Exhibit 10.12
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of June __, 2006, by and between
XXXXXXXX X. XXXXXX (the "Executive") and Synchronoss Technologies, Inc., a
Delaware corporation (the "Company").
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) POSITION. For the term of his employment under this Agreement
(the "Employment"), the Company agrees to employ the Executive in the position
of Chief Financial Officer and Treasurer. The Executive shall report to the
Company's Chief Executive Officer.
(b) OBLIGATIONS TO THE COMPANY. During his Employment, the Executive
(i) shall devote his full business efforts and time to the Company, (ii) shall
not engage in any other employment, consulting or other business activity that
would create a conflict of interest with the Company, (iii) shall not assist any
person or entity in competing with the Company or in preparing to compete with
the Company and (iv) shall comply with the Company's policies and rules, as they
may be in effect from time to time.
(c) NO CONFLICTING OBLIGATIONS. The Executive represents and
warrants to the Company that he is under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with his obligations under this
Agreement. The Executive represents and warrants that he will not use or
disclose, in connection with his Employment, any trade secrets or other
proprietary information or intellectual property in which the Executive or any
other person has any right, title or interest and that his Employment will not
infringe or violate the rights of any other person. The Executive represents and
warrants to the Company that he has returned all property and confidential
information belonging to any prior employer.
(d) COMMENCEMENT DATE. The Executive previously commenced full-time
Employment. This Agreement shall govern the terms of Executive's Employment
effective as of June __, 2006 (the "Commencement Date").
2. CASH AND INCENTIVE COMPENSATION.
(a) SALARY. The Company shall pay the Executive as compensation for
his services a base salary at a gross annual rate of not less than $225,000.
Such salary shall be payable in accordance with the Company's standard payroll
procedures. (The annual compensation specified in this Subsection (a), together
with any increases in such compensation that the Company may grant from time to
time, is referred to in this Agreement as "Base Salary.")
(b) INCENTIVE BONUSES. The Executive shall be eligible for an annual
incentive bonus with a target amount equal to 50% of his Base Salary. The
Executive's bonus (if any) shall be awarded based on criteria established in
advance by the Company's Board of Directors (the "Board") or its Compensation
Committee. The determinations of the Board or its
Compensation Committee with respect to such bonus shall be final and binding.
The Executive shall not be entitled to an incentive bonus if he is not employed
by the Company on the last day of the fiscal year for which such bonus is
payable.
3. VACATION AND EMPLOYEE BENEFITS. During his Employment, the
Executive shall be eligible for paid vacations in accordance with the Company's
vacation policy, as it may be amended from time to time, with a minimum of 15
vacation days per year. During his Employment, the Executive shall be eligible
to participate in the employee benefit plans maintained by the Company, subject
in each case to the generally applicable terms and conditions of the plan in
question and to the determinations of any person or committee administering such
plan.
4. BUSINESS EXPENSES. During his Employment, the Executive shall be
authorized to incur necessary and reasonable travel, entertainment and other
business expenses in connection with his duties hereunder. The Company shall
reimburse the Executive for such expenses upon presentation of an itemized
account and appropriate supporting documentation, all in accordance with the
Company's generally applicable policies.
5. TERM OF EMPLOYMENT.
(a) EMPLOYMENT TERM. The Company hereby employs Executive to render
services to the Company in the position and with the duties and responsibilities
described in Section 1 for the period commencing on the Commencement Date and
ending upon the earlier of (i) three (3) years from such date, and (ii) the date
Executive's Employment is terminated in accordance with Subsection 5(b). This
Agreement will automatically renew for annual one- year periods unless either
party gives to the other written notice on or before May 1, 2007 or May 1 of
each succeeding year, of such party's intent to modify, amend or terminate this
Agreement according to the terms hereof.
(b) TERMINATION OF EMPLOYMENT. The Company may terminate the
Executive's Employment at any time and for any reason (or no reason), and with
or without Cause (as defined below), by giving the Executive 30 days' advance
notice in writing. The Executive may terminate his Employment by giving the
Company 30 days' advance notice in writing. The Executive's Employment shall
terminate automatically in the event of his death. The termination of the
Executive's Employment shall not limit or otherwise affect his obligations under
Section 7.
