EMPLOYMENT AGREEMENT
This
Employment Agreement (“Agreement”)
is
dated as of December
13th,
2006
(the “Effective
Date”),
by
and between netGuru,
Inc., a Delaware corporation (“NGRU”)
(the
“Company”),
and
Xxxxxxx Xxxxx, an individual (the “Employee”).
RECITALS
WHEREAS,
BPO Management Services, Inc., a Delaware corporation (“BPOMS”),
and the Company intend to effect a merger, as a result of which BPOMS will
become a wholly-owned subsidiary of the Company (the
“Merger
Agreement”);
WHEREAS,
Employee has been employed by the Company on a full time continuous basis as
Chief
Technology Officer of the Web4 division
since
April 2000 and Chief Operating Officer since November 2005;
WHEREAS,
the Company will secure the ongoing services of the Employee upon the closing
(“Closing”) of such Merger Agreement pursuant to the terms and conditions set
forth herein, and therefore the Employee and the Company intend hereby to enter
into an employment agreement as set forth herein;
WHEREAS,
this Agreement is conditioned upon the Closing and shall be void and of no
effect if for any reason, including, without limitation, a default or breach
by
the Company or BPOMS, the Merger Agreement is terminated.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants set forth
below, the parties hereby agree as follows:
1. Employment.
From and after the Effective Date, the Company hereby agrees to employ the
Employee as Chief Technology Officer of the Company, and the Employee hereby
accepts such employment, on the terms and conditions set forth
below.
2.
Term.
The
term of this Agreement shall begin on the Effective Date and shall end two
(2)
years from the Effective Date or upon termination of the Employee’s employment
by the Company or by the Employee in accordance with the terms of this
Agreement. The two year employment term herein shall be referred to as the
“Employment
Period”.
Thereafter, the Company may elect, in its sole discretion to either: (i) o
enter
into a new employment agreement upon terms and conditions as then mutually
agreed by the Company and the Employee; or (ii) continue Employee’s employment
on an “at will” basis only and in such case the Company may terminate the
Employee’s employment at any time with or without cause and with or without
notice.
3.
Position
and Duties.
(a)
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During
the Employment Period, the Employee shall serve as Chief Technology
Officer of the Company with such duties, authority and responsibilities
that are customary for such position and such other related duties
as
requested by the Chief Executive Officer or the President of the
Company
from time to time. The Employee shall report directly to the Chief
Executive Officer of the Company. Unless otherwise authorized by
the Chief
Executive Officer, the President or the Board of Directors of the
Company
(“Board”),
the Employee shall devote substantially all of his working time,
attention
and energies during normal business hours (other than absences due
to
illness or vacation) to the performance of his duties for the Company.
Notwithstanding the above, the Employee shall be permitted to (i)
serve on
civic or charitable boards or committees, or (ii) serve on boards
of other
companies provided such activities do not interfere with the Employee’s
performance of his duties for the Company. The Employee shall be
entitled
to receive and retain all remuneration received by him from the items
listed in clauses (i) and (ii) of this
paragraph.
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(b)
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In
order to induce the Company to enter into this Agreement, except
for the
employment agreement with the Company concerning employment with
the
Company which has been disclosed to BPOMS in writing by the Company
or
Employee prior to the execution of the Merger Agreement, and which
employment agreement shall be terminated by the Company and Employee
effective on the Closing, Employee represents and warrants to the
Company
that (i) Employee is not a party or subject to any employment agreement
or
arrangement with any other person, firm, company, corporation or
other
business entity; and (ii) Employee is subject to no restraint, limitation
or restriction by virtue of any agreement or arrangement, or by virtue
of
any law or otherwise which would impair Employee’s right or ability to
enter the employ of the Company or to perform fully his duties and
obligations pursuant to this
Agreement.
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(c)
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Effective
upon the Closing, and as a material inducement for the Company to
enter
into this Agreement, Employee agrees to execute and deliver to the
Company: (i) the Release
Agreement
in
the form of Exhibit
A
attached hereto, which Release Agreement is intended to release the
Company, BPOMS and other parties as provided for in such Release
Agreement
from all known and unknown claims, and as further provided for in
such
Release Agreement; and (ii) the Employee
Proprietary Information And Inventions Agreement in
the form of
Exhibit B attached
hereto.
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4.
