EXHIBIT 10.18
EXECUTION COPY
|__| Employee's Copy
|__| Company's Copy
CLARANT WORLDWIDE CORPORATION
EMPLOYMENT AGREEMENT
To XXXXXX X. XXXXXXXX:
This Agreement establishes the terms of your employment with Clarant
Worldwide Corporation, a Delaware corporation (the "COMPANY"). The Company has
been formed as a parent company to acquire companies engaged in the business of
providing internet professional services and to make an initial public offering
("IPO") of the Company's common stock.
EMPLOYMENT AND DUTIES You and the Company agree to your employment as Vice
President, Finance on the terms contained herein. You
agree to perform whatever duties the Company's Board
of Directors (the "BOARD") or person the Board or the
Company's Chief Executive Officer specifies as your
direct report (the "DIRECT REPORT") may assign you
from time to time that are reasonably consistent with
your position as Vice President, Finance. During your
employment, you agree to devote your full business
time, attention, and energies to performing those
duties (except as your Direct Report otherwise agrees
from time to time). You agree to comply with the
noncompetition, secrecy, and other provisions of
Exhibit A to this Agreement.
TERM OF EMPLOYMENT Your employment under this Agreement begins as of
your execution of this Agreement (the "EFFECTIVE
DATE"). Unless sooner terminated under this
Agreement, your employment ends at 6:00 p.m. Central
Time on
(i) December 31, 1999 (or such earlier date
as of which the Board or the CEO notifies
you the Company is abandoning its efforts
for 1999 to complete an IPO), if the Company
has not completed its IPO by that date, or
(ii) the third anniversary of the Effective
Date if the Company has completed its IPO on
or before December 31, 1999.
The period running from the Effective Date to the
applicable date in the preceding sentence is the
"TERM."
Termination or expiration of this Agreement ends your
employment but does not end your obligation to comply
with Exhibit A or the Company's obligation, if any,
to make payments under the PAYMENTS ON TERMINATION
and SEVERANCE provisions as specified below.
COMPENSATION
SALARY The Company will pay you an annual salary (the
"SALARY") from the Effective Date at the rate of not
less than $150,000 in accordance with its generally
applicable payroll practices. The Board or your
Direct Report will review your Salary annually and
consider you for increases.
BONUS The Board or its Compensation Committee, or if the
Board directs, your Direct Report will establish
annual bonus targets under which you will be eligible
for an annual bonus equal to up to 100% of your
Salary. It is the Company's good faith intention to
establish bonus targets for the first year, in
consultation with you, within 90 days following the
Effective Date.
OPTIONS The Company will grant options to you under the
Company's 1999 Equity Incentive Plan, exercisable at
the IPO price, to acquire 100,000 shares of common
stock. The options will consist of incentive stock
options under Section 422 of the Internal Revenue
Code to the extent the tax laws permit and of
nonqualified stock options for the remainder. The
options will become exercisable, so long as you
remain employed, in sixths every six months after the
closing date of the IPO and will remain exercisable
for up to 10 years, subject to the option plan's
rules on expiration on or after termination of
employment. In addition, if you resign from
employment for any reason or the Company terminates
your employment without CAUSE, the options described
above will accelerate such that any portion of the
options that would become exercisable within the six
months after your date of termination or resignation
will become exercisable as a result of your
termination or resignation (and will expire in
accordance with the option's terms within 90 days
after such date).
EMPLOYEE BENEFITS While the Company employs you under this Agreement,
the Company will provide you with the same benefits
as it makes generally available from time to time to
the Company's employees, as those benefits are
amended or terminated from time to time. Your
participation in the
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Company's benefit plans will be subject to the terms
of the applicable plan documents and the Company's
generally applied policies, and the Company in its
sole discretion may from time to time adopt, modify,
interpret, or discontinue such plans or policies.
PLACE OF EMPLOYMENT Your principal place of employment will be within 35
miles of Horsham, Pennsylvania for the first 12
months following the closing date of the IPO. You
understand and agree that you must travel from time
to time for business reasons; however, you will not
be required to spend more than a cumulative maximum
of 12 days per month away on travel. (The monthly
travel obligations may vary, so long as you are not
required on a cumulative basis to have been away on
travel more than 12 days times the number of months
of employment, and any days in excess of that amount
will reduce the obligations for succeeding months.)
EXPENSES The Company will reimburse you for reasonable and
necessary travel and other business-related expenses
(including costs associated with maintaining your CPA
license) you incur for the Company in performing your
duties under this Agreement. You must itemize and
substantiate all requests for reimbursements. You
must submit requests for reimbursement in accordance
with the policies and practices of the Company. From
the Effective Date through the IPO Closing Date, the
Company will reimburse such expenses on a biweekly
basis and will reimburse them after that date
according to its normal schedule.
