EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into effective as
of May 27, 2004, by and between TCI Solutions, Inc. (the "Company") and Xxxxx X.
Xxxxxx (the "Executive"). The Company and the Executive are hereinafter
collectively referred to as the "Parties", and individually referred to as a
"Party." Notwithstanding the foregoing, this Agreement shall not become
effective until approved by the Company's Board of Directors (the "Board") if
such approval is not obtained prior to the Effective Date.
RECITALS
A. The Company desires to retain the Executive's experience, skills, abilities,
background and knowledge and is willing to engage the Executive's services on
the terms and conditions set forth in this Agreement.
B. The Executive desires to be in the employ of the Company and is willing to
accept such employment on the terms and conditions set forth in this Agreement.
AGREEMENT
In consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable consideration, the
Parties, intending to be legally bound, agree as follows:
1. EMPLOYMENT.
1.1 Title. The Executive shall serve as the Company's Chief
Executive Officer and shall serve in such other capacities as the Company may
from time to time prescribe. The Executive shall serve on, and report to, the
Board. The Company will continue to support the Executive's membership on the
Board at all times while he serves as the Company's Chief Executive Officer.
1.2 Duties. The Executive shall perform all services and actions
necessary or advisable to conduct the business of the Company and which are
normally associated with the position(s) the Executive holds. The Executive
shall begin employment under this Agreement on July 1, 2004 (the "Effective
Date").
1.3 Location. The Executive shall perform the services required
pursuant to this Agreement at the Company's offices located in Irvine,
California; provided, however, that the Company may require the Executive to
travel temporarily to other locations in connection with the Company's business.
1.
2. LOYAL AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1 Loyalty. During the Executive's employment with the Company, the
Executive shall devote the Executive's full business energies, interest,
abilities and productive time to the proper and efficient performance of the
Executive's duties under this Agreement.
2.2 Covenant not to Compete. Except with the prior written consent
of the Board, the Executive shall not, during any period the Executive is
receiving compensation or any other consideration from the Company, including,
but not limited to severance pay, engage in competition with the Company and/or
any of its Affiliates (as defined below), either directly or indirectly, in any
manner or capacity, as adviser, principal, agent, affiliate, promoter, partner,
officer, director, employee, stockholder, owner, co-owner, consultant, or member
of any association or otherwise, in any phase of the business of developing,
manufacturing and marketing of products or services which are in the field of
merchandising, pricing and inventory management software for the retail
industry. For purposes of this Agreement, "Affiliate" means, with respect to any
specific entity, any other entity that, directly or indirectly, through one or
more intermediaries, controls, is controlled by or is under common control with
such specified entity.
2.3 Agreement not to Participate in Company's Competitors. Except
with the prior written consent of the Board, the Executive shall not, during any
period the Executive is receiving compensation or any other consideration from
the Company, including, but not limited to severance pay, assume or participate
in, directly or indirectly, any investment or equity interest known by the
Executive to be adverse or antagonistic to the Company, its business or
prospects, financial or otherwise, or in any company, person or entity that is,
directly or indirectly, in competition with the business of the Company or any
of its Affiliates. Ownership by the Executive, as a passive investment, of less
than one percent (1%) of the outstanding shares of capital stock of any
corporation with one or more classes of its capital stock listed on a national
securities exchange or publicly traded on the Nasdaq Stock Market or in the
over-the-counter market shall not constitute a breach of this paragraph.
3. COMPENSATION OF THE EXECUTIVE.
3.1 Base Salary. The Company shall pay the Executive a base salary
of three hundred thousand dollars ($300,000) per year, payable in regular
periodic payments in accordance with Company policy. Such base salary shall be
prorated for any partial year of employment on the basis of a 365-day fiscal
year.
