EXHIBIT 10.4
GLOBALOPTIONS, INC.
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Employment Agreement (the "Agreement"), made this 24th day of January, 2002
is entered into by and between GlobalOptions, Inc., a Delaware corporation, with
its principal place of business at 0000 X Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000
(the "Company"), and Xxxx X. Xxxxxxxxxxx (the "Employee").
The Company desires to employ the Employee, and the Employee desires to be
employed by the Company. In consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby agrees to employ the
Employee, and the Employee hereby accepts employment with the Company, upon the
terms set forth in this Agreement, for the period commencing on the date hereof
and ending upon January 24, 2007, unless otherwise terminated pursuant to the
terms hereof The term shall automatically extend for an additional one year
period on the first day of the final year of the term, or any extension thereof,
as the case may be, on the same terms and conditions as set forth herein, unless
either the Company or the Employee gives written notice to the other within 60
days before the first day of the final year that the term shall not
automatically be extended; provided, however, that the Company and Employee may
amend this Employment Agreement during such 60 day period to provide for such
additional or modified terms and conditions as they shall mutually agree in
writing.
2. CAPACITY. The Employee shall serve as Chairman of the Board of
Directors. The Employee shall be based at the Company's office in the
Washington, D.C. metropolitan area or at such other area as the Company shall
reasonably deem necessary. The Employee hereby accepts such employment and
agrees to undertake the duties and responsibilities inherent in such position
and such other duties and responsibilities as the Board of Directors shall from
time to time reasonably assign to him. The Employee agrees to devote his entire
business time, attention and energies to the business and interests of the
Company during the Employment Period, provided however, the Employee shall be
free to engage in, outside the Company, the activities described in Exhibit A.
The Employee agrees to abide by the rules, regulations, instructions, personnel
practices and policies of the Company and any changes therein which may be
adopted from time to time by the Company.
3. COMPENSATION AND BENEFITS.
3.1 Effective on the date of employment, the Company shall pay
the Employee, a base salary of $260,000, per annum ("Base Salary"). The Employee
shall be eligible for a bonus based upon mutually agreed to goals, established
by the Compensation Committee formed by the Board of Directors. All bonuses are
pro-rated from the date of employment to December 31. All bonuses set out in
this Section shall be payable in accordance with Company policy, which is based
upon annual review, unless mutually agreed to by the Employee and Company.
Increase in the Base Salary will be based on the Company's performance as well
as Employee's contribution to that performance, and shall be determined the
Compensation Committee.
3.2 In addition to the bonus set forth in Section 3.1, above, the
Employee shall be entitled to participate in all bonus programs that the Company
may establish for executives, and other benefit programs that the Company
establishes Employee shall be entitled to four weeks of annual paid vacation and
two weeks of annual sick leave. If vacation or sick leave is not used in any
given year, it shall not carryover to the next year, and Employee shall receive
no compensation therefor. The Company shall provide a Disability Plan, travel
accident insurance, and shall procure and pay premiums on a Key Man Insurance
policy on the life of the Employee in the face amount of at least $500,000
having the Employee or the Employee's designee as beneficiary. The Employee will
be eligible to participate in the Company's Incentive Stock Option Plan. The
employee shall be provided medical and dental insurance, and be reimbursed for
an annual physical, by a physician of his choice, of an amount up to $1,500 per
examination.
3.3 The Company shall reimburse Employee for all reasonable
business and professional expenses incurred by the Employee in connection with
his employment within thirty (30) days of the Company's receipt of appropriate
documentation that conforms to the requirements of the Company's expense
reimbursement procedures.
4. EMPLOYMENT TERMINATION. The employment of the Employee by the
Company pursuant to this Agreement shall terminate upon the occurrence of any of
the following:
4.1 At the election of the Company, for cause, immediately upon
written notice by the Company to the Employee. For the purposes of this Section
4.1, "cause" for termination shall be deemed to exist upon: (a) failure to cure
a material breach by the Employee of the terms of this Agreement within thirty
(30) days of receipt of written notice of such breach from the Company; (b)
illegal use or possession by Employee of drugs or controlled substances; (c)
malfeasance, reckless conduct, gross negligence or willful misconduct relating
to the Employee's duties; or (d) the commission by the Employee of, any crime
involving moral turpitude, any felony, or any act of dishonesty or fraud against
the Company;
4.2 Upon the death or thirty (30) days after the disability of
the Employee. As used in this Agreement, the term "disability" shall mean the
inability of the Employee, due to a physical or mental disability, for a period
of one hundred and eighty (180) days, regardless of whether consecutive, during
any 360-day period to perform the services contemplated under this Agreement. A
determination of disability shall be made by a physician satisfactory to both
the Employee and the Company, provided that if the Employee and the Company do
not agree on a physician, the Employee and the Company shall each select a
physician and these two together shall select a third physician, whose
determination as to disability shall be binding on all parties;
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4.3 At the election of the Employee, upon not less than thirty
(30) days prior written notice of termination; or
4.4 At the election of the Company, otherwise than (i) for cause,
or (ii) pursuant to delivery by the Company of a notice not to renew this
Agreement for any additional term pursuant to Section 1, upon not less than
thirty (30) days prior written notice.
