Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), made and entered into as
of the 19th day of September, 2002 (the "Effective Date") by and between
Predictive Systems, Inc., a Delaware corporation with principal offices located
at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Company"), and Xxxxx Xxxxxxx
(the "Executive"). The Company and the Executive may be referred to herein
individually as a "Party" or collectively as the "Parties".
WITNESSETH
WHEREAS, the Company has a need for the Executive's personal services
in an executive capacity; and
WHEREAS, the Executive possesses the necessary strategic, financial,
planning, operational and managerial skills necessary to fulfill those needs;
and
WHEREAS, the Executive and the Company desire to enter into a formal
Employment Agreement to fully recognize the contributions of Executive to the
Company and to assure continuous harmonious performance of the affairs of the
Company.
NOW, THEREFORE, in consideration of the mutual promises, terms,
provisions, and conditions contained herein, the parties agree as follows:
I. Position and Duties.
The Company hereby agrees to employ the Executive to serve in the role of
Executive Vice President of Sales and Business Development, subject to the
limitations set forth herein. The Executive accepts such employment upon the
terms and conditions set forth herein, and further agrees to perform to the best
of his abilities the duties generally associated with his position, as well as
such other duties commensurate with his position as Executive Vice President as
may be reasonably assigned by the Company. The Executive shall, at all times
during the Term (as defined below), report directly to the Chief Executive
Officer. The Executive's responsibilities shall initially include coordinating
the Company's business development, sales and marketing functions. The Executive
shall perform his duties diligently and faithfully and shall devote his full
business time and attention to such duties, provided however, that nothing
herein shall preclude the Executive from (i) serving on the boards of directors
of a reasonable number of other corporations with the prior written approval of
the Chief Executive Officer (which approval shall not be unreasonably withheld),
as long as such service does not require a time commitment of more than an
average of 4 hours per week; (ii) serving on the boards of a reasonable number
of trade associations and/or charitable organizations, (iii) engaging in
charitable activities and community affairs and (iv) managing his personal
investments and affairs, provided that such activities do not conflict or
interfere with the effective discharge of his duties and responsibilities under
this Agreement, or otherwise violate any of the terms of this Agreement.
II. Term of Employment and Renewal.
The term of Executive's employment under this Agreement will commence
on the Effective Date. Subject to the provisions of Section 10 of this
Agreement, the term of Executive's employment hereunder shall be for an initial
term of three (3) years from the Effective Date (the "Initial Term"). The
Initial Term of this Agreement shall be automatically extended for successive
one (1) year periods (each a "Renewal Period") unless the Company or the
Executive gives written notice to the other at least ninety (90) days prior to
the expiration of the Initial Term or a Renewal Period, of such Party's election
not to extend this Agreement. References herein to the "Term" shall mean the
Initial Term as it may be so extended by one or more Renewal Periods. The last
day of the Term is the "Expiration Date."
III. Compensation and Benefits.
A. Salary. Commencing on the Effective Date, the Company agrees
to pay the Executive a base salary at an annual rate of One
Hundred Ninety Thousand Dollars ($190,000.00), payable in such
installments as is the policy of the Company (the "Salary"),
but no less frequently than monthly. The Salary shall be
eligible for annual review by the Board beginning with
calendar year 2003, and shall not be decreased unless all of
the Executive's peer executives undergo substantially similar
reductions. For the purposes of this Agreement, "peer
executives" shall be defined to mean those executives who
report directly to the Chief Executive Officer.
B. Bonuses. The Executive shall be entitled to receive annual
bonuses beginning for calendar year 2003 with adjustments, as
set forth below, depending upon the Company's achievement of
revenue targets (each, a "Target"), to be set by the Chief
Executive Officer or his or her designee, with input from the
Executive, at the beginning of each calendar year during the
Term. Such Targets are to be consistent with the revenue
targets given to the CEO and CFO of the Company The following
minimum revenue thresholds shall apply to the Executive's
annual bonus: he shall receive no bonus if the Company
achieves less than 80% of the Target, a bonus equal to 50% of
the Salary if the Company achieves between 80% and 84% of the
Target, a bonus equal to 60% of the Salary if the Company
achieves between 85% and 89% of the Target, a bonus equal to
70% of the Salary if the Company achieves between 90% and 94%
of the Target, a bonus equal to 80% if the Company achieves
between 95% and 99% of the Target, and for each Target amount
achieved equal to 100% or more of the Target, a bonus equal to
the percentage amount of the Target achieved. The annual bonus
shall be paid by March 31 of the year following the calendar
year being measured. The Executive must be employed by the
Company on the bonus payment date in order to be deemed to
have earned and be eligible for such bonus, provided, however,
that if the Executive is terminated without Cause, as defined
below, or resigns with Good Reason, as defined below, from
January 1 through March 31 in any calendar year, he shall be
deemed to have earned, and is eligible for, the bonus, if any,
applicable to the prior calendar year, which bonus shall be
paid by March 31 of the year in which such termination without
Cause, as defined below, or resignation for Good Reason, as
defined below, occurs.