NO OTHER EMPLOYMENT While the Company employs you, you agree that you
will not, directly or indirectly, provide services to
any person or organization for which you receive
compensation or otherwise engage in activities that
would conflict or interfere significantly with your
faithful performance of your duties as an employee
without the Board's prior written consent. (This
prohibition excludes any work performed at the
Company's direction.) The Company acknowledges that,
as of the Effective Date, you serve as a director or
comparable position of ARC Group LLC and agrees that
such positions do not violate the prohibition on
other employment, so long as you do not violate the
provisions of Exhibit A. You may manage your personal
investments, as long as the management takes only
minimal amounts of time and is consistent with the
provisions of the NO CONFLICTS OF INTEREST Section
and the NO COMPETITION Section in Exhibit A.
You represent to the Company that you are not subject
to any agreement, commitment, or policy of any third
party that would prevent you from entering into or
performing your
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duties under this Agreement, and you agree that you
will not enter into any agreement or commitment or
agree to any policy that would prevent or hinder your
performance of duties and obligations under this
Agreement, including Exhibit A.
NO CONFLICTS OF INTEREST You confirm that you have fully disclosed to the
Company, to the best of your knowledge, all
circumstances under which you, your spouse, and other
persons who reside in your household have or may have
a conflict of interest with the Company. You further
agree to fully disclose to the Company any such
circumstances that might arise during your employment
upon your becoming aware of such circumstances. You
agree to fully comply with the Company's policy and
practices relating to conflicts of interest.
NO IMPROPER You will neither pay nor permit payment of any
PAYMENTS remuneration to or on behalf of any governmental
official other than payments required or permitted by
applicable law. You will comply fully with the
Foreign Corrupt Practices Act of 1977, as amended.
You will not, directly or indirectly,
make or permit any contribution, gift,
bribe, rebate, payoff, influence payment,
kickback, or other payment to any person or
entity, private or public, regardless of
what form, whether in money, property, or
services
to obtain favorable treatment for business
secured,
to pay for favorable treatment for business
secured,
to obtain special concessions or for special
concessions already obtained, or
in violation of any legal requirement, or
establish or maintain any fund or asset related to
the Company that is not recorded in the Company's
books and records, or
take any action that would violate (or would be part
of a series of actions that would violate) any U.S.
law
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relating to international trade or commerce,
including those laws relating to trading with the
enemy, export control, and boycotts of Israel or
Israeli products (as is sought by certain Arab
countries).
TERMINATION Subject to the provisions of this section, you and the Company
agree that it may terminate your employment, or you may
resign, except that, if you voluntarily resign, you must
provide the Company with 90 days' prior written notice (unless
the Board or your Direct Report has previously waived such
notice in writing or authorized a shorter notice period).
FOR CAUSE The Company may terminate your employment for "CAUSE" if
you:
(i) commit a material breach of your obligations or
agreements under this Agreement, including Exhibit A;
(ii) commit an act of gross negligence with respect
to the Company or otherwise act with willful
disregard for the Company's best interests;
(iii) fail or refuse to perform any duties delegated
to you that are consistent with the duties of
similarly-situated senior executives or are otherwise
required under this Agreement, provided that these
duties do not conflict with any other provision of
this Agreement;
(iv) seize a corporate opportunity for yourself
instead of offering such opportunity to the Company
if within the scope of the Company's or its
subsidiaries' business; or
(v) are convicted of or plead guilty or no contest to
a felony (or to a felony charge reduced to
misdemeanor), or, with respect to your employment, to
any misdemeanor (other than a traffic violation) or,
with respect to your employment, commit either a
material dishonest act or common law fraud or
knowingly violate any federal or state securities or
tax laws.
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Your termination for Cause will be effective immediately upon
the Company's mailing or written transmission of notice of
such termination. Before terminating your employment for Cause
under clauses (i) - (iv) above, the Company will specify in
writing to you the nature of the act, omission, refusal, or
failure that it deems to constitute Cause and, unless the
Board or your Direct Report reasonably concludes the situation
could not be corrected, give you 30 days after you receive
such notice to correct the situation (and thus avoid
termination for Cause), unless the Company agrees to extend
the time for correction. You agree that the Board or your
Direct Report will have the discretion to determine in good
faith whether your correction is sufficient, provided that
this decision does not foreclose you from using the Dispute
Resolution provisions of Exhibit B.
