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EXHIBIT 10.07
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of February 4, 1996 by and between Xxxxxx Computer Systems Corporation, a
Florida corporation (the "Company") and XXXXX XXXXXXX ("Employee").
WHEREAS, the Company, through its Board of Directors, desires to retain
the services of Employee, and Employee desires to be retained by the Company, on
the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained, herein, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Employment. The Company hereby employs Employee, and Employee
hereby accepts employment, as General Counsel of the Company upon the terms
subject to this Agreement.
2. Term. The term (the "Term") of this Agreement shall commence on
March 1, 1996 and end on March 1, 1998, subject to the extension of such term
as hereinafter provided and earlier expiration of such term as otherwise
provided herein. After the expiration of this initial Term, this Agreement
shall automatically be renewed for successive one-year terms ("Additional
Terms") until either the Board of Directors of the Company (the "Board"), on
behalf of the Company, or Employee gives written notice to the other, at least
60 days prior to the expiration of any Additional Term, that the Term shall not
be so extended.
3. Duties. During his employment hereunder, Employee will serve as
the General Counsel of the Company. Employee shall report directly to the Chief
Executive Officer of the Company and, within the discretion of the Board,
directly to the Board, and shall serve at the Chief Executive's and the Board's
direction. Employee shall perform services as assigned by the Chief Executive
Officer or the Board of the Company consistent with the title of General
Counsel. Employee shall diligently perform such duties and shall devote his
business skill, time and effort to his employment and his duties hereunder as
follows: Employee shall work part time, as least twenty hours per week for the
Company.
4. Compensation.
a. Salary. During his employment hereunder, Employee shall be
paid an initial salary of $120,000 per year, payable in equal installments not
less than monthly. If Employee works at the rate of more than twenty hours per
week during any pay period (the "Standard Hours"), then he shall be paid for
that pay period an additional amount equal to this then annual salary, divided
by one thousand, for each additional hour worked during such pay period. It is
expected that Employee shall be paid at least the Standard Hours in each pay
period, but if Employee is not available to work at least the Standard Hours in
any given pay period, the Company may claim a credit for that pay period equal
to Employee's then annual
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salary, divided by one thousand, for each hour less than the Standard Hours
Employee was available to work. The Employee's salary shall be reviewed at
least annually by the Board or any Committee of the Board delegated the
authority to review compensation.
b. Option/Bonus. In addition to salary, Employee is hereby granted
an option ("Stock Option") to purchase 24,000 shares of the Company's Common
Stock at an exercise price of $16.50 per share. The Stock Option shall be
further defined in an option agreement to be entered into between the Employee
and the Company, which shall contain anti-dilution provisions substantially
similar to those other in option agreements for officers of the Company (but
the failure to so enter into such an additional agreement shall not affect the
binding nature of the Stock Option as of the date hereof). The Option shall be
exercisable one-third on March 1, 1996, one-third on March 1, 1997 and
one-third on March 1, 1998. Each installment of the Stock Option shall
continue to be exercisable for five years after the first date such installment
first becomes exercisable. Employee shall be entitled to participate in the
Company's Management Bonus Program anticipated to be established by the Company
with an initial targeted bonus of $20,000 (or, if higher, 16.7% of Employee's
actual base compensation paid to Employee for the prior twelve months)
(hereafter the "Management Bonus Program").
c. Insurance. During his employment hereunder, Employee shall only
be entitled to participate in health, life, disability and other insurance
programs of the Company to the extent that he is eligible based upon hours
worked and length of service.
d. Vacation. Employee shall be entitled to four weeks' (two weeks
with pay and two without pay) vacation leave (in addition to holidays) in each
calendar year during the Term, or such additional amount as may be set forth in
the vacation policy that the Company shall establish from time to time. Except
with respect to vacation time unused as the result of a request by the Company
to postpone a vacation, any unused vacation from one calendar year shall not
carry-over to any subsequent calendar year.
e. Expense Reimbursement. Employee shall, upon submission of
appropriate supporting documentation, be entitled to reimbursement of reasonable
out-of-pocket expenses incurred in the performance of his duties hereunder in
accordance with policies established by the Company. Such expenses shall
include, without limitation, reasonable entertainment expenses, gasoline and
toll expenses and cellular phone use charges, if such charges are directly
related to the business of the Company.