3.2 Bonus. In addition to the Executive's base salary, the Executive
shall be eligible to receive a target annual bonus of one hundred thousand
dollars ($100,000) (the "Bonus"). For the 2004 fiscal year, fifty percent (50%)
of the Bonus shall be guaranteed (subject to pro-ration as set forth herein),
and the remainder shall be payable pursuant to the Company's Bonus Plan. In
future years, all of such bonuses shall be payable pursuant to the Company's
Bonus Plan. In the event that the Executive's employment is terminated by the
Company for any reason other than Cause (as defined below), the Executive
resigns for any reason or the Executive's employment terminates as a result of
death or Complete Disability (as
2.
defined below), the Executive shall be entitled to receive the amount of Bonus
(or any future annual target bonus) equal to the product of (a) the amount of
the Bonus (or any future annual target bonus) that the Executive would have
earned during the calendar year pursuant to the Bonus Plan (including the
guaranteed portion of the Bonus in 2004) multiplied by (b) the quotient of (i)
the number of calendar days the Executive had been employed by the Company in
that calendar year, including any days on which the Executive was on leave or
vacation pursuant to the Company's standard policies (except in 2004, in which
it shall be the number of days elapsed since the beginning of the calendar
year), divided by (ii) 365. For purposes of awarding any pro-rata bonus payment,
the Board shall make a good faith determination regarding the achievement of any
applicable objectives under the Bonus Plan within a reasonable period following
the termination of the Executive's employment. The good faith determinations of
the Board with respect to the payment of the non-guaranteed portion of the
Executive's Bonus (or any future bonus) shall be final and binding. The
Compensation Committee of the Board (the "Compensation Committee") is free to
amend or revise the Company's Bonus Plan at any time, provided, however, that
nothing in this Section shall be deemed to waive, amend or modify the provisions
of Sections 3.6, 4.4.2 or 4.4.3 with regard to compensation owing to the
Executive under such specified situations or to amend the definitions in Section
4.5.2 and 4.5.3.
3.3 Changes to Compensation. The Executive's compensation shall be
reviewed in accordance with all other senior management on an annual basis by
the Compensation Committee beginning on January 1, 2005 and may be changed from
time to time by the Board upon mutual written agreement between the Executive
and the Chairman of the Compensation Committee, provided, however, that nothing
in this Section shall be deemed to waive, amend or modify the provisions of
Sections 3.6, 4.4.2 or 4.4.3 with regard to compensation owing to the Executive
under such specified situations or to amend the definitions in Section 4.5.2 and
4.5.3.
3.4 Employment Taxes. All of the Executive's compensation (in any
form) shall be subject to all required withholding taxes, employment taxes and
other deductions required by law.
3.5 Benefits. The Executive shall, in accordance with Company policy
and the terms of the applicable plan documents, be eligible to participate in
benefits (including, but not limited to, health benefits for the Executive and
his family) under any benefit plan or arrangement which may be in effect from
time to time and made available to the Company's employees. In addition, the
Executive shall be eligible for paid vacation commensurate with his position
under this Agreement, in accordance with Company policy as in effect from time
to time. Within sixty (60) days following the Effective Date, the Company shall
provide the Executive with satisfactory information pertaining to his benefits.
3.6 Option. Subject to the approval of the Board, the Executive
shall be granted an option (the "Option") to purchase the number of shares equal
to seven and one half percent (7.5%) of the Company's fully diluted capital
stock as of the Effective Date. The exercise price per share will be equal to
the fair market value per share on the date the Option is granted or on the
Executive's first day of employment, whichever is later. The Option will be
subject to the terms and conditions applicable to options granted under the
Company's Stock
3.
Option Plan (the "Plan"), as described in the Plan and the applicable Stock
Option Agreement. The Executive shall vest in the Option shares in accordance
with the standard vesting schedule under the Plan. The Executive shall generally
have ninety (90) days after termination of employment to exercise any vested
Option shares. In addition, if the Company is subject to a Change in Control (as
defined below) before the Executive's employment with the Company terminates and
within twelve (12) months following such Change in Control the Executive is
terminated by the Company without Cause (as defined below) or resigns for Good
Reason (as defined below), then all of the remaining Option shares shall vest in
full upon the effective date of such separation. Notwithstanding the foregoing,
if a successor or surviving entity following a Change in Control requests that
the Executive remain employed in the same or similar position as set forth in
this Agreement for a period of not more than twelve (12) months following such
Change in Control, then the vesting acceleration set forth herein may be
conditioned on such continued employment; provided, however, that if the
Executive is terminated by the successor or surviving entity without Cause (as
defined below) or resigns for Good Reason (as defined below), then all of the
remaining Option shares shall vest in full upon the effective date of such
separation.