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C. Benefits. The Executive shall be entitled to participate in
all employee benefit plans which the Company provides or may
establish from time to time for the benefit of its employees
or senior-level executives, including, without limitation,
group life, medical, surgical, dental and other health
insurance, short and long-term disability, deferred
compensation, profit-sharing and similar plans subject to the
terms and conditions of the applicable plans and/or policies.
The Executive shall also be entitled to paid vacation of
twenty (20) days per year, in accordance with the Company's
vacation policy.
D. Stock Options. On the Effective Date, the Company shall grant
the Executive, pursuant to the Company's 1999 Stock Incentive
Plan (the "Plan"), an option to purchase Five Hundred Thousand
(500,000) shares of the Company's common stock (the "Option
Shares") at a purchase price equal to the closing price of the
Company's common stock on the date of the grant, under the
terms and conditions set forth in the Plan and the Company's
standard Notice Of Grant of Stock Option, and the exhibits
thereto, which shall be provided to the Executive upon the
date of the stock option grant provided for herein, vesting
and becoming exercisable as to 25% of the Option Shares on the
first anniversary of the grant, and in thirty-six (36) equal
monthly installments thereafter as long as the Executive is
employed by the Company on such vesting dates.
E. Restricted Stock. Effective January 2, 2003, the Company shall
grant the Executive, pursuant to the Plan, Three Hundred
Seventy Five Thousand (375,000) shares of restricted stock
(the "Restricted Stock"). The Restricted Stock grant shall be
subject to the terms and conditions set forth in the Plan and
the Company's standard Stock Purchase Agreement, and the
exhibits thereto, which shall be provided to the Executive
upon the date of the Restricted Stock grant provided for
herein. The Restricted Stock shall be subject to a repurchase
right by the Company at the purchase price paid by the
Executive, which repurchase right shall lapse as to 25% of the
Restricted Stock on the first anniversary of the Effective
Date, and in thirty-six (36) equal monthly installments
thereafter as long as the Executive is employed by the
Company, provided that, if the Executive is terminated without
Cause, as defined below, or resigns with Good Reason, as
defined below, prior to the first anniversary of the Effective
Date, the Company's repurchase right shall lapse as to a
percentage of the Restricted Stock equal to the number of full
months of the Executive's employment by the Company divided by
48.
F. Purchase of Common Stock. The Executive shall, effective on
the Effective Date, purchase from the Company, pursuant to the
terms and conditions of a Stock Purchase Agreement attached
hereto as Exhibit B, such number of shares of the Company's
Common Stock equal to the price listed for such stock on the
NASDAQ National Market on the Effective Date or, if the
Effective Date is not a regular trading day, the first regular
trading day thereafter, divided by Fifty Thousand (50,000).
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G. Other Long-Term Incentives. The Executive shall be eligible to
participate in any ongoing long-term incentive programs of the
Company subject to the terms and conditions of such programs.
H. Perquisites. The Executive shall be entitled to perquisites on
the same basis as provided to other senior-level executives of
the Company from time to time.
I. Expenses. The Company shall pay or reimburse the Executive for
all reasonable out-of-pocket expenses actually incurred by him
during the Term in performing services hereunder in accordance
with the time periods specified in the Company's expense
policy, provided that the Executive properly accounts for such
expenses in accordance with the Company's policy.
IV. Confidentiality, Disclosure of Information.
A. The Executive recognizes and acknowledges that the Executive
will have access to Confidential Information (as defined
below) relating to the business or interests of the Company or
of persons with whom the Company may have business
relationships. Except as permitted herein, the Executive will
not during the Term, or at any time thereafter, use, disclose
or permit to be known by any other person or entity, any
Confidential Information of the Company (except (i) as
required by applicable law, by a court of law or an
arbitrator, by any governmental agency having supervisory
authority over the business of the Company or by any
administrative or legislative body (including a committee
thereof) with jurisdiction to do so, (ii) as necessary in the
good faith furtherance of the Company's business objectives,
as long as the Executive seeks, to the maximum extent
possible, to protect such Confidential Information through
contractual or other legal mechanism; (iii) with the Board's
prior written authorization). The term "Confidential
Information" means information relating to the Company's
business affairs, proprietary technology, trade secrets,
patented processes, research and development data, know-how,
market studies and forecasts, competitive analyses, pricing
policies, employee lists, employment agreements (other than
this Agreement), personnel policies, the substance of
agreements with customers, suppliers and others, marketing
arrangements, customer lists, commercial arrangements or any
other information relating to the Company's business that is
not generally known to the public or to actual or potential
competitors of the Company (other than through a breach of
this Agreement). This obligation shall continue until such
Confidential Information becomes available to the public or
the relevant trade or industry, other than pursuant to a
breach of this Section 4 by the Executive, regardless of
whether the Executive continues to be employed by the Company.
