LANPROFESSIONAL, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective the
date indicated on the signature page hereto (the "Effective Date"), is entered
into by and between LanProfessional, Inc., a Canadian corporation ("Company"),
and Xxxxx X. Xxxxx, an individual residing in Ottawa, Canada (the "Employee").
W I T N E S S E T H:
WHEREAS, Employee is presently employed by LanProfessional,
Inc. as President;
WHEREAS, concurrent with the execution of this Agreement, The
ForeFront Group, Inc., a Delaware corporation ("ForeFront") has acquired all of
the outstanding shares of LanProfessional, Inc. (the "Transaction") pursuant to
that certain Acquisition Agreement dated the date hereof (the "Acquisition
Agreement");
WHEREAS, pursuant to the Acquisition Agreement, the Company
has agreed to employ the Employee as Chief Technology Officer of the Company,
effective upon closing of the Transaction;
WHEREAS, the Employee wishes to accept such employment and
perform such duties on such terms and conditions and for such consideration;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and obligations contained herein, the Employee and Company do hereby
agree as follows:
1. EMPLOYMENT, DUTIES and TERM. Employee hereby agrees to be
employed by Company as Chief Technology Officer. Employee shall report to Xxxxxx
Xxxx, Chief Financial Officer of Company, and shall be responsible for directing
ForeFront's product development efforts relating to the Computer Based Training
market, as more fully described on Exhibit A hereto, in addition to other
functions that may be required and agreed upon from time to time. While employed
by Company, Employee agrees to devote Employee's full productive efforts to the
business of Company. Employee may have no other sources of active employment
while employed by Company. Employee understands and agrees that this Agreement
and Employee's status as an employee of Company creates a fiduciary duty which
the Employee owes to Company, which duty the Employee promises to fulfill.
This Agreement shall be for an initial term ("Initial Term")
of two years from the date hereof. Notwithstanding the above, Employee's
employment may be terminated by Company at any time if the Employee: (i) is
convicted of or pleads nolo contendere to a felony offense or a crime of moral
turpitude; (ii) materially breaches this Agreement and fails to cure such breach
within thirty (30) days of notice of such breach by Company; (iii) engages in
willful misconduct, gross neglect
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of Employee's duties, or an activity which constitutes a material conflict of
interest with Employee's job; (iv) is reasonably determined by Company to be
fully disabled and unable to perform Employee's duties; (v) dies; or (vi) has
materially misrepresented Employee's skills, past employment, education, or any
other matter discussed between Company and Employee prior to commencement of
employment hereunder, including without limitation, information supplied to
Company by the Employee in connection with the Transaction. In addition,
Employee may terminate, the Agreement at any time prior to its expiration or
other termination upon 30 days prior written notice to the Company. In such
cases, Employee will receive only Employee's compensation to date of
termination.
2. COMPENSATION.
2.1 Salary. In consideration of the performance of duties
hereunder, Company agrees to pay the Employee a monthly salary of $11,666.67
U.S.D. for the first twelve month period during the Initial Term. Such amount
shall be increased for the second year of the Initial Term by an amount not less
than 10%. Employee shall also be eligible to receive a bonus of up to 25% of
base salary each year during the Initial Term, based upon the achievement of
certain objectives and CBT product deliverables during each year of the Initial
Term, as described on Exhibit A hereto. Company may withhold from any amounts
payable under this Agreement, all Canadian, United States, provincial, city or
other taxes as may be required pursuant to any law or governmental regulation or
ruling or Company's policy, and to remit same when withheld.
2.2 Equity. In consideration of Employee entering into this
Agreement and Employee's performance of duties hereunder, Company agrees to
grant Employee a non-qualified stock option for 75,000 shares of Common Stock of
ForeFront which shares vest and are exercisable as follows: 25% (18,750 shares)
shall vest upon the completion of the first year of employment of the Initial
Term and 1/12 of such amount (6,250 shares) shall vest upon the completion of
each consecutive three (3) month period of continuous employment in the position
described above following such initial year, provided that if Employee's
employment is terminated by Company without cause prior to the expiration of two
years of full time employment with Company, Employee shall become automatically
vested in the shares which would have vested during such two year period had
such termination not occurred. The options shall have an exercise price equal to
the fair market value of ForeFront's Common Stock on the date hereof.