4. TERMINATION.
4.1 Termination By the Company. The Executive's employment with the
Company may be terminated under the following conditions:
4.1.1 Termination for Death or Disability. The Executive's
employment with the Company shall terminate effective upon the date of the
Executive's death or Complete Disability (as defined below).
4.1.2 Termination by the Company For Cause. The Company may
terminate the Executive's employment under this Agreement for Cause (as defined
below). A notice of termination given pursuant to this Section 4.1.2 shall
effect termination as of the date specified, or, in the event no such date is
specified, on the date upon which the notice is given.
4.1.3 Termination by the Company For Any Reason Other Than
Cause. The Executive's employment by the Company shall be "at will". The Company
may terminate the Executive's employment under this Agreement at any time, for
any or no reason and with or without cause or advance notice. This is the full
and complete agreement between the Executive and the Company on this term.
Although the Executive's duties, title, compensation and benefits may change,
the "at will" nature of the Executive's employment relationship with the Company
may only be modified in an express written agreement signed by the Executive and
the Chairman of the Compensation Committee.
4.2 Termination by Mutual Agreement of the Parties. The Executive's
employment pursuant to this Agreement may be terminated at any time upon the
mutual written agreement of the Parties. Any such termination of employment
shall have the consequences specified in such writing.
4.
4.3 Termination by the Executive. The Executive's employment by the
Company shall be "at will". The Executive shall have the right to resign or
terminate the Executive's employment at any time, with or without Good Reason.
4.4 Compensation Upon Termination.
4.4.1 With Cause, Executive's resignation without Good Reason,
Death or Complete Disability. If the Executive's employment is terminated by the
Company for Cause, the Executive resigns employment hereunder without Good
Reason or the Executive's employment terminates as a result of death or Complete
Disability, then the Company shall pay the Executive's base salary and any
accrued and unused vacation benefits earned through the date of termination, and
the Company shall thereafter have no further obligations to the Executive under
this Agreement except as set forth in Section 3.2 above.
4.4.2 Without Cause. If the Company terminates the Executive's
employment without Cause, then the Company shall pay the Executive's base salary
and accrued and unused vacation earned through the date of termination and shall
comply with the provisions of Section 3.2 above. In addition, the Company shall
provide the Executive with the following severance benefits:
4.4.2.1 The Company shall continue to pay the
Executive's base salary as in effect on the date of termination until the
earlier of (i) the end of the twelve (12) month period following the termination
of employment or (ii) the date the Executive commences subsequent employment
(the "Without Cause Severance Payments"). Such Without Cause Severance Payments
shall be subject to standard deductions and withholdings and paid in accordance
with the Company's regular payroll policies and practices.
4.4.2.2 The Executive shall be given vesting credit
under the Option as if the Executive had remained employed for a period of nine
(9) months following the date of his termination.
4.4.2.3 Assuming the Executive timely and accurately
elects to continue his health insurance benefits under COBRA, the Company shall
reimburse him for his COBRA expenses until the earliest of (i) the end of the
period during which he is receiving Without Cause Severance Payments, (ii) the
expiration of the Executive's continuation coverage under COBRA or (iii) the
date he becomes covered by the health insurance benefits of a subsequent
employer.
4.4.3 With Good Reason. If the Executive resigns employment
with Good Reason, then the Company shall pay the Executive's base salary and
accrued and unused vacation earned through the date of termination and shall
comply with the provisions of Section 3.2 above. In addition, the Company shall
provide the Executive with the following severance benefits:
4.4.3.1 The Company shall continue to pay the
Executive's base salary as in effect on the date of termination for a period of
six (6) months following the
5.
termination of employment (the "Good Reason Severance Payments"). Such Good
Reason Severance Payments shall be subject to standard deductions and
withholdings and paid in accordance with the Company's regular payroll policies
and practices.
