EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of May 30, 1997, between IT PARTNERS, INC. , a
Delaware corporation ("ITPI") and XXXXX X. XXXXX ("Blech").
WHEREAS, ITPI desires to employ Blech and Blech desires to accept such
employment on the terms and conditions hereinafter set forth; and
WHEREAS, the parties hereby acknowledge that the goodwill, continued
patronage, names, addresses and specific business requirements of ITPI's
clients and customers, and the designs, procedures, systems, strategies,
business methods and know-how of ITPI, having been acquired through ITPI's
efforts and the expenditure of considerable time and money, are among the
principal assets of ITPI; and
WHEREAS, the parties hereby acknowledge that as a result of the
position(s) in which Blech will be employed, Blech will develop special skills
and knowledge peculiar to ITPI's business, whereby he will become, through his
employment with ITPI, acquainted with the identities of the clients and
customers of ITPI, and will acquire access to the techniques of ITPI in
carrying on its business as well as other confidential and proprietary
information; and
WHEREAS, the parties hereto acknowledge that the Covenants set forth in
Section 8 of this Agreement are necessary for the reasonable and proper
protection of ITPI's confidential and proprietary information (as defined
herein), customer relationships, and the goodwill of ITPI's business, and that
such Covenants constitute a material portion of the consideration for Blech's
employment hereunder.
NOW, THEREFORE, in consideration of the premises and mutual promises and
covenants contained herein, and for other good and valuable consideration, the
receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Term. ITPI agrees to employ Blech, and Blech agrees to be
employed, as Vice Chairman and/or Chief Operating Officer as determined by
ITPI's Board of Directors (the "Board") from time to time for an initial term
of five (5) years commencing June 1, 1997 and ending May 30, 2002 (the
"Initial Term"), unless such employment is sooner terminated as provided
herein. In such capacity, Blech shall perform such duties and have such
responsibilities as are incident and customary to such offices, and shall have
such powers and perform such other duties and responsibilities as may be
assigned to him by the Board. During term hereof, Blech shall devote his full
time, attention, skill and energy to the performance of his duties under this
Agreement, and he shall comply with all reasonable professional requests of
the Company.
2. Compensation.
2.1 Base Salary. In consideration of Blech's services
hereunder, ITPI shall, beginning with the pay period commencing 6/1/1997, pay
Blech a minimum base salary of One Hundred Twenty Thousand and 00/100 Dollars
($120,000) per annum, payable in equal monthly installments in accordance with
ITPI's normal payroll practices. Such base salary will be reviewed annually,
and may be increased (but not decreased) by ITPI's Board, or its Executive
Committee in its sole discretion.
2.2. Bonus Compensation. In addition, Blech shall be
eligible for an annual performance bonus of up to one hundred percent (100%)
of Blech's base salary, based upon the achievement of certain defined annual
performance goals consistent with the Company's 5-year operating plan
established by the Board (including, without limitation, "threshold" goals,
"plan" goals and "override" goals), in consultation with ITPI management,
during the term hereof.
a. Achievement by the Company of its "threshold"
performance goal for a given year shall make Blech eligible to receive a bonus
payment equal to twenty percent (20%) of his annual base salary.
b. Achievement by the Company of its "plan"
performance goal for a given year shall make Blech eligible to receive a bonus
payment equal to sixty percent (60%) of his annual base salary.
c. Achievement by the Company of its "override"
performance goal for a given year shall make Blech eligible to receive a bonus
payment equal to one hundred percent (100%) of his annual base salary.
d. ITPI may, in its sole discretion, pay a bonus to
Blech over and above any bonuses determined and paid to Blech in accordance
with this Section.
3. Fringe Benefits.
3.1. During the term of this Agreement, Blech shall be
entitled to participate in any and all fringe benefit plans, programs and
practices which shall from time to time be sponsored by ITPI for the benefit
of its executive employees, and shall be furnished with other services and
perquisites appropriate to his position.
3.2. Without limiting the generality of the foregoing, Blech
shall be entitled to the following benefits (regardless of whether such
benefits are provided to other executives):
a. Comprehensive medical insurance for Blech, his
spouse, and his dependent children with no deductibles or co-insurance.
b. Dental and vision insurance for Blech, his spouse,
and his dependent children with no deductibles or co-insurance.
c. Group term life insurance with death benefits of
not less than $1,000,000.00.
d. Long-term disability insurance paying disability
benefits of at least 70% of Blech's salary upon the termination of Blech's
employment by reason of disability.
e. Accidental death and dismemberment insurance
benefits of not less than $1,000,000.00.
f. Annual physical examinations.
g. Financial planning services with a value of up to
$2,500.00 per year during the term hereof.
