EXHIBIT 99.3
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of January 3, 2005,
by and between Sytel, Inc., a Maryland corporation ("Employer"), and Xxxxxxxxx
Xxx White ("Employee");
WHEREAS, Employer wishes to employ Employee on the terms and conditions
contained in this Agreement and Employee wishes to accept such employment; and
NOW, THEREFORE, in consideration of the mutual promises contained herein,
and for other good and valuable consideration, the adequacy of which is hereby
acknowledged, Employer and Employee, each intending to be legally bound, agree
as follows:
1. Term. The term of Employee's employment hereunder shall commence on the
date hereof and shall continue until 5:00 p.m. on December 31, 2005, unless
earlier terminated as provided in Section 7. Unless this Agreement is expressly
extended or renewed by Employer in writing, any continued employment of Employee
by Employer after December 31, 2005 shall be on an at will basis and both
Employer and Employee shall have the right to terminate Employee's employment
with Employer, at any time, upon two weeks' written notice, pursuant to the
notification provisions of Section 16, for any reason or no reason, and Employee
shall not be entitled to the accrual of any additional compensation hereunder
after the date of such termination. All references herein to the "Term" refer to
the original term of Employee's employment hereunder.
2. Duties.
a. Offices. During the Term, Employee shall serve as Employer's
President and Chief Executive Officer, shall have direct involvement in all
material decisions affecting the Company's operations and shall perform such
duties as the Employer's Board of Directors (the "Board") assigns to her.
Employer agrees that Employee will be assigned only duties of the type, nature
and dignity normally assigned to the president and chief executive officer of a
corporation of the size, stature and nature of Employer. Employee shall also
serve during the Term as a member of the Board. Employee will be covered by all
director and officer insurance policies maintained by the Employer's parent
corporation, TechTeam Global, Inc. ("TechTeam"), for its senior officers.
b. Full-Time Basis. During the Term, Employee shall devote, on a
full-time basis, her services, skills and abilities to her employment hereunder,
excepting periods of vacation, illness or Disability (as defined below), and
excepting any charitable, philanthropic, or professional association activities
which do not materially interfere with her duties hereunder or constitute a
breach by Employee of the provisions of Section 6(c) with respect to the
interests of Employer or of any direct or indirect subsidiary of Employer or
other entity under common control with the Employer ("Affiliate").
3. Compensation. As full consideration for the services performed by
Employee under this Agreement, Employer shall pay to Employee the compensation
and benefits provided in this Section 3.
a. Salary. During the Term, as compensation for services rendered by
Employee hereunder, Employer shall pay to Employee a base salary at a rate not
less than Two Hundred Twenty Five Thousand Dollars ($225,000) per annum, payable
in installments in accordance with Employer's standard payroll policy ("Base
Salary").
b. Other Compensation.
(i) Simultaneously with the Closing (as defined in and
pursuant to that certain Stock Purchase Agreement dated January 3, 2005 among
Digital Support Corporation ("DSC"), a subsidiary of TechTeam, Employee and
others the "Stock Purchase Agreement"), TechTeam will issue and deliver to
Employee a non-qualified option entitling Employee to acquire 10,000 shares of
TechTeam's common stock (the "Option Shares") in the form attached as Schedule 1
at a strike price per Option Share equal to the market price, as quoted on
NASDAQ, of one share of TechTeam common stock at the close of trading on January
3, 2005.
(ii) During the Term, Employee shall also be eligible to
participate in other currently existing or subsequently implemented compensation
benefit plans or arrangements available generally to other officers or senior
officers of Employer or TechTeam, including deferred compensation plans,
ESOP/401(k) plans, and any stock grant, stock option, stock purchase or similar
stock plans or arrangements, but excluding TechTeam's Long Term Incentive Plan
or Annual Incentive Plan. It is acknowledged that any amounts that Employee
receives under Section 2.8 of the Stock Purchase Agreement will not be treated
as compensation hereunder and are part of the consideration paid under the Stock
Purchase Agreement.
c. Tax Withholdings. Employer shall withhold from Employee's
compensation hereunder and pay over to the appropriate governmental agencies all
payroll taxes, including income, social security, and unemployment compensation
taxes required by the federal, state and local governments with jurisdiction
over Employer
d. Signing Bonus. To induce the Employee to enter into this
Agreement, simultaneously with the closing of the acquisition of the Company by
DSC and TechTeam, DSC and TechTeam will pay, or cause the Company to pay, the
sum of $500,000 to the Employee, less required tax withholdings as described in
Section 5(c) above.