4.4.3.2 Assuming the Executive timely and accurately
elects to continue his health insurance benefits under COBRA, the Company shall
reimburse him for his COBRA expenses until the earlier of (i) the end of the
period during which he is receiving Good Reason Severance Payments, (ii) the
expiration of the Executive's continuation coverage under COBRA or (iii) the
date he becomes covered by the health insurance benefits of a subsequent
employer.
4.4.4 Release and Consultation. Notwithstanding the foregoing,
the Executive shall receive no severance benefits under Sections 4.4.2 or 4.4.3
unless the Executive resigns from the Board and furnishes the Company with an
effective waiver and release of claims (the "Release") in a form acceptable to
the Company and substantially as attached hereto as Exhibit A. At the time such
Release is executed, the Board shall make a good faith determination as to
whether it is in the best interests of the Company to make such Release mutual.
If a majority of the Board determines in good faith after the Executive has had
reasonable opportunity to present his position, that the Executive has breached
any provision of his Proprietary Information and Inventions Agreement or any
material provision of this Agreement or the Release, the Company shall be
excused from the obligation to provide any remaining severance benefits under
Sections 4.4.2 or 4.4.3. During any period the Executive is receiving severance
benefits under Sections 4.4.2 or 4.4.3, the Executive shall, for no additional
consideration, consult with the Company on an occasional basis as requested by
the Company, not to exceed twelve (12) hours per month.
4.5 Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
4.5.1 Complete Disability. "Complete Disability" shall mean
the inability of the Executive to perform the Executive's duties under this
Agreement because the Executive has become permanently disabled within the
meaning of any policy of disability income insurance covering employees of the
Company then in force. In the event the Company has no policy of disability
income insurance covering employees of the Company in force when the Executive
becomes disabled, the term "Complete Disability" shall mean the inability of the
Executive to perform the Executive's duties under this Agreement by reason of
any incapacity, physical or mental, which the Board, based upon medical advice
or an opinion provided by a licensed physician acceptable to the Board,
determines to have incapacitated the Executive from satisfactorily performing
all of the Executive's usual services for the Company for a period of at least
one hundred twenty (120) days during any twelve (12) month period (whether or
not consecutive). Based upon such medical advice or opinion, the determination
of the Board shall be final and binding and the date such determination is made
shall be the date of such Complete Disability for purposes of this Agreement.
6.
4.5.2 Cause. "Cause" for the Company to terminate Executive's
employment hereunder shall mean the occurrence of one or more of the following,
as reasonably determined by the Board:
(i) the Executive's gross misconduct or commission of an act
that materially injures (or reasonably could materially injure) the Company;
(ii) the Executive's refusal or failure to follow lawful
directions of the Board;
(iii) the Executive's conviction of, or plea of guilty or no
contest to, any felony under the laws of the United States or any state thereof;
or
(iv) the Executive's engaging or in any manner participating
in any activity which violates any provision of Section 2 or Section 5 hereof or
the Executive's Proprietary Information and Inventions Agreement.
4.5.3 Good Reason. "Good Reason" for the Executive to
terminate his employment hereunder shall mean the occurrence of one or more of
the following, without the Executive's express written consent and for which the
Executive has given the Company express written notice within six (6) months
following such occurrence: (i) a significant reduction in the Executive's
duties, position or responsibilities relative to the duties, position or
responsibilities in effect immediately prior to such reduction, which reduction
continues for a period of thirty (30) days following the Executive giving the
Company notice of such significant reduction; provided, however, that a
reduction in his duties, position or responsibilities solely by virtue of the
Company being acquired and made part of a larger entity (as, for example, when,
following a Change of Control, he remains the head executive of a division or
subsidiary of the acquirer that contains the Company's business) shall not
constitute Good Reason for the Executive to terminate his employment; (ii) a
greater than 10% reduction in the Executive's Base Salary as in effect
immediately prior to such reduction or a greater than 10% reduction in the
previously established target bonus as in effect for that year immediately prior
to such reduction; provided, however, that the contemplated one hundred thousand
dollar ($100,000) target bonus for 2005 pursuant to the Company's Bonus Plan
shall not be considered to be a reduction from the Executive's 2004 target
bonus; (iii) a material reduction by the Company in the kind or level of
employee benefits to which the Executive is entitled immediately prior to such
reduction with the result that his overall benefits package is materially
reduced or (iv) a relocation of the Executive's principal workplace to a site
more than 40 miles from Orange County, California.