WITHOUT CAUSE Subject to the provisions below under PAYMENTS ON TERMINATION
and SEVERANCE, the Company may terminate your employment under
this Agreement before the end of the Term without CAUSE.
DISABILITY If you become "DISABLED" (as defined below), the Company may
terminate your employment. You are "disabled" if you are
unable, despite whatever reasonable accommodations the law
requires, to render services to the Company for more than 90
consecutive days because of physical or mental disability,
incapacity, or illness. You are also disabled if you are found
to be disabled within the meaning of the Company's long-term
disability insurance coverage as then in effect (or would be
so found if you applied for the coverage).
GOOD REASON You may resign for Good Reason with 45 days' advance written
notice. "GOOD REASON" for this purposes means, without your
consent, (i) the Company materially breaches this Agreement or
(ii) before the first anniversary of the IPO Closing Date, the
Company relocates your primary office by more than 35 miles
from Horsham, Pennsylvania.
You must give notice to the Company of your intention to
resign for Good Reason within 30 days after the occurrence of
the event that you assert entitles you to resign for Good
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Reason. In that notice, you must state the condition that you
consider provides you with Good Reason and, if such reason
relates to clause (i) above, must give the Company an
opportunity to cure the condition within 30 days after your
notice. Before or during the 30 day period, either party may
request mediation under Exhibit B to resolve any such
disputes, and, if so requested, the parties agree to cooperate
to arrange a prompt mediation during no more than a 30 day
period. If the Company fails to cure the condition, your
resignation will be effective on the 45th day after your
notice (unless the Board has previously waived such notice
period in writing or agreed to a shorter notice period or
unless mediation is proceeding in good faith), in which case
such resignation will become effective 15 days after the end
of such mediation, if not previously cured.
You will not be treated as resigning for GOOD REASON if the
Company already had given notice of termination for CAUSE as
of the date of your notice of resignation.
RELOCATION If on or after the first anniversary of the IPO Closing Date,
REASON the Company requires you, without your consent, to move your
principal place of employment by more than 35 miles, you may
resign for RELOCATION REASON
DEATH If you die during the Term, the Term will end as of the date
of your death.
PAYMENTS ON If you resign or the Company terminates your employment with
TERMINATION or without Cause or because of disability or death or because
the Company does not complete its IPO, the Company will pay
you any unpaid portion of your Salary pro-rated through the
date of actual termination (and any annual bonuses already
determined by such date but not yet paid unless your
employment is terminated with CAUSE or because the IPO has
been canceled), reimburse any substantiated but unreimbursed
business expenses, pay any accrued and unused vacation time
(to the extent consistent with the Company's policies), and
provide such other benefits as applicable laws or the terms of
the benefits require. Except to the extent the law requires
otherwise or as provided in the SEVERANCE paragraph or in your
option agreements, neither you nor your beneficiary or
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estate will have any rights or claims under this Agreement or
otherwise to receive severance or any other compensation, or
to participate in any other plan, arrangement, or benefit,
after such termination or resignation. If your employment is
terminated because the Company does not complete its IPO in
1999, you acknowledge that you have no rights to the Severance
set forth below or to any other payments under or with respect
to this Agreement.
SEVERANCE In addition to the foregoing payments, if after the completion
of the IPO but before the end of the Term, the Company
terminates your employment without CAUSE or you resign for
GOOD REASON, the Company will
pay you severance equal to your Salary, as then in
effect, for 18 months on the same schedule as though
you had remained employed during such period, even
though you are no longer employed;
pay the after-tax premium cost for you to receive any
group health coverage the Company must offer you
under Section 4980B of the Internal Revenue Code of
1986 ("COBRA COVERAGE") for the period of such
coverage (unless the coverage is then provided under
a self-insured plan);
pay you, at the time the Company would otherwise pay
your annual bonus, your pro rata share of the bonus
for the year of your termination, where the pro rata
factor is based on days elapsed in your year of
termination till date of termination over 365, less
any portion of the bonus for the year of your
termination already paid; and
accelerate your options such that any options that
would become exercisable within the six months after
your date of termination or resignation will become
exercisable as a result of your termination or
resignation (and will
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expire in accordance with the option's terms within
90 days after such date); PROVIDED, HOWEVER, that
this provision does not itself accelerate any option
described above in the OPTION section of this
Agreement.
In lieu of the Severance and other benefits described above on
termination for GOOD REASON, if after the completion of the
IPO but before the end of the Term, you resign for RELOCATION
REASON, the Company will pay you severance equal to your
Salary, as then in effect, for four and one-half months on the
same schedule as though you had remained employed during such
period, even though you are no longer employed.