4. Benefits. During the Term, Employee shall be entitled to receive such
fringe benefits and perquisites as are provided to all employees of the
Employer, as well as any fringe benefits and perquisites provided by TechTeam to
its senior executives under the terms of TechTeam's Executive Benefit Plan.
5. Expenses and Other Perquisites. Employer shall reimburse Employee for
all reasonable and proper business expenses incurred by her in the performance
during the Term of her duties hereunder, in accordance with Employer's Business
Expense Reimbursement policy. Also, during the Term, Employer shall continue to
provide Employee with an office and suitable
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office fixtures, telephone services, and secretarial assistance of a nature
appropriate to Employee's position hereunder.
6. Exclusive Services, Confidential Information, Business Opportunities
and Non-Solicitation.
(a) Exclusive Services.
(i) During the Term, Employee shall at all times devote her
full-time attention, energies, efforts and skills to Employer's business and
shall not, directly or indirectly engage in any other business activity, whether
or not for profit, gain or other pecuniary advantages, without the Board's
written consent; provided that such prior consent shall not be required with
respect to Employee's charitable, philanthropic, or professional association
activities which do not materially interfere with her duties hereunder or
constitute a breach by Employee of the provisions of Section 6(c) with respect
to the interests of Employer or of any Affiliate.
(ii) During the Term, Employee shall not, without the Board's
prior written consent, directly or indirectly, either as an officer, director,
employee, agent, advisor, consultant, principal, stockholder, partner, owner or
in any other capacity, on her own behalf or otherwise, in any way engage in,
represent, be connected with or have a financial interest in, any business which
is, or to her knowledge, is about to become, engaged in the business of
providing information technology outsourcing services to any party, directly or
as a sub-contractor, including the United States Government or any department,
agency, or instrumentality thereof, or any state or local governmental agency
(collectively a "Person"). Notwithstanding the foregoing, Employee shall be
permitted to own passive investments in publicly held companies provided that
such investments do not exceed five percent (5%) of any class of such company's
outstanding equity securities.
(b) Confidential Information. During the Term and for the first 36
consecutive months after the termination or expiration of the Term or any
extended term (the "Restricted Term") Employee shall not disclose or use,
directly or indirectly, any Confidential Information (as defined below). For the
purposes of this Agreement, "Confidential Information" shall mean all
information disclosed to Employee or known by her as a consequence of or through
her employment with Employer or any Affiliate to the extent that such
information refers or relates to the business activities, processes, services or
products of Employer or any Affiliate, including business and development plans
(whether contemplated, initiated or completed), information with respect to the
development of technical and management services, business contacts, methods of
operation, results of analysis, business forecasts, financial data, costs,
revenues, and similar information. "Confidential Information" shall not include:
(i) information that is now or shall become public through no fault of Employee;
(ii) information that the Employee can demonstrate was received by her without
restriction from a third party without breach of any confidentiality obligation
by the Employee or the person disclosing the information to the Employee; or
(iii) information developed by the Employee independently, on her own time and
unrelated to the business of Employer or any Affiliate. Upon termination of the
Term, Employee shall immediately return to Employer all property of Employer or
any Affiliate and all Confidential Information whether in tangible or electronic
form, and all copies
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thereof, except that if, at the time of termination, the Employer and the
Employee are in a dispute, the Employee may retain copies of such Confidential
Information as the Employee or her counsel deem necessary for purposes of
resolution of the dispute, while returning the original copies of such
Confidential Information to the Employer.
(c) Business Opportunities and Conflicts of Interests.
(i) During the Term, Employee shall promptly disclose to
Employer each business opportunity of a type which, based upon its prospects and
relationship to the existing businesses of Employer or any Affiliate, Employer
or any Affiliate might consider pursuing.
(ii) During the Term, Employee shall refrain from engaging in
any activity, practice or act which conflicts with, or has the potential to
conflict with, the interests of Employer or any Affiliate, and she shall avoid
any acts or omissions which are disloyal to, or competitive with Employer or any
Affiliate. Notwithstanding the foregoing, Employee may author one or more books
or other publications without violating the provisions of Section 2(b) of this
Agreement, if Employee receives the prior written consent of the Chief Executive
Officer of TechTeam, which consent shall not be unreasonably withheld. Any such
authorship shall not be considered within the scope of Employee's employment
under this Agreement.
(d) Non-Solicitation of Employees. During the Term and the
Restricted Term, Employee shall not, except in the course of her duties with
Employer or any Affiliate, directly or indirectly, induce or attempt to induce
or otherwise counsel, advise, ask or encourage any person to leave the employ of
Employer or any Affiliate, or solicit or offer employment to any person who was
employed by Employer or any Affiliate at any time during the 36 month period
preceding the solicitation or offer (unless such individual was terminated by
Employer at least six months prior to such solicitation or offer).