(c) RIGHTS UPON TERMINATION. Upon Executive's voluntary termination
of employment or the Company's termination of Executive's employment for Cause,
Executive shall only be entitled to the compensation, benefits and
reimbursements described in Sections 1 2, and 3 for the period preceding the
effective date of the termination and no other benefits. Upon the Company's
termination of Executive's employment other than for Cause, Executive shall only
be entitled to the compensation, benefits and reimbursements described in
Sections 1, 2, and 3 for the period preceding the effective date of the
termination and the severance pay benefits described in Section 6. The payments
under this Agreement shall fully discharge all
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responsibilities of the Company to Executive. This Agreement shall terminate
when all obligations of the parties hereunder have been satisfied.
(d) RIGHTS UPON DEATH OR DISABILITY. If Executive's Employment ends
due to death, Executive's estate shall be entitled to receive an amount equal to
his target bonus for the fiscal year in which his death occurred, prorated based
on the number of days he was employed by the Company during that fiscal year. If
Executive's Employment ends due to Permanent Disability (as such term is defined
below), Executive shall be entitled to receive an amount equal to his target
bonus for the fiscal year in which his employment ended, prorated based on the
number of days he was employed by the Company during that fiscal year, and the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") benefits described in
the next sentence. If Executive or his personal representative elects to
continue health insurance coverage under COBRA for Executive and his dependents
following the termination of his employment, then the Company will pay the
monthly premium under COBRA until the earliest of (a) the close of the 24-month
period following the termination of his employment, (b) the expiration of his
continuation coverage under COBRA or (c) the date he becomes eligible for
substantially equivalent health insurance coverage in connection with new
employment
6. TERMINATION BENEFITS.
(a) PRECONDITIONS. Any other provision of this Agreement
notwithstanding, Subsections (b) and (c) below shall not apply unless the
Executive:
(i) Has executed a general release of all claims (in a form
prescribed by the Company);
(ii) Has returned all property of the Company in the
Executive's possession; and
(iii) If requested by the Board, has resigned as a member of
the Board and as a member of the boards of directors of all subsidiaries
of the Company, to the extent applicable.
(b) SEVERANCE PAY IN THE ABSENCE OF A CHANGE IN CONTROL. If, during
the term of this Agreement and prior to the occurrence of a Change in Control or
more than 12 months following a Change in Control, the Company terminates the
Executive's employment with the Company for a reason other than Cause or
Permanent Disability (as such terms are defined below), then the Company shall
pay the Executive a lump sum severance payment equal to one and one-half times
(i) his Base Salary in effect at the time of the termination of Employment and
(ii) his average bonus received in the immediately preceding two years. If,
during the term of this Agreement and prior to the occurrence of a Change in
Control or more than 12 months following a Change in Control, Executive resigns
his Employment for Good Reason (as such term is defined below), then the Company
shall pay the Executive a lump sum severance payment equal to one times (i) his
Base Salary in effect at the time of the termination of Employment and (ii) his
average bonus received in the immediately preceding two years. However, the
amount of the severance payment under this Subsection (b) shall be reduced by
the
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amount of any severance pay or pay in lieu of notice that the Executive receives
from the Company under a federal or state statute (including, without
limitation, the Worker Adjustment and Retraining Notification Act). The
severance payments under this Subsection (b) shall in no event commence prior to
the earliest date permitted by Section 409A(a)(2) of the Internal Revenue Code
of 1986, as amended (the "Code"). If the commencement of such severance payments
must be delayed, as determined by the Company, then the deferred installments
shall be paid in a lump sum on the earliest practicable date permitted by
Section 409A(a)(2) of the Code.
(c) SEVERANCE PAY IN CONNECTION WITH A CHANGE IN CONTROL. If, during
the term of this Agreement and within 12 months following a Change in Control,
the Company terminates the Executive's employment with the Company for a reason
other than Cause or Permanent Disability or the Executive resigns his Employment
for Good Reason, then the Company shall pay the Executive a lump sum severance
payment equal to two times his Base Salary in effect at the time of the
termination of Employment plus two times the Executive's average bonus received
in the immediately preceding two years. However, the amount of the severance
payment under this Subsection (c) shall be reduced by the amount of any
severance pay or pay in lieu of notice that the Executive receives from the
Company under a federal or state statute (including, without limitation, the
Worker Adjustment and Retraining Notification Act). The severance payments under
this Subsection (c) shall in no event commence prior to the earliest date
permitted by Section 409A(a)(2) of the Code. If the commencement of such
severance payments must be delayed, as determined by the Company, then the
deferred installments shall be paid in a lump sum on the earliest practicable
date permitted by Section 409A(a)(2) of the Code.