You are not required to mitigate amounts payable under the
SEVERANCE paragraph by seeking other employment or otherwise,
nor must you return to the Company amounts earned under
subsequent employment.
EXPIRATION Expiration of this Agreement, whether because of notice of
non-renewal or otherwise, does not constitute termination
without CAUSE nor provide you with GOOD REASON and does not
entitle you to SEVERANCE, unless the Company's general
severance practices entitle you to severance in that
situation. If you remain employed at the end of the Term and
your employment then ends as a result of expiration of the
Agreement, the Company will pay you severance equal to your
Salary, as then in effect, for 12 months on the same schedule
as though you had remained employed during such period, even
though you are no longer employed, which payments you agree
compensate you for the restrictions under Exhibit A upon
contract expiration.
ASSIGNMENT The Company may assign or otherwise transfer this Agreement
and any and all of its rights, duties, obligations, or
interests under it to
any of the affiliates or subsidiaries of the Company
or
to any business entity that at any time by merger,
consolidation, or otherwise acquires all or
substantially all of the Company's stock or assets or
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to which the Company transfers all or substantially
all of its assets.
Upon such assignment or transfer, any such business entity
will be deemed to be substituted for the Company for all
purposes (except that the Company will remain secondarily
liable if it transfers this Agreement to a subsidiary). You
agree that assignment or transfer does not entitle you to
Severance. This Agreement binds and benefits the Company, its
successors or assigns, and your heirs and the personal
representatives of your estate. Without the Board's or your
Direct Report's prior written consent, you may not assign or
delegate this Agreement or any or all rights, duties,
obligations, or interests under it.
SEVERABILITY If the final determination of an arbitrator or a court of
competent jurisdiction declares, after the expiration of the
time within which judicial review (if permitted) of such
determination may be perfected, that any term or provision of
this Agreement, including any provision of Exhibit A, is
invalid or unenforceable, the remaining terms and provisions
will be unimpaired, and the invalid or unenforceable term or
provision will be deemed replaced by a term or provision that
is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or
provision.
AMENDMENT; WAIVER Neither you nor the Company may modify, amend, or waive the
terms of this Agreement other than by a written instrument
signed by you and an executive officer of the Company duly
authorized by the Board. Either party's waiver of the other
party's compliance with any provision of this Agreement is not
a waiver of any other provision of this Agreement or of any
subsequent breach by such party of a provision of this
Agreement.
WITHHOLDING The Company will reduce its compensatory payments to you for
withholding and FICA taxes and any other withholdings and
contributions required by law.
THIRD PARTY You understand and agree that, until the IPO is completed,
BENEFICIARY Commonwealth Principals II LLC is a third party beneficiary of
this Agreement, which means that Commonwealth may enforce this
Agreement even though not a party to it.
GOVERNING LAW The laws of the State of Texas (other than its conflict of
laws
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provisions) govern this Agreement.
NOTICES Notices must be given in writing by personal delivery, by
certified mail, return receipt requested, by telecopy, or by
overnight delivery. You should send or deliver your notices to
the Company's corporate headquarters. The Company will send or
deliver any notice given to you at your address as reflected
on the Company's personnel records. You and the Company may
change the address for notice by like notice to the others.
You and the Company agree that notice is received on the date
it is personally delivered, the date it is received by
certified mail, the date of guaranteed delivery by the
overnight service, or the date the fax machine confirms
effective transmission.
SUPERSEDING This Agreement supersedes any prior oral or written
EFFECT employment, severance, option, or fringe benefit agreements
between you and the Company, other than with respect to your
eligibility for generally applicable employee benefit plans.
This Agreement supersedes all prior or contemporaneous
negotiations, commitments, agreements, and writings with
respect to the subject matter of this Agreement, other than
the agreement among the Company, ARC Group LLC and
Commonwealth Principals II LLC dated as of March 8, 1999,
under which ARC Group LLC will receive a $240,000 payment upon
successful completion of the IPO. All such other negotiations,
commitments, agreements, and writings will have no further
force or effect; and the parties to any such other
negotiation, commitment, agreement, or writing will have no
further rights or obligations thereunder.
If you accept the terms of this Agreement, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.
CLARANT WORLDWIDE CORPORATION
By: /s/ Xxxxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxxxx X. Xxxxxx
Chief Executive Officer
I accept and agree to the terms of employment set
forth in this Agreement:
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/s/ Xxxxxx X. Xxxxxxxx
---------------------------
Xxxxxx X. Xxxxxxxx
Dated: June 28, 1999
---------------------
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EXHIBIT A
NO COMPETITION You agree to the provisions of this Exhibit A in
consideration of your employment by the Company and
salary and benefits under this Agreement and the
training you will receive in connection with such
employment, and you agree that Exhibit A should be
considered ancillary to the option agreements by
which you will receive options from the Company.