4. Vacation and Sick Leave. Blech shall be entitled to a total of
four (4) weeks of vacation each year during the term hereof. Unused vacation
shall not accumulate from year to year. Blech may take his vacation at such
time or times as shall not unreasonably interfere with the performance of his
duties under this Agreement. Blech shall be entitled to paid sick leave and
holidays in accordance with ITPI's announced policy for executive employees as
in effect from time to time.
5. Reimbursement of Expenses. Blech is authorized to incur
reasonable expenses in connection with the business of ITPI including expenses
for travel and similar items. ITPI will reimburse Blech for all previously
approved reasonable expenses upon itemized account of expenditures.
6. Illness or Disability. Blech shall receive full compensation
for any period of illness or disability during the term of this Agreement
until such time as he receives benefits under the long term disability
insurance coverage referred to in Section 4, supra; provided, however, that
such interim period of compensation for illness or disability shall not exceed
six (6) months. Notwithstanding the foregoing, ITPI shall have the right to
terminate this Agreement without further obligation to Blech if such illness
or disability shall be of such a character as totally to disable Blech from
rendering any services to ITPI for a period of more than six (6) consecutive
months on giving at least thirty (30) days' written notice of intention to do
so.
7. Termination of Employment. Blech's employment hereunder is
employment at will, and either ITPI or Blech may terminate this Agreement and
Blech's employment at any time, with or without cause. If ITPI terminates the
Agreement other than (i) for Cause (defined below) or (ii) due to Blech's
Disability as described in Section 6 hereof, Blech shall be entitled to
receive, as his exclusive remedy for such termination, the payment of his
then-current base salary for the remainder of the Term hereof (the "Severance
Benefit"). Such Severance Benefit shall be payable to Blech in equal monthly
installments consistent with ITPI's standard payroll practices, the first of
such installments to be due within thirty (30) days after a qualifying
termination hereof. For purposes of this Agreement, "Cause" shall mean drug
or alcohol abuse, conviction of a felony or crime involving moral turpitude, a
material breach of this Agreement, or any willful or grossly negligent act or
omission by Blech having a material adverse effect on the business of ITPI.
8. Restrictive Covenants.
a. Noncompetition. Blech agrees that during his employment,
and for a period of two (2) years after the later of termination of this
Agreement and termination of his employment with ITPI (the "Protected
Period"), he will not: (a) engage in, manage, operate, control or supervise,
or participate in the management, operation, control or supervision of, any
business or entity that provides computer programming or consulting services,
or any other products or services competitive with those currently provided by
ITPI or those ITPI is providing as of the date of termination of Blech's
employment with ITPI ("Competitive Activity"); or (b) have any ownership or
financial interest, directly or indirectly, in any entity that engages in
Competitive Activity, including, without limitation, as an individual,
partner, shareholder (other than as a shareholder of a publicly owned
corporation in which Blech owns less than 2% of the outstanding shares of such
corporation), officer, director, employee, member, associate, principal,
agent, representative or consultant, and shall not in any other manner,
directly or indirectly, compete to any extent with such business of ITPI.
Notwithstanding the foregoing, if the Agreement is terminated by ITPI and such
termination is without Cause, as defined herein, Blech shall be bound by the
terms of this subsection 8a only for the shorter of (i) two (2) years
following such termination or (ii) the period of time following such
termination during which ITPI, at ITPI's sole discretion, continues to pay
Blech's then-current base salary.
b. Nonsolicitation. During Blech's employment with ITPI,
and during the Protected Period, Blech agrees not to solicit or conduct
business, without ITPI's consent, with any client or customer of ITPI (past or
present), whether or not ITPI is doing work for such client or customer as of
the date of termination of Blech's employment with ITPI, as well as any
prospective client or customer of ITPI, or to contact, solicit, interfere with
or attempt to entice in any form, fashion or manner any employee of ITPI for
the purpose of inducing that employee to terminate his/her employment with
ITPI or act in any way that would be contrary to the best interests of ITPI.
c. Nondisclosure. During and after Blech's employment with
ITPI, Blech agrees not to disclose, or to knowingly allow any other employee
to disclose, to any other person or business entity, or use for personal
profit or gain, any confidential or proprietary information of ITPI,
regardless of whether the same shall be or may have been originated,
discovered or invented by Blech or by Blech in conjunction with others. For
purposes of this Agreement, the term "confidential or proprietary information"
shall include, without limitation: the names, addresses and telephone numbers
of past, present and prospective clients or customers of ITPI, as well as
products, designs, business plans, proposed business development, marketing
strategies, customers requirements, contractual provisions, employee
capabilities, proposed marketing initiatives, pricing methods, company
earning, computer software and reporting systems, and the procedures, systems
and business methods of ITPI.
d. Geographic Scope of Restrictive Covenants. The geographic
area in which Blech shall not engage in any of the prohibited activities
listed in subsections 8a and 8b hereof shall be limited to the continental
United States.
