1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into on the 16th day of May, 1995, by and
between XXXX XXXXXXXXX XXXXXX, XX., whose address is 000 Xxxx Xxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxx 00000 (herein called the "Employee") and XXXXXX
COMPUTER GROUP, INC., a Delaware corporation ("CCG"), whose address is 0000
Xxxxxxxxxx 00 Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, CCG is engaged in the business of computer software
development, license, sale and service (including, without limitation,
computer software which addresses the health care and workers' compensation
markets), the remarketing of hardware, equipment and software (including
the hardware and software of IBM), computer consulting services,
educational services, computer connectivity and communications products and
services;
WHEREAS, CCG desires to obtain the services of the Employee as
President of CCG and the Employee is willing to render such services to CCG
upon the terms and conditions herein set forth; and
WHEREAS, this Employment Agreement was a condition precedent to the
acquisition by CCG of all of the business of Xxxxxx Computer Consultants,
Inc. ("CCC"), Conway Computer Applications, Inc. ("CCA") and Xxxxxx
Computer Investments, Inc. ("CCI") and the Employee, as a shareholder of
CCC, CCA and CCI, derived a substantial benefit from the consideration paid
by CCG in connection with such acquisitions;
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. DUTIES AND SALARY.
(a) CCG agrees to employ the Employee and the Employee agrees to
accept employment by CCG on a full-time basis as President of CCG at a base
salary of $12,500.00 per month payable during the Term of Employment, as
hereinafter defined. Such salary may be increased from time to time in the
discretion of the CCG Board of Directors.
(b) The Employee hereby agrees to undertake such travel as may be
required in the performance of his duties. The reasonable travel expenses
of the Employee shall be reimbursed in accordance with CCG's reimbursement
policy, in effect from time to time. The Employee shall not be required to
relocate from the Jackson, Mississippi area without his consent.
(c) The Employee shall carry out his duties under the general
supervision of CCG.
(d) The Employee's duties shall include the duties and
responsibilities identified on Schedule I attached hereto. The Employee
shall perform such other tasks and duties as may be assigned by CCG, from
time to time and CCG reserves the right to change the office and/or
position of the Employee within CCG, so long as such change is mutually
acceptable. The Employee shall devote his full time, attention, skill and
efforts to the tasks and duties assigned by CCG. The Employee shall not
provide services, for compensation, to any other person or business entity
while employed by CCG without the written consent of CCG.
2
2. TERM OF EMPLOYMENT. This Agreement shall commence as of the date
hereof and shall end two (2) years from the date hereof (the "Term of
Employment"), unless terminated earlier as provided herein. Upon
expiration of the initial Term of Employment, unless earlier terminated as
provided herein, the Employee shall be employed as a temporary, on-call
employee. The terms and provisions of such employment as a temporary, on-
call employee are defined in Section 16 below.
3. TERMINATION BEFORE EXPIRATION OF TERM OF EMPLOYMENT. The termination
of the employment of the Employee during the initial Term of Employment
shall occur in one of the following ways:
(a) BY CCG, FOR CAUSE. Termination by CCG shall be deemed to be for
cause only upon:
(i) Employee's conviction of or pleading guilty to a felony;
(ii) Refusal or failure by the Employee, without reasonable
excuse or proper authorization, to carry out any reasonable
instructions of CCG consistent with Employee's rights or
duties as set forth in this Agreement;
(iii) Material breach of this Agreement or any material breach of
any agreement with CCG;
(iv) The Employee's demonstration of negligence or willful
misconduct in the execution of his duties, including without
limitation breach of fiduciary duty or the duty of loyalty
owed CCG.
If CCG intends to terminate for cause, CCG shall provide notice to
Employee of intent to terminate his employment, stating the termination
provision in this Agreement relied upon and setting forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination under the provisions so indicated, and shall provide Employee
with an opportunity to cure the alleged default or breach within thirty
(30) days of receipt of the notice, provided that if the matter is not
curable within such thirty (30) day period, the Employee shall not be
deemed in default if the Employee commences immediately to cure the matter
and proceeds diligently thereafter to complete the cure, further provided
that the alleged breach or default must be cured within ninety (90) days of
receipt of the notice. CCG shall not be required to give more than one
notice with respect to the same matter. Notwithstanding the foregoing, no
notice and no cure right shall be required with respect to termination for
cause under 3(a)(i) or an act involving theft of information or property of
CCG.