While the Company (or its successor or transferee)
employs you and to the end of the Restricted Period
(as defined below), you agree as follows:
You will not, directly or indirectly, be employed by,
lend money to, or engage in any Competing Business
within the Market Area (each as defined below). That
prohibition includes, but is not limited to, acting,
either singly or jointly or as agent for, or as an
employee of or consultant to, any one or more
persons, firms, entities, or corporations directly or
indirectly (as a director, independent contractor,
representative, consultant, member, or otherwise)
that constitutes such a Competing Business. You also
will not invest or hold equity or options in any
Competing Business, provided that you may own up to
3% of the outstanding capital stock of any
corporation that is actively publicly traded without
violating this NO COMPETITION covenant, so long as
you have no involvement beyond passive investing in
such business and you comply with the second sentence
of this paragraph.
If, during the Restricted Period, you are offered and
want to accept employment with a business that
engages in activities similar to the Company's, you
will inform your Direct Report in writing of the
identity of the business, your proposed duties with
that business, and the proposed starting date of that
employment. You will also inform that business of the
terms of this Exhibit A. The Company will analyze the
proposed employment and make a good faith
determination as to whether it would threaten the
Company's legitimate competitive interests. If the
Company determines that the proposed employment would
not pose an unacceptable threat to its interests, the
Company will notify you that it does not object to
the employment.
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You acknowledge that, during the portion of the
Restricted Period that follows your employment, you
may engage in any business activity or gainful
employment of any type and in any place except as
described above. You acknowledge that you will be
reasonably able to earn a livelihood without
violating the terms of this Agreement.
You understand and agree that the rights and
obligations set forth in this NO COMPETITION Section
will continue and will survive through the Restricted
Period.
DEFINITIONS
COMPETING COMPETING BUSINESS means any service or product of
BUSINESS any person or organization other than the Company and
its successors, assigns, or subsidiaries
(collectively, the "COMPANY GROUP") that competes
with any service or product of the Company Group
provided by any member of the Company Group during
your employment. COMPETING BUSINESS includes any
enterprise engaged in the formation or operation of
internet professional services firms that provide
strategic, interactive design and technical business
services, information technology and interactive
business consulting, and other related services to
assist clients in integrating and maintaining their
electronic commerce capabilities.
MARKET AREA The Market Area consists of the United States and
Canada. You agree that the Company provides services
both at its facilities and at the locations of its
customers or clients and that, by the nature of its
business, it operates globally.
RESTRICTED For purposes of this Agreement, the RESTRICTED PERIOD
PERIOD ends at the first anniversary of the date your
employment with the Company Group ends for any
reason; PROVIDED, HOWEVER, that the RESTRICTED PERIOD
will end nine months to the day after your employment
ends if you resign as a result of RELOCATION REASON.
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NO INTERFERENCE; During the Restricted Period, you agree that you will
NO SOLICITATION not, directly or indirectly, whether for yourself or
for any other individual or entity (other than the
Company or its affiliates or subsidiaries),
intentionally
solicit any person or entity who is, or was,
within the 24 months preceding your date of
termination or resignation, a customer,
prospect (with respect to which any member
of the Company Group has incurred
substantial costs or with which you have
been involved), or client of the Company
Group within the Market Area, with the 24
month period reduced to 12 months for
prospects with which you have not been
involved;
hire away or endeavor to entice away from
the Company Group any employee or any other
person or entity whom the Company Group
engages to perform services or supply
products and including, but not limited to,
any independent contractors, consultants,
engineers, or sales representatives or any
contractor, subcontractor, supplier, or
vendor; or
hire any person whom the Company Group
employs or employed within the prior
12 months.
SECRECY
PRESERVING Your employment with the Company under and, if
COMPANY applicable, before this Agreement (with a predecessor
CONFIDENCES to a member of the Company Group), has given and will
give you access to Confidential Information (as
defined below). You acknowledge and agree that using,
disclosing, or publishing any Confidential
Information in an unauthorized or improper manner
could cause the Company or Company Group to incur
substantial loss and damages that could not be
readily calculated and for which no remedy at law
would be adequate. Accordingly, you agree with the
Company that you will not at any time, except in
performing your employment duties to the Company or
the Company Group under
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this Agreement (or with the Board's or your Direct
Report's prior written consent), directly or
indirectly, use, disclose, or publish, or permit
others not so authorized to use, disclose, or publish
any Confidential Information that you may learn or
become aware of, or may have learned or become aware
of, because of your prior or continuing employment,
ownership, or association with the Company or the
Company Group or any of their predecessors, or use
any such information in a manner detrimental to the
interests of the Company or the Company Group.