2.3 Benefits. The Employee will also continue to receive other
benefits from time to time normally provided to employees of ForeFront, on the
same terms as ForeFront employees, unless such benefits are not available for
employees residing in Canada. Notwithstanding the above, there shall be no
obligation to commence any benefit plan, or to continue any plan once commenced,
so long as such impacts all other ForeFront employees similarly. Employee shall
be entitled to credit toward ForeFront's vacation policy for all time worked at
LanProfessional, Inc.
2.4 Reimbursement. While employed hereunder, Company agrees to
reimburse the Employee for all reasonable and necessary business expenses in
accordance with Company's expense reimbursement policy, which expenses have been
approved in advance.
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2.5 Severance. Notwithstanding anything herein to the
contrary, in the event that Company terminates Employee's employment, other than
for cause, at any time after the Initial Term of 2 years, Company agrees to
continue Employee's salary for a period of 14 days or such longer period or may
be required under applicable law; furthermore, should Employee's employment be
terminated during the Initial Term of 2 years as a result of an acquisition of
ForeFront by a third party, this Agreement shall be cancelled, subject to the
payment to Employee of six months salary as severance, and no other amounts
shall be owing to Employee hereunder.
3. PROPRIETARY RELATIONSHIP.
3.1 Disclosure of Confidential Information. No Confidential
Information or anything directly related to it shall be used by the Employee for
the benefit of the Employee or any third party, nor shall such Confidential
Information be disclosed to a third party, without the prior written consent of
Company, except as may be necessary in the ordinary cause of performing the
Employee's duties for Company and only for the benefit of Company. "Confidential
Information" shall mean all of: (a) information pertaining to the design and
development of all commercial products of Company and its affiliates and
subsidiaries that is not generally known within the industry in which Company or
any of its affiliates or subsidiaries is engaged and that is disclosed to,
learned by or developed by the Employee in the performance of his duties during
Employee's employment by Company; (b) ForeFront's and the Company's customer
lists, sales data, pricing formulas, marketing strategies, sales methods and
processes, and other proprietary information acquired by Employee in the
performance of employment duties for Company; and (c) anything which would be
considered "confidential" under Ontario law.
3.2 Exemption. Confidential Information shall not include
information that:
(a) at the time of its disclosure, is publicly available
through no fault of the Employee;
(b) at the time of its disclosure, is, without fault of the
receiving party, part of the public domain;
(c) subsequent to its disclosure hereunder, is obtained by the
Employee from a third party not subject to a contractual or fiduciary
obligation for confidentiality to the disclosing party; or
(d) is required to be disclosed under court or governmental
order, rule or regulation.
3.3 Return of Data. In the event of the termination of
employment of the Employee for any reason, the Employee will deliver to Company
all documents, notebooks, designs, specifications, customer lists, drawings,
software, manuals, reports, plans and other data of any nature containing
Confidential Information or relating to the business of Company, and the
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Employee will not deliver to anyone else any of such documents or data or any
reproduction of such documents or data containing Confidential Information or
relating to the business of Company.
3.4 Disclosure and Assignment of Inventions. The Employee
agrees to make prompt and complete disclosure to Company of every Invention.
"Inventions" shall mean all improvements, discoveries, inventions, whether
patentable or not, copyrightable works, copyrights, trade secrets, formulae,
processes, techniques, and other developments and advances which are related to
or useful in the actual or anticipated business of Company and that are
developed, conceived or reduced to practice or learned by the Employee, either
alone or jointly with others, during Employee's employment by Company or result
from tasks assigned to the Employee by Company or result from use of premises or
equipment owned, leased, or contracted for by Company. The Employee agrees that
Company shall have sole ownership rights to all Inventions and agrees to
cooperate fully, at no expense to the Employee, with Company to secure and
defend Company's said ownership rights. The Employee hereby assigns to Company
any rights the Employee may acquire in any such Inventions.