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B. It is further agreed and understood by and between the parties
to this Agreement that all "Company Materials," which include,
but are not limited to, computers, computer software, computer
disks, tapes, printouts, source, HTML and other code,
flowcharts, schematics, designs, graphics, drawings,
photographs, charts, graphs, notebooks, customer lists, sound
recordings, other tangible or intangible manifestation of
content, and all other documents whether printed, typewritten,
handwritten, electronic, or stored on computer disks, tapes,
hard drives, or any other tangible medium, as well as samples,
prototypes, models, products and the like, shall be the
exclusive property of the Company and, upon termination of
Executive's employment with the Company, and/or upon the
request of the Company, all Company Materials, including
copies thereof, as well as all other Company property then in
the Executive's possession or control, shall be returned to
and left with the Company except for any documents for which
the Company has given written consent to removal and except
for his personal Rolodex, calendars, diaries, personal files
and similar items, provided that such items must be examined
by an authorized agent of the Company and all Confidential
Information deleted prior to being retained by the Executive.
V. Inventions Discovered by Executive.
The Executive shall promptly disclose to the Company any invention,
improvement, discovery, process, formula, or method or other intellectual
property, whether or not patentable or copyrightable (collectively,
"Inventions"), conceived or first reduced to practice by the Executive, either
alone or jointly with others, while performing services hereunder (or, if based
on any Confidential Information, at any time during or after the Term), (a)
which pertain to any line of business activity of the Company, whether then
conducted or then being actively planned by the Company, with which the
Executive was or is involved, (b) which is developed using time, material or
facilities of the Company, whether or not during working hours or on the Company
premises, or (c) which directly relates to any of the Executive's work during
the Term, whether or not during normal working hours. The Executive hereby
assigns to the Company all of the Executive's right, title and interest in and
to any such Inventions. During and after the Term, the Executive shall execute
any documents necessary to perfect the assignment of such Inventions to the
Company and to enable the Company to apply for, obtain and enforce patents,
trademarks and copyrights in any and all countries on such Inventions,
including, without limitation, the execution of any instruments and the giving
of evidence and testimony, without further compensation beyond the Executive's
agreed compensation during the course of the Executive's employment. Without
limiting the foregoing, the Executive further acknowledges that all original
works of authorship by the Executive, whether created alone or jointly with
others, related to the Executive's employment with the Company and which are
protectable by copyright, are "works made for hire" within the meaning of the
United States Copyright Act, 17 U.S.C. ss. 101, as amended, and the copyright of
which shall be owned solely, completely and exclusively by the Company. If any
Invention is considered to be work not included in the categories of work
covered by the United States Copyright Act, 17 U.S.C. ss. 101, as amended, such
work is hereby assigned or transferred completely and exclusively to the
Company. The Executive hereby irrevocably designates counsel to the Company as
the Executive's agent and attorney-in-fact to do all lawful acts necessary to
apply for and obtain patents and copyrights and to enforce the Company's rights
under this Section. This Section 5 shall survive the termination of this
Agreement. Any assignment of copyright hereunder includes all rights of
paternity, integrity, disclosure and withdrawal and any other rights that may be
known as or referred to as "moral rights" (collectively "Moral Rights"). To the
extent such Moral Rights cannot be assigned under applicable law and to the
extent the following is allowed by the laws in the various countries where Moral
Rights exist, the Executive hereby waives such Moral Rights and consents to any
action of the Company that would violate such Moral Rights in the absence of
such consent. The Executive agrees to confirm any such waivers and consents from
time to time as requested by the Company.
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VI. Non-Competition and Non-Solicitation.
The Executive acknowledges that the Company has invested substantial
time, money and resources in the development and retention of its Inventions,
Confidential Information (including trade secrets), customers, accounts and
business partners, and further acknowledges that during the course of the
Executive's employment with the Company the Executive will have access to the
Company's Inventions and Confidential Information (including trade secrets), and
will be introduced to existing and prospective customers, accounts and business
partners of the Company. The Executive acknowledges and agrees that the
Company's business is international in scope. The Executive acknowledges and
agrees that any and all "goodwill" associated with any existing or prospective
customer, account or business partner belongs exclusively to the Company,
including, but not limited to, any goodwill created as a result of direct or
indirect contacts or relationships between the Executive and any existing or
prospective customers, accounts or business partners. Additionally, the parties
acknowledge and agree that the Executive possesses skills that are special,
unique or extraordinary and that the value of the Company depends, in great
part, upon his use of such skills on its behalf.
In recognition of this, the Executive covenants and agrees that:
A. During the Term, and for a period of six (6) months
thereafter, the Executive may not, without the prior written
consent of the Board (whether as an employee, agent, servant,
owner, partner, consultant, independent contractor,
representative, stockholder or in any other capacity
whatsoever), participate in any business that offers products
or services directly competitive with any of those offered by
the Company, or that were under active development by the
Company during the Term (any such business, a "Competitor,"
any such products or services, "Competitive Services"),
provided that nothing herein shall prohibit the Executive from
(i) owning securities of corporations which are listed on a
national securities exchange or traded in the national
over-the-counter market in an amount which does not exceed 3%
of the outstanding shares of such corporation or (ii) after
termination of his employment (x) participating in the
business of a separately managed and operated division,
subsidiary or affiliate of a Competitor, provided that such
division, subsidiary or affiliate does not offer Competitive
Services and the Executive has no business communications with
employees of any division, subsidiary or affiliate of the
Competitor that offers Competitive Services regarding the
business of the competitive division, subsidiary or affiliate
or (y) becoming affiliated with an entity that is not a
Competitor but that is subsequently acquired by or merged with
a Competitor, provided that, following such acquisition or
merger, he is participating in the business of a separately
managed and operated division, subsidiary or affiliate of the
Competitor that does not offer Competitive Services and he has
no business communications with employees of any division,
subsidiary or affiliate of the Competitor that offers
Competitive Services regarding the business of the competitive
division, subsidiary or affiliate.
