Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective as of the 15th day of
March 1999, by and between Sky Alland Research, Inc., d/b/a Sky Alland, a
Maryland corporation (the "Company"), and Xxxxxxx X. Xxxxx (the "Employee").
W I T N E S S E T H:
The Company desires to employ the Employee and the Employee is willing to accept
such employment with the Company on the terms and subject to the conditions and
limitations contained in this Agreement. Accordingly, in consideration of the
mutual promises and covenants contained in this Agreement, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs the Employee and the Employee
hereby accepts employment with the Company on the terms and conditions
set forth in this Agreement.
2. DUTIES. The Employee shall perform, under the direction of the Chief
Executive Officer, the duties of Senior Vice President of Sales for the
Company. The Employee agrees to be so employed and shall devote his
best efforts and substantially all of his business time to advance the
interests of the Company, subject to reasonable vacations compatible
with his position. The Employee shall perform his duties hereunder in
compliance with all Company policies applicable thereto.
3. EMPLOYMENT TERM. The term of the Employee's employment hereunder (the
"Employment Term") shall commence as of the date hereof and,
unless extended by the terms of this Paragraph 3 or otherwise
modified by separate agreement signed by all parties hereto, or
terminated as otherwise provided herein, shall terminate on March 15,
2000. The term of the Employee's employment shall be renewed and
extended automatically for additional one-year periods thereafter
(each, an "Extended Employment Term"), until terminated pursuant to
Paragraph 6 hereof. Paragraphs 8, 9, and 10 shall continue in force in
accordance with provisions therein and shall survive the expiration of
the Employment Term and each Extended Employment Term.
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4. COMPENSATION. During the Employment Term and each Extended Employment
Term under this Agreement, the Employee shall be paid his entire
compensation for services performed under this Agreement as follows:
a. SALARY. The Employee shall receive a salary ("Salary") paid
at a rate of $150,000.00 annually, which shall be reviewed
at least annually by the Board of Directors and adjusted by
the Board of Directors in its sole discretion. The Salary
shall be paid in such increments as are established by the
Company, but in no event less frequently than once per
calendar month.
b. INCENTIVE COMPENSATION. The Employee will have the ability
to earn annual incentive compensation. The Employee will be
entitled to a $37,500 cash bonus (25% of annual base wage)
if, a) SKY records at least $25MM in FY 1999 revenue, and b)
at the end of one year employment, specific individual
performance objectives set by the Chief Executive Officer
and agreed to by the Employee, have been met. In accordance
with Sky Alland's Employee Stock Option Plan and subject to
Board approval, the Employee will receive an initial grant
to purchase 56,000 shares of Sky Alland stock at $8.00 per
share.
In addition, the Employee will be entitled to revenue-based
incentive payments according to the following schedule of
revenue targets and commensurate payouts for FY 1999:
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REVENUE TARGET ANNUAL PAYMENT
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Less than @26.8MM - 0-
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$26.8MM - $28.3MM $60,000.00
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$28.4MM - $29.9MM $85,000.00
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$30.0MM - $31.5MM $112,500.00
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$31.6MM - $33.1MM $150,000.00
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$33.2MM - $34.7MM $190,000.00
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The Company will guarantee (at the $60,000.00 level) the
revenue-based incentive for the first six months' of the
Employee's initial employment term, and will pay it
quarterly. The Company will continue to pay the
revenue-based incentive quarterly (at the $60,000.00 level)
provided the Company's revenues are at least meeting its
"worst case" budget scenario -- for FY 1999 this is $26.8MM
of revenue, with $5,017MM earned in Q1, $6,443MM in Q2,
$7,618MM in Q3 and $7,733 in Q4.