(d) PARACHUTE TAXES. If amounts paid or payable or distributed or
distributable pursuant to the terms of this Agreement (the "Total Payments")
would be subject to the excise tax imposed by section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder or
any interest or penalties with respect to such excise tax (such excise tax and
any such interest or penalties are collectively referred to as the "Excise
Tax"), then the Total Payments shall be reduced to ensure that the Total
Payments are not subject to Excise Tax. In determining whether to cap the Total
Payments, compensation or other amounts that the Executive is entitled to
receive other than pursuant to this Agreement shall be disregarded. All
determinations and calculations required to be made under this provision will be
made by an independent accounting firm selected by Executive from among the
largest eight accounting firms in the United States (the "Accounting Firm"). If
the Accounting Firm determines that the Total Payments are to be reduced under
the preceding sentences, then the Company will promptly give Executive notice to
that effect and a copy of the detailed calculation thereof. Executive may then
elect, in his sole discretion, which and how much of the Total Payments are to
be eliminated or reduced (as long as after such election no Excise Tax will be
payable), and Executive will advise the Company in writing of his election
within 10 business days of receipt of notice. If Executive makes no such
election within such 10-day period, then the Company may elect which and how
much of the Total Payments are to be eliminated or reduced (as long as after
such election no Excise Tax will be payable), and it will notify Executive
promptly of such election. The fees of the Accounting Firm shall be paid by the
Company.
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(e) DEFINITION OF "CAUSE." For all purposes under this Agreement,
"Cause" shall mean:
(i) An unauthorized use or disclosure by the Executive of the
Company's confidential information or trade secrets, which use or
disclosure causes material harm to the Company;
(ii) A material breach by the Executive of any material
agreement between the Executive and the Company;
(iii) A material failure by the Executive to comply with the
Company's written policies or rules;
(iv) The Executive's conviction of, or plea of "guilty" or "no
contest" to, a felony under the laws of the United States or any State
thereof;
(v) The Executive's gross negligence or willful misconduct
which causes material harm to the Company;
(vi) A continued failure by the Executive to perform
reasonably assigned duties after receiving written notification of such
failure from the Board; or
(vii) A failure by the Executive to cooperate in good faith
with a governmental or internal investigation of the Company or its
directors, officers or employees, if the Company has requested the
Executive's cooperation.
(f) DEFINITION OF "GOOD REASON." "Good Reason" exists upon:
(i) a change in the Executive's position with the Company that
materially reduces his level of authority or responsibility;
(ii) a reduction in the Executive's base salary by more than
10% unless pursuant to a Company-wide salary reduction affecting all
Executives proportionately;
(iii) relocation of the Executive's principal workplace by
more than 50 miles;
(iv) a substantial reduction, without good business reasons,
of the facilities and perquisites (including office space and location)
available to the Executive immediately prior to such reduction; or
(v) a material reduction in the kind or level of employee
benefits to which the Executive is entitled immediately prior to such
reduction with the result that the Executive's overall benefits package is
significantly reduced, unless such reduction is made in connection with a
reduction in the kind
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or level of employee benefits of employees of the Company generally.
(g) DEFINITION OF "PERMANENT DISABILITY." For all purposes under
this Agreement, "Permanent Disability" shall mean the Executive's inability to
perform the essential functions of the Executive's position, with or without
reasonable accommodation, for a period of at least 120 consecutive days because
of a physical or mental impairment.
7. NON-SOLICITATION AND NON-DISCLOSURE.
(a) NON-SOLICITATION. During the period commencing on the date of
this Agreement and continuing until the second anniversary of the date the
Executive's Employment terminated for any reason, the Executive shall not
directly or indirectly, personally or through others, solicit or attempt to
solicit (on the Executive's own behalf or on behalf of any other person or
entity) either (i) the employment of any employee or consultant of the Company
or any of the Company's affiliates or (ii) the business of any customer of the
Company or any of the Company's affiliates.
(b) NON-COMPETITION. As one of the Company's executive and
management personnel and officer, Executive has obtained extensive and valuable
knowledge and confidential information concerning the business of the Company,
including certain trade secrets the Company wishes to protect. Executive further
acknowledges that during his employment he will have access to and knowledge of
Proprietary Information (as defined below). To protect the Company's Proprietary
Information, Executives agrees that during his employment with the Company,
whether full-time or half-time and for a period of 24 months after his last day
of employment with the Company, he will not directly or indirectly engage in
(whether as an employee, consultant, proprietor, partner, director or
otherwise), or have any ownership interest in, or participate in the financing,
operation, management or control of, any person, firm, corporation or business
that engages in a "Restricted Business" in a "Restricted Territory" as defined
below. It is agreed that ownership of (i) no more than one percent (1%) of the
outstanding voting stock of a publicly traded corporation, or (ii) any stock he
presently owns shall not constitute a violation of this provision.