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B. During the Term, other than in the course of the proper
performance of his duties hereunder, and for a period of one
(1) year thereafter, the Executive may not knowingly, directly
or indirectly through another individual or individuals,
entice, solicit or encourage any Company employee to leave the
employ of the Company or any independent contractor to sever
its engagement with the Company, absent prior written consent
to do so from the Board.
C. During the Term, and for a period of one (1) year thereafter,
the Executive may not knowingly, directly or indirectly
through another individual or individuals, entice, solicit or
encourage any customer, prospective customer, vendor,
strategic partner or business associate of the Company (i) to
cease doing business with the Company, reduce its relationship
with the Company or refrain from establishing or expanding a
relationship with the Company or (ii) for the purpose of
offering Competitive Services. For purposes of this Agreement,
"prospective customer" shall mean those businesses to whom the
Company submitted a written proposal to perform services
during the Term.
VII. Non-Disparagement.
A. The Executive hereby agrees that during the Term, and for a
period of one (1) year thereafter, the Executive will not
intentionally make any public statement that is disparaging
about the Company or any of its officers or directors,
including, but not limited to, any public statement that
disparages the products, services, finances, financial
condition, capabilities or other aspect of the business of the
Company.
B. The Company hereby agrees that during the Term and for a
period of one (1) year thereafter its officers and directors
will not intentionally make any public statement that is
disparaging about the Executive, including, but not limited
to, any statement that disparages the services, capabilities,
performance or any other aspect of the Executive's
relationship with the Company.
C. This Section 7 shall not prevent any person or entity subject
to it from responding publicly to incorrect or disparaging
public statements made in violation of this Section 7 to the
extent reasonably necessary to correct or refute such public
statements or from making truthful statements when necessary
to enforce this Agreement or required by applicable law, by a
court of law or an arbitrator, by any governmental agency
having supervisory authority over the business of the Company
or by any administrative or legislative body (including a
committee thereof) with jurisdiction to do so.
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VIII. Provisions Necessary and Reasonable.
A. The Executive agrees that
1. the provisions of Sections 4, 5, 6 and 7 of this
Agreement are necessary and reasonable to protect the
Company's Confidential Information, Inventions, and
goodwill;
2. the specific temporal, geographic and substantive
provisions set forth in Section 6 of this Agreement
are reasonable and necessary to protect the Company's
business interests in part because the Company's
business is international in scope; and
3. in the event of any breach of any of the covenants
set forth herein, the Company would suffer
substantial irreparable harm and would not have an
adequate remedy at law for such breach. In
recognition of the foregoing, the Executive agrees
that in the event of a breach or threatened breach of
any of these covenants, in addition to such other
remedies as the Company may have at law, without
posting any bond or security, the Company shall be
entitled to seek equitable relief, in the form of
specific performance, and/or temporary, preliminary
or permanent injunctive relief, or any other
equitable remedy which then may be available. The
seeking of such injunction or order shall not affect
the Company's right to seek and obtain damages or
other equitable relief on account of any such actual
or threatened breach.
B. If any of the covenants contained in Sections 4, 5, 6 and 7
hereof, or any part thereof, is hereafter construed to be
invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given
full effect without regard to the invalid portions.
C. If any of the covenants contained in Sections 4, 5, 6 and 7
hereof, or any part thereof, is held to be unenforceable by a
court of competent jurisdiction because of the temporal or
geographic scope of such provision or the area covered
thereby, the Parties agree that the court making such
determination shall have the power to reduce the duration
and/or geographic area of such provision and, in its reduced
form, such provision shall be enforceable.
IX. Representations.
A. Representations by the Executive.
1. The Executive represents that the Executive has no
agreement or other legal obligation with any prior
employer, or any other person or entity, that
restricts the Executive's ability to accept
employment, or to perform any function for, the
Company.
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2. The Executive has been advised by the Company that at
no time should the Executive divulge to or use for
the benefit of the Company any trade secret or
confidential or proprietary information of any
previous employer; the Executive expressly
acknowledges that the Executive has not to the best
of his knowledge divulged or used any such
information for the benefit of the Company.
3. The Executive acknowledges that the Executive has not
and will not knowingly misappropriate any Invention
that the Executive played any part in creating while
working for any former employer.
4. The Executive acknowledges that the Company is basing
important business decisions on these
representations, and affirms that all of the
statements included herein are true to the best of
his knowledge.
B. Representations by the Company.
1. The Company represents that it is fully authorized by
all necessary action of its Board and any other body,
entity or person whose action is required to enter
into this Agreement and to perform its obligations
under it and will, in a reasonably prompt manner,
take all commercially reasonable actions necessary to
allow performance of all obligations hereunder.
