EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made and entered into December
2, 1996, by and between XXXXX X. XXXXXXX ("Executive") and BRITE VOICE SYSTEMS,
INC. ("Brite").
WHEREAS, Brite desires to engage Executive to perform services for Brite
and Executive desires to perform such services on the terms and conditions set
forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in consideration of the
covenants and obligations herein contained, the parties hereto agree as follows:
1. EMPLOYMENT AND DUTIES. From and after December 2, 1996 ("Commencement
Date"), Brite shall employ Executive as Chief Executive Officer. Executive
shall perform such acts and duties as the Board of Directors of Brite ("Board")
shall from time to time direct and shall report directly to the Board.
Executive shall use his best efforts on a full time basis (at least forty (40)
hours per week) to Brite's business. Notwithstanding the foregoing, it is
understood that Executive may serve as an outside director of up to two
companies other than Brite, and such additional company or companies as may be
approved by the Board.
2. COMPENSATION AND BENEFITS.
2.1 SALARY. Executive's annual salary ("Base Salary") shall be at
least $350,000, payable pursuant to Brite's customary payroll policies in
force at the time of payment. For the period from the Commencement Date
through December 31, 1997, Executive's Base Salary shall be $350,000.
2.2 BONUS.
a. COMMENCEMENT DATE THROUGH DECEMBER 31, 1997. During the
period from the Commencement Date through December, 1997, Executive
will be entitled to a bonus in the amount of $189,500, payable in
equal installments at the same time as Executive's Base Salary
pursuant to Brite's customary payroll policies in force at the time of
payment.
b. 1998 AND THEREAFTER. For each year of employment after 1997,
Executive will be entitled to participate in an incentive compensation
program which shall provide for an annual bonus of at least 50% of his
Base Salary upon attainment of reasonable performance goals
established by the Board. Payments of any such bonus shall be made at
the times and in the amounts determined by the Board.
2.3 ANNUAL REVIEW. Commencing with calendar year 1998, the Board
shall conduct an annual performance review of the Executive as a part of
which increases in Executive's Base Salary and incentive will be
considered.
2.4 BENEFITS. Executive shall be entitled to participate in Brite's
standard benefits provided to other employees having similar responsibility
with Brite, as established and/or modified by Brite from time to time,
including, but not limited to, life insurance, health insurance, and dental
insurance.
2.5 VACATION. Executive shall be entitled to a reasonable amount of
vacation to be scheduled by Executive, taking into consideration
Executive's responsibilities and the scheduled vacations of other executive
officers of Brite.
2.6 BUSINESS EXPENSES. Pursuant to Brite's customary policies in
force at the time of payment, Executive shall be promptly reimbursed,
against presentation of vouchers or receipts, for all authorized expenses
properly incurred by him in the performance of his duties hereunder.
2.7 MOVING, TEMPORARY LODGING AND RELOCATION COSTS. Brite will
reimburse Executive for all reasonable and necessary costs of moving
Executive's furniture, personal items and vehicles to the Wichita, Kansas
area, as well as reasonable and necessary closing costs, excluding prepaid
items, relating to the purchase of Executive's new home and the commission
payable with respect to the sale of his present home. Until such time as
Executive relocates his residence to the Wichita, Kansas area, which shall
be not later than six months from the date hereof, Executive will be
entitled to reimbursement for the cost of a furnished apartment and for
telephone service and utilities at such apartment. Brite shall reimburse
Executive for all expenses and costs provided for in this Section 2.7, and
the tax liability incurred by Executive with respect to the reimbursement,
against presentation of documentation detailing the same, up to the amount
of $235,000. All expenses and costs incurred in excess of this amount are
the responsibility of Executive.
3. STOCK OPTIONS
3.1 OPTION GRANT. Brite hereby grants Executive options ("Options")
to purchase 500,000 shares of its no par value common stock (the "Stock")
at the option exercise price of $14.875 per share.
3.2 VESTING OF OPTIONS. Subject to such further limitations and
qualifications as are provided herein, the Options shall be exercisable as
follows:
a. 100,000 shares on the date hereof;
b. 100,000 shares on December 2, 1997;
c. 150,000 shares on December 2, 1998; and
d. 150,000 shares on December 2, 1999.