(b) BY CCG, WITHOUT CAUSE. Any termination of Employee by CCG for
reasons other than as set forth in subsections 3(a), (e) or (f) shall be a
termination without cause. CCG may terminate the employment of Employee
without cause by thirty (30) days' prior written notice at any time.
(c) BY EMPLOYEE, FOR GOOD REASON. Termination by the Employee shall
be deemed for good reason because of a material breach by CCG of this
Agreement including, without limitation, making a material change in the
Employee's duties, responsibilities or authority as set forth in this
Agreement, without his express written consent. In all cases in which
Employee intends to terminate for Good Reason, the Employee shall provide
CCG with notice of intent to terminate this Agreement, stating the facts
and circumstances giving rise to a breach of this Agreement claimed to
provide a basis for termination under the provisions so indicated, and
shall provide CCG with an opportunity to cure the alleged default or breach
within thirty (30) days of receipt of the notice, provided that if the
matter is not curable within such thirty (30) day period, CCG shall not be
deemed in default if it commences immediately to cure the matter and
proceeds diligently thereafter to complete the cure, further provided that
the alleged breach or default must be cured within ninety (90) days of
receipt of the notice. Employee shall not be required to give more than
one such notice with respect to the same matter.
(d) BY THE EMPLOYEE, WITHOUT GOOD REASON. Any termination by
Employee for reasons other than as set forth in subsections 3(c), (e) or
(f) shall be a termination without good reason. The Employee may terminate
his employment without good reason upon thirty (30) days' prior written
notice at any time.
(e) DEATH OF THE EMPLOYEE.
(f) DISABILITY OF EMPLOYEE. If, during the Term of Employment, a
physician selected by CCG determines that the Employee has become
physically or mentally disabled so as to be unable to carry out the normal
and usual duties of his employment for three (3) continuous months, and
reasonable accommodation cannot be made to allow the Employee to continue
to perform his duties full-time, his employment hereunder may be terminated
at the election of CCG or the Employee.
4. CONSEQUENCES OF TERMINATION. The termination of the employment of
Employee will cause the following results:
(a) If the termination is by CCG for cause, or is by the Employee
under Section 3(d) above, the following payments shall be made:
(i) CCG will pay the Employee within five (5) days after the
date of termination any unpaid salary prorated to the date
of termination, the amount of any accrued annual vacation
pay to which he may be entitled under CCG's vacation plan
and benefits, with such compensation and benefits (if any)
paid only through the date termination occurs.
(ii) the Employee shall pay to CCG as liquidated damages and not
as a penalty an amount equal to $3,125.00 multiplied by the
number of full months remaining after the date of
termination until expiration of the initial Term of
Employment assuming the Term of Employment is not terminated
early. For example, if employment is terminated 11 months
after the date hereof, the liquidated damages would be
$40,625.00 ($3,125.00 X 13 months). The liquidated damages
shall be paid in equal, consecutive monthly installments
without interest commencing 30 days after termination,
provided that, if any monthly installment is not paid within
10 days after notice of default, the entire amount of
liquidated damages shall be paid in lump sum immediately.
The liquidated damages may be prepaid.
(b) If the termination is by CCG under Section 3(b) above, or is by
the Employee for good reason, CCG shall pay to the Employee, in addition to
the amounts set forth in 4(a)(i) above, as liquidated damages and not as a
penalty, an amount equal to $3,125.00 multiplied by the number of full
months remaining after the date of termination until expiration of the
initial Term of Employment assuming the Term of Employment is not
terminated early. For example, if employment is terminated 11 months
after the date hereof, the liquidated damages would be $40,625.00
($3,125.00 X 13 months). The liquidated damages shall be paid in equal,
consecutive monthly installments without interest commencing 30 days after
termination, provided that, if any monthly installment is not paid within
10 days after notice of default, the entire amount of liquidated damages
shall be paid in lump sum immediately. The liquidated damages may be
prepaid.