5. OTHER BENEFITS.
a. In addition to the compensation set forth in Paragraph 4, the
Company shall provide for the Employee, during the Employment Term
and each Extended Employment Term, the following benefits:
(i) payment of premiums for a medical insurance plan
covering the Employee, including hospitalization, major
medical, dental and prescriptions, and payment of the
premiums for his dependents for inclusion in such
medical insurance plan, in such amounts which the
Company will pay on behalf of its other management
officials, if at all;
(ii) disability and life insurance, if any, upon the same
terms and conditions which the Company will grant to
other management officials, if at all;
(iii) the same or similar leave or absence from work on
account of personal illness as is the policy of the
Company to grant to other management officials;
(iv) such number of days of vacation per each calendar year
as the Company grants to other management officials, or
such greater number of days of vacation as may be
determined in the discretion of the Chief Executive
Officer. It is the intention of the parties that the
Employee take all vacation allotted to him within the
calendar year for which the vacation is awarded,
consistent with his duties and the demands on his time
made from the ongoing operation of the Company's
business. Should the Employee not take all of the
allotted days of vacation in a given calendar year
which he is entitled to take, he will lose that
vacation time and will not be entitled either to carry
over the unused vacation to succeeding years or to
receive payment in respect of such unused vacation; and
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b. REIMBURSEMENT FOR REASONABLE BUSINESS EXPENSES. The Company shall
reimburse the Employee for reasonable ordinary and necessary
expenses incurred by him in connection with the performance of his
duties pursuant to this Agreement.
6. TERMINATION OF EMPLOYMENT.
a. TERMINATION UPON DEATH OR DISABILITY. The Employee's employment
and this Agreement shall terminate immediately upon the Employee's
death or upon the certification by a duly licensed physician that
the Employee is mentally or physically incapable of performing his
duties hereunder. He, or his estate or heirs, as the case may be,
shall be entitled to receive his rights vested as of the date of
such termination, prorated to that date, and, in the case of
termination on account of disability, he, or his estate or heirs,
as the case may be, shall be entitled to receive disability
benefits as provided under Paragraph 5a(ii), if any.
b. TERMINATION FOR CAUSE. At any time during the Employment Term or
any Extended Employment Term hereunder, the Company shall be
entitled to terminate the Employee's employment for Cause. Such
Termination for Cause shall be effective immediately following the
delivery by the Company to the Employee of a written notice
thereof specifying the Cause. For this purpose, "Cause" shall
mean: (i) fraud or embezzlement by the Employee in the course of
employment; (ii) conviction of a felony or of any crime involving
moral turpitude; or (iii) willful misconduct or gross negligence
in the performance of his duties hereunder. In the event of such
termination, the Company shall pay the Employee his Salary through
the date of such termination plus one week's severance for each
month of employment not to exceed 24 weeks, and the Employee on
account of such termination shall automatically be divested of any
Incentive Compensation accruing or owed as of the date of such
termination.
c. TERMINATION WITHOUT CAUSE. Effective at any time from the date
hereof during the Employment Term, or at any time during any
Extended Employment Term, the Company may terminate the Employee's
employment without Cause. In the event of Termination without
Cause, the Employee shall be entitled to receive his Salary
through the date of
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termination, plus one week's severance for each month, or partial
month, of employment, not to exceed 24 weeks, and with a minimum
of 12 weeks, and the Employee shall be entitled to any incentive
compensation earned and accrued as of the date of such
termination, pro rated through the effective date of such
termination. During the period of severance, Company shall
continue to provide all benefits to the Employee that the Employee
had been entitled to prior to Termination (defined in section 5 of
this agreement), and continue to pay for such benefits at the same
rate as before. Specifically, this is to include medical and other
such benefits as is typically provided to senior management. In
addition to the severance compensation, Employee shall be entitled
to receive compensation at his standard pay rate for any unused
but accrued vacation days through the date of termination.
7. DISCOVERIES. The Employee will promptly disclose to the Company each
improvement, discovery, development, idea, and invention, whether
patentable or not, directly or indirectly relating to the business or
products of the Company, made or conceived, in whole or in part, by the
Employee while employed by the Company (whether or not during Company
working hours) if such improvement, discovery, development, idea, or
invention directly or indirectly then results from or was suggested by
such employment, in whole or in part. Each such improvement, discovery,
development, idea, and invention shall be the sole and exclusive
property of, and is hereby assigned to, the Company.