5. Grounds for Termination.
The Board of Directors of the Company may terminate this Agreement for
Cause. As used herein, "Cause" shall mean any of the following: (i) an act of
willful misconduct or gross negligence by Employee in the performance of his
material duties or obligations to the Company; if such act is capable of cure,
Employee shall be given notice and such act shall not be deemed a basis for
Cause if cured within 60 days after written notice is received by
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Employee specifying the alleged failure in reasonable detail, or (ii) conviction
of Employee of a felony involving moral turpitude or (iii) a material act of
dishonesty or breach of trust on the part of Employee resulting or intended to
result directly or indirectly in personal gain or enrichment at the expense of
the Company.
6. Termination by Employee.
Employee may terminate this Agreement with Good Reason. "Good Reason"
means:
a. Without Employee's express written consent, the assignment to
Employee of duties inconsistent with Employee's positions with the Company as
set forth in this Agreement (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by
Paragraph 3; or
b. A material breach of the provisions of this Agreement by the
Company (except those set forth in Paragraph 4.a) and Employee provides at least
15 days' prior written notice to at least two members of the Company's board
of Directors (other than Employee) of the existence of such breach and his
intention to terminate this Agreement (no such termination shall be effective if
such breach is cured during such period); or
c. The failure of the Company to comply with the provisions of
Paragraph 4.a for an uninterrupted 10 day period.
7. Payment and Other Provisions Upon Termination.
a. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company for Cause as provided in Paragraph 5
then, on or before Employee's last day of employment with the Company, the
provisions of this Paragraph 7.a shall apply. These same provisions shall apply
if Employee terminates his employment without Good Reason as described in
Paragraph 6.
i. Salary, Performance Award, and Bonus Payments: The Company
shall pay in a lump sum to Employee such amount of compensation due
Employee for services rendered to the Company, as well as compensation
for unused vacation time, as has accrued but remains unpaid. Any and all
other rights granted to Employee under this Agreement shall terminate as
of the date of termination.
b. In the event Employee's employment with the Company (including its
subsidiaries) is terminated by the Company for any reason other than for Cause
as provided in Paragraph 5 and other than as a consequence of Employee's death,
disability, or normal retirement under the Company's retirement plans and
practices, then the following provisions apply. These same provisions shall
apply if Employee terminates his employment with Good Reason as described in
Paragraph 6.
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i. Salary, Performance Award, and Bonus Payments: On or before
Employee's last day of employment with the Company, the Company shall
pay in a lump sum to Employee as compensation for services rendered to
the Company a cash amount equal to the amount of Employee's annual base
salary (or, if higher, Employee's actual base compensation paid to
Employee for the prior twelve months) and the amount of the target bonus
under the Management Bonus Program as in effect immediately prior to his
date of termination. So long as the members of the Company's Board of
Directors on the date hereof continue to comprise at least a majority of
the Board, then, at the Company's election, the lump sum payment referred
to in this section 7b.i may be paid in equal installments over a six
month period.
ii. Vesting of Options and Rights: Notwithstanding the vesting
period provided for in Employee's Stock Option contained herein, in the
Stock Incentive Plan and any related stock option agreements between the
Company and Employee for stock options ("options") and stock appreciation
rights ("rights") granted Employee by the Company, all options and stock
appreciation rights shall be immediately exercisable upon termination of
employment. In addition, Employee will have the right to exercise all
options and rights for the shorter of (a) one year following his
termination of employment or (b) with respect to each option, the
remainder of the period of exercisability under the terms of the
appropriate documents that grant such options.
c. The provisions of this Paragraph 7 shall apply if Employee's
employment is terminated prior of a Change of Control (as defined in Paragraph
8) or more than three years after the occurrence of a Change of Control. From
the occurrence of any Change of Control until the third anniversary of such
Change of Control, the provisions of Paragraph 8 shall apply in place of this
Paragraph 7, except that in the event that Employee's employment is terminated
by Employee after a Change of Control without Good Reason, then the provisions
of Paragraph 8 shall not apply and the provisions of Paragraph 7.b shall apply.
Termination upon death and disability and are covered by Paragraphs 9 and 10,
respectively.