2. The Company acknowledges that the Executive has
relied upon such representations in entering into
this Agreement.
X. Termination and Severance; Change of Control.
Notwithstanding the provisions of Section 2 of this Agreement, the
Executive's employment hereunder may terminate under the following
circumstances:
A. Termination by the Company for Cause.
1. The Company may terminate the Executive's employment under
this Agreement for Cause at any time, subject to the
requirements of Section 10(a)(ii) below. For purposes of this
Agreement, "Cause" is defined as (A) the Executive's willful
and material breach of the terms of this Agreement; (B) the
Executive's commission of any felony or any crime involving
moral turpitude; (C) willful gross neglect or willful
misconduct by the Executive in connection with his position
hereunder; or (D) the Executive's willful refusal to perform
his duties hereunder.
2. A termination for Cause shall not take effect unless the
provisions of this Section 10(a)(ii) are compiled with. The
Executive shall be given written notification by the Company
of the termination for Cause, such notification to state in
reasonable detail the grounds on which the proposed
termination for Cause is based. Such written notification
shall be given within (90) days of the CEO learning of the
grounds for such Termination. The Executive shall be given ten
(10) calendar days' written notice and one opportunity to cure
prior to a termination for Cause pursuant to Section
10(a)(i)(D).
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3. Upon the termination for Cause of Executive's employment (A)
the Executive shall be entitled to Salary earned under this
Agreement prior to the date of termination, any earned but
unpaid bonus, and any accrued but unused vacation; and (B) any
unvested stock options shall be forfeited, provided however
that if the basis for termination of Executive's employment
constitutes Misconduct under the relevant Stock Option
Agreements referred to above, then any unvested stock option
shall terminate immediately and cease to be outstanding.
B. Termination by the Company Without Cause. The Executive's
employment under this Agreement may be terminated without
Cause (other than owing to death or Disability) by the
Company, provided, however, that if the Company terminates the
Executive's employment without Cause, or the Executive
terminates his employment for Good Reason, as defined below,
the Executive shall be entitled to:
1. Salary through the date of termination;
2. a lump sum payment equal to Salary for a period of 6
months, at the annualized rate in effect on the date
of termination, payable as provided for in Exhibit A
hereto;
3. all outstanding options scheduled to vest within the
one-year period following termination shall
immediately become fully vested and exercisable and
all vested options shall remain exercisable through
the end of their originally scheduled terms before
such termination;
4. continuation health coverage for the Executive and
any eligible dependents covered as of the effective
date of the termination, pursuant to COBRA, at the
Company's expense for a period of 6 months; and
5. if such termination occurs after June 30 and the
Company is projected to meet the revenue targets
established pursuant to Section 3(B) above (based on
an extrapolation of revenue figures for the partial
year over a full year), then the Executive shall
receive a pro-rata bonus payment based on a target of
100% of the Salary and the number of full months of
the calendar year worked prior to such termination.
As a condition of receiving severance benefits pursuant to
this Section 10(B) or Sections 10(C) or 10(G), the Executive shall execute and
deliver to the Company prior to his receipt of such benefits a general release
substantially in the form attached hereto as Exhibit A.
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C. Termination by the Executive. The Executive may
terminate his employment hereunder upon thirty days
(30) days' written notice to the Company.
1. In the event of termination by the Executive of his
employment hereunder pursuant to this subsection
10(c) other than for Good Reason, (y) the Company may
accelerate the termination date provided it pays the
Executive during the 30-day notice period provided
for in the previous sentence (or for any remaining
portion of that period) the Salary and benefits at
the rate of compensation the Executive was receiving
immediately before such notice of termination was
tendered in lieu of actual notice and (z) the
Executive shall have the same entitlements as under
Section 10(a)(iii) above.
2. The Executive may also terminate his employment
hereunder for "Good Reason." For purposes of this
Agreement, "Good Reason" shall mean termination by
the Executive of his employment following the
occurrence of any of the following events without his
consent:
a. a material breach of this Agreement by the
Company;
b. a change in the Executive's reporting
relationship so that he no longer reports
directly to the CEO;
c. the failure of the Company to obtain the
assumption in writing of its obligation to
perform this Agreement by any successor to
all or substantially all of the assets of
the Company within a reasonable period after
a merger, consolidation, sale or similar
transaction; or
d. a relocation of the Executive's principal
worksite to a location 25 miles or more from
the location of the Company's principal
offices as of the Effective Date.
Provided, however, that the Executive must deliver to the Company written notice
of his intention to terminate his employment with Good Reason within thirty (30)
days following the Executive's discovery of the event or events constituting the
grounds for the termination, and the Company shall have thirty (30) days
following its receipt of such notice to cure such grounds prior to the
effectiveness of such termination.
3. In the event the Executive terminates his employment
under this Agreement for Good Reason, he shall have
the same entitlements as under Section 10(b) above.
D. Death. In the event of the Executive's death during the Term,
the Executive's employment hereunder shall immediately and
automatically terminate, and the Company shall have no further
obligation or duty to the Executive or his estate or
beneficiaries other than for the Salary earned under this
Agreement to the date of termination, any payments or benefits
due under Company policies or benefit plans and, in the case
of the Executive's death occurring during the months of July
through December of any given calendar year, a pro rata
portion of the Annual Bonus for that calendar year.