(c) If both parties have grounds for termination under Sections 3(a)
and 3(c), such termination shall be deemed to be by mutual consent and
neither party shall owe the other party the liquidated damages set forth
above in Sections 4(a)(ii) or 4(b).
(d) In the event of the Employee's death or disability, the following
provisions will apply:
(i) Upon his death, the Employee's estate will be entitled to
receive the amount set forth in Section 4(a)(i) and the
benefits set forth in any plans of CCG then in effect and
applicable under the circumstances. The Employee or his
estate shall be entitled to no other compensation or
benefits in the event of death.
(ii) Upon termination on account of disability, Employee will be
entitled to receive the amount set forth in Section 4(a)(i)
and the benefits set forth in any plans of CCG then in
effect and applicable under the circumstances. The Employee
or his personal representative shall be entitled to no other
compensation or benefits in the event of disability.
(e) The Employee shall not be required to mitigate the amount of
payment provided for in this Section 4 by seeking employment.
(f) The amounts set forth above in this Section 4 shall be paid and
received in complete discharge of any other obligation of CCG to Employee
or Employee to CCG resulting from termination of his employment.
5. FRINGE BENEFITS.
The Employee shall participate in any group health insurance, vacation
and sick leave plans, and other benefit plans available to all employees of
CCG in accordance with their terms and conditions which may be amended or
terminated by CCG at any time.
6. NON-DISCLOSURE COVENANTS AND PROPRIETARY MATTERS.
(a) Unless authorized or instructed in writing by CCG, the Employee
shall not, except as required in the conduct of CCG's business, during or
at any time after the Term of Employment, disclose to others, or use, any
of CCG's inventions or discoveries or its respective secret or confidential
information or data (oral, written, or in machine readable form) which the
Employee may obtain during the course of or in connection with the
Employee's employment (or employment or affiliation with any company that
transfers to CCG such information or data), including such inventions,
discoveries, information, know-how or data relating to machines, equipment,
products, systems, software, contracts, contract performance, research or
development, designs, computations, formulas, processes, manufacturing
procedures, business methods, customer lists, and suppliers, whether or not
developed by the Employee, by others in CCG or obtained by CCG from third
parties, and irrespective of whether or not such inventions, discoveries,
information, knowledge or data have been identified by CCG as secret or
confidential, unless and until, and then to the extent and only to the
extent that, such inventions, discoveries, information, knowledge or data
become available to the public otherwise than by the Employee's act or
omission.
(b) The Employee shall not, except as required in the conduct of
CCG's business, disclose to others, or use, any of the information (which,
if disclosed or used, could be harmful to CCG) relating to present and
prospective customers of CCG, business dealings with such customers,
prospective sales and advertising programs and agreements with
representatives or prospective representatives of CCG, present or
prospective sources of supply or any other business arrangements of CCG,
including but not limited to customers, customer lists, costs, prices and
earnings, whether or not such information is developed by the Employee, by
others in CCG or obtained by CCG from third parties, and irrespective of
whether or not such information has been identified by CCG as secret or
confidential, unless and until, and then to the extent and only to the
extent that, such information becomes available to the public otherwise
than by the Employee's act or omission.
