EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is dated as of April 1, 1999,
between METRO INFORMATION SERVICES, INC., a Virginia corporation (the
"Company"), and XXXXXXX XXXXX ("Executive").
PRELIMINARY STATEMENTS
A. Executive is employed by the Company as a Vice President of Operations.
B. The Company and the Executive desire to enter into this agreement to
establish the terms and conditions of Executive's employment with the Company.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is acknowledged by the parties, the parties agree as
follows:
1. EMPLOYMENT PERIOD. The Company agrees to employ Executive and Executive
accepts such employment for the period beginning April 1, 1999 and ending on the
first to occur of (a) December 31, 1999 and (b) the termination of Executive's
employment pursuant to paragraph 6 (the "Employment Period"); provided, however,
the Employment Period will be continued for successive one-year periods unless
at least 90 days before the end of the initial or any subsequent term either the
Company or the Executive gives the other notice of termination of this
Agreement.
2. SERVICES. During the Employment Period, Executive will render such
services of an executive and administrative character to the Company as it may
from time to time direct. During the Employment Period, Executive will devote
his best efforts and all of his business time and attention (except for vacation
periods and reasonable periods of illness or other incapacity) to the business
of the Company, and will not perform any services of any nature for any
enterprise other than the Company without the prior consent of the Company's
board of directors (the "Board of Directors").
3. BASE SALARY. Beginning April 1, 1999 and thereafter during the
Employment Period, the Company will pay Executive salary at a per annum rate of
One Hundred Fifty Thousand Dollars ($150,000) (the "Base Salary"). The Company
may increase or decrease the Base Salary at any time and from time to time. Any
increase or decrease in Executive's Base Salary shall be made in accordance with
Executive's annual compensation plan as approved by the Company's Board of
Directors.
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4. BENEFITS. Executive will be entitled to receive from the Company, in
addition to the salary set forth in paragraph 3 above, all benefits provided
generally to full time employees of the Company. Any alteration of the benefits
that Executive is entitled to receive from the Company shall be made in
accordance with Executive's annual compensation plan as approved by the
Company's Board of Directors.
5. Intentionally Omitted.
6. TERMINATION OF EMPLOYMENT.
a. The Employment Period will automatically end on Executive's
voluntary resignation, termination by the Board of Directors with or without
cause, termination by the Board of Directors in the event of Executive's
disability (as determined by the Board of Directors in its good faith judgment)
or Executive's death; PROVIDED, that Executive's resignation will be effective
not less than three months after Executive has given written notice thereof to
the Board of Directors; PROVIDED FURTHER, that Executive's termination with or
without cause will be effective only after the Board of Directors has determined
in its good faith judgment that such termination is in the best interests of the
Company and written notice of such termination has been delivered to Executive.
b. In the event of termination for disability or without cause,
Executive will be entitled to be paid his salary by the Company and to receive
the benefits set forth in paragraph 4 for a period following such termination of
2 weeks for each full year of service completed at the time of termination or 90
days, whichever is the longer. Such salary will be payable semi-monthly at the
rate in effect at the time of termination. Executive will have no duty to
mitigate the Company's damages by taking other employment after his termination
by the Company without cause and any compensation earned by him in such other
employment will not be deducted from any amount payable to him hereunder. In the
event of Executive's disability, however, the amounts payable to him hereunder
will be reduced by any amounts received by Executive from disability insurance
purchased by the Company for Executive.
c. "Disability," for purposes hereof, means any physical or mental
condition which prevents Executive from performing his duties hereunder, for 180
days, whether or not consecutive, in any 12-month period. In the event of
disagreement between the Board of Directors and Executive whether "disability"
exists, the disagreement will be resolved by arbitration pursuant to paragraph 9
below.
d. "Cause" for which the Board of Directors may terminate Executive's
employment means, (i) the commission of a crime involving the Company or any
entity in which it has an interest or (ii) a breach or
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breaches of Executive's fiduciary duty to the Company or its shareholders which
individually or in the aggregate are materially adverse to the Company's
business or financial condition or prospects; and, in either case, as finally
determined by a court of competent jurisdiction. "Finally determined" means
after all direct appeals to appellate courts of competent jurisdiction are
exhausted. While "materially adverse" as used in clause (ii) above is not
limited to the following instances, (x) any substantial breach of Executive's
duties under paragraphs 2, 7, 8 or 9 of this Agreement, and (y) any willful or
grossly negligent breach or breaches (whether or not related) of Executive's
fiduciary duties to the Company which, individually or in the aggregate, result
in the Company's suffering damages of $100,000 or more, will be deemed PRIMA
FACIE "materially adverse" within the meaning of clause (ii).