4.5.4 Change in Control. "Change in Control" shall mean the
occurrence of any of the following: (i) any "person," as such term is used in
Sections 13(d) and 14(d) of the Securities and Exchange Act of 1934, as amended
from time to time, and any successor statute (the "Exchange Act") (other than
the Company, a subsidiary, an Affiliate, or a Company employee benefit plan,
including any trustee of such plan acting as trustee) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
Company's then outstanding securities (on an as-converted and exercised basis)
other than by virtue of a merger,
7.
consolidation or similar transaction; (ii) there is consummated a sale or other
disposition of all or substantially all of assets of the Company (other than a
sale to an entity where at least 50% of the combined voting power of the voting
securities of such entity are owned by the stockholders of the Company in
substantially the same proportions as their ownership of the Company immediately
prior to such sale); or (iii) there is consummated a merger, consolidation or
similar transaction involving (directly or indirectly) the Company and,
immediately after the consummation of such transaction, the stockholders of the
Company immediately prior to the consummation of such transaction do not own,
directly or indirectly, outstanding voting securities representing more than 50%
of the combined outstanding voting power of the surviving entity in such
transaction or more than 50% of the combined outstanding voting power of the
parent of the surviving entity in such transaction. Notwithstanding the
foregoing, a Change in Control shall not be deemed to occur on account of the
acquisition of securities of the Company by an investor, any Affiliate thereof
or any other person or entity in a transaction or series of transactions the
primary purpose of which is to obtain financing for the Company.
4.6 Parachute Payments. Anything in this Agreement to the contrary
notwithstanding, if any payment or benefit the Executive would receive from the
Company pursuant to this Agreement or otherwise ("Payment") would (i) constitute
a "parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), and (ii) but for this sentence, be
subject to the excise tax imposed by Section 4999 of the Code (the "Excise
Tax"), then such Payment shall be equal to the Reduced Amount. The "Reduced
Amount" shall be either (1) the largest portion of the Payment that would result
in no portion of the Payment being subject to the Excise Tax or (2) the Payment
or a portion thereof after payment of the applicable Excise Tax, whichever
amount after taking into account all applicable federal, state and local
employment taxes, income taxes, and the Excise Tax (all computed at the highest
applicable marginal rate), results in the Executive's receipt, on an after-tax
basis, of the greatest amount of the Payment. If a reduction in payments or
benefits constituting "parachute payments" is necessary so that the Payment
equals the Reduced Amount, reduction shall occur in the order of payments the
Executive elects in writing, provided, however, that such election shall be
subject to Company approval if made on or after the date on which the event that
triggers the Payment occurs. The Company's principal outside accounting firm
will make all determinations hereunder and shall provide its calculations,
together with detailed supporting documentation, to the Company and the
Executive within fifteen (15) calendar days after the date on which the
Executive's right to a Payment is triggered (if requested at that time by the
Company or Executive) or such other time as requested by the Company or the
Executive. If the accounting firm determines that no Excise Tax is payable with
respect to a Payment, either before or after the application of the Reduced
Amount, it shall furnish the Company and the Executive with an opinion
reasonably acceptable to the Executive that no Excise Tax will be imposed with
respect to such Payment. The Company shall be entitled to rely upon the
accounting firm's determinations, which shall be final and binding on all
persons.