8. Payment and Other Provisions after Change of Control.
a. Salary, Performance Award, and Bonus Payments: In the event
Employee's employment with the Company is terminated within three years
following the occurrence of a Change of Control (other than as a consequence of
this death or disability, or of his normal retirement under the Company's
retirement plans and practices) either (i) by the Company for any reason
whatsoever or (ii) by Employee with Good Reason as provided in Paragraph 6, then
Employee shall be entitled to receive from the Company, the following:
i. Base Salary. Employee's annual base salary (or, if higher,
Employee's actual base compensation paid to Employee for the prior twelve
months) as in effect at the date of termination, multiplied by two, shall
be paid on the date of termination; and
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ii. Target Bonus. The amount of the Employee's target bonus
under the Management Bonus Program for the fiscal year in which the date
of termination occurs, multiplied by two, shall be paid on the date of
termination.
iii. Other Benefits. All benefits under Paragraphs 7.b.ii shall
be extended to Employee as described in such paragraph, except that the
period for exercise of the Stock Option and any other options and rights
described in Paragraph 7.b.ii (a) shall be two years.
b. For purposes of this Agreement, the term "Change of Control" shall
mean:
i. The acquisition, other than from the Company, by an
individual, entity or group (within the meaning of sec. 13(d)(3) or sec.
14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) any of the foregoing described
in this Paragraph 8.b.i, 12 hereafter a "Person") of 15% or more of
either (a) the then outstanding shares of Capital Stock of the Company
(the "Outstanding Capital Stock") or (b) the combined voting power of
the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Voting Securities"),
provided, however, that any acquisition by (x) the Company or any of it
subsidiaries, or any employee benefit plan (or related trust) sponsored
or maintained by the Company or any of its subsidiaries or (y) any Person
that is eligible, pursuant to Rule 13d-1(b) under the Exchange Act, to
file a statement on Schedule 13G with respect to its beneficial
ownership of Voting Securities, whether or not such Person shall have
filed a statement on Schedule 13G, unless such Person shall have filed a
statement on Schedule 13D with respect to beneficial ownership of 15% or
more of the Voting Securities or (z) any corporation with respect to
which, following such acquisition, more than 60% of, respectively, the
then outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is
then beneficially owned, directly or indirectly, by all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Capital Stock and Voting Securities
immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition of
the Outstanding Capital Stock and Voting Securities, as the case may be,
shall not constitute a Change of Control; or
ii. Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least
a majority of the Board, provided that any individual becoming a director
subsequent to the date hereof whose election or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, or such individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the
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Company (as such terms are used in rule 14a-11 of Regulation 14A, or any
successor section, promulgated under the Exchange Act); or
iii. Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a "Business Combination"), in
each case, with respect to which all or substantially all holders of the
Outstanding Capital Stock and Voting Securities immediately prior to such
Business Combination do not, following such Business Combination,
beneficially own, directly or indirectly, more than 60% of, respectively,
the then outstanding shares of common stock and the combined voting power
of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from Business Combination; or
iv. (a) a complete liquidation or dissolution of the Company or
(b) a sale or other disposition of all or substantially all of the assets
of the Company other than to a corporation with respect to which,
following such sale or disposition, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of
the then outstanding voting securities entitled to vote generally in the
election of directors is then owned beneficially, directly or indirectly,
by all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Capital Stock and
Voting Securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the Outstanding
Capital Stock and Voting Securities, as the case may be immediately prior
to such sale or disposition.
9. Termination by Reason of Death: If Employee shall die while
employed by the Company both prior to termination of employment and during the
effective term of this Agreement, all Employee's rights under this Agreement
shall terminate with the payment of such amounts of annual base salary as have
accrued but remain unpaid and a prorated amount of targeted bonus under the
Company's Management Bonus Program through the month in which his death occurs,
plus six additional months of the fixed salary and targeted bonus. All benefits
under Paragraphs 7.b.ii. shall be extended to Employee's estate as described in
such paragraph.
