Exhibit 10.4
THIS EMPLOYMENT AGREEMENT (the "Agreement")
is entered into this 16th day of February 1999,
between ENTERSPECT CORPORATION, a Delaware
corporation (the "Company") and XXXXXX X. XXXXXXX
("Employee").
WHEREAS, Employee is the President of the Company; and
WHEREAS, it is the desire of the Company and Employee that Employee
continue to be employed as President of the Company
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises hereinafter set forth, the parties hereby agree as follows:
1. EMPLOYMENT. The Company hereby employees Employee and Employee
hereby accepts employment by the Company, upon the terms and subject to the
conditions described in this Agreement.
2. TERM OF EMPLOYMENT. The initial term of Employee's employment by the
Company under this Agreement shall begin on the date of this Agreement and shall
end on the third anniversary of the date hereof (the "Term"), unless sooner
terminated pursuant to the provisions of this Agreement.
3. SERVICES. During the Term, Employee shall serve as, and perform the
duties of President of the Company. At all times, Employee shall be subject to
the direction and control of the Chief Executive Officer and board of directors
of the Company (the "Board"). Employee's services hereunder shall be exclusive
and he shall devote all of his business and professional time, attention,
energy, loyalty and skill to the business of the Company as may be reasonably
necessary to carry on the business of the Company and to perform his duties
under the Agreement; PROVIDED, HOWEVER, that Employee may (i) engage in
activities in connection with charitable or civic activities, and (ii) serve as
an executor, trustee or in other similar fiduciary capacity. In addition,
Employee shall use his reasonable efforts to preserve for the Company the
goodwill of customers and others with whom Employee has previously established
business relationships, or with whom the Company or Employee establishes
business relationships during the Term, and to advance the reputation of the
Company.
4. AUTHORITY. Employee shall have such authority to act on behalf of
the Company: (a) as may be provided in this Agreement; (b) as may be provided in
the Company's by-laws (the "By-laws"); (c) as may be delegated to him from time
to time by the Board and Chief Executive Officer; and (d) as generally pertains
to Presidents of corporations.
5. COMPENSATION.
(A) SALARY. During the first year of the Term, Employee shall be paid a
base salary of not less than ninety thousand ($90,000) per year, payable in
arrears at the established pay period of the Company. Thereafter the base salary
payable to Employee shall be reviewed at least annually by the Board, and
reasonable increases shall be based on Employee's performance as well as the
Company's performance as determined in the sole discretion of the Board, but in
no event shall Employee's base salary per year during the Term be less than
Employee's base salary in the first year of the Term.
(B) BONUS. In addition to any other compensation provided for in this
Agreement, during each year of the Term, Employee shall be eligible to receive
performance bonuses at the discretion of the Board.
(C) METHOD OF PAYMENT. All compensation payable under this Agreement to
Employee shall be paid via deposit to an account or accounts designated in
writing to the Company by Employee.
6. OTHER EMPLOYEE BENEFITS. During the Term, Employee shall be eligible
to participate in the employee benefit plans and compensation programs
maintained by the Company, including (without limitation) retirement plans,
life, health, disability and other insurance programs, paid vacations and
similar plans a programs, subject in each case to the generally applicable terms
and conditions of the applicable plan or program and to the determination of any
committee administering such plan or program.
7. REIMBURSEMENT OF EXPENSES. Employee shall be entitled to
reimbursement by the Company for all direct out-of-pocket expenditures made by
him on the Company's behalf in the performance of his services under this
Agreement, subject to any reasonable recordkeeping, reporting and other
reasonable requirements imposed from time to time by the Company.
8. Termination of Agreement.
(A) TERMINATION UPON DEATH. Employee's employment shall terminate
automatically upon Employee's death during the Term, in which event Employee's
estate shall be entitled to certain Rights (as such term is defined below).
(B) TERMINATION FOR CAUSE. The Company may terminate Employee's
employment during the Term for Cause. For purposes of this Agreement, "Cause"
for termination shall mean the occurrence of any of the following events:
(i) acts of dishonesty by Employee related to the Company
involving malfeasance;
(ii) Employee resignation;
(iii) any material deviation from the Financial Projections
attached hereto as Exhibit A;
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(iv) gross negligence or willful malfeasance in the
performance of Employee's duties after reasonable notice of such
conduct;
(v) willful disregard of, or failure to follow written
instructions from, the Company's officers or board of directors to do
any legal act relating to the Company's business;
(vi) conviction of Employee of a crime relating to his
employment, or of any felony;
(vii) Employee's physical or mental disability, which prevents
performance of his duties for a consecutive period of at least 120
days, or at least 150 days in a period of 200 days; or
(C) TERMINATION WITHOUT CAUSE. The Company may terminate Employee
without cause on 30 days notice (a "Dismissal").