(e) Covenant Not To Compete.
(i) If the Term expires on December 31, 2005 or is terminated
by Employer for Cause or by Employee without Good Reason, Employee shall not,
during the Restricted Term, engage in competition with the business of the
Employer or any Affiliate as such businesses exist as of the termination date of
Employee's employment, or solicit information technology outsourcing business
from any Person who purchased any products or services from Employer or any
Affiliate while Employee was employed by Employer or any Affiliate. For the
purpose of this Section (e), the Restricted Term shall not exceed four (4) years
after the date of this Agreement.
(ii) For purposes of this Agreement, Employee shall be deemed
to engage in competition with Employer if she directly or indirectly, either
individually or as a stockholder, director, officer, partner, consultant, owner,
employee, agent, or in any other capacity, consults with or otherwise assists
any Person in providing information technology outsourcing products or services
to any Person to which Employer or any Affiliate provided information technology
outsourcing products or services while Employee was employed with Employer or
any Affiliate.
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(iii) Notwithstanding the foregoing provisions of this Section
(e), during the Restricted Term, Employee shall be permitted to own passive
investments in publicly held companies provided that such investments do not
exceed five percent (5%) of any class of such company's outstanding equity
securities and to engage in the following activities:
(A) Employee may provide advisory services in connection
with the procurement of 8(a) contracts, if Employee receives the prior written
consent of TechTeam's Chief Executive Officer, which consent shall not be
unreasonably withheld; and
(B) Employee shall be permitted to make investments in,
organize and consult with, private equity and similar funds, that may invest in
companies doing business in the commercial and government sectors, provided
that, during the Restricted Term, the Employee does not personally sit on any
governing or advisory board of, or participate in any management discussions
concerning, any company engaged in providing information technology outsourcing
services (other than a discussion concerning an investment in any such company).
Employee shall give TechTeam's Chief Executive Officer written notice of any
investments permitted under this Section 6(e)(iii)(B) within five (5) business
days after such investment is made.
(iv) In addition, it is acknowledged that Employee's
son, through the Xxxxxxx Xxx Revocable Trust ("Trust"), owns 25% of Xxxx
Information Systems, Inc. and that such ownership does not violate or come
within the scope of this Agreement. During the Term, Employee agrees not to be
the Trustee of the Trust.
(f) Employee Acknowledgment. Employee hereby agrees and acknowledges
that the restrictions imposed upon her by the provisions of this Section 6 are
fair and reasonable considering the nature of Employer's business and are
reasonably required for Employer's protection.
(g) Invalidity. If a court of competent jurisdiction or an
arbitrator shall declare any provision or restriction contained, in this Section
6 to be unenforceable or void, the provisions of this Section 6 shall remain in
full force and effect to the extent not so declared to be unenforceable or void,
and the court or arbitrator may modify the invalid provision to make it
enforceable to the maximum extent permitted by law.
(h) Specific Performance. Employee agrees that if she breaches any
of the provisions of this Section 6, the remedies available at law to Employer
would be inadequate and in lieu thereof, or in addition thereto, Employer shall
be entitled to seek appropriate equitable remedies, including specific
performance and injunctive relief. Employee agrees not to enter into any
agreement, either written or oral, which may conflict with this Agreement, and
Employee authorizes Employer to make known the terms of Sections 6 and 7 to any
Person, including future employers of Employee.
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7. Termination.
(a) By Employer.
(i) Termination for Cause. Employer may terminate this
Agreement for Cause (as defined below) at any time by written notice to
Employee, as provided below. For purposes of this Agreement, the term "Cause"
shall mean any one or more of the following events or circumstances: (1)
Employee's conviction of a felony or conduct by Employee with respect to her
duties to the Company which is fraudulent or materially illegal; (2) Employee's
use of illegal drugs or abuse of alcohol or other legal drugs which impairs her
ability to perform her duties to the Company; (3) Employee's willful neglect of
her duties to the Company which materially affects the business of the Company
or any of its Affiliates; or (4) Employee's failure to follow reasonable
instructions given to her in good faith by the Company's board of directors
which are consistent with the terms and conditions hereof, provided that, in the
case of termination under clauses (3) or (4) above, Employee shall be given an
opportunity to appear with legal counsel before the Company's board of directors
promptly after written notice is given by the Company's board of directors
specifying the reasons for the termination and shall have failed within thirty
(30) days after receipt of such notice to cure the related neglect or failure
under clause (3) or (4) above or, in respect of a termination notice under
clause (2) above, Employee shall have failed within sixty (60) days thereafter
to cure the impairment under clause (2) and, provided further that subsequent to
appearing before the Company's board of directors, Employee may, in her sole
discretion, elect to appear, with legal counsel, before the board of directors
of TechTeam.