Upon termination of Executive's employment, Executive shall have the
right to exercise the Options at any time within ninety days after such
termination of employment, to the extent his right to exercise such Options
had accrued pursuant to
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Section 3.2 and had not previously been exercised at the date of such
termination. Upon a Change in Control, all previously unexercised Options
shall become immediately exercisable and shall be canceled ninety (90) days
thereafter.
3.3 METHOD OF EXERCISE. Each option shall be exercised by written
notice, directed to the Chief Financial Officer of Brite at Brite's
principal place of business and accompanied by a check in payment of the
exercise price for the number of shares of Stock being purchased. Brite
shall make immediate delivery of the Stock to be acquired upon such
exercise, provided that, if any law or regulation requires Brite to take
any action with respect to the Stock specified in such notice or for the
issuance thereof, the date of delivery of such Stock shall be extended for
the period necessary to take such action.
3.4 TERMINATION OF OPTION. Except as herein otherwise stated, each
Option, to the extent not previously exercised, shall terminate on December
2, 2006.
3.5 RECAPITALIZATION.
a. Subject to any required action by the stockholders, the
number of shares of Stock covered by each outstanding Option, and the
price per share of each such Option, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Stock
of Brite resulting from a subdivision or consolidation of shares or
the payment of a stock dividend (but only on the Stock) or any
increase or decrease in the number of such shares effected without
receipt of consideration by Brite.
b. Subject to any required action by the stockholders, if Brite
shall be the surviving corporation in any merger or consolidation,
each outstanding Option shall pertain to and apply to the securities
to which a holder of the number of shares of Stock subject to the
Option would have been entitled.
c. In the event of a change in the Stock as presently
constituted, which is limited to a change of all if its authorized
shares with par value into the same number of shares with a different
par value or without par value, the shares resulting from any such
change shall be deemed to be the Stock.
d. To the extent that the foregoing adjustments relate to stock
or securities of Brite, such adjustments shall be made by the Board,
whose determination in such respect shall be final, binding and
conclusive.
e. Except as hereinbefore expressly provided, Executive shall
have no rights by reason of any subdivision or consolidation of shares
of stock of any class or the payment of any stock dividend or any
other increase or decrease in the number of shares of stock of any
class or by reason of any dissolution, liquidation, merger of
consolidation or spin-off of assets or stock of another corporation,
and any issue by Brite of shares of stock of any class, or securities
convertible into
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shares of stock of any class, shall not effect, and no adjustment by
reason thereof shall be made with respect to, the number or price of
shares of Stock subject to an Option.
3.6 RIGHTS PRIOR TO EXERCISE OF OPTION. The Options are
nontransferable by Executive, and during his lifetime are exercisable only
by him; provided, however, in the event of the death of Executive, the
Options may pass to his executor or administrator or any person who shall
acquire the Options directly from Executive or his estate by bequest or
inheritance. Executive shall not have any rights as a stockholder with
respect to any shares covered by the Options until the date of the issuance
of a stock certificate to him for such shares. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date
is prior to the date such stock certificate is issued, except as provided
in Section 3.5 hereof.
3.7 INVESTMENT PURPOSE. The Options are granted on the condition
that any purchase of Stock thereunder shall be for investment purposes, and
not with a view to resale or distribution, except that in the event the
Stock subject to the Options is registered under the Securities Act of
1933, as amended, or in the event a resale of such Stock without such
registration would otherwise be permissible, such condition shall be
inoperative if, in the opinion of counsel for Brite, such condition is not
required under the Securities Act of 1933 or any other applicable law,
regulation, or rule of any governmental agency.
3.8 ADDITIONAL OPTION GRANTS. During January in each year beginning
in 2000, the Board shall grant Executive additional non-statutory stock
options to purchase at least 20,000 shares of Stock, with the exercise
price being the fair market value of the Stock as of the date of grant.
All other terms and conditions of such options shall be determined by the
Board.