8. COMPETITION. For the period following the last day of employment, and
for the entire time in which Employee shall receive Salary or Severance
compensation under this Agreement the Employee will not, without the
prior written consent of the Company, solicit or engage directly or
indirectly in any business or activity (either financially or as a
shareholder, employee, officer, partner, independent contractor,
consultant, advisor or owner, or in any other capacity, including, but
not limited to, any capacity calling for the making of any investment
or rendition of personal services or acts of management, operation or
control) which is competitive with the "Company Business" within the
geographic area in which any such Company Business is now being
conducted by the Company. For purposes of the Agreement, the term
"Company Business" shall mean the business of providing integrated
customer management services,
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including but not limited to outsourced telephone and Internet
marketing and customer service, enhanced by computerized database
management and analysis.
9. CONFIDENTIALITY. The Employee agrees not to divulge, furnish or make
accessible to any person or entity, and to keep strictly and absolutely
confidential during the initial Employment Term, each Extended
Employment Term, if any, and forever thereafter, any confidential or
secret aspect of the business of the Company or any related company,
including, but not limited to, the finances, trade secrets, customers,
customer lists, suppliers, supplier lists, sales or distribution agents
and representatives, sales or distribution agent and representative
lists, methods, arts or processes, and the business plans and marketing
strategies of the Company. All records, files, drawings, documents,
models, equipment, computer software and the like relating to the
business of the Company which the Employee shall prepare or use or come
into contact with shall remain the sole property of the Company.
10. INJUNCTIVE RELIEF. The Employee acknowledges that his compliance with
his agreements in Paragraphs 8 and 9 is necessary to protect the
goodwill and other proprietary interests of the Company. The Employee
acknowledges that a breach of his agreements in Paragraphs 8 or 9 will
result in irreparable and continuing damage to the Company and the
business of the Company for which there will be no adequate remedy at
law, and agrees that, in the event of any breach of the aforesaid
agreements, the Company and its successors and assigns shall be
entitled to injunctive relief and to such other and further relief as
may be proper.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties with respect to the Employee's employment by the Company and
supersedes any prior agreements between them, whether oral or written.
12. AMENDMENTS. Any amendment to this Agreement shall be made in writing
and signed by both parties hereto.
13. ENFORCEABILITY. If any provision of this Agreement shall be found by a
court with proper jurisdiction to be invalid or unenforceable, in whole
or in part, then such provision shall be
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deemed to be modified, narrowed, or restricted only to the limited
extent and in the manner necessary to render the same valid and
enforceable, as the case may require, and this Agreement shall be
construed and enforced to the maximum extent permitted by law as if
such provision had been originally incorporated herein as so modified,
narrowed, or restricted.
14. SUCCESSORS. This Agreement shall inure to the benefit of and shall be
assignable to the successors of the business of the Company. This
Agreement is personal to the Employee and may not be assigned by him.
15. WAIVERS. A waiver by one party of any breach of or failure to comply
with any provision of this Agreement by the other party shall not be
construed as a waiver of any other provision, or a waiver of a breach
of any other provision, of this Agreement.
16. NOTICES. Unless otherwise notified in writing to the contrary, any
notice required or permitted by the terms hereof shall be effectively
delivered for all purposes if delivered personally, upon delivery, or
if mailed, upon deposit in the United States mail, registered or
certified, postage prepaid, and if directed to the Company at its
principal business office and in the case of the Employee, to his
address appearing on the records of the Company, or to such other
address as he may designate in writing to the Company.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland.
IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto to be
effective on the date first above written.
Sky Alland Research, Inc.
d/b/a Sky Alland
By:/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Chief Executive Officer Employee
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