If a termination occurs pursuant to clause (1) above, the date on which
the Term is terminated (the "Termination Date") shall be the date Employee
receives notice of termination and, if a termination occurs pursuant to clauses
(2), (3), (4) or (5) above, the Termination Date shall be the date on which the
specified cure period expires. In any event, as of the Termination Date (in the
absence of satisfying the alleged breach or violation within the applicable cure
period), Employee shall be relieved of all of her duties hereunder and Employee
shall not be entitled to the accrual or provision of any compensation or
benefits hereunder after the Termination Date but Employee shall be entitled to
the provision of all compensation and other benefits that shall have accrued as
of the Termination Date, including, without limitation, Base Salary, paid leave
benefits and reimbursement of incurred business expenses.
(b) Death or Disability.
(i) The Term shall be terminated immediately and automatically
upon Employee's death or "Disability." The term "Disability" shall mean
Employee's inability to perform all of the essential functions of her position
hereunder for an aggregate of 90 work days during any 12-month period by reason
of illness, accident or any other physical or mental incapacity, as may be
permitted by applicable law. Employee's capability to continue performance of
Employee's duties hereunder shall be determined by a panel composed of two
independent medical doctors, one appointed by the Board and one appointed by
Employee or her designated representative. If the panel is unable to reach a
decision the matter will be referred to arbitration in accordance with Section
12.
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(ii) In the event of Employee's death, Employer shall pay
Employee's estate that portion of Employee's Base Salary accrued but unpaid as
of the date of Employee's death, plus all paid leave and other benefits accruing
to the termination date and the amount required to reimburse the Employee for
all reimbursable expenses incurred to the termination date.
(iii) In the Event of Employee's Disability, Employer shall
pay Employee (or her designated beneficiary) her Base Salary until Employee
begins to receive benefits pursuant to the disability insurance policy, if any,
purchased by Employer pursuant to Section 4.
(c) By Employee.
(i) Without Cause. Employee may, in her sole discretion,
without cause, terminate the Term at any time upon 90 days' written notice to
Employer. If Employee exercises such termination right, Employer may, at its
option, at any time after receiving such notice from Employee, relieve her of
her duties and terminate the Term at any time prior to the expiration of said
notice period. If Employer so advances the Termination Date, Employer shall pay
Employee salary, plus all paid leave and other benefits accruing to the
Termination Date and the amount required to reimburse the Employee for all
reimbursable expenses incurred to the Termination Date
(ii) For Good Reason. Employee may terminate this Agreement at
any time for Good Reason (as defined below) by providing Employer with 60 days'
written notice thereof. On or prior to the Termination Date, Employer shall pay
Employee a lump sum severance compensation payment equal to the total amount of
Employee's Base Salary payable hereunder through the end of the Term had such
Term ended on December 31, 2005, plus all paid leave and other benefits accruing
to the Termination Date and the amount required to reimburse the Employee for
all reimbursable expenses incurred to the Termination Date. In addition, the
Employee shall be entitled to receive (a) medical and hospitalization benefits
for the first 12 months after the Termination Date For purposes of this
Agreement, "Good Reason" shall mean the occurrence, without the express written
consent of Employee, of any of the following circumstances or events, unless
such circumstances or events are fully corrected prior to the Termination Date:
(1) Employer's breach of any material provision of this Agreement, (2) except
for Cause, any reduction by the Employer in Employee's Base Salary, or (3)
except for Cause, the Employer's failure to elect, reelect or otherwise maintain
Employee in an office or position with responsibilities and duties that are
commensurate with those held or performed by Employee held immediately prior to
such failure.
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(d) No Duty to Mitigate. If Employee is entitled to the compensation
and other benefits provided under Section 7(a)(ii), Employee shall have no
obligation to seek employment to mitigate damages hereunder.
(e) Notwithstanding any termination hereunder, Employee shall remain
eligible and entitled to receive "Earnout Payments" under and as defined in the
Stock Purchase Agreement.
8. Non-Waiver. It is understood and agreed that one party's failure at any
time to require the performance by the other party of any of the terms,
provisions, covenants or conditions hereof shall in no way affect the first
party's right thereafter to enforce the same, nor shall the waiver by either
party of the breach of any term, provision, covenant or condition hereof be
taken or held to be a waiver of any succeeding breach.