(c) The Employee agrees to disclose immediately to CCG or any persons
designated by it and to assign to CCG or its successors or assigns, all
inventions made, discovered, or first reduced to practice by the Employee,
solely or jointly with others, during the Term of Employment or within a
period of six months from the date of termination of such employment
(either during or outside of the Employee's working hours and either on or
off CCG's premises), which inventions are made, discovered or conceived
either in the course of such employment, or with the use of CCG's time,
material, facilities or funds, or which are directly related to any
investigations or obligations undertaken by CCG; and the Employee hereby
grants and agrees to grant the right to CCG and its nominees to obtain, for
its own benefit and in its own name (entirely at its expense) patents and
patent applications including original, continuation, reissue, utility and
design patents, and applications, patents of addition, confirmation
patents, registration patents, xxxxx patents, utility models, and all other
types of patents and the like, and all renewals and extensions of any of
them for those inventions in any and all countries; and the Employee shall
assist CCG, at CCG's expense, without further charge during the term of the
Employee's employment, and after termination of the Employee's employment
at the same base salary rate (excluding any bonuses, incentive or deferred
compensation or other benefits and based upon a forty hour work week) as
during the last year of the Employee's employment (determined on an hourly
basis for this purpose), through counsel designated by CCG, to execute,
acknowledge, and deliver all such further papers, including assignments,
applications for Letters Patent (of the United States or of any foreign
country), oaths, disclaimers or other instruments and to perform such
further acts, including giving testimony or furnishing evidence in the
prosecution or defense of appeals, interferences, suits and controversies
relating to any aforesaid inventions as may reasonably be deemed necessary
by CCG or its nominees to effectuate the vesting or perfecting in CCG or
its nominees of all right, title and interest in and to said inventions,
applications and patents.
(d) The Employee agrees to disclose immediately to CCG or any persons
designated by it and to assign to CCG, at its option, or its successors or
assigns, all works of authorship, including all writings, computer
programs, software, and firmware, written or created by the Employee solely
or jointly with others, during the course of his employment by CCG (either
during or outside of the Employee's working hours and either on or off
CCG's premises), which works are made or conceived either in the course of
such employment, or with the use of CCG's time, material, facilities or
funds, or which are directly related to any investigations or obligations
undertaken by CCG; and the Employee hereby agrees that all such works are
works made for hire, of which CCG is the author and the beneficiary of all
rights and protections afforded by the law of copyright in any and all
countries; and the Employee will assist CCG at CCG's expense without
further charges during the term of his employment, and after termination of
his employment at the same base salary rate (excluding any bonuses,
incentive or deferred compensation or other benefits) as during the last
year of his employment (determined on an hourly basis for this purpose
assuming a forty hour work week), through counsel designated by CCG, to
execute, acknowledge, and deliver all such further papers, including
assignments, applications for copyright registration (in the United States
or in any foreign country), oaths, disclaimers or other instruments, and to
perform such further acts, including giving testimony or furnishing
evidence in the prosecution or defense of appeals, interferences, suits and
controversies relating to any aforesaid works, as may be deemed necessary
by CCG or by its nominees to effectuate the vesting or perfecting in CCG or
its nominees of all rights and interest in and to said works and copies
thereof, including the exclusive rights of copying and distribution.
(e) The Employee shall keep complete, accurate and authentic
accounts, notes, data and records of all inventions made, discovered or
developed and all works of authorship written or created by the Employee as
aforesaid in the manner and form requested by CCG.
(f) All computer or other hardware, computer software, computer
programs, source codes, object codes, magnetic tapes, printouts, samples,
notes, records, reports, documents, customer lists, photographs, catalogues
and other writings, whether copyrightable or not, relating to or dealing
with CCG's business and plans, and those of others entrusted to CCG, which
are prepared or created by the Employee or which may come into his
possession during or as a result of his employment, are the property of
CCG, as applicable, and upon termination of his employment, the Employee
agrees to return all such computer software, computer programs, source
codes, object codes, magnetic tapes, printouts, samples, notes, records,
reports, documents, customer lists, photographs, catalogues and writings
and all copies thereof to CCG.
7. NON-SOLICITATION AND NON-COMPETITION. During the "Restriction Period"
(as hereinafter defined), the Employee shall not directly or indirectly:
(a) Solicit the business of CCG from any customer of CCG or any
entity controlled by CCG or solicit any employees of CCG to leave the
employ of CCG.
(b) Directly or indirectly, hire any employees or former employees of
CCG or any entity controlled by CCG or cause any entity with which the
Employee is affiliated to hire any such employees or former employees of
CCG.