(c) DEFINITIONS. The term "PROPRIETARY INFORMATION" shall mean any
and all confidential and/or proprietary knowledge, data or information of the
Company. By way of illustration but not limitation, Proprietary Information
includes (a) trade secrets, inventions, mask works, ideas, processes, formulas,
source and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques; and (b)
information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers; and (c) information
regarding the skills and compensation of other employees of the Company.
"RESTRICTED BUSINESS" shall mean the design, development, marketing or sales of
software, or any other process, system, product, or service marketed, sold or
under development by the Company at the time Executive's employment with the
Company ends. "RESTRICTED TERRITORY" shall mean any state, county, or locality
in the United States in which the Company conducts business.
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(d) REASONABLE. Executive agrees and acknowledges that the time
limitation on the restrictions in this Section 7, combined with the geographic
scope, is reasonable. Executive also acknowledges and agrees that this provision
is reasonably necessary for the protection of Proprietary Information, that
through his employment he shall receive adequate consideration for any loss of
opportunity associated with the provisions herein, and that these provisions
provide a reasonable way of protecting the Company's business value which will
be imparted to him. If any restriction set forth in this Section 7 is found by
any court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the maximum
period of time, range of activities or geographic area as to which it may be
enforceable.
(e) NON-DISCLOSURE. The Executive has entered into a Proprietary
Information and Inventions Agreement with the Company, which is incorporated
herein by this reference.
8. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(b) EMPLOYEE'S SUCCESSORS. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
9. MISCELLANEOUS PROVISIONS.
(a) NOTICE. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered, when delivered by FedEx with delivery charges
prepaid, or when mailed by U.S. registered or certified mail, return receipt
requested and postage prepaid. In the case of the Executive, mailed notices
shall be addressed to him at the home address that he most recently communicated
to the Company in writing. In the case of the Company, mailed notices shall be
addressed to its corporate headquarters, and all notices shall be directed to
the attention of its Secretary.
(b) MODIFICATIONS AND WAIVERS. No provision of this Agreement shall
be modified, waived or discharged unless the modification, waiver or discharge
is agreed to in writing and signed by the Executive and by an authorized officer
of the Company (other than the Executive). No waiver by either party of any
breach of, or of compliance with, any condition or provision of this Agreement
by the other party shall be considered a waiver of any other condition or
provision or of the same condition or provision at another time.
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(c) WHOLE AGREEMENT. No other agreements, representations or
understandings (whether oral or written and whether express or implied) that are
not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof. This Agreement and the
Proprietary Information and Inventions Agreement contain the entire
understanding of the parties with respect to the subject matter hereof.
(d) TAXES. All payments made under this Agreement shall be subject
to reduction to reflect taxes or other charges required to be withheld by law.
The Company shall not have a duty to design its compensation policies in a
manner that minimizes the Executive's tax liabilities, and the Executive shall
not make any claim against the Company or the Board related to tax liabilities
arising from the Executive's compensation.
(e) CHOICE OF LAW AND SEVERABILITY. This Agreement shall be
interpreted in accordance with the laws of the State of New Jersey (except their
provisions governing the choice of law). If any provision of this Agreement
becomes or is deemed invalid, illegal or unenforceable in any applicable
jurisdiction by reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the minimum extent necessary to
conform to applicable law so as to be valid and enforceable or, if such
provision cannot be so amended without materially altering the intention of the
parties, then such provision shall be stricken and the remainder of this
Agreement shall continue in full force and effect. If any provision of this
Agreement is rendered illegal by any present or future statute, law, ordinance
or regulation (collectively the "Law"), then such provision shall be curtailed
or limited only to the minimum extent necessary to bring such provision into
compliance with the Law. All the other terms and provisions of this Agreement
shall continue in full force and effect without impairment or limitation.
(f) NO ASSIGNMENT. This Agreement and all rights and obligations of
the Executive hereunder are personal to the Executive and may not be transferred
or assigned by the Executive at any time. The Company may assign its rights
under this Agreement to any entity that assumes the Company's obligations
hereunder in connection with any sale or transfer of all or a substantial
portion of the Company's assets to such entity.
(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.
_______________________________________
XXXXXXXX X. XXXXXX
SYNCHRONOSS TECHNOLOGIES, INC.
By ____________________________________
Title: ________________________________
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