10. Termination of Disability: Employee's employment hereunder may be
terminated by the Company for disability. In such event, all Employee's rights
under this Agreement shall terminate with the payment of such amounts of annual
base salary as have accrued but remain unpaid as of thirtieth (30th) day after
such notice is given except that all benefits under Paragraph 7.b.ii shall be
extended to Employee as described in such paragraph. For purposes of this
Agreement, "disability" is defined to mean that, as a result of Employee's
incapacity due to physical or mental illness:
a. Employee shall have been absent from his duties as General
Counsel of the Company substantially all the time otherwise required of
him hereunder for six (6) consecutive months; and
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b. Within thirty (30) days after the Company notifies Employee in
writing that it intends to replace him, Employee shall not have returned
to the performance of his duties for the Company on a full-time basis.
This thirty-day notice may be given by the Company at anytime after
Employee has been absent for more than four months from performing his
duties in accordance with paragraph 10.a.
11. Indemnification: a. If litigation shall be brought to enforce or
interpret any provision contained herein, the non-prevailing party shall
indemnify the prevailing party for reasonable attorney's fees (including those
for negotiations, trial and appeals) and disbursements incurred by the
prevailing party in such litigation, and hereby agrees to pay prejudgment
interest on any money judgment obtained by the prevailing party calculated at
the generally prevailing NationsBank of Florida, N.A. base rate of interest
charged to its commercial customers in effect from time to time from the date
that payment(s) to him should have been made under this Agreement.
b. Employee shall be indemnified by the Company as General Counsel of the
Company to the fullest extent provided by law, under the same terms and
conditions as the most favorable indemnification provisions accorded to any
officer or director of the Company. This indemnification provision shall
include, without limitation, all terms and provisions of the most favorable
indemnification provided to any officer or director, including, without
limitation the right to advancement of expenses.
12. Payment Obligations Absolute: The provisions of this Paragraph 12
shall apply only within the three year period immediately following a Change of
Control. The Company's obligation to pay Employee the compensation and to make
the arrangements provided herein shall be absolute and unconditional and shall
not be affected by any circumstances, including, without limitation, any
set-off, counterclaim, recoupment, defense, duty to mitigate, or other right
that the Company may have against him or anyone else. The amount shall not be
reduced by reason of Employee's securing other employment or for any other
reason. All amounts payable by the Company hereunder shall be paid without
notice or demand, and in no event later than seven business days after such
payments become due. Except as expressly provided herein, the Company waives
all rights that it may now have or may hereafter have conferred upon it, by
statute or otherwise, to terminate, cancel or rescind this Agreement in whole or
in part. Each and every payment made hereunder by the Company shall be final
and the Company will not seek to recover all or any part of such payment from
Employee or from whomsoever may be entitled thereto, for any reason whatsoever.
The Company may withhold for income tax purposes any amounts required to be
withheld under applicable tax statutes and regulations. This Paragraph 12 shall
not be used for interpretive purposes with respect to any other provision of
this Agreement other than in connection with a Change of Control.
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13. Confidentiality:
a. Nondisclosure: Employee acknowledges and agrees that the
Confidential Information (as defined below) is a valuable, special and
unique asset for the Company's business. Accordingly, except in
connection with the performance of his duties hereunder, Employee shall
not at any time during or for any one year subsequent to the term of his
employment hereunder disclose, directly or indirectly, to any person,
firm, corporation, partnership, association or other entity any
proprietary or confidential information relating to the Company or any
information concerning the Company's financial condition or prospects, the
Company's customers, the design, development, manufacture, marketing or
sale of the Company's products or the Company's methods of operating its
business (collectively "Confidential Information"). Confidential
Information shall not include information which, at the time of
disclosure, is known or available to the general public by publication or
other wise through no act or failure to act on the part of Employee.
b. Return of Confidential Information. Upon termination of
Employee's employment, for whatever reason and whether voluntary or
involuntary, or at any time at the request of the Company, Employee shall
promptly return all Confidential Information in the possession or under the
control of Employee to the Company and shall not retain any copies or other
reproductions or extracts thereof. Employee shall at any time at the
request of the Company destroy or have destroyed all memoranda, notes,
reports, and documents, whether in "hard copy" form or as stored on
magnetic or other media, and all copies and other reproductions and
extracts thereof, prepared by Employee and shall provide the Company with
a certificate that the foregoing materials have in fact been returned or
destroyed.
c. Books and Records. All books, records and accounts whether
prepared by Employee or otherwise coming into Employee's possession, shall
be the exclusive property of the Company and shall be returned immediately
to the Company upon termination of Employee's employment hereunder or upon
the Company's request at any time.