(c) Engage in, represent in any way or be connected with, as a
consultant, officer, director, partner, employee, sales representative,
proprietor, member, stockholder (except for stock ownership of less than 1%
in a publicly owned corporation) or otherwise, any business competing with
the business of CCG as conducted by CCG on the date hereof or during the
period of Employee's employment by CCG within the "Territory" (as
hereinafter defined).
As used herein, the Restriction Period shall mean the period while the
Employee is employed by CCG and two (2) years after the date the Employee
ceases to be employed by CCG. As used herein, the Territory shall mean the
States of Mississippi, Louisiana, Arkansas, Alabama, Tennessee, Florida and
Georgia.
8. NO CONFLICT. Employee represents and warrants that he is not a party
to or otherwise subject to or bound by the terms of any contract, agreement
or understanding which in any manner would limit or otherwise affect his
ability to perform his obligations hereunder, including without limitation
any contract, agreement or understanding containing terms and provisions
similar in any manner to those contained in Sections 6 and 7 hereof.
Employee covenants to indemnify and hold CCG and any of its affiliates
harmless from any cost or damages resulting from any breach of the
provisions of this Agreement.
9. SURVIVAL OF COVENANTS, EFFECT.
(a) The covenants on the part of the Employee contained or referred
to in Sections 6 and 7 above shall survive termination of this Agreement,
and the existence of any claim or cause of action of the Employee against
CCG, whether predicated on this Agreement or otherwise. The Employee
agrees that a remedy at law for any breach of the foregoing covenants
contained or referred to in Sections 6 and 7 would be inadequate, that CCG
would suffer irreparable harm as a result and that CCG shall be entitled to
a temporary and permanent injunction or an order for specific performance
of such covenants without the necessity of proving actual damage to CCG and
without the posting of any bond or other security. Any breach of this
Agreement by CCG shall not release the Employee from his obligations under
Sections 6 and 7 hereof.
(b) The Employee hereby represents and acknowledges that CCG is
relying on the covenants in Sections 6 and 7 in entering into this
Agreement as well as the acquisition of CCC and the assets of CCA and CCI
and that the restrictions in Sections 6 and 7 are fair and reasonable. The
Employee acknowledges that CCG intends to do business throughout the United
States and that the geographic scope of the covenants in Section 7 is
reasonable and necessary to protect the interests of CCG.
(c) It is the intent of the parties that the provisions of Sections 6
and 7 shall be enforced to the fullest extent permissible under the laws
and public policies of each jurisdiction in which enforcement is sought.
If any particular provision of Sections 6 and 7 shall be adjudicated to be
invalid or unenforceable, such provision(s) of Sections 6 and 7 shall be
deemed amended to provide restrictions to the fullest extent permissible
and consistent with applicable law and policies, and such amendment shall
apply only with respect to the particular jurisdiction in which such
adjudication is made. If such deemed amendment is not allowed by the
adjudicating body, the offending provision, only, shall be deleted and the
remainder of Sections 6 and 7 shall not be effected. The restrictions set
forth in Sections 6 and 7 shall be in addition to, independent of, and
shall not be affected by any other restrictions which may be contained in
the Asset Purchase Agreement and Merger Agreement between CCG and the
Employee of even date herewith.
10. ASSIGNMENT.
The rights and obligations of CCG under this Agreement may be assigned
by CCG to any successors in interest of CCG of that part of the business of
CCG to which this Agreement applies or to its respective affiliates. This
Agreement may not be assigned and any duties of the Employee may not be
delegated by the Employee, but any amounts owing to the Employee upon his
death shall inure to the benefit of his estate.
11. NOTICES.
All notices or other communications which may be or are required to be
given, served or sent by either party to the other party pursuant to this
Agreement shall be in writing, addressed to its/his residence or place of
business as set forth above, and shall be mailed by first-class certified
mail, return receipt requested, postage prepaid, next-day air delivery, or
transmitted by facsimiles or hand delivery. Such notice or other
communication shall be deemed sufficiently given, served, sent or received
for all purposes at such time as it is delivered to the addressee or at
such time as delivery is refused by the addressee upon presentation. Each
party may designate by notice in writing an address to which any notice or
communication may thereafter be so given, served or sent.
