Exhibit 10.12
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is made this 16th day of July, 1998, between
LINC SYSTEMS CORPORATION, a Connecticut corporation (the "Company"), and XXXXXX
XXXXXX (the "Executive").
WHEREAS, the Company is a wholly-owned subsidiary of Condor Technology
Solutions, Inc., a Delaware corporation ("Condor").
WHEREAS, the parties hereto wish to enter into an employment agreement
to employ the Executive and to set forth certain additional agreements between
the Executive and the Company.
NOW, THEREFORE, in consideration of the mutual covenants and
representations contained herein, the parties hereto agree as follows:
1. TERM.
The Company will employ the Executive, and the Executive will serve
the Company, under the terms of this Agreement for the period set forth on
SCHEDULE A attached hereto, commencing on the date hereof (the "Term"). Upon
expiration of the Term, this Agreement maybe extended by mutual consent of
the parties, upon terms and conditions to be determined by mutual agreement.
Notwithstanding the foregoing, the Executive's employment hereunder may be
earlier terminated as provided in Section 4 hereof and as set forth in
SCHEDULE A attached hereto. The period of time between the commencement and
the termination of the Executive's employment hereunder shall be referred to
herein as the "Employment Period."
2. EMPLOYMENT.
(a) POSITION AND REPORTING. The Company hereby employs the Executive
for the Employment Period to serve in the office or position of the Company set
forth on SCHEDULE A attached hereto on the terms and conditions set forth in
this Agreement.
(b) AUTHORITY AND DUTIES. In addition to such objectives as are set
forth on SCHEDULE A attached hereto (if any), the Executive shall exercise such
authority, perform such duties and functions and discharge such responsibilities
as are reasonably associated with the Executive's position, commensurate with
the authority vested in the Executive's position, pursuant to this Agreement and
consistent with the By-Laws of the Company. During the Employment Period, the
Executive shall devote his full business time, skill and efforts to the business
of the Company. Notwithstanding the foregoing, the Executive may (i) make and
manage passive personal business investments of his choice (in the case of
publicly-held corporations, not to exceed five percent (5%) of the outstanding
voting stock) and serve in any capacity with any civic, educational or
charitable organization, or any trade association, without seeking or obtaining
approval by the Board of Directors of the Company (the "Board"), provided such
activities and service do not materially interfere or conflict with the
performance of his duties hereunder and (ii) with the approval of the Board,
which shall not be unreasonably withheld, serve on the boards of directors of
other corporations.
3. COMPENSATION AND BENEFITS.
(a) SALARY. During the Employment Period, the Company shall pay to
the Executive, as compensation for the performance of his duties and
obligations under this Agreement, a base salary at the per annum rate set
forth on SCHEDULE A attached hereto, payable in arrears not less frequently
than monthly in accordance with the normal payroll practices of the Company.
Such base salary shall be subject to review each year for possible increase
by the Board, but shall in no event be decreased from its then-existing level
during the Employment Period.
(b) ANNUAL BONUS. During the Employment Period, the Executive shall
have the opportunity to earn an annual bonus in accordance with a Company
annual bonus program to be established by the Board for senior executives of
the company and its subsidiaries. The payment of any annual bonus under any
such program shall be contingent upon the achievement of certain corporate
and/or individual performance goals established by the Board in its
discretion.
(c) OTHER BENEFITS. During the Employment Period, the Executive
shall be entitled to participate in all of the employee benefit plans,
programs and arrangements in effect during the Employment Period that are
generally available to senior executives of the Company, subject to and on a
basis consistent with the terms, conditions and overall administration of
such plans, programs and arrangements. In addition, during the Employment
Period, the Executive shall be entitled to fringe benefits and perquisites
comparable to those of other senior executives of the Company.
(d) BUSINESS EXPENSES. During the Employment Period, the Company
shall reimburse the Executive for all documented reasonable business expenses
incurred by the Executive in the performance of his duties under this
Agreement, in accordance with the Company's and Condor's policies.
(e) INDEMNIFICATION. During the Employment Period and thereafter,
the Company shall indemnify the Executive to the fullest extent permitted by
applicable law, with respect to all costs, charges and expenses, including
attorneys' fees, whatsoever incurred or sustained by the Executive in
connection with any action, suit or proceeding (other than any action, suit
or proceeding brought by or in the name of the Company against the Executive)
to which he may be made party by reason of being or having been a director,
officer or employee of the Company or his serving or having served any other
enterprise as a director, officer or employee at the request of the Company,
and the Executive shall be entitled to the protection of any insurance
policies the Company may elect to maintain generally for the benefit of the
directors and officers of the Company.