PRESERVING You agree not to use in working for the Company Group
OTHERS' and not to disclose to the Company Group any trade
CONFIDENCES secrets or other information you do not have the
right to use or disclose and that the Company Group
is not free to use without liability of any kind. You
agree to promptly inform the Company in writing of
any patents, copyrights, trademarks, or other
proprietary rights known to you that the Company or
the Company Group might violate because of
information you provide.
CONFIDENTIAL "CONFIDENTIAL INFORMATION" includes, without
INFORMATION limitation, information that the Company or the
Company Group has not previously disclosed to the
public or to the trade with respect to the Company's
or the Company Group's present or future business,
including its operations, services, products,
research, inventions, discoveries, drawings, designs,
plans, processes, models, technical information,
facilities, methods, trade secrets, copyrights,
software, source code, systems, patents, procedures,
manuals, specifications, any other intellectual
property, confidential reports, price lists, pricing
formulas, customer lists, financial information
(including the revenues, costs, or profits associated
with any of the Company's or the Company Group's
products or services), business plans, lease
structure, projections, prospects, opportunities or
strategies, acquisitions or mergers, advertising or
promotions, personnel matters, legal matters, any
other confidential and proprietary information, and
any other information not generally known outside the
Company or the Company Group that may be of value to
the Company or the Company Group but, notwithstanding
anything to the contrary, excludes any information
already properly in the public domain. "CONFIDENTIAL
INFORMATION" also includes confidential and
proprietary information and trade secrets that third
parties entrust to the Company or the Company Group
in
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confidence.
You understand and agree that the rights and
obligations set forth in this SECRECY Section will
continue indefinitely and will survive termination of
this Agreement and your employment with the Company
or the Company Group.
EXCLUSIVE PROPERTY You confirm that all Confidential Information is and
must remain the exclusive property of the Company or
the relevant member of the Company Group. Any office
equipment (including computers) you receive from the
Company Group in the course of your employment and
all business records, business papers, and business
documents you keep or make, whether on digital media
or otherwise, in the course of your employment by the
Company relating to the Company or any member of the
Company Group must be and remain the property of the
Company or the relevant member of the Company Group.
Upon the termination of this Agreement with the
Company or upon the Company's request at any time,
you must promptly deliver to the Company or to the
relevant member of the Company Group any such office
equipment (including computers) and any Confidential
Information or other materials (written or otherwise)
not available to the public or made available to the
public in a manner you know or reasonably should
recognize the Company did not authorize, and any
copies, excerpts, summaries, compilations, records,
or documents you made or that came into your
possession during your employment. You agree that you
will not, without the Company's consent, retain
copies, excerpts, summaries, or compilations of the
foregoing information and materials. You understand
and agree that the rights and obligations set forth
in this EXCLUSIVE PROPERTY Section will continue
indefinitely and will survive termination of this
Agreement and your employment with the Company Group.
COPYRIGHTS, You agree that all records, in whatever media
DISCOVERIES, (including written works), documents, papers,
INVENTIONS, AND notebooks, drawings, designs, technical information,
PATENTS source code, object code, processes, methods or other
copyrightable or otherwise protected works you
conceive, create, make, invent, or discover that
relate to or result from any work you perform or
performed for the Company or the Company Group or
that arise from the use or assistance of the Company
Group's facilities, materials, personnel, or
Confidential Information in the course of your
employment (whether or not during usual working
hours), whether conceived, created, discovered, made,
or invented individually or jointly
Employment Agreement with Xxxxxx X. Xxxxxxxx Page 17 of 22
with others, will be and remain the absolute property
of the Company (or another appropriate member of the
Company Group, as specified by the Company), as will
all the worldwide patent, copyright, trade secret, or
other intellectual property rights in all such works.
(All references in this section to the Company
include the members of the Company Group, unless the
Company determines otherwise.) You irrevocably and
unconditionally waive all rights, wherever in the
world enforceable, that vest in you (whether before,
on, or after the date of this Agreement) in
connection with your authorship of any such
copyrightable works in the course of your employment
with the Company Group or any predecessor. Without
limitation, you waive the right to be identified as
the author of any such works and the right not to
have any such works subjected to derogatory
treatment. YOU RECOGNIZE ANY SUCH WORKS ARE "WORKS
FOR HIRE" OF WHICH THE COMPANY IS THE AUTHOR.