4.7 Exclusive Remedy. The rights, remedies and payments set forth in
this Section 4 shall be the exclusive rights, remedies and payments available to
the Executive upon termination of this Agreement and the Executive's employment
hereunder. Such rights remedies and payments shall supercede and replace any and
all rights and remedies under state or federal law. The Company may deduct any
amounts the Executive owes the Company at the time of the
8.
Executive's termination of employment from any Without Cause Severance Payments
or Good Reason Severance Payments.
4.8 Survival of Certain Sections. Sections 2.2, 2.3, 3.2, 3.4, 3.5,
3.6, 4.4, 4.5, 4.6, 4.7, 4.8 and 5 - 18 of this Agreement shall survive the
termination of this Agreement.
5. CONFIDENTIAL AND PROPRIETARY INFORMATION; NONSOLICITATION.
5.1 Proprietary Information and Inventions Agreement. As a condition
of employment, the Executive agrees to execute and abide by the Proprietary
Information and Inventions Agreement attached hereto as Exhibit B.
5.2 Non-Solicitation. During any period the Executive is receiving
compensation or any other consideration from the Company, including, but not
limited to severance pay, the Executive agrees that in order to protect the
Company's confidential and proprietary information from unauthorized use, the
Executive shall not, either directly or through others, solicit or attempt to
solicit (i) any employee, consultant or independent contractor of the Company to
terminate his or her relationship with the Company in order to become an
employee, consultant or independent contractor to or for any other person or
business entity, or (ii) the business of any customer, supplier, service
provider, vendor or distributor of the Company which, at the time of termination
or one (1) year immediately prior thereto, was doing business with the Company
or listed on Company's customer, supplier, service provider, vendor or
distributor list.
6. INDEMNIFICATION.
The Company agrees to enter into an indemnification agreement with
the Executive in the form attached hereto as Exhibit C.
7. DIRECTORS' AND OFFICERS' INSURANCE.
The Company agrees that it shall use best efforts to procure and
maintain in effect directors' and officers' insurance in an amount and of a type
reasonable and customary for similarly situated companies.
8. ASSIGNMENT AND BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
Executive and the Executive's heirs, executors, personal representatives,
assigns, administrators and legal representatives. Because of the unique and
personal nature of the Executive's duties under this Agreement, neither this
Agreement nor any rights or obligations under this Agreement shall be assignable
by the Executive. This Agreement shall be binding upon and inure to the benefit
of the Company and its successors, assigns and legal representatives.
9.
9. CHOICE OF LAW.
This Agreement shall be construed and interpreted in accordance with
the internal laws of the state of California (without giving effect to
principles of conflicts of law).
10. INTEGRATION.
Except as may otherwise be provided herein, this Agreement,
including Exhibit A, Exhibit B and Exhibit C, contains the complete, final and
exclusive agreement of the Parties relating to the terms and conditions of the
Executive's employment and the termination of Executive's employment, and
supersedes all prior and contemporaneous oral and written employment agreements
or arrangements between the Parties. To the extent this Agreement conflicts with
the Proprietary Information and Inventions Agreement attached as Exhibit B, the
Proprietary Information and Inventions Agreement controls.
11. AMENDMENT.
This Agreement cannot be amended or modified except by a written
agreement signed by the Executive and the Chairman of the Compensation
Committee.
12. WAIVER.
No term, covenant or condition of this Agreement or any breach
thereof shall be deemed waived, except with the written consent of the Party
against whom the waiver is claimed, and any waiver or any such term, covenant,
condition or breach shall not be deemed to be a waiver of any preceding or
succeeding breach of the same or any other term, covenant, condition or breach.
13. SEVERABILITY.
The finding by a court of competent jurisdiction or other authorized
body of the unenforceability, invalidity or illegality of any provision of this
Agreement shall not render any other provision of this Agreement unenforceable,
invalid or illegal. The invalid or unenforceable term or provision shall be
modified or replaced with a valid and enforceable term or provision which most
accurately represents the Parties' intention with respect to the invalid or
unenforceable term or provision.