4. TERMINATION OF EMPLOYMENT.
(a) TERMINATION FOR CAUSE. The Company may terminate the Executive's
employment hereunder with or without cause, subject to the obligations of the
Company under Section 5 hereof in the event of the termination of the
Executive without cause. For purposes of this Agreement, the Company shall
have "cause" to terminate the Executive's employment hereunder if such
termination shall be the result of:
2
(i) willful fraud or dishonesty in connection with the
Executive's performance hereunder that results in material harm to the Company;
(ii) the Executive's continued failure to substantially perform
his duties with the Company (other than such failure resulting from his
incapacity due to physical or mental illness) after written demand for
substantial performance is delivered to the Executive by the Company
specifically identifying the manner in which the Company believes the
Executive has not substantially performed his duties; or
(iii) the conviction for, or plea of nolo contendere to, a charge
of commission of a felony.
(b) TERMINATION UPON DEATH OR PERMANENT AND TOTAL DISABILITY. The
Employment Period shall be terminated by the death of the Executive. The
Employment Period may be terminated by the Company if the Executive shall be
rendered incapable of performing his duties to the Company by reason of a
"disability," defined as either (i) any medically determined physical or
mental impairment that can be expected to result in death or that can be
expected to last for a period of six or more consecutive months from the
first date of the Executive's absence, or (ii) due to a total and permanent
"disability" that can be expected to last for a period of six or more
consecutive months from the first date of the Executive's absence, as such
term is defined in the Company's or Condor's long term disability insurance
policy or contract as may be in effect from time to time for the benefit of
employees of the Company (either, a "Disability"). If the Employment Period
is terminated by reason of the Disability of the Executive, the Company shall
give 30 days' advance written notice to that effect to the Executive. If the
existence of a Disability hereunder is in dispute, it shall be resolved by
two physicians, one appointed by the Executive and one appointed by the
Company. If the two physicians so selected cannot agree as to whether or not
the Executive has a Disability, the two physicians so selected shall
designate a third physician and a majority of the three physicians so
selected shall determine whether or not the Executive has a Disability.
(c) TERMINATION FOR FAILURE TO ACHIEVE OBJECTIVES. If the Term of
Executive's employment is more than one (1) year, then the Employment Period may
be terminated upon thirty (30) days' written notice, AND such termination shall
be effective as of a date during the thirty (30) day period following the first
anniversary of the date hereof, if the Executive fails to make reasonable
progress towards satisfying the objectives, if any, set forth on SCHEDULE A
attached hereto.
5. CONSEQUENCES OF TERMINATION.
(a) TERMINATION WITHOUT CAUSE. In the event of termination of the
Executive's employment hereunder by the Company without "cause" (other than
upon death or Disability) (defined in Section 4 hereof), the Executive shall
be entitled to the following severance pay and benefits:
(i) Severance Pay - severance payments in the form of
continuation of the Executive's base salary as in effect immediately prior to
such termination over the longer of: (A) the then-remaining Term hereof; or (B)
six months (the "Severance Period"); and
(ii) Benefits Continuation - continuation for the Severance
Period of coverage under the group medical care, disability and life insurance
benefit plans or arrangements in which the Executive is participating at the
time of termination; provided, however, that the Company's obligation to provide
or
3
cause to be provided such coverages shall be terminated if the Executive
obtains comparable substitute coverage from another employer at any time during
the Severance Period. The Executive shall be entitled, at the expiration of the
Severance Period, to elect continued medical coverage in accordance with section
4980B of the Internal Revenue Code of 1986, as amended (or any successor
provision thereto); and
(b) OTHER TERMINATIONS. In the event of termination of the Executive's
employment hereunder for any reason other than those specified in Section
5(a) hereof, including but not limited to Executive's voluntary termination
or termination for failure to achieve objectives, the Executive shall not be
entitled to any severance pay, benefits continuation or stock option rights
contemplated by the foregoing, except as may otherwise be provided under the
applicable benefit plans or award agreements relating to the Executive.
(c) ACCRUED RIGHTS. Notwithstanding the foregoing provisions of this
Section 5, in the event of termination of the Executive's employment
hereunder for any reason, the Executive shall be entitled to payment of any
unpaid portion of his base salary through the effective date of termination,
and payment of any accrued but unpaid rights solely in accordance with the
terms of any incentive bonus, stock option or employee benefit plan or
program of the Company.