3.5 No Conflict. The Employee represents and warrants that:
(a) as a matter of record, the Employee has identified on Exhibit B attached
hereto all inventions or improvements relevant to the subject matter of
Employee's employment by Company which have been made or conceived or first
reduced to practice by the Employee alone or jointly with others prior to
Employee's engagement by Company, which the Employee desires to remove from the
operation of this Agreement; and the employee covenants that such list is
complete. If there is no such list on Exhibit B, the Employee represents that
the Employee has made no such inventions and improvements at the time of signing
this Agreement;
(b) performance of all the terms of this Agreement by the
Employee and as an employee of Company does not and, to the best of the
Employee's present knowledge and belief, will not breach any agreement or duty
to keep in confidence proprietary information acquired by the Employee in
confidence or in trust prior to the Employee's employment by Company. The
Employee has not entered into, and will not enter into, any agreement either
written or oral in conflict herewith. The Employee is not at the present time
restricted from being employed by Company or entering into this Agreement;
(c) as part of the consideration for the offer of employment
extended to the Employee by Company and of the Employee's employment or
continued employment by Company, the Employee has not brought and will not bring
with the Employee to Company or use in the performance of the Employee's
responsibilities at Company any materials or documents of a former employer
which are not generally available to the public, unless the Employee has
obtained written authorization from the former employer for their possession and
use; and
(d) in the Employee's employment with Company, the Employee is
not to breach any obligation of confidentiality or duty that the Employee has to
former employers and the Employee agrees that all such obligations during the
Employee's employment with Company shall be fulfilled.
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4. NON-COMPETITION.
4.1 Restrictions While Employed. In consideration of
employment or continued employment, as the case may be, and the compensation
received by the Employee from Company while employed by Company, the Employee
agrees to refrain from working for or providing consulting or other services,
directly or indirectly, in connection with a Conflicting Product anywhere in the
world, whether or not to a Competitive Business (as defined below). "Conflicting
Product" shall mean any commercial product, or any information pertaining to the
design, development and marketing of such product, that provides essentially
similar form, fit and function as, and competes or proposes to compete with, a
commercial product developed by Company.
4.2 Restrictions After Termination. In consideration of
employment or continued employment, as the case may be, the compensation
received by the Employee from Company while employed by Company, the Employee
agrees that until the expiration of twelve months after the termination of the
Employee's employment with Company or three years from the date of this
Agreement, whichever is longer, (the "Restricted Period") he shall not, directly
or indirectly, as principal, agent, employee, employer, consultant, stockholder,
partner or in any other capacity, engage in the development, sale, marketing,
licensing or support of software products that compete with, directly or
indirectly, software products owned or licensed by Company or ForeFront, or any
of their subsidiaries or affiliates, including any products in development or
design at the time of such termination (the "Competitive Business") wherever the
Company or ForeFront, or any of their subsidiaries or affiliates conducts such
business and only for so long as the Company or ForeFront, or any of its
subsidiaries or affiliates is engaged in such business. Notwithstanding anything
to the contrary herein, Employee may, without violating the provisions of this
Section 4.2, (i) purchase and hold up to 5% of any entity whose shares are
publicly traded on NASDAQ or any U.S. or foreign stock exchange (a "Public
Company"), whether or not such entity competes with Company or any affiliate
thereof; (ii) purchase up to 5% of any privately-held company or more than 5% of
any Public Company (in either case as a passive investor) provided that at the
time of the investment such Employee reasonably believed that such entity was
not engaged and had no present intention to engage in, a Competitive Business
and continue to hold such investment even if such entity unbeknownst to him is
engaged in a Competitive Business or subsequently enters into a Competitive
Business; (iii) enter into a relationship as a principal, agent, employee,
consultant or in any other representative capacity with an entity that Employee
reasonably believes, at the initiation of such relationship, is not engaged in,
and has no present intention of engaging in, a Competitive Business, provided
that if such entity subsequently engages in such Competitive Business, Employee
may only maintain such relationship if he does not personally directly engage in
such Competitive Business and such entity has annual revenues in excess of $100
million in its most recent fiscal year.
4.3 Other Agreements. In consideration of employment or
continued employment as the case may be, and the compensation received by the
Employee from Company while employed by Company, the Employee hereby further
agrees that Employee will not, during the Restricted Period, (i) solicit, for
himself or others, any person or entity that is or was a customer of ForeFront
or the Company while Employee was employed by Company, for any purpose or
activity that is directly competitive with the business of ForeFront or the
Company or solicit the
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employment or services of any person who is employed full-time by ForeFront or
the Company or (ii) solicit, recruit or hire, or assist any person, firm,
corporation, association or other entity in the solicitation, recruitment or
hiring of, any person then engaged by ForeFront or the Company as an employee,
officer, director or consultant, or so engaged by ForeFront or the Company
within the then prior six (6) months.