14. INTERPRETATION; CONSTRUCTION.
The headings set forth in this Agreement are for convenience of
reference only and shall not be used in interpreting this Agreement. The
Executive has been encouraged to consult with, and has consulted with,
Executive's own independent counsel and tax advisors with respect to the terms
of this Agreement. The Parties acknowledge that each Party and its counsel has
reviewed and revised, or had an opportunity to review and revise, this
Agreement, and any rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Agreement.
10.
15. REPRESENTATIONS AND WARRANTIES.
The Executive represents and warrants that the Executive is not
restricted or prohibited, contractually or otherwise, from entering into and
performing each of the terms and covenants contained in this Agreement, and that
the Executive's execution and performance of this Agreement shall not violate or
breach any other agreements between the Executive and any other person or
entity.
16. COUNTERPARTS.
This Agreement may be executed in two counterparts, each of which
shall be deemed an original, all of which together shall constitute one and the
same instrument.
17. ARBITRATION.
To ensure the rapid and economical resolution of disputes that may
arise in connection with the Executive's employment with the Company, the
Executive and the Company agree that any and all disputes, claims, or causes of
action, in law or equity, arising from or relating to Executive's employment, or
the termination of that employment, will be resolved, to the fullest extent
permitted by law, by final binding arbitration in Orange County, California
conducted by the Judicial Arbitration and Mediation Services ("JAMS"), or its
successors, under the then current rules of JAMS for employment disputes;
provided that the arbitrator shall: (a) have the authority to compel adequate
discovery for the resolution of the dispute and to award such relief as would
otherwise be permitted by law and (b) issue a written arbitration decision
including the arbitrator's essential findings and conclusions and a statement of
the award. Both the Executive and the Company shall be entitled to all rights
and remedies that either the Executive or the Company would be entitled to
pursue in a court of law. The Company shall pay all fees in excess of those
which would be required if the dispute was decided in a court of law. Nothing in
this Agreement is intended to prevent either the Executive or the Company from
obtaining injunctive relief in court to prevent irreparable harm pending the
conclusion of any such arbitration. Notwithstanding the foregoing, the Executive
and the Company each have the right to resolve any and all issues or disputes
involving confidential or proprietary information, trade secrets or related
information or intellectual property rights by court action instead of
arbitration.
18. TRADE SECRETS OF OTHERS.
It is the understanding of both the Company and the Executive that
the Executive shall not divulge to the Company and/or its subsidiaries any
confidential information or trade secrets belonging to others, including the
Executive's former employers, nor shall the Company and/or its Affiliates seek
to elicit from the Executive any such information. Consistent with the
foregoing, the Executive shall not provide to the Company and/or its Affiliates,
and the Company and/or its Affiliates shall not request, any documents or copies
of documents containing such information.
11.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first shown above.
TCI SOLUTIONS, INC.
/s/ Xxxxx X. Xxxxxxxx III
-------------------------------------------
Xxxxx X. Xxxxxxxx III, on behalf of the Board of Directors
XXXXX X. XXXXXX
/s/ Xxxxx X. Xxxxxx
-------------------------------------------
Xxxxx X. Xxxxxx
12.