6. CONFIDENTIALITY.
The Executive agrees that he will not at any time during the Term hereof
or at any time thereafter for any reason, in any fashion, form or manner,
either directly or indirectly, divulge, disclose or communicate to any
person, firm, corporation or other business entity, in any manner whatsoever,
any confidential information or trade secrets concerning the business of
Condor, the Company or any other subsidiaries of Condor, including, without
limiting the generality of the foregoing, the techniques, methods or systems
of operation or management, or any information regarding financial matters,
plans or other material data. The provisions of this Section 6 shall not
apply to (i) information that is public knowledge other than as a result of
disclosure by Executive in breach of this Section 6; (ii) information
disseminated by the Company, Condor or any of Condor's other subsidiaries to
third parties in the ordinary course of business; (iii) information lawfully
received by the Executive from a third party who, based upon inquiry by the
Executive, is not bound by a confidential relationship to Condor, the Company
or any of Condor's other subsidiaries; or (iv) information disclosed under a
requirement of law or as directed by applicable legal authority having
jurisdiction over the Executive.
7. INVENTIONS.
The Executive is hereby retained in a capacity such that the Executive's
responsibilities include the making of technical and managerial contributions
of value to Condor and the Company. The Executive hereby assigns to the
Company all right, title and interest in such contributions and inventions
made or conceived by the Executive alone or jointly with others during the
Employment Period that relate to the business of the Company, Condor or any
of Condor's other subsidiaries. This assignment shall include (a) the right
to file and prosecute patent applications on such inventions in any and all
countries, (b) the patent applications filed and patents issuing thereon, and
(c) the right to obtain copyright, trademark or trade name protection for any
such work product. The Executive shall promptly and fully disclose all such
contributions and inventions to the Company and assist the Company in
obtaining and protecting the rights
4
therein (including patents thereon) in any and all countries; provided,
however, that said contributions and inventions will be the property of the
Company, whether or not patented or registered for copyright, trademark or
trade name protection, as the case may be. The Executive hereby agrees to
execute any documentation requested by the Company to be so executed if such
request is made in order to carry out the purpose and terms of this
paragraph. Inventions conceived by the Executive that are not related to the
business of the Company or any of its subsidiaries will remain the property
of the Executive.
8. NON-COMPETITION.
The Executive agrees that he shall not, from the date hereof until the
later to occur of (a) two (2) years after the date hereof, or (b) one (1)
year after the expiration of the Executive's employment hereunder for any
reason (the "Restricted Term"), directly or indirectly, alone or as
principal, partner, joint venturer, officer, director, employee, consultant,
agent, independent contractor or stockholder (other than as provided below)
of any company or business, engage in any "Competitive Business" within the
United States. For purposes of the foregoing, the term "Competitive Business"
shall mean any business involved in providing information technology
solutions, including, but not limited to, desktop services, software
development, systems design and integration, large scale survey research,
recruiting and comprehensive marketing and sales, which is in direct
competition with (x) the Company, or (y) a "Restricted Entity" (defined
below) in any community in which such Restricted Entity is doing business.
For the purposes hereof, "Restricted Entity" shall mean Condor and/or any of
Condor's subsidiaries, to the extent that the Executive has had significant
contacts or involvement with, or obtained knowledge of or had access to
proprietary or confidential information or trade secrets of, such entity.
Notwithstanding the foregoing, the Executive shall not be prohibited during
the Restricted Term from acting as a passive investor where he owns not more
than five percent (5%) of the issued and outstanding capital stock of any
publicly-held company. During the Restricted Term, the Executive shall not
solicit or encourage any employee of the Company or any current or future
subsidiary or affiliate thereof to terminate his or her employment.
9. NON-SOLICITATION OF EMPLOYEES.
The Executive agrees that he shall not during Restricted Term,
directly or indirectly, alone or as principal, partner, joint venturer,
officer, director, employee, consultant, agent, independent contractor or
stockholder, or in any other capacity whatsoever, employ, retain, or enter
into any employment, agency, consulting or other similar arrangement with,
any person who, within the twelve-month period prior to the termination of
the Executive's employment by the Company, was an employee of the Company or
of any of Condor's other subsidiaries, or, induce or attempt to induce such
person to terminate his employment with the Company or such subsidiary.
10. NON-SOLICITATION OF CLIENTS OR CUSTOMERS.
The Executive agrees that he shall not during the Restricted Term,
directly or indirectly, alone or as principal, partner, joint venturer,
officer, director, employee, consultant, agent, independent contractor or
stockholder, or in any other capacity whatsoever, directly or indirectly, for
his or her own account, or for the account of others, solicit orders for
services of a kind or nature like or similar to services performed by the
Company or any of Condor's other subsidiaries as of the date of the
termination of the Executive's employment by the Company, from any party that
was a customer or client of the Company or such
5
subsidiary, or which the Company or any of Condor's other subsidiaries was
soliciting to be a customer or client, during the twelve (12) month period
preceding the termination of the Executive's employment.