4.4 Severability of Provisions. The Employee hereby
acknowledges and agrees that the scope of the foregoing covenants are reasonable
and necessary to protect the interests of the Company and ForeFront. While the
restrictions set forth in this Article 4 are considered by the parties to be
reasonable in all circumstances, it is recognized that restrictions of the
nature in question may fail for technical reasons unforeseen, and accordingly it
is hereby agreed that if any of such restrictions shall be adjudged to be void
as going beyond what is reasonable in all the circumstances for the protection
of the Company and ForeFront or for any other reason but would be valid if part
of the wording thereof were deleted or the periods (if any) thereof reduced or
the range of activities or area dealt with thereby reduced in scope, such
restrictions shall apply with such modifications as may be necessary to make
them valid and effective and such provisions shall be modified accordingly.
5. MISCELLANEOUS.
5.1 Notice. For purposes of this Agreement, notices and all
other communications provided for or permitted herein shall be in writing and
shall be deemed to have been duly given when personally delivered or when mailed
by United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to Company:
The ForeFront Group, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: The President
If to the Employee, at the address identified on the signature page hereof, or
to such other address as either party may furnish to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.
5.2 Applicable Law. This Agreement shall be construed and
enforced in accordance with the laws of the Province of Ontario, Canada.
5.3 No Waiver. No failure by either party hereto at any time
to give notice of any breach by the other party of, or to require compliance
with, any condition or provision of this Agreement shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
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5.4 Severability. If a court of competent jurisdiction
determines that any provision of this Agreement is invalid or unenforceable,
then the invalidity or unenforceability of that provision shall not affect the
validity or enforceability of any other provision of this Agreement, and all
other provisions shall remain in full force and effect. Further, such provisions
shall be reformed and construed to the extent permitted by law so that it would
be valid, legal and enforceable to the maximum extent possible.
5.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but both of which
together will constitute one and the same Agreement.
5.6 Headings. The article and section headings have been
inserted for purposes of convenience and shall not be used for interpretive
purposes.
5.7 Entire Agreement. This Agreement constitutes the entire
agreement of the parties with regard to the subject matter hereof, and contains
all the covenants, promises, representations, warranties and agreements between
the parties with respect to the subject matter hereof. Each party to this
Agreement acknowledges that no representation, inducement, promise or agreement,
oral or written, has been made by either party, or by anyone acting on behalf of
either party, that is not embodied herein, and that no agreement, statement or
promise relating to the subject matter hereof that is not contained in this
Agreement hereto shall be valid or binding.
5.8 Amendments. No amendment or modification to this Agreement
will be effective unless it is in writing and signed by duly authorized
representatives of both parties.
5.9 Further Assurances. The parties agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Agreement.
5.10 Survival. The provisions of Articles 3 and 4 herein shall
survive any termination of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed effective as of September _______, 1997 (the "Effective Date").
LANPROFESSIONAL, INC. EMPLOYEE:
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxxx Name: Xxxxx Xxxxx
-------------------------- -------------------------------
Title: President Address:
-------------------------- -------------------------------
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EXHIBIT A
Job Duties
The Employee's duties shall be:
(1) Evaluation of Computer Based Training Technologies
(i) new products
(ii) development tools
(2) Product Design and Development
(3) Research
(i) CBT engines
(ii) CBT user interfaces
(4) Management of Technical Team including
(i) Graphic Designers
(ii) Compilers
(iii) Course Developers
(iv) evaluation of Human Resource requirements
(v) problem solving
(vi) conflict resolution
Milestones and Objectives
Employee's aggregate possible bonus shall be payable in four equal quarterly
installments, consisting of $8,750.00 each, upon and subject to the satisfactory
delivery of the product deliverable objectives within budget as provided in
Exhibit A-1 attached hereto and incorporated herein.
Any of the products specified in Exhibit A-1 which are not completed and
delivered in a satisfactory condition within the time period and budget
indicated, shall result in the applicable portion of the bonus to be forfeited
by Employee.
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EXHIBIT B
1. The following is a complete list of all inventions or improvements
relevant to the subject matter of my employment by LanProfessional,
Inc. (the "Company") which have been made or conceived or first
conceived or first reduced to practice by me alone or jointly with
others prior to my engagement by the Company:
No inventions or improvements
See below
All inventions.
Additional sheets attached
2. I propose to bring to my employment the following materials and
documents of a former employer which are not generally available to the
public, which materials and documents may be used in my employment:
No materials
See below
The "Guide" computer program licensed to the employee by the
University of Minnesota for use by the employee in the research he is
conducting to obtain a postgraduate degree.
Additional sheets attached
The signature below confirms that my continued possession and use of
these materials is authorized.
Name:
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