14. Injunction/Specific Performance Setoff. Employee acknowledges that a
breach of any of the provisions of Paragraph 13 hereof would result in immediate
and irreparable injury to the Company which cannot be adequately or reasonably
compensated at law. Therefore, Employee agrees that the Company shall be
entitled, if any such breach shall occur or be threatened or attempted, to a
decree of specific performance and to a temporary and permanent injunction,
without the posting of a bond, enjoining and restraining such breach by Employee
or his agents either directly or indirectly, and that such right to injunction
shall be cumulative to whatever other remedies for actual damages to which the
Company is entitled. Employee further agrees that, except as other provided in
Paragraph 12 hereof, the Company may set off against or recoup from any amounts
due under this Agreement to the extent of any losses incurred by the Company as
a result of any breach by Employee of the provisions of Paragraph 13 hereof.
15. Severability: Any provision in this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such
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prohibition or unenforceability without invalidating or affecting the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other other jurisdiction.
16. Successors: This Agreement shall be binding upon Employee and inure
to his and his estate's benefit, and shall be binding upon and inure to the
benefit of the Company and any permitted successor of the Company. Neither this
Agreement nor any rights arising hereunder may be assigned or pledged by:
Employee or anyone claiming through Employee; or by the Company, except to any
corporation which is the successor in interest to the Company by reason of a
merger, consolidation or sale of substantially all of the assets of the Company.
The foregoing sentence shall not be deemed to have any effect upon the rights of
Employee upon a Change of Control.
17. Controlling Law: This Agreement shall in all respects be governed by,
and construed in accordance with, the laws of the State of Florida.
18. Notices. Any notice required or permitted to be given hereunder shall
be written and sent by registered or certified mail, telecommunicated or hand
delivered at the address set forth herein or to any other of which notice is
given:
To the Company: Xxxxxx Computer Systems Corporation
0000 Xxxx Xxxxxxx Xxxxx Xxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
To Employee: Xxxxx Xxxxxxx
0000 X. 00 Xxxxxx
Xxxxxxxxx, XX 00000
19. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto on the subject matter hereof and may not be modified
without the written agreement of both parties hereto.
20. Waiver. A waiver by any party of any of the terms and conditions
hereof shall not be construed as a general waiver by such party.
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21. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original and both of which together shall constitute a
single agreement.
22. Interpretation. In the event of a conflict between the provisions of
this Agreement and any other agreement or document defining rights and duties of
Employee or the Company upon Employee's termination, the rights and duties set
forth in this Agreement shall control.
23. Certain Limitations on Remedies. Paragraph 7.b provides that certain
payments and other benefits shall be received by Employee upon the termination
of Employee of the Company other than for Cause and states that these same
provisions shall apply if Employee terminates his employment for Good Reason. It
is the intention of this Agreement that if the Company terminates Employee other
than for Cause (and other than as a consequence of Employee's death, or
disability) or if Employee terminates his employment with Good Reason, then the
payments and other benefits set forth in Paragraph 7.b shall constitute the sole
and exclusive remedies of Employee. This Paragraph 23 shall have no effect upon
the provisions of Paragraph 8 of this Agreement.
24. Miscellaneous. The parties hereto agree that if the proposed
transaction with Concurrent Computer Corporation is not consummated
substantially as set forth in the Purchase and Sale Agreement between the
Company and Concurrent dated as of March 26, 1996 ("Concurrent Transaction"),
then the Company will have the right to determine whether there is a need for
the Employee's services with the Company. If the Concurrent Transaction is not
consummated, then the Company shall have the right to terminate this Agreement,
including the Option, in which case: (i) the Option shall be reduced to the same
number of shares as were granted in February 1996 to the outside directors of
the Company; (ii) Employee shall be paid an amount equal to his then current
hourly billing rate, less $120 per hour, times the number of hours worked under
this Agreement; and (iii) this Agreement shall terminate in full.
IN WITNESS WHEREOF, this Employment Agreement has been executed by the
parties as of the date first above written.
COMPANY: EMPLOYEE:
XXXXXX COMPUTER SYSTEMS
CORPORATION
By:
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E. Xxxxxxxx Xxxxxx Xxxxx Xxxxxxx
Chairman, President and CEO
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