11. BREACH OF RESTRICTIVE COVENANTS.
The parties agree that a breach or violation of Section 6, 7, 8, 9 or 10
hereof may result in immediate and irreparable injury and harm to the
innocent party, which party shall have, in addition to any and all remedies
of law and other consequences under this Agreement, the right to an
injunction, specific performance or other equitable relief to prevent the
violation of the obligation hereunder.
12. NOTICES.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
(a) If to the Company, to:
LINC SYSTEMS CORPORATION
000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
with a copy to:
CONDOR TECHNOLOGY SOLUTIONS, INC.
Xxxxxxxxx Xxxxxx Xxxxx
000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
(b) If to the Executive, to the address set forth on SCHEDULE A attached
hereto;
or to such other address as a party hereto shall designate to the other party
by like notice, provided that notice of a change of address shall be
effective only upon receipt thereof.
13. ARBITRATION: LEGAL FEES.
Except as provided in Section 11 hereof, any dispute or controversy
arising under or in connection with this Agreement shall be settled
exclusively by arbitration in Hartford, Connecticut in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction. The
Company shall reimburse the Executive for all reasonable legal fees and costs
and other fees and expenses that the Executive may incur in respect of any
dispute or controversy arising against the Company under or in connection
with this Agreement; provided, however, that the Company shall not reimburse
any such fees, costs and expenses if the fact
6
finder determines that an action brought by the Executive was substantially
without merit or the Executive is otherwise unsuccessful in such an action.
14. WAIVER OF BREACH.
Any waiver of any breach of the Agreement shall not be construed to be a
continuing waiver or consent to any subsequent breach on the part of either
the Executive or of the Company.
15. NON-ASSIGNMENT: SUCCESSORS.
Neither part hereto may assign his or its rights or delegate his or its
duties under this Agreement without prior written consent of the other party;
provided, however, that (i) this Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the Company upon any sale of
all or substantially all of the Company's assets, or upon any merger,
consolidation or reorganization of the Company with or into any other
corporation, all as though such successors and assigns of the Company and
their respective successors and assigns were the Company; and (ii) this
Agreement shall inure to the benefit of and be binding upon the heirs,
assigns or designees of the Executive to the extent of any payments due to
the Executive hereunder. As used in this Agreement, the term "Company" shall
be deemed to refer to any such successor or assign of the Company referred to
in the preceding sentence.
16. WITHHOLDING OF TAXES.
All payments required to be made by the Company to the Executive under
this Agreement shall be subject to the withholding of such amounts, if any,
relating to tax, and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
17. SEVERABILITY.
To the extent any provision of this Agreement or portion thereof shall
be invalid or unenforceable, it shall be considered deleted therefrom and the
remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.
18. COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
19. GOVERNING LAW.
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of Maryland.
20. ENTIRE AGREEMENT.
7
This Agreement constitutes the entire agreement by the Company and the
Executive with respect to the subject matter hereof and supersedes any and
all prior agreements or understandings between the Executive and the Company
with respect to the subject matter hereof, whether written or oral. This
Agreement may be amended or modified only by a written instrument executed by
the Executive and the Company.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
8
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
LINC SYSTEMS CORPORATION
By: /s/ Xxxxxxx X. Kehse, Vice President
-------------------------------------
Xxxxxxx X. Kehse, Vice President
THE EXECUTIVE
/s/ Xxxxxx Xxxxxx
------------------------------------
Xxxxxx Xxxxxx
1144384.V3
9
SCHEDULE A
TO
EMPLOYMENT AGREEMENT
BETWEEN
LINC SYSTEMS CORPORATION
AND
XXXXXX XXXXXX
A. TERM: Two (2) years
B. EARLY TERMINATION PROVISIONS (IN ADDITION TO SECTION 4): None.
C. THE EXECUTIVE SHALL SERVE IN THE FOLLOWING OFFICE(S) AND/OR POSITION(S)
OF THE COMPANY: President and Chief Executive Officer.
D. BASE SALARY: $200,000. In addition, Condor has granted to the Executive
options to purchase 30,000 shares of Condor's common stock, as set
forth in an Option Grant Certificate of even date herewith.
E. OBJECTIVES: In addition to serving as an officer of the Company, the
Executive shall also lead the Systems Services Division of Condor.
F. RESIDENCE ADDRESS OF EXECUTIVE FOR NOTICES:
00 Xxxx Xxxxx Xxxx
Xxxx Xxxxxxxx, XX 00000
10