9. Severability. Except as otherwise set forth in Section 6(g) of this
Agreement, if any provision of this Agreement conflicts with the law under which
this Agreement is to be construed, or if any such provision is held invalid or
unenforceable by a court of competent jurisdiction or any arbitrator, such
provision shall be deleted from this Agreement and the Agreement shall be
construed to give full effect to the remaining provisions thereof.
10. Survivability. Unless otherwise provided herein, upon termination or
expiration of the Term, the provisions of Section 6 shall nevertheless remain in
full force and effect for the period specified therein.
11. Governing Law. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Maryland, without regard to the
conflict of law provisions thereof.
12. Arbitration. Any dispute arising out of, or in connection with, the
execution, interpretation, performance or nonperformance of this Agreement
(including the validity, scope and enforceability of this arbitration provision)
shall be settled by final and binding arbitration, which shall be conducted in
the English language in Washington, D.C. pursuant to the then prevailing
commercial rules of the American Arbitration Association ("AAA") by a panel of
three arbitrators (the "Board of Arbitration"). Each of Employee and Employer
shall select one arbitrator and the third arbitrator shall be selected by mutual
agreement of the other two arbitrators. If either Employee or Employer fails to
appoint its arbitrator within 15 Business Days (as defined below) from the date
of the demand for arbitration, then such arbitrator shall be appointed by the
AAA in accordance with AAA rules. If Employee and Employer appointed arbitrators
fail to reach agreement on a third arbitrator within 15 Business Days after
their selection, Employee or Employer shall request the AAA to designate, in
accordance with AAA rules, a third arbitrator. The parties agree to facilitate
the arbitration by (a) making available to one another and to the Board of
Arbitration for inspection and extraction all documents, books and records under
their control or under the control of a Person controlling or controlled by such
party if determined by the Board of Arbitration to be relevant to the dispute,
(b) conducting arbitration hearings to the greatest extent possible on
successive Business Days and (c) using their best efforts to observe the time
periods established by the rules of the AAA by the Board of Arbitration for the
submission of evidence and briefs. The decision of the Board of Arbitration
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shall be final, binding and not subject to further review, and judgment on the
award of the Board of Arbitration may be entered in and enforced by any court
having jurisdiction over the parties or their assets subject to the procedural
requirements in such jurisdiction. The Board of Arbitration shall be authorized
and directed to award reasonable costs and attorney's fees to the prevailing
party. The Board of Arbitration shall base its judgment on the applicable laws.
The Board of Arbitration shall be authorized to award equitable relief,
including specific performance or other injunctive relief. Any monetary award
shall be made and payable in U.S. dollars. Notwithstanding the foregoing
agreement to arbitrate, the parties expressly reserve the right to seek
provisional relief from any court of competent jurisdiction to preserve their
respective rights pending arbitration. As used herein, "Business Day" means any
day other than a Saturday or Sunday on which banks are open for commercial
banking business in Washington, D.C.
13. Construction. The paragraph and section headings and captions
contained in this Agreement are for convenience only and shall not be construed
to define, limit or affect the scope or meaning of the provisions hereof. All
references herein to Sections shall be deemed to refer to Sections of this
Agreement.
14. Entire Agreement. This Agreement contains and represents the entire
agreement of Employer and Employee and supersedes all prior agreements,
representations or understandings, oral or written, express or implied with
respect to the subject matter hereof, including the Employment Agreement dated
as of September 30, 1998 between Employer and Employee. This Agreement may not
be modified or amended in any way unless in writing signed by each of Employer
and Employee. No representation, promise or inducement has been made by either
Employer or Employee that is not embodied in this Agreement, and neither
Employer nor Employee shall be bound by or liable for any alleged
representation, promise or inducement not specifically set forth herein.
15. Assignability. Neither this Agreement nor any rights or obligations of
Employer or Employee hereunder may be assigned by Employer or Employee without
the other party's prior written consent. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of Employer and
Employee and their heirs, successors and assigns.
16. Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed properly given if delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, or sent
by telegram, telex, telecopy or similar form of telecommunication, and shall be
deemed to have been given when received. Any such notice or communication shall
be addressed: if to Employer, to President of TechTeam Global, Inc., 00000 X. 00
Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx, 00000; if to Employee, to her last known home
address on file with Employer and to Xxxx Xxxxxxx LLP, 0000 Xxxxxx Xxxx. XxXxxx,
XX 00000, Attention: Xxxxx Xxxxxx; or to such other address as Employer or
Employee shall have furnished to the other in writing.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
to be effective as of the day and year first above written.
THE COMPANY: SYTEL, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
Its: Chairman
EMPLOYEE
/s/ Xxxxxxxxx Xxx White
-----------------------
Xxxxxxxx Xxx White
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