e. In the event that the Board of Directors determines, in its good
faith judgment, that Executive has committed a crime involving the Company or
any entity in which it has an interest, it may suspend Executive without pay
pending final determination of the charges, but only after Executive has been
charged with such crime by competent law-enforcement authorities by warrant,
summons, information, indictment or otherwise. During the period of suspension,
the Company will continue to provide Executive with the insurance benefits which
it provided pursuant to paragraph 4 above immediately before his suspension. In
the event that the criminal charges against Executive are finally determined
without a conviction of Executive of the crime charged or any lesser offense
included under such crime, the Company will reinstate Executive and resume
paying him the salary and providing him with the other benefits to which he is
entitled hereunder, with the salary payable retroactively to the date of
suspension (with interest at 8% per annum on all amounts not paid during the
period of suspension, calculated from the respective dates these amounts would
have been payable).
f. In the event that the Board of Directors determines, in its good
faith judgment, that Executive has committed a breach of fiduciary duty of a
type justifying termination with Cause, the Board may immediately suspend
Executive. During such suspension, however, Executive will continue to be paid
the salary provided in paragraph 3 and receive the benefits provided for in
paragraph 4, regardless of any other employment Executive may take. In the event
of final determination by a court of competent jurisdiction that Executive has
breached his fiduciary duty to the Company or its stockholders within the
meaning of paragraph 7(d)(ii) above, Executive will, on demand by the Board of
Directors, reimburse the Company for all salary and benefits received by him
from the Company from the date of suspension, together with interest thereon at
8% per annum from the respective
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dates of payment.
7. CONFIDENTIAL INFORMATION. Executive acknowledges that all computer
systems, programs, reports, designs, drawings, memoranda, discoveries,
inventions, state of the art technology, data, notes, records, files,
proposals, plans, lists, documents and any other information containing or
referring to confidential or proprietary information or concerning the
business or affairs of the Company or any of its clients (the "Proprietary
Information"), whether prepared or developed or both by Executive or others,
and all copies thereof are property of the Company or its clients,
respectively. Executive agrees that he will not disclose to any unauthorized
person any Proprietary Information nor will he use for his own account any
Proprietary Information without the written consent of the Company, which
consent may be denied for any reason or no reason. On the termination of
Executive's employment with the Company for any reason (or at any earlier
time that such request is made by the Company), Executive will deliver to the
Company all Proprietary Information and any copies thereof which Executive
may possess or have under his control. Executive agrees not to copyright or
attempt to copyright any Proprietary Information or any computer system or
any findings or recommendations or other data prepared in connection with the
Proprietary Information or Executive's performance of duties with the Company
or both.
8. NON-COMPETE. As a significant inducement to the Company to enter into
this Agreement, Executive agrees that:
a. as long as Executive is employed by the Company in any capacity,
during or after the Employment Period, Executive will not, directly or
indirectly, own any interest in, manage, control, participate in, render
services for or in any other manner engage in any other activity (all of the
foregoing being hereinafter referred to as having or acquiring an "interest") in
any information technology services business (whether or not a client of the
Company), without the prior consent of the Board of Directors;
b. beginning on the termination of Executive's employment with the
Company and ending two years after such termination for any reason (the
"Non-Compete Period"), Executive will not have or acquire an interest in any
enterprise which is "in competition" with the Company, as "in competition" is
defined below; and
c. after the end of the Non-Compete Period, Executive will not acquire
any interest in any enterprise "in competition" with the Company as long as he
owns 1% or more of any class of the capital stock of the Company.
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An enterprise will be deemed to be "in competition" with the Company
if (i) such enterprise is involved, directly or indirectly with providing
information technology services, or (ii) in the case of any enterprise other
than an enterprise providing information technology services, Executive's
intended relationship to such enterprise would, in the reasonable good faith
judgment of the Board of Directors, create problems for the Company or any of
its affiliates, or (iii) is a client of the Company or has been a client of
the Company during the 24-month period before the beginning of the
Non-Compete Period. To enable the Board of Directors to make the
determination required by clauses (ii) or (iii) of the immediately preceding
sentence, Executive will, during the Non-Compete Period and as long
thereafter as he owns any of the capital stock of the Company, inform the
Board of Directors in writing, at least 30 days before acquiring any interest
in any enterprise, of his intention to acquire such interest. The notice will
set forth sufficient information about that enterprise to enable the Company
to determine whether the enterprise is "in competition" with the Company.