5. EFFECT OF TERMINATION.
5.1 TERMINATION FOR CAUSE OR AT ELECTION OF EMPLOYEE. In the
event the Employee's employment is terminated' for cause pursuant to Section
4.1, or at the election of the Employee pursuant to Section 4.3, the Company
shall pay to the Employee the compensation and benefits otherwise payable to him
under Section 3 through the last day of his actual employment by the Company.
5.2 TERMINATION FOR DEATH. If the Employee's employment is
terminated by death pursuant to Section 4.2, the Company shall pay to the estate
of the Employee the compensation, benefits and expense reimbursements that would
otherwise be payable to the Employee up to and including the date of the
Employee's death. The Key Man Policy proceeds shall be payable as the Employee
instructed pursuant to such policy.
5.3 TERMINATION FOR DISABILITY. If the Employee's employment is
terminated by the Employee's disability pursuant to Section 4.2, the Company
shall pay to the Employee the compensation, benefits and expenses reimbursements
that would otherwise be payable to the Employee up to and including the date of
such termination. Any Disability Insurance shall be payable as the Employee
instructed pursuant to such policy.
5.4 TERMINATION BY THE COMPANY WITHOUT CAUSE. If the Employee's
Employment is terminated at the election of the Company pursuant to Section 4.4,
the Company shall pay to the Employee as severance pay, in accordance with the
Company's payroll practices, his Salary (defined later in this Subsection) and
medical and dental medical insurance, long term disability and Key Man Policy at
the Company's expense for a period equal to the shorter of (i) twelve (12)
months, or (ii) the remainder of the employment term under this Agreement.
Employee will not be required to mitigate the amount of any payment provided in
this Section 5.4 by seeking other employment or otherwise. If the Employee is
subsequently employed by another employer, the Employee shall continue to be
entitled to the Salary payable to Employee pursuant to this Section 5.4 but
shall no longer be entitled to receive from the Company any other benefits
provided for pursuant to this Section 5.4. The term Salary used in this Section
5.4 shall be as follows: (i) the then base salary of the Employee, plus (ii) the
amount equal to the previous year's bonus awarded to the Employee.
5.5 SURVIVAL. The provisions of Sections 6 and 7 shall survive
the termination of this Agreement, provided the Company is not in breach of this
agreement.
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6. NON-COMPETE.
6.1 So long as the Company is not in material breach of this
Agreement, during the Employment Period and the twelve (12) month period
beginning on the day of termination, the Employee will not directly or
indirectly, privately or as an employee, individual proprietor, partner,
stockholder, officer, employee, director, joint venturer, investor, lender, or
in any other capacity whatsoever (other than as the holder of not more than one
percent (1%) of the total outstanding stock of a publicly held company):
(a) recruit, hire, solicit or induce, or attempt to induce,
or assist others in hiring, soliciting or inducing, any employee or employees of
the Company or its affiliates to terminate their employment with, or otherwise
cease their relationship with, the Company or its affiliates;
(b) solicit, divert or take away, or attempt to divert or to
take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts, of the Company or its
affiliates which were contacted, solicited or served by the Employee while
employed by the Company. The terms "client" and "customer" as used herein shall
mean such firms or agencies to which the Company or any affiliate of the Company
has provided services or sold products within twelve (12) months prior to the
date of termination of the Employee's employment; or
(c) engage in the rendering of any of the services that are
provided by the Company as of the time of the Employee's termination or that are
contemplated by any business plan approved by the Board of Directors at the time
of the Employee's termination
6.2 The parties agree that the relevant public policy aspects of
covenants not to compete have been discussed, and that every effort has been
made to limit the restrictions placed upon the Employee to those that are
reasonable and necessary to protect the Company's legitimate interests.
6.3 If any restriction set forth in this Section 6 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable; provided, however, that if the period of time over which the
restrictions set forth in this Section 6 apply is reduced, the period of time
for which the Company is required to make severance payments pursuant to Section
5.4 shall be similarly reduced.
6.4 The restrictions contained in this Section 6 are necessary
for the protection of the business and goodwill of the Company and/or its
affiliates and are considered by the Employee to be reasonable for such
purposes. The Employee agrees that any breach of this Section 6 will cause the
Company and/or its affiliates substantial and irrevocable damage and therefore,
in the event of any such breach, in, addition to such other remedies which may
be available, the Company shall have the right to seek specific performance and
injunctive relief.