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E. Disability. The Company may terminate the Executive's
employment hereunder, upon written notice to the Executive, in
the event that the Executive becomes disabled during the Term
through any condition of either a physical or psychological
nature and, as a result, is, with or without reasonable
accommodation, unable to perform the essential functions of
the services contemplated hereunder for (a) a period of ninety
(90) consecutive days, or (b) for shorter periods aggregating
one hundred twenty (120) days during any twelve (12) month
period during the Term. Any such termination shall become
effective upon mailing or hand delivery of notice that the
Company has elected its right to terminate under this
subsection 10(e), and the Company shall have no further
obligation or duty to the Executive other than for salary
earned under this Agreement prior to the date of termination,
any payments or benefits due under Company policies or benefit
plans and, in the case of termination hereunder occurring
during the months of July through December of any given
calendar year, a pro rata portion of the Annual Bonus for that
calendar year.
F. Effect of Non-Renewal. In the event that the Company gives
notice of its election not to extend the Term of the Agreement
for a Renewal Period pursuant to Section 2 above, the Company
shall continue to pay the Executive full compensation as
defined in Section 3 of this Agreement from the date the
Executive receives such notice through the Expiration Date.
The Executive shall not be entitled to any additional
compensation other than any payments or benefits due under
Company policies or benefit plans.
G. Change of Control. In the event a Change in Control or Hostile
Takeover, as defined in the Plan (collectively a "Change of
Control"), occurs on or before September 19, 2003, Fifty
Percent (50%) of any unvested stock options granted to the
Executive shall accelerate and vest in full immediately and
the Repurchase Right shall lapse as to 50% of the Restricted
Stock to which it then applies prior to the Change of Control,
provided the Executive remains employed by the Company on the
date of such Change of Control. Any remaining unvested stock
options granted to the Executive shall vest, and the Company's
Repurchase Right shall lapse, in equal monthly installments
over a period of twelve months from the date of the Change of
Control, provided the Executive remains employed by the
Company on such vesting dates. If (i) the Executive is
terminated other than for Cause, Disability or death, or (ii)
he terminates his employment for Good Reason, within 60 days
prior to the announcement of a Change of Control or within
twelve months from the effective date of the Change of
Control, then (x) all unvested stock options granted to the
Executive shall accelerate and vest in full, and (y) Executive
shall receive a lump sum payment equal to Salary for a period
of 6 months, at the annualized rate in effect on the date of
termination. Such payments shall be in addition to any payment
owed pursuant to paragraph (b) of this Section 10. If a Change
of Control occurs after September 19, 2003, then all unvested
stock options and Restricted Stock granted to the Executive
shall accelerate and vest in full immediately prior to the
Change of Control, provided the Executive remains employed by
the Company on the date of such Change of Control.
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XI. Choice of Law.
The Executive acknowledges that a substantial portion of the Company's
business is based out of and directed from the State of New York. The Executive
also acknowledges that during the course of the Executive's employment with the
Company the Executive will have substantial contacts with New York.
The validity, interpretation and performance of this Agreement shall be
governed by, and construed in accordance with, the internal law of New York,
without giving effect to conflicts of law principles. Both Parties agree that
the exclusive venue for any action, demand, claim or counterclaim relating to
the terms and provisions of Sections 4, 5, 6 and 7 of this Agreement, or to
their breach, shall be in the state or federal courts located in the State and
County of New York and that such courts shall have personal jurisdiction over
the Parties to this Agreement.
XII. Miscellaneous.
A. Assignment.
1. This Agreement shall be binding upon and shall inure
to the benefit of the Company, its successors and
assigns. Rights or obligations of the Company under
this Agreement may be assigned or transferred by the
Company pursuant to a merger or consolidation in
which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all
of the assets of the Company, provided that the
assignee or transferee is the successor to all or
substantially all of the assets of the Company and
such assignee or transferee assumes the liabilities,
obligations and duties of the Company, as contained
in this Agreement, either contractually or as a
matter of law. The Company further agrees that, in
the event of a sale of assets or liquidation as
described in the preceding sentence, it shall take
whatever action it reasonably can in order to cause
such assignee or transferee expressly to assume the
liabilities, obligations and duties of the Company
hereunder. The term the "Company" as used herein
shall include such successors and assigns. Neither
this Agreement nor any right or interest hereunder
shall be assignable or transferable by the Executive,
his beneficiaries or legal representatives, except by
will or by the laws of descent and distribution.
2. The Executive shall be entitled, to the extent
permitted under any applicable law, to select and
change a beneficiary or beneficiaries to receive any
compensation or benefit payable hereunder following
the Executive's death by giving the Company written
notice thereof. In the event of the Executive's death
or a judicial determination of his incompetence,
references in this Agreement to the Executive shall
be deemed, where appropriate, to refer to his
beneficiaries, estate or other legal representative.
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B. Withholding. All salary and bonus payments required to be made
by the Company to the Executive under this Agreement shall be
subject to withholding taxes, social security and other
payroll deductions in accordance with the Company's policies
applicable to employees of the Company at the Executive's
level.