9. Remedies for Breach. Blech hereby acknowledges and agrees that
a violation of any of the covenants set forth in Section 8 hereof (the
"Covenants") would result in immediate and irreparable harm to ITPI, and that
ITPI's remedies at law, including, without limitation, the award of money
damages, would be inadequate relief to ITPI for any such violation.
Therefore, any violation or threatened violation by Blech of the Covenants
shall give ITPI the right to enforce such Covenants through specific
performance, temporary restraining order, preliminary or permanent injunction,
and other equitable relief. Such remedies shall be cumulative and in addition
to any other remedies ITPI may have, at law or in equity.
10. Notice of Subsequent Employment; Etc. Blech agrees that he
shall, during the two (2) year period following the termination of his
employment with ITPI, give written notice to ITPI of the names and addresses
of each person, firm, corporation or other entity by whom he is employed or
for whom he acts as director, agent, representative, member, associate or
consultant. Blech further agrees that if at any time during such two (2) year
period he conducts business on his own account, or through a proprietary
interest in any business, firm, partnership or other entity, or as contractor,
or owns any stock in a corporation, Blech shall give written notice to ITPI of
the name, address and nature of any such business.
11. Return of ITPI Property; Assignment of Inventions.
a. Return of Property. Upon the termination of Blech's
employment with ITPI for any reason, Blech shall leave with or return to ITPI
all personal property belonging to ITPI ("ITPI Property") that is in Blech's
possession or control as of the date of such termination of employment,
including, without limitation, all records, papers, drawings, notebooks,
specifications, marketing materials, software, reports, proposals, equipment,
or any other device, document or possession, however obtained, whether or not
such ITPI Property contains confidential or proprietary information of ITPI as
described in Section 8c hereof.
b. Assignment of Inventions. If at any time or times during
Blech's employment, Blech shall (either alone or with others) make, conceive,
discover or reduce to practice any invention, modification, discovery, design,
development, improvement, process, software program, work of authorship,
documentation, formula, data, technique, know-how, secret or intellectual
property right whatsoever or any interest therein (whether or not patentable
or registrable under copyright or similar statutes or subject to analogous
protection) (herein called "Developments") that (a) relates to the business of
ITPI or any of the products or services being developed, manufactured or sold
by ITPI or that may be used in relation therewith, (b) results from tasks
assigned him by ITPI or (c) results from the use of premises or personal
property (whether tangible or intangible) owned, leased or contracted for by
ITPI, such Developments and the benefits thereof shall immediately become the
sole and absolute property of ITPI and its assigns, and Blech shall promptly
disclose to ITPI (or any persons designated by it) each such Development and
hereby assigns any rights Blech may have or acquire in the Developments and
benefits and/or rights resulting therefrom to ITPI and its assigns without
further compensation and shall communicate, without cost or delay, and without
publishing the same, all available information relating thereto (with all
necessary plans and models) to ITPI.
Upon disclosure of each Development to ITPI, Blech will, during
his employment and at any time thereafter, at the request and expense of ITPI,
sign, execute, make and do all such deeds, documents, acts and things as ITPI
and its duly authorized agents may reasonably require:
(i) to apply for, obtain and vest in the name of ITPI alone
(unless ITPI otherwise directs) letters patent,
copyrights or other analogous protection in any country
throughout the world and when so obtained or vested to
renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or
petitions or applications for revocation of such
letters patent, copyright or other analogous
protection.
In the event ITPI is unable, after reasonable effort, to secure
Blech's signature on any letters patent, copyright or other analogous
protection relating to a Development, whether because of Blech's physical or
mental incapacity or for any other reason, Blech hereby irrevocably designates
and appoints ITPI and its duly authorized officers and agents as Blech's
agents and attorneys-in-fact, to act for and in behalf of Blech and stead to
execute and file any such application or applications and to do all other
lawfully permitted acts to further the prosecution and issuance of letters
patent, copyright or other analogous protection thereon with the same legal
force and effect as if executed by Blech.
12. Survival. The provisions of Sections 8, 9, 10 and 11 hereof
shall survive the termination of this Agreement, regardless of the manner or
cause of such termination.
13. Effect of Agreement. This Agreement sets forth the final and
complete Agreement of the parties. It shall not be assigned by Blech and may
not be modified except by way of a writing executed by both parties. All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their successors and
assigns.
14. Governing Law. The provisions of this Agreement and any
disputes arising hereunder shall be governed by and construed in accordance
with the laws of the State of Delaware.
[The next page is the Signature Page.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their seals affixed hereto as of the day and year first
above written.
IT PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: President
/s/ Xxxxx X. Xxxxx (SEAL)
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Xxxxx X. Xxxxx
