBICS.
ARTICLE II
EMPLOYMENT AT WILL
2.01 Employment at Will: The parties agree and acknowledge that the employment
relationship created by this Agreement is at will and that either party may
terminate this agreement with or without cause. The party terminating the
agreement shall provide the other party with two (2) months notice of the
party's intent to terminate or, in lieu of notice, two months compensation.
However, any such notice shall not in any way alter or modify the at will
employment relationship established by this agreement. All payments due to
Employee under this agreement and all outstanding advances due to UBICS by the
Employee shall be settled in full within 30 days of the date of termination.
2.02 Effect of Termination on Options: Notwithstanding anything to the contrary
set forth in any stock option plan of the Company or any Stock Option Agreement
between the Company and Employee, in the event of termination of Employee's
employment hereunder for any reason other than for cause due to Employee's
willful misconduct, gross negligence or resignation without Good Reason, all
unexercised stock options granted to Employee shall immediately vest and shall
remain exercisable by Employee or Employee's estate for a period of one year
following such termination.
ARTICLE III
EMPLOYEE'S ACKNOWLEDGMENTS
Employee acknowledges that: (a) in the course of Employee's employment by the
Company, Employee will acquire information concerning the Company's sales, sales
volume, sales methods, sales proposals, customers and prospective customers,
identity
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of key personnel in the employment of the Company, amount or kind of customer's
purchases from the Company, the Company's recruiting method and practices,
computer programs, system documentation, special hardware, product hardware,
related software development, manuals, formulae, processes, methods and other
confidential or proprietary information belonging to the Company relating to the
Company's affairs (collectively referred to herein as the "Confidential
Information"); (b) the Confidential Information is the property of the Company;
(c) the use, misappropriation or disclosure of the Confidential Information
would constitute a breach of trust and could cause irreparable damage to the
Company; and (d) it is essential for the protection of the Company's goodwill
and to the maintenance of the Company's competitive position that the
Confidential Information be kept secret and that Employee not disclose the
Confidential Information to others or use the Confidential Information to
Employee's own advantage or the advantage of others.
Employee further acknowledges that it is essential for the proper protection of
the business of the Company that Employee be restrained from: (a) soliciting or
inducing any employee of the Company to leave the employment of the Company, (b)
from soliciting the trade of or trading with the customers of the Company for a
competitive purpose pursuant to P. 4.04 and 4.05 hereof.
ARTICLE IV
EMPLOYEE'S CONVENANTS AND AGREEMENTS
4.01 Nondisclosure or Utilization of Confidential Information. Employee agrees
to hold and safeguard the Confidential Information in trust for the Company and
its successors and assigns and agrees that he shall not, without the prior
written consent of the Company, misappropriate, disclose or use for any reason
or purpose, or make available to anyone for use outside the Company's
organization at any time for any reason or purpose, either during his employment
by the Company or subsequent to the termination of his employment by the Company
for any reason, any of the Confidential Information, whether or not developed by
Employee, except as required in the performance of Employee's duties to the
Company.
4.02 Duties. Employees agrees to be a loyal employee of the Company. Employee
agrees to devote his full working time and best efforts to the performance of
his duties for the Company, to give proper time and attention to furthering the
Company's business, and to comply with all rules, regulations and instructions
established or issued by the Company. Employee further agrees that during the
term of this Agreement, Employee shall not, directly or indirectly, engage in
any business which would detract from Employee's ability to apply his full
working time and best efforts to the performance of his duties hereunder.
Employee shall not perform services for other companies without the approval of
management. Employee also agrees that he shall not usurp any corporate
opportunities of the Company.
4.03 Return of Materials. Upon the termination of Employee's employment by the
Company for any reason, Employee shall promptly deliver to the Company all
correspondence, drawings, blueprints, manuals, letters, notes, notebooks,
reports, programs, proposals and any documents concerning the Company's
customers or concerning products or processes used by the Company and, without
limiting the foregoing, will promptly deliver to the Company any and all other
documents or materials containing or constituting Confidential Information.
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4.04 Nonsolicitation of Customers. Employee agrees that during his employment by
the Company and for one (1) year following termination of Employee's employment
with the Company for any reason, he shall not, directly or indirectly, solicit
the trade of, or trade with, any customer or prospective customer of the Company
in competition with the Company, unless any such customers are current customers
of the new company the Employee may join. Nonsolicitation will not apply to the
Company's customers if the Employee solicits them for business unrelated to
Company's products/services.
4.05 Nonsolicitation of Employees. Employee agrees that during his employment by
the Company and for one (1) year following termination of Employee's employment
with the Company for any reason, Employee shall not, directly or indirectly,
solicit or induce, or attempt to solicit or induce, any employee of the Company
to leave the Company for any reason whatsoever, or hire an employee of the
Company.