4. TERMINATION.
4.1 TERMINATION FOR CAUSE. Executive shall be entitled to payment of
his Base Salary, accrued bonus (if any) and benefits existing at the time
of termination of his employment if such termination is a Termination for
Cause. Termination for Cause means one or more of: (i) voluntary
termination of employment by Executive for any reason; (ii) the death of
Executive; (iii) Executive having been unable to render services required
of him hereunder for a consecutive period of six months or for any period
in the aggregate of six months in any twelve month period because of a
serious and continuing health impairment, which impairment will most likely
result in Executive's continued inability to render the services required
of him hereunder; (iv) Executive's misappropriation of corporate funds; (v)
Executive's conviction of a felony; (vi) Executive's conviction of any
crime involving theft, dishonesty, or moral turpitude; (vii) Executive's
failure to devote substantially his full business time to Brite as provided
in Section 1 hereof; (viii) Executive's willful violation of directions of
the Board Brite
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which are consistent with Executive's duties as Chief Executive Officer;
(ix) falsification of any material representation made by Executive to
Brite; or, (x) the commission by Executive of a material breach of the
terms of this Agreement.
4.2 TERMINATION OTHER THAN FOR CAUSE. If Executive's employment with
Brite is terminated and such termination is not a Termination for Cause,
Executive will be entitled to payment of his Base Salary, bonus and other
benefits existing at the time of such termination, for a period of one year
thereafter with all such payments to be made periodically pursuant to
Brite's policies in force at the time of payment; provided, however, that
Brite shall not be obligated to continue any benefit if the plan or policy
under which such benefit is provided limits the provision of the benefit to
full-time employees of Brite, or if the validity of the plan or policy
would be adversely impacted by the continuation of the benefit.
4.3 CHANGE IN CONTROL. If, upon a Change in Control, Executive is
either terminated or elects to resign, such termination shall be treated as
a termination under Section 4.2, except that the time period for payment of
the Base Salary, bonus and benefits shall be extended from one year to two
years after the date of termination. "Change of Control" shall mean (i) a
dissolution or liquidation of Brite; (ii) a merger or consolidation in
which Brite is not the surviving corporation; or (iii) the acquisition of
more than 50% of the outstanding Stock by any person, or group of related
persons acting in concert, in a single transaction or series of related
transactions.
5. CONFIDENTIAL INFORMATION.
5.1 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, the term "Confidential Information" means:
That secret, proprietary information of Brite not otherwise
publicly disclosed (whether or not discovered or developed
by Executive) and known by Executive as a consequence of
Executive's employment with Brite or as a consequence of
Executive's position as a director of Brite. Without
limiting the generality of the foregoing, such proprietary
information shall include: information not generally known
in the industry or related industries which concerns (i)
customer lists; (ii) computer programs and facilities; (iii)
the identity of specialized consultants and contractors and
confidential information developed by them for Brite; (iv)
operating and other cost data, including information
regarding salaries and benefits of employees; (v) cost and
pricing data; (vi) acquisition, expansion, marketing,
financial and other business plans; (vii) Brite manuals,
files, records, memoranda, plans, drawings and designs,
specifications and computer programs and records; and (viii)
all
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information which is a "trade secret" as defined in the Uniform Trade
Secrets Act as adopted in Kansas at K.S.A. 60-3320.
5.2 CONFIDENTIAL INFORMATION. During Executive's employment with
Brite, Executive will have access to and become familiar with Confidential
Information of Brite. Executive acknowledges that such Confidential
Information is owned and shall continue to be owned solely by Brite.
During the term of Executive's employment with Brite and after termination
of such employment, Executive shall not use or divulge Confidential
Information to any person or entity other than Brite, or persons to whom
Brite has given its written consent, unless such information has become
common knowledge and is no longer Confidential Information.
5.3 RETURN OF DOCUMENTS. Upon termination of Executive's employment
with Brite, all procedural manuals, guides, specifications, plans,
drawings, designs, records, lists, notebooks, software, diskettes, customer
lists, pricing documentation and other property which is or contains
Confidential Information, including all copies thereof, in the possession
or control of Executive, whether prepared by Executive or others, shall be
forthwith delivered by Executive to Brite.
6. COVENANTS NOT TO COMPETE.
6.1 RESTRICTIVE COVENANT. Executive covenants and agrees that during
Executive's employment with Brite and for a period of one year following
the date of termination of Executive's employment with Brite, Executive
shall not in any manner:
a. accept employment with the following companies or any
business venture in which they hold any investment or management
interest: Perphonics, Intervoice Precision Systems, Syntellect,
Octel, Boston Technology, Edify, Microlog, Premier Technology, Talx,
Brooktrout, or Comverse Technology.
b. start or join any business which after the date of this
Agreement enters into a line of business that is a line of business
conducted by Brite during the term of Executive's employment with
Brite.