You will promptly disclose, grant, and assign
ownership to the Company for its sole use and
benefit any and all ideas, processes, inventions,
discoveries, improvements, technical information,
and copyrightable works (whether patentable or
not) that you develop, acquire, conceive or reduce
to practice (whether or not during usual working
hours) while the Company or the Company Group
employs you. You will promptly disclose and hereby
grant and assign ownership to the Company of all
patent applications, letters patent, utility and
design patents, copyrights, and reissues thereof
or any foreign equivalents thereof, that may at
any time be filed or granted for or upon any such
invention, improvement, or information. In
connection therewith:
You will, without charge but at the
Company's expense, promptly execute and
deliver such applications, assignments,
descriptions, and other instruments as
the Company may consider reasonably
necessary or proper to
vest title to any such inventions,
discoveries, improvements, technical
information, patent applications,
patents, copyrightable works, or reissues
thereof in the Company and to enable it
to obtain and maintain the entire
worldwide right and title thereto; and
You will provide to the Company at its
expense all such assistance as the Company
may reasonably
Employment Agreement with Xxxxxx X. Xxxxxxxx Page 18 of 22
require in the prosecution of applications
for such patents, copyrights, or reissues
thereof, in the prosecution or defense of
interferences that may be declared involving
any such applications, patents, or
copyrights and in any litigation in which
the Company may be involved relating to any
such patents, inventions, discoveries,
improvements, technical information, or
copyrightable works or reissues thereof. The
Company will reimburse you for reasonable
out-of-pocket expenses you incur and pay you
reasonable compensation for your time if the
Company Group no longer employs you.
To the extent, if any, that you own rights to works,
inventions, discoveries, proprietary information, and
copyrighted or copyrightable works, or other forms of
intellectual property that are incorporated in the
work product you create for the Company Group, you
agree that the Company will have an unrestricted,
non-exclusive, royalty-free, perpetual, transferable
license to make, use, sell, offer for sale, and
sublicense such works and property in whatever form,
and you hereby grant such license to the Company (and
the Company Group).
This COPYRIGHTS, DISCOVERIES, INVENTIONS AND PATENTS
section does not apply to an invention or discovery
for which no equipment, supplies, facility or trade
secret information of the Company Group (including
its predecessors) was used and that was developed
entirely on your own time, unless (a) the invention
relates (i) directly to the business of the Company
Group, or (ii) the Company Group's actual or then
reasonably anticipated research or development, or
(b) the invention results from any work you performed
for the Company Group or any predecessor.
MAXIMUM LIMITS If any of the provisions of Exhibit A are ever deemed
to exceed the time, geographic area, or activity
limitations the law permits, you and the Company
agree to reduce the limitations to the maximum
permissible limitation, and you and the Company
authorize a court or arbitrator having jurisdiction
to reform the provisions to the maximum time,
geographic area, and activity limitations the law
permits; PROVIDED, HOWEVER, that such reductions
apply only with respect to the operation of such
provision in the particular jurisdiction with respect
to which such
Employment Agreement with Xxxxxx X. Xxxxxxxx Page 19 of 22
adjudication is made.
INJUNCTIVE RELIEF Without limiting the remedies available to the
Company, you acknowledge
that a breach of any of the covenants in
this Exhibit A may result in material
irreparable injury to the Company and
Company Group for which there is no adequate
remedy at law, and
that it will not be possible to measure
damages for such injuries precisely.
You agree that, if there is a breach or threatened
breach, the Company or any member of the Company
Group may be entitled to obtain a temporary
restraining order and/or a preliminary or permanent
injunction restraining you from engaging in
activities prohibited by any provisions of this
Exhibit A or such other relief as may be required to
specifically enforce any of the covenants in this
Exhibit A. The Company or any member of the Company
Group will, in addition to the remedies provided in
this Agreement, be entitled to avail itself of all
such other remedies as may now or hereafter exist at
law or in equity for compensation and for the
specific enforcement of the covenants contained in
this Agreement. Resort to any remedy provided for in
this Section or provided for by law will not prevent
the concurrent or subsequent employment of any other
appropriate remedy or remedies, or preclude the
Company's or the Company Group's recovery of monetary
damages and compensation. You also agree that the
Restricted Period or such longer period during which
the covenants hereunder by their terms survive will
extend for any and all periods for which a court
with personal jurisdiction over you finds that you
violated the covenants contained in this Exhibit A.