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7. PROPRIETARY INFORMATION AND DEVELOPMENTS.
7.1 PROPRIETARY INFORMATION.
(a) Employee agrees never to reveal the business methods or
business secrets (all inclusive) of the Company, its affiliates, or of its
customers to anyone other than the Company and authorized customer personnel.
Such business methods and secrets shall include but are not limited to, computer
programs, data systems, trade secrets, inventions, products, processes, methods,
techniques, formulas, compositions, compounds, discoveries, projects,
developments, plans, research data, clinical data, financial data, pricing
policies, personnel data, customer and supplier lists and all other Company,
affiliate or customer business and technological information. Employee will not
disclose any Proprietary Information to others outside the Company or use the
same for any unauthorized purposes without written approval by an officer of the
Company, either during or after his employment, unless and until such
Proprietary Information has become public knowledge without fault by the
Employee.
(b) Employee agrees that all files, letters, memoranda,
reports, records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, or other tangible material containing
Proprietary Information, whether created by the Employee or others, which shall
come into his custody or possession, shall be and are the exclusive property of
the Company to be used by the Employee only in the performance of his duties for
the Company.
(c) Employee agrees that his obligation not to disclose or
use information, know-how and records of the types set forth in paragraphs (a)
and (b) above, also extends to such types of information, know-how, records and
tangible property of affiliates of the Company, customers of the Company or
suppliers to the Company or other third parties who may have disclosed or
entrusted the same to the Company or to the Employee in the course of the
Company's business.
(d) Employee has read, understood and agreed to the
Intellectual Property Agreement attached hereto as Exhibit B relating the
Company's ownership of Intellectual Property and proprietary information and the
non-disclosure obligations of Employee.
7.2 OTHER AGREEMENTS. The Employee hereby represents that he is
not bound by the terms of any agreement with any previous employer or other
party to refrain from using or disclosing any trade secret or confidential or
proprietary information in the course of his employment with the Company or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other party. Employee further represents that his
performance of all the terms of this Agreement and as an employee of the Company
does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by him in confidence or in trust prior
to his employment with the Company. The Company and the Employee acknowledge
that this Agreement shall replace the previous employment agreement entered into
by GlobalOptions, LLC and the Employee, and all terms and conditions of that
agreement are null and void.
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8. NOTICES. All notices required or permitted under this Agreement
shall be in writing and shall be deemed effective upon delivery personally, by
facsimile or by overnight mail, or upon deposit in the United States Post
Office, by registered or certified mail, postage prepaid, addressed to the other
party at the address shown above, or at such other address or addresses as
either party shall designate to the other in accordance with this Section 8.
9. PRONOUNS. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter
pronouns, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, whether written or oral, relating to the subject matter of this
Agreement.
11. AMENDMENT. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Employee.
12. GOVERNING LAW. This Agreement shall be governed and construed by
the laws of the District of Columbia. No claims may be brought concerning the
validity or interpretation of this Agreement other than in the courts of the
District of Columbia.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of both parties and their respective successors and
assigns, including any corporation with which or into which the Company may be
merged or which may succeed to its assets or business, provided, however, that
the obligations of the Employee are personal and shall not be assigned by him.
14. MISCELLANEOUS.
14.1 No delay or omission by the Company in exercising any right
under this Agreement shall operate as a waiver of that or any other right. A
waiver or consent given by the Company on any one occasion shall be effective
only in that instance and shall not be construed as a bar or waiver of any right
on any other occasion.
14.2 The captions of the sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
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14.3 In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
14.4 Employee understands and agrees that the business ethics of
the Company and personal standards and ethics of its employees, must at all
times be above reproach, and the Employee agrees to conduct himself in a manner
to reflect credit upon the Company. Employee understands that employment with
the Company is contingent upon satisfactory verification of all statements made
by Employee in the employment application process and completion of a
satisfactory background check. Employee understands that any illegal use or
possession of drugs or controlled substances could result in immediate
termination of the employment relationship. Employee further understands and
agrees that he shall not, while employed by the Company, engage in any other
employment or business venture without the written consent of the Company,
except as provided in Section 2 of this Agreement. Employee agrees to inform and
discuss with the Company any other employment or business venture that may
constitute a conflict of interest with the Company.
15. This Agreement shall not be considered valid unless signed by the Employee
and an official authorized by the Company to sign such Agreement.
/s/ Xxxx Xxxxxxxxxxx January 24, 2002
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Employee: Date
/s/ Xxxxxx Xxxxxx January 24, 2002
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GlobalOptions, Inc. Date
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