(D) EFFECT OF TERMINATION. In the event of a Dismissal, Employee shall
be entitled to Rights. In the event that the Company terminates Employee's
employment during the Term for Cause, Employee shall not be entitled to Rights.
(i) (i) "Rights" means that (i) Employee (or, as the case may
be,. Employee's estate) shall be entitled to receive the same salary
and benefits as. he would be entitled to receive had he been employed
by the Company for the three (3) month period following the earlier to
occur of the date of Dismissal.or the date of Employee's death, (ii)
Employee shall be entitled to reimbursement for all expenses incurred
prior to the last day that Employee provided services to the Company,
(iii) Employee's vesting schedule under the Company's 1998 Stock Option
Plan (as defined therein); shall be accelerated by one year, and (iv)
any stock repurchase rights in favor of the Company or Xxx Xxxxxxxx
shall lapse. The Company acknowledges and agrees that any compensation,
irrespective of the kind or nature of such compensation, earned by
Employee from any third party after Employee terminates his employment
with the Company under this Section 8 shall not in any way reduce or
eliminate the Company's obligations to Employee under this Section 8.
9. DISCLOSURE, OWNERSHIP AND PROTECTION OF PROPRIETARY INFORMATION AND
PROPERTY. Because the Company's proprietary and confidential information is
among its most important assets, Employee shall, as a condition to employment
with the Company, sign the Company's standard proprietary information and
non-disclosure agreement.
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10. RESTRICTIVE COVENANTS.
(A) COVENANTS AGAINST COMPETITION. During the Term of this agreement
and for one (1) year following the termination hereof, Employee shall not in any
manner, directly or indirectly, as an employee, employer, consultant, agent,
principal, partner, manager, stockholder, officer, director, or in any other
individual or representative capacity, engage in or become interested in the
business of providing network consulting services, or any business that is
competitive with the business of the Company during the Term, in those places
where the Company is doing business during the Term. Notwithstanding the
foregoing, Employee may own less than one percent (1%) of the issued and
outstanding capital stock of any publicly traded company.
(B) COVENANTS AGAINST HIRING CERTAIN EMPLOYEES AND CERTAIN EMPLOYMENT.
During the Term of this agreement and for one (1) year following the termination
hereof, Employee shall not in any manner, directly or indirectly, (i) solicit
for employment or employ any person who was employed by the Company during
Employee's employment
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11. ASSIGNMENT. Employee shall not assign the rights or obligations
hereunder without the prior written consent of the Company. The Company may
assign its rights under this Agreement to an affiliate of or successor to the
Company.
12. GOVERNING LAW. This Agreement shall be governed by, construed and
enforced in accordance with the internal laws of the State of New York.
13. CAPTIONS. The paragraph and section headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
14. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof.
15. AMENDMENT AND NON-WAIVER. This Agreement may be amended, modified,
superseded or canceled, and the terms and covenants hereof may be waived, only
by a written instrument executed by both of the parties hereto, or in the case
of a waiver, by the party waiving compliance. The failure of either party at any
time or times to require performance of any provision hereof shall in no manner
affect the right at a later time to enforce the same. No waiver by either party
of the breach of any term or covenant contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or waiver of
the breach of any other term or covenant contained in this Agreement.
16. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
New York, New York in accordance with the rules of the American Arbitration
Association then in effect. The prevailing party shall be entitled to recover
its fees. Judgment may be entered on the arbitrator's award in any court having
jurisdiction. Punitive damages shall not be awarded.
17. EMPLOYMENT TAXES. All payments made pursuant to this Agreement will
be subject to withholding of applicable income and employment taxes.
18. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ENTERSPECT CORPORATION
By:
---------------------------------
Name: Xxx X. Xxxxxxxx
Title: Chairman
EMPLOYEE:
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Xxxxxx X. Xxxxxxx
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