ARTICLE V
EMPLOYEE'S REPRESENTATIONS AND WARRANTIES
5.01 No Prior Agreements. Employee represents and warrants that he is not a
party to or otherwise subject to or bound by the terms of any contract,
agreement or understanding which in any manner would limit or otherwise affect
his ability to perform his obligations hereunder, including without limitation
any contract, agreement or understanding containing terms and provisions similar
in any manner to those contained in Article IV hereof.
5.02 Remedies. In the event of a breach by Employee of the terms of this
Agreement, the Company shall be entitled, if it shall so elect, to institute
legal proceedings to obtain damages for any such breach, or to enforce the
specific performance of this Agreement by Employee and to enjoin Employee from
any further violation of this Agreement and to exercise such remedies
cumulatively or in conjunction with all other rights and remedies provided by
law. Employee acknowledges, however, that the remedies at law for any breach by
him of the provisions of this Agreement may be inadequate and that the Company
shall be entitled to seek injunctive relief against him in the event of any
breach.
5.03 Definition of "Good Reason": The term "Good Reason" means: (i) a material
diminution by the Company of Employee's title or responsibilities, or (ii) a
material diminution by the Company in Employee's salary, benefits or incentive
or other forms of compensation, or (iii) a material change in title,
responsibilities or compensation as a result of change in contract.
ARTICLE VI
SEVERABILITY
Severability. In the event that one or more of the provisions of the agreement
shall for any reason be held to be invalid, illegal or unenforceable, the
remaining provisions of this agreement shall be unimpaired, and the invalid,
illegal or unenforceable provision shall be replaced by a mutually acceptable
provision which being valid, legal and enforceable, comes closest to the
intention of the parties underlying the invalid, illegal or unenforceable
provision.
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ARTICLE VII
MISCELLANEOUS
7.01 Authorization to Modify Restrictions. It is the intention of the parties
that the provisions of Article IV hereof shall be enforceable to the fullest
extent permissible under applicable law, but that the unenforceability (or
modification to conform to such law) of any provision or provisions hereof shall
not render unenforceable, or impair, the remainder thereof. If any provision or
provisions hereof shall be deemed invalid or unenforceable, either in whole or
in part, this Agreement shall be deemed amended to delete or modify, as
necessary, the offending provision or provisions and to alter the bounds thereof
in order to render it valid and enforceable.
7.02 Entire Agreement. This Agreement represents the entire agreement of the
parties and may be amended only by a writing signed by each of them.
7.03 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
7.04 Agreement Binding. The obligation of Employee and Employer under this
Agreement shall continue after the termination of Employee's employment with the
Company for any reason, with or without cause, and shall be binding on and inure
to the benefit of their respective heirs, executors, legal representatives,
successors and assigns.
7.05 Counterparts, Section Headings. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument. The section
headings of this Agreement are for convenience for reference only and shall not
affect the construction or interpretation of any of the provisions hereof.
7.06 Arbitration/Litigation: The parties agree that except as otherwise
provided, all claims, disputes and other matters in question between them which
arise out of this Agreement or their employment relationship shall be determined
in Pittsburgh, Pennsylvania in accordance with the Rules of the American
Arbitration Association. However, the parties expressly agree that
notwithstanding the foregoing provision, the Company and the Employee shall have
the right to seek injunctive or related legal or equitable relief under this
Agreement in the Allegheny County Court of Common Pleas or the U.S. District
Court for the Western District of Pennsylvania without the need to resort to
arbitration. The parties agree that this Agreement shall be governed by,
construed under, and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, the place where this Agreement is deemed to have been made, and
Pennsylvania law shall be applied without regard to the principles or provisions
of conflict of laws. Each of the parties hereto hereby submits to the exclusive
jurisdiction of any federal or state court situated in Allegheny County,
Pennsylvania with respect to the interpretation and enforcement of the
provisions of this Agreement or any litigation arising hereunder and hereby
waives as a defense that he or it is not subject thereto or that such action may
not be brought in said courts or that the venue of the lawsuit is improper.
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IN WITNESS WHEREOF, the parties, intending to be legally bound, have executed
this agreement on the day and year set forth below.
WITNESS:
/s/ XXXXX X. XXXXX /s/ XXXXXX X. XXXXXXX
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Xxxxxx X. Xxxxxxx
9-1-99
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Date
ATTEST: UBICS, Inc.
/s/ BABU SRINIVAS /s/ XXXXXXX X. XXXX
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M. B. Hira
President
9-1-99
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Date
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