This Section shall prevent Executive, directly or indirectly, on
Executive's own behalf or as an executive, officer, agent, director,
partner, consultant, lender, or advisor, during the period covered by this
Section, from forming, owning, joining, controlling, financing, or
otherwise participating in the ownership or management of or being
otherwise affiliated with any person or entity engaged in the type of
business prohibited by this Section. During the period covered by this
Section, Executive shall not permit any person or entity (other than Brite)
of which Executive is a shareholder, partner or director or in which
Executive has an ownership interest, to engage in any type of business
prohibited by this Section. Notwithstanding any other provision herein,
the parties agree that Executive may, during the period covered by this
Agreement, invest Executive's personal, private assets as a passive
investor in not more than one percent (1%) of the total outstanding shares
of any publicly traded company engaged in a
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competing business, so long as Executive does not participate in the
management or operations of the affairs of such company.
6.2 SOLICITATION OF EMPLOYEES. During the one-year period following
Executive's termination of employment with Brite, Executive shall not,
without the prior written approval of the Chairman of the Board of
Directors of Brite, directly or indirectly solicit, raid, entice, or induce
any person who is, or was at any time within six months prior to such
termination, an employee of Brite, to become employed by any other person,
firm, or corporation in any business which is in any manner in competition
with Brite. Furthermore, Executive shall inform Brite in writing if any
other person employed by Brite contacts Executive for the purpose of
seeking employment during such one year period.
6.3 NEW DEVELOPMENTS. Executive agrees that, with respect to its
work for Brite, any developments made by Executive or under Executive's
direction in connection with the work of Brite shall be the sole and
complete property of Brite and that any and all copyrights, patent rights
and other proprietary rights therein shall belong to Brite. Executive
shall cooperate with Brite and execute any documents prepared by Brite to
secure or protect any such rights.
7. REPRESENTATIONS OF EXECUTIVE. Executive hereby represents and
warrants that he has the unrestricted right to accept employment with Brite on
the terms and conditions set forth herein and to execute and perform this
Agreement without being in conflict with any other agreement, obligation or
understanding with any such third party. Executive represents that he is not
bound by any agreement or by any other existing or previous business
relationship which conflicts with, or may conflict with, the performance of his
obligations hereunder, or prevent the full performance of his duties and
obligations hereunder.
8. NOTICES. Any notice permitted or required to be given under this
Agreement shall be sufficient if in writing and delivered personally or by
registered mail return receipt requested, if to Executive, to Xx. Xxxxx X.
Xxxxxxx at his residence address as reflected in Brite's records, and if to
Brite, to the attention of Xx. Xxxxxxx X. Xxxxxxx, Chairman, Brite Voice
Systems, Inc., 0000 Xxxx 00xx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxx 00000. A party may
change its address for receipt of notices by complying with this Section.
9. ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties in respect of its subject matter and supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
10. AMENDMENT; WAIVER. This Agreement may not be amended, supplemented,
canceled or discharged except by written instrument executed by the party
affected thereby. No failure to exercise, and no delay in exercising, any
right, power or privilege hereunder shall operate as a waiver thereof. No
waiver of any breach of any provision of this Agreement shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any other provision.
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11. BINDING EFFECT; ASSIGNMENT. The rights an obligations of this
Agreement shall bind and inure to the benefit of any successor of Brite by
reorganization, merger or consolidation or any assignee of all or substantially
all of Brite's business and properties. Executive's rights or obligations under
this Agreement may not be assigned by Executive, except that upon Executive's
death, all right to compensation hereunder shall pass to Executive's executor or
administrator.
12. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
13. GOVERNING LAW; INTERPRETATION. This Agreement shall be construed in
accordance with, and governed for all purposes by, the laws and public policy of
the State of Kansas applicable to contracts executed and to be wholly performed
within such State.
14. FURTHER ASSURANCES. Each of the parties agrees to execute,
acknowledge, deliver and perform, and/or cause to be executed, acknowledged,
delivered and performed, at any time and/or from time to time, as the case may
be, all such further acts, documents, transfers, conveyances, and/or assurances
as may be necessary and/or proper to carry out the provisions and/or intent of
this Agreement.
15. SEVERABILITY. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have entered this Agreement
effective the date first above written.
BRITE VOICE SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxxxxx
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/s/ Xxxxx X. Xxxxxxx
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XXXXX X. XXXXXXX
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