EXHIBIT A
RELEASE AND WAIVER OF CLAIMS
In consideration of the payments and other benefits set forth in Section
4.4 of the Employment Agreement dated May 27, 2004 (the "Employment Agreement"),
to which this form is attached, I, Xxxxx X. Xxxxxx, hereby furnish TCI
Solutions, Inc. (the "Company"), with the following release and waiver ("Release
and Waiver"):
In exchange for the consideration provided to me by the Employment
Agreement that I am not otherwise entitled to receive, I hereby generally and
completely release the Company and its directors, officers, employees,
shareholders, partners, agents, attorneys, predecessors, successors, parent and
subsidiary entities, insurers, Affiliates, and assigns from any and all claims,
liabilities and obligations, both known and unknown, that arise out of or are in
any way related to events, acts, conduct, or omissions occurring prior to my
signing this Release and Waiver. This general release includes, but is not
limited to: (1) all claims arising out of or in any way related to my employment
with the Company or the termination of that employment; (2) all claims related
to my compensation or benefits from the Company, including, but not limited to,
salary, bonuses, commissions, vacation pay, expense reimbursements, severance
pay, fringe benefits, stock, stock options, or any other ownership interests in
the Company; (3) all claims for breach of contract, wrongful termination, and
breach of the implied covenant of good faith and fair dealing; (4) all tort
claims, including, but not limited to, claims for fraud, defamation, emotional
distress, and discharge in violation of public policy; and (5) all federal,
state, and local statutory claims, including, but not limited to, claims for
discrimination, harassment, retaliation, attorneys' fees, or other claims
arising under the federal Civil Rights Act of 1964 (as amended), the federal
Americans with Disabilities Act of 1990, the federal Age Discrimination in
Employment Act of 1967 (as amended) ("ADEA"), and the California Fair Employment
and Housing Act (as amended). Notwithstanding the foregoing, this Release and
Waiver shall not apply to (i) any claims I have to payment of the consideration
provided to me in exchange for this Release and Waiver or (ii) any claims I have
to indemnification under the Company's articles of incorporation or bylaws,
applicable law or individual agreement.
I also acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor." I hereby expressly waive and
relinquish all rights and benefits under that section and any law of any
jurisdiction of similar effect with respect to any claims I may have against the
Company.
I acknowledge that, among other rights, I am waiving and releasing any
rights I may have under ADEA, that this Release and Waiver is knowing and
voluntary, and that the consideration given for this Release and Waiver is in
addition to anything of value to which I was already entitled as an executive of
the Company. I further acknowledge that I have been advised, as required by the
Older Workers Benefit Protection Act, that: (a) the release and waiver granted
herein does not relate to claims under the ADEA which may arise after this
Release and Waiver is executed; (b) I should consult with an attorney prior to
executing this Release and Waiver; (c) I have twenty-one (21) days in which to
consider this Release and Waiver (although I may choose
voluntarily to execute this Release and Waiver earlier); (d) I have seven (7)
days following the execution of this Release and Waiver to revoke my consent to
this Release and Waiver; and (e) this Release and Waiver shall not be effective
until the eighth day after I execute this Release and Waiver and the revocation
period has expired (the "Effective Date").
I acknowledge my continuing obligations under my Proprietary Information
and Inventions Agreement, a copy of which is attached to the Employment
Agreement as Exhibit B. Pursuant to the Proprietary Information and Inventions
Agreement, I understand that among other things, I must not use or disclose any
confidential or proprietary information of the Company and I must immediately
return all Company property and documents (including all embodiments of
proprietary information) and all copies thereof in my possession or control. I
understand and agree that my right to the severance pay I am receiving in
exchange for my agreement to the terms of this Release and Waiver is contingent
upon my continued compliance with my Proprietary Information and Inventions
Agreement.
I represent that I have not filed any claims against the Company, and
agree that, except as such waiver may be prohibited by statute, I will not file
any claim against the Company or seek any compensation for any claim other than
the payments and benefits referenced herein. I agree to indemnify and hold the
Company harmless from and against any and all loss, cost, and expense,
including, but not limited to court costs and attorney's fees, arising from or
in connection with any action which may be commenced, prosecuted, or threatened
by me or for my benefit, upon my initiative, or with my aid or approval,
contrary to the provisions of this Release and Waiver.
This Release and Waiver, including any referenced documents, constitutes
the complete, final and exclusive embodiment of the entire agreement between the
Company and me with regard to the subject matter hereof. I am not relying on any
promise or representation by the Company that is not expressly stated herein.
This Release and Waiver may only be modified by a writing signed by both me and
a member of the Board of Directors of the Company (other than myself).
Date: __________________ By: /s/ XXXXX X. XXXXXX
-------------------------------
XXXXX X. XXXXXX
2.
EXHIBIT B
[PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT]
3.
EXHIBIT B
[FORM OF INDEMNIFICATION AGREEMENT]
4.