C. Entire Agreement. Except as otherwise specifically provided
for herein, this Agreement sets forth the entire agreement
between the Parties and supersedes any prior communications,
agreements and understandings, written or oral, with respect
to the terms and conditions of the Executive's employment. In
the event of any inconsistency between any provision of this
Agreement and any provision of any written plan, employee
handbook or personnel manual of the Company or any of its
affiliates, the provisions of this Agreement shall control
unless the Executive otherwise agrees in a writing which
expressly refers to the provision of this Agreement whose
control he is waiving.
D. Amendments. Any attempted modification of this Agreement will
not be effective unless signed by an authorized officer of the
Company and the Executive.
E. Waiver of Breach. No waiver by either Party of any breach by
the other Party of any condition or provision contained in
this Agreement to be performed by such other Party shall be
deemed a waiver of a similar or dissimilar condition or
provision at the same or any prior or subsequent time. Any
waiver must be in writing and signed by the Executive or an
authorized officer of the Company, as the case may be. The
Executive understands that a breach by him of any provision of
this Agreement may only be waived by an authorized officer of
the Company.
F. Severability. If any provision of this Agreement should, for
any reason, be held invalid or unenforceable in any respect by
a court of competent jurisdiction, then the remainder of this
Agreement, and the application of such provision in
circumstances other than those as to which it is so declared
invalid or unenforceable, shall not be affected, and each such
provision of this Agreement shall be valid and enforceable to
the fullest extent permitted by law.
G. Notices. Any notices, requests, demands and other
communications provided for by this Agreement shall be in
writing and shall be effective when delivered by private
messenger, private overnight mail service, or, if to the
Company, by facsimile (with confirmation in writing) as
follows (or to such other address as either Party shall
designate by notice in writing to the other in accordance
herewith):
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If to the Company:
Predictive Systems, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax number: 000.000.0000
Attn: General Counsel
If to Executive:
Xxxxx Xxxxxxx
c/o Predictive Systems, Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
Xxxxxx Xxx Xxxxxxx, Esq.
000 0xx Xxxxxx
Xxx Xxxx, XX 00000
H. Survival. The Executive and the Company agree that certain
provisions of this Agreement shall survive the expiration or
termination of this Agreement and the termination of the
Executive's employment with the Company. Such provisions shall
be limited to those within this Agreement which, by their
express or implied terms, obligate either Party to perform any
obligation, or create an entitlement that runs beyond the
termination of the Executive's employment or termination of
this Agreement.
I. Indemnification. The Executive shall be entitled to all rights
of indemnification as provided for in the Company's
certificate of incorporation and by-laws as presently in
effect and/or applicable insurance policies.
J. Waiver of Jury Trial. The Company and the Executive each
irrevocably waive any right to a trial by jury in any action,
suit or other legal proceeding arising under or relating to
any provision of this Agreement.
K. Rights of Other Individuals. Except as otherwise provided in
this Agreement, this Agreement confers rights solely on the
Executive and the Company. This Agreement is not a benefit
plan and confers no rights on any individual or entity other
than the undersigned.
L. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future
participation in any benefit, bonus, incentive or other plan
or program provided by the Company and for which the Executive
may qualify by the express terms of such benefit, bonus,
incentive or other plan or program, nor shall anything herein
limit or otherwise affect such rights as the Executive may
have under any other written agreements with the Company or
any of its affiliated companies which are signed by an
authorized officer of the Company.
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M. No Mitigation; No Offset. In the event of any termination of
his employment hereunder, the Executive shall be under no
obligation to seek other employment nor shall any amounts due
him pursuant to Section 10(b) or Section 10(g) be offset by
any other compensation received by the Executive.
N. Headings. The Parties acknowledge that the headings in this
Agreement are for convenience of reference only and shall not
control or affect the meaning or construction of this
Agreement.
O. Advice of Counsel. The Executive and the Company hereby
acknowledge that each Party has had adequate opportunity to
review this Agreement, to obtain the advice of counsel with
respect to this Agreement, and to reflect upon and consider
the terms and conditions of this Agreement. The Parties
further acknowledge that each Party fully understands the
terms of this Agreement and has voluntarily executed this
Agreement.
P. If either party employs attorneys to enforce any rights
arising out of or relating to this Agreement, the prevailing
party in the event of a litigation shall be entitled to
recover reasonable attorney's fees and costs.
Q. Counterparts. This Agreement may be executed in two or more
counterparts.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the day and year set forth below.
EXECUTIVE Predictive Systems, Inc.
/s/ Xxxxx Xxxxxxx By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------- ---------------------------------
Xxxxx Xxxxxxx
Title: CEO
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EXHIBIT A
SEPARATION AGREEMENT
AND GENERAL RELEASE
This Separation Agreement and General Release ("Agreement") is
made and entered into this ____ day of _____, _____, by and between Predictive
Systems, Inc. (hereinafter the "Company" or "Employer") and Xxxxx Xxxxxxx
("Employee") (hereinafter collectively referred to as the "Parties"), and is
made and entered into with reference to the following facts.