If, at the time of enforcement of this Agreement, a court of
competent jurisdiction should hold that the restrictions contained in this
paragraph 8 are unreasonable under circumstances then existing, the Company
and Executive agree that the maximum period, scope, or geographical area
reasonable under such circumstances will be substituted for the stated
period, scope, or area.
9. STAFF RELATIONSHIPS. Executive acknowledges that the Company's employees
and its relationships with its employees are valuable assets of the Company.
Executive agrees that he will not, at any time during the term of his employment
and during the Non-Compete Period, directly or indirectly, engage in any of the
following activities, as an individual, independent contractor, officer,
partner, member, employee, agent, consultant, shareholder or investor:
a. employ, hire, engage, contract with or enter into any type of
business arrangement with any employee of the Company or any Prospect
(defined below) or solicit or seek to solicit any employee of the Company or
any Prospect to cease being an employee of the Company or seeking to have
such employee or Prospect enter into the employment of or enter into any
business arrangement with any other entity. For purposes of this Agreement,
the term "Prospect" means any individual or entity which is a candidate
recorded on the Company's Staff Sourcing Network or is an employee of any
entity with which the Company has entered into discussions or agreements
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concerning its acquisition or a strategic alliance or with which the Company has
another contractual arrangement. During the Non-Compete Period, Prospects shall
be those Prospects in existence at the beginning of the Non-Compete Period.
10. ARBITRATION. If there is any disagreement between the Company and
Executive whether a resignation by Executive was "voluntary" for purposes of
paragraphs 6 or 8, whether there was "Cause" for the Board of Directors to
terminate Executive's employment for purposes of paragraph 6, whether Executive
is "disabled" for purposes of paragraph 6 or whether an enterprise in which
Executive desires to acquire an interest is "in competition" with the Company
for purposes of paragraph 8, the Company and Executive will make a good faith
effort to resolve such disagreement between themselves. If they fail to so
resolve it, they agree to submit the issue to a binding arbitrator proposed by
the Company reasonably satisfactory to Executive. Executive agrees to pay all
costs of such arbitration and to abide by the results if the Company prevails in
the arbitration and the Company agrees to pay all the costs of the arbitration
and to abide by the results if Executive prevails in the arbitration.
11. REMEDIES. The parties will be entitled to enforce their rights under
this Agreement specifically, to recover damages by reason of any breach of any
provision hereof, and to exercise all other rights existing in their favor. The
Company and Executive agree and acknowledge that money damages may not be an
adequate remedy for any breach by Executive of the provisions of this Agreement
(including paragraph 8) and that the Company may in its sole discretion apply to
any court of law or equity of competent jurisdiction for specific performance
and/or injunctive relief to enforce, or prevent any violations of, the
provisions of this Agreement.
12. MODIFICATION, AMENDMENT, WAIVER. No modification, amendment or waiver
of any provision of this Agreement will be effective unless set forth in a
writing signed by the Company and Executive and approved by the Board of
Directors. The Company's or Executive's failure at any time to enforce any
provision of this Agreement will in no way be construed as a waiver of such
provision and will not affect the right of the Company and Executive thereafter
to enforce each and every provision of this Agreement in accordance with its
terms.
13. SEVERABILITY. Whenever possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such provision will be ineffective only to the extent of such
invalidity, illegality or unenforceability in such jurisdiction, without
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invalidating the remainder of this Agreement in such jurisdiction or any
provision hereof in any other jurisdiction.
14. DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
inserted for convenience and do not constitute a part of this Agreement.
15. CHOICE OF LAW. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by and interpreted in
accordance with the internal law, and not the law of conflicts, of the
Commonwealth of Virginia.
16. NOTICES. All notices, demands or other communications to be given or
delivered under or by reason of any of the provisions of this Agreement will be
in writing and will, except as otherwise provided herein, be deemed to have been
given when delivered personally or mailed by certified or registered mail,
return receipt requested and postage prepaid, to the recipient c/o Metro
Information Services, Inc., Reflections II, X.X. Xxx 0000, Xxxxxxxx Xxxxx,
Xxxxxxxx 00000, or at such other address as the recipient party has specified by
prior written notice to the sending party.
IN WITNESS, the undersigned parties have executed this Agreement as of the
date first written above.
METRO INFORMATION SERVICES, INC.
By /s/ Xxxx X. Xxxx
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Xxxx X. Xxxx, President
EXECUTIVE:
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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