12. APPLICABLE LAW JURISDICTION.
This Agreement has been negotiated and executed in the State of
Mississippi, and it shall be governed by, construed and enforced in
accordance with the internal substantive laws and not the choice of law
rules of the State of Mississippi.
13. EFFECTIVENESS/INTERPRETATION.
The parties acknowledge and agree that this Agreement has been
negotiated at arm's length between parties equally sophisticated and
knowledgeable in the matters dealt with herein. Each party has been
represented by counsel of its or his own choosing. Accordingly, any rule
of law or legal decision that would require interpretation of any
ambiguities in the Agreement against the party that drafted it is not
applicable and is waived.
14. SEVERABILITY.
If any of the articles, sections, paragraphs, clauses or provisions of
this Agreement shall be held by a court of last resort to be invalid, the
remainder of this Agreement shall not be affected thereby.
15. ENTIRE AGREEMENT.
The foregoing contains the entire agreement between the parties
relating to the subject matter of this Agreement, and may not be altered or
amended except by an instrument in writing approved by CCG and signed by
the parties hereto, and this Agreement supersedes all prior understandings
and agreements relating to employment of the Employee by CCG. The waiver
of any rights under this Agreement on any one or more occasions shall not
constitute a waiver on any subsequent occasion.
16. TEMPORARY, ON-CALL EMPLOYMENT. After the initial two-year Term of
Employment and provided such employment has not terminated pursuant to
Section 3 hereof prior to expiration of the term of employment, the
Employee shall become a temporary, on-call employee of CCG. The terms and
conditions relating to such employment as a temporary, on-call employee of
CCG are as follows:
(a) The Employee shall render consulting services to CCG on an as
needed basis at the request of CCG, but in no event shall Employee be
required to devote more than 50 hours per month to consulting services for
CCG.
(b) The Employee shall not be restricted with respect to other
employment provided such other employment does not unreasonably interfere
with his ability to render consulting services to CCG and provided further
that such employment is not in competition with CCG. It is intended hereby
that the restrictive covenants of Sections 6 and 7 shall continue to apply
to the Employee as a temporary, on-call employee.
(c) The Employee shall not have the duties set forth in Section 1 and
Schedule I hereof and shall not be an officer of CCG.
(d) The salary set forth in Section 1 hereof shall terminate after
the initial two year Term of Employment. As a temporary, on-call employee
of CCG, the Employee shall receive the sum of $4,166.66 per month even
though in any one month the Employee performs less than 50 hours of
consulting services to CCG or in any one month CCG requests no such
consulting services.
(e) At the end of the two year period during which Employee is a
temporary, on-call employee, his employment with CCG shall terminate unless
by material written agreement the parties continue the employment
relationship after such date.
IN WITNESS WHEREOF, CCG has caused this Agreement to be executed by
its duly authorized officers and the Employee has hereunto set his hand as
of the date first above written.
XXXXXX COMPUTER GROUP, INC.
By: Xxxxxxx X. Xxxx
---------------------------
Its: Vice President
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Xxxx Xxxxxxxxx Xxxxxx, Xx.
-------------------------------------
XXXX XXXXXXXXX XXXXXX, XX., Employee
SCHEDULE I
DUTIES OF EMPLOYEE
Xxxx X. Xxxxxx, Xx.
President
The President has responsibility for overall corporate operations and
personnel administration. He must insure that plans are created and
programs implemented that will ensure the achievement of both CCG and NRC
corporate goals as set by the Board of Directors and the Shareholders.
At a minimum, the President must be concerned with profitability, financial
matters and reporting of same both at CCG and to NRC, employee satisfaction
and morale, consumer satisfaction, and maintaining proper business
processes, policies, and procedures. In addition to duties as the
President of CCG, he should be available to fulfill duties as a corporate
officer of NRC or any other such duties as he may be assigned by the Board
or NRC.