EXHIBIT B
DISPUTE RESOLUTION
MEDIATION If either party has a dispute or claim relating to this
Agreement or
Employment Agreement with Xxxxxx X. Xxxxxxxx Page 20 of 22
their relationship and except as set forth in ALTERNATIVES,
the parties must first seek to mediate the same before an
impartial mediator the parties mutually designate, and the
parties must equally share the expenses of such proceeding
(other than their respective attorneys' fees). Subject to the
mediator's schedule, the mediation must occur within 45 days
of either party's written demand. However, in an appropriate
circumstance, a party may seek emergency equitable relief from
a court of competent jurisdiction notwithstanding this
obligation to mediate.
BINDING If the mediation reaches no solution or the parties agree to
ARBITRATION forego mediation, the parties will promptly submit their
disputes to binding arbitration before one or more arbitrators
(collectively or singly, the "ARBITRATOR") the parties agree
to select (or whom, absent agreement, a court of competent
jurisdiction selects). The arbitration must follow applicable
law related to arbitration proceedings and, where appropriate,
the Commercial Arbitration Rules of the American Arbitration
Association.
ARBITRATION All statutes of limitations and substantive laws applicable to
PRINCIPLES a court proceeding will apply to this proceeding. The
Arbitrator will have the power to grant relief in equity as
well as at law, to issue subpoenas duces tecum, to question
witnesses, to consider affidavits (provided there is a fair
opportunity to rebut the affidavits), to require briefs and
written summaries of the material evidence, and to relax the
rules of evidence and procedure, provided that the Arbitrator
must not admit evidence it does not consider reliable. The
Arbitrator will not have the authority to add to, detract
from, or modify any provision of this Agreement. The parties
agree (and the Arbitrator must agree) that all proceedings and
decisions of the Arbitrator will be maintained in confidence,
to the extent legally permissible, and not be made public by
any party or the Arbitrator without the prior written
consent of all parties to the arbitration, except as the law
may otherwise require.
DISCOVERY; The parties have selected arbitration to expedite the
EVIDENCE; resolution of disputes and to reduce the costs and burdens
PRESUMPTIONS associated with litigation. The parties agree that the
Arbitrator should take these concerns into account when
determining whether to authorize discovery and, if so, the
scope of permissible discovery and other hearing and
pre-hearing procedures. The Arbitrator may permit reasonable
discovery rights in preparation for the arbitration, provided
that it should accelerate the scheduling of and responses to
such discovery so as not to unreasonably delay the
arbitration. Exhibits must be marked and left with the
Arbitrator until it has rendered a decision. Either party
Employment Agreement with Xxxxxx X. Xxxxxxxx Page 21 of 22
may elect, at its expense, to record the proceedings by
audiotape or stenographic recorder (but not by video). The
Arbitrator may conclude that the applicable law of any foreign
jurisdiction would be identical to that of Texas on the
pertinent issue(s), absent a party's providing the Arbitrator
with relevant authorities (and copying the opposing party) at
least five business days before the arbitration hearing.
NATURE OF AWARD The Arbitrator must render its award, to the extent feasible,
within 30 days after the close of the hearing. The award must
set forth the material findings of fact and legal conclusions
supporting the award. The parties agree that it will be final,
binding, and enforceable by any court of competent
jurisdiction. Where necessary or appropriate to effectuate
relief, the Arbitrator may issue equitable orders as part of
or ancillary to the award. The Arbitrator must equitably
allocate the costs and fees of the proceeding and may consider
in doing so the relative fault of the parties. The Arbitrator
may award reasonable attorneys' fees to the prevailing party
to the extent a court could have made such an award.
APPEAL The parties may appeal the award based on the grounds allowed
by statute, as well as upon the ground that the award
misapplies the law to the facts, provided that such appeal is
filed within the applicable time limits law allows. If the
award is appealed, the court may consider the ruling, evidence
submitted during the arbitration, briefs, and arguments but
must not try the case DE NOVO. The parties will bear the costs
and fees associated with the appeal in accordance with the
arbitration award or, in the event of a successful appeal, in
accordance with the court's final judgment.
ALTERNATIVES This DISPUTE RESOLUTION provision does not preclude a party
from seeking equitable relief from a court (i) to prevent
imminent or irreparable injury or (ii) pending arbitration, to
preserve the last peaceable status quo, nor does it preclude
the parties from agreeing to a less expensive and faster means
of dispute resolution. It does not prevent the Company from
immediately seeking in court an injunction or other remedy
with respect to Exhibit A.
Employment Agreement with Xxxxxx X. Xxxxxxxx Page 22 of 22