RECITALS
WHEREAS, Employee was hired by the Company on or about
________, as a ____________; and
WHEREAS, the Company and Employee have agreed to terminate
their employment relationship effective ______, ____; and
WHEREAS, the Parties each desire to resolve any potential
disputes which exist or may exist arising out of Employee's employment with the
Company and/or the termination thereof.
NOW THEREFORE, in consideration of the covenants and promises
contained herein, the Parties hereto agree as follows:
AGREEMENT
1. Agreement By the Company. In exchange for Employee's agreement to be bound by
the terms of this entire Agreement, including but not limited to the Release of
Claims in paragraph 2, the Company agrees to provide Employee with the benefits
required pursuant to Section 10(b) or section 10(G), as Applicable, of his
Employment Agreement with the Company dated as of _____________ (the "Employment
Agreement"), the terms of which are hereby incorporated by reference, to be paid
within ten (10) days of the Company's receipt of this Agreement, fully executed
by Employee, or as otherwise agreed in such Employment Agreement.
Employee acknowledges that, absent this Agreement, he has no
legal, contractual or other entitlement to the consideration set forth in this
paragraph and that the amount set forth in this paragraph constitute valid and
sufficient consideration for Employee's release of claims and other obligations
set forth herein.
2. Executive's Release of Claims. Employee hereby expressly waives, releases,
acquits and forever discharges the Company and its divisions, subsidiaries,
affiliates, parents, related entities, partners, officers, directors,
shareholders, investors, executives, managers, employees, agents, attorneys,
representatives, successors and assigns (hereinafter collectively referred to as
"Releasees"), from any and all claims, demands, and causes of action which
Employee has or claims to have, whether known or unknown, of whatever nature,
which exist or may exist on Employee's behalf from the beginning of time up to
and including the date of this Agreement arising out of or related to the
employment of Employee by the Company. As used in this paragraph, "claims,"
"demands," and "causes of action" include, but are not limited to, claims based
on contract, whether express or implied, fraud, stock fraud, defamation,
wrongful termination, estoppel, equity, tort, retaliation, intellectual
property, spoliation of evidence, emotional distress, public policy, wage and
hour law, statute or common law, claims for severance pay, vacation pay, debts,
accounts, compensatory damages, punitive or exemplary damages, liquidated
damages, and any and all claims arising under any federal, state, or local
statute, law, or ordinance prohibiting discrimination on account of race, color,
sex, age, religion, sexual orientation, disability or national origin, including
but not limited to, the Age Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964 as amended, the Americans with Disabilities Act, the
Family and Medical Leave Act or the Employee Retirement Income Security Act.
Anything to the contrary notwithstanding in this Agreement or the Employment
Agreement, nothing herein shall release the Company from any claims or damages
based on (i) any right the Executive may have to enforce this Agreement, (ii)
any right or claim that arises after the date of this Agreement, (iii) any right
the Employee may have to benefits or entitlement under any applicable plan,
agreement, program, award, policy or arrangement of the Company that becomes
payable or due after the date of this Agreement; (iv) the Executive's
eligibility for indemnification in accordance with applicable laws or the
certificate of incorporation and by-laws of the Company, or any applicable
insurance policy, with respect to any liability he incurs or incurred as an
employee, officer or director of the Company.
3. Acceptance of Agreement/Revocation. This Agreement was received by Employee
on ______, ____. Employee may accept this Agreement by returning a signed
original to the Company. This Agreement shall be withdrawn if not accepted in
the above manner on or before _______, which in no event shall be less than 21
days from date upon which he received this Agreement.
4. Confidentiality. Employee understands and agrees that this Agreement, and the
matters discussed in negotiating its terms, are entirely confidential. It is
therefore expressly understood and agreed that Employee will not reveal,
discuss, publish or in any way communicate any of the terms of this Agreement to
any person, organization or other entity, with the exception of his immediate
family members and professional representatives, including lawyers, financial
and tax advisors, unless required by subpoena or court order or as necessary in
connection with the enforcement of this Agreement. Employee and the Company
further agree to abide by the provisions of Section 7 of the Employment
Agreement with respect to disparagement.
5. New York Law Applies; Disputes. This Agreement, in all respects, shall be
interpreted, enforced and governed by and under the laws of the State of New
York without giving effect to conflict of law principles. Any and all actions
relating to this Agreement shall be filed and maintained in the federal and/or
state courts located in the State and County of New York, and the parties
consent to the jurisdiction of such courts. In any action arising out of this
Agreement, or involving claims barred by this Agreement, each shall pay its own
costs of suit, including reasonable attorneys' fees.
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6. Voluntary Agreement. EMPLOYEE UNDERSTANDS AND AGREES THAT HE MAY BE WAIVING
SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT, AND REPRESENTS THAT HE HAS
ENTERED INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY, WITH A FULL UNDERSTANDING
OF AND IN AGREEMENT WITH ALL OF ITS TERMS.
IN WITNESS WHEREOF, the Parties hereto have executed this
Agreement on the dates provided below.
DATED: Predictive Systems, Inc.
By:
----------------------
Its:
----------------------
DATED: Xxxxx Xxxxxxx
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