Place
of
Performance. During the Employment Period, the location of employment of the
Employee shall be at the Company’s principal offices, which currently are
located in Xxxxx Xxxxx, Orange County, California.
5.
Compensation
and Related Matters.
(a)
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Base
Salary. Commencing on the Effective Date and thereafter during the
Employment Period, the Company shall pay the Employee a base salary
at the
rate of not less than $140,000.00 per year (“Base
Salary”).
The Base Salary shall be paid in approximately equal installments
in
accordance with the Company’s customary payroll practices. Effective upon
the occurrence of two consecutive fiscal quarters (i.e. with the
first
full fiscal quarter commencing after the Closing )of positive EBITDA
by
the Company, as determined by the Company, the Base Salary shall
be
increased, on a one time basis only, by an amount equal to 15% of
the then
current Base Salary (the “Base Salary Increase”). Notwithstanding any term
in this Agreement to the contrary, however, Employee shall be entitled
to
receive no more than one Base Salary Increase. EBITDA for purposes
of this
paragraph means earnings of the Company before interest, taxes, and
depreciation and amortization expenses as determined in accordance
with
GAAP by the Company. The Company may not reduce the Base Salary amount
without the prior written consent of the
Employee.
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(b)
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Annual
Bonus. Commencing on January 1, 2007 and ending on the end of the
Employment Period, the Employee shall be eligible to earn an annual
cash
bonus (the “Annual
Bonus”)
in such amount equal to 50% of the then current Base Salary as shall
be
determined by the Board based on the achievement of Company and individual
performance goals for the Company as established by the Board for
each
applicable calendar year, with such Annual Bonus being prorated for
any
Partial Year (as defined below), and except that no Annual Bonus
(or any
pro-rated amount thereof for any Partial Year) shall be accrued,
due or
payable or deemed earned by Employee if, prior to the end of a calendar
year, Employee voluntarily terminates his employment with the Company
other than for Good Reason as defined below or if the Company terminates
Employee’s employment for Cause as defined in this Agreement. The Board
shall establish objective and subjective criteria to be used to determine
the extent to which performance goals have been satisfied. The Annual
Bonus shall be prorated for any applicable partial calendar year
(each a
“Partial
Year”).
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(c)
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Business,
Travel and Entertainment Expenses. The Company shall promptly reimburse
the Employee for all business, travel and entertainment expenses
incurred
during the Employment Period with respect to the business or prospective
business of the Company, subject to the Company’s expense reimbursement
policies.
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(d)
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Vacation.
During the Employment Period, the Employee shall be entitled to four
(4) weeks
of paid vacation per year. Vacation not taken during the applicable
fiscal
year (but not in excess of three weeks) shall be carried over to
the next
following fiscal year and no vacation shall accrue during the time
period
that Employee has accrued and unused vacation in excess of five (5)
weeks.
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(e)
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Equity
Awards. The Employee is hereby granted (the “Grant”) an “incentive stock
option” (“Option”) as defined under Section 422 of the Internal Revenue
Code of 1986, as amended, to purchase 75,000 shares of common stock
of the
Company at the exercise price per share equal to the fair market
value per
share of the Company’s common stock as of the Closing as determined by the
Board and subject to the following: (i) vesting shall be conditioned
upon
being employed by the Company on a full time basis and shall be subject
to
the following schedule: 25% shall vest and become exercisable 6 months
after the Closing; an additional 25% shall vest and become exercisable
12
months after the Closing; an additional 25% shall vest and become
exercisable 18 months after the Closing; and 25% shall vest and become
exercisable 24 months after the Closing and whereupon the Option
shall
have become vested and exercisable as to one hundred percent (100%)
of the
stock covered by the Option. (ii) full 100% accelerated vesting of
the
Option upon termination of Employee’s employment by the Company without
Cause or by the Employee for Good Reason; (iii) except as otherwise
provided for above in this paragraph 5(e), such other terms as provided
for in the netGuru, Inc. 2003 Stock Option Plan (“Plan”); and (iv)
Employee shall be required to execute at the Closing a stock option
grant
agreement in the form generally utilized by the Company for incentive
stock options granted under the Plan and otherwise consistent with
the
terms herein.
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(f)
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Welfare, Pension and Incentive Benefit Plans. During the Employment Period, the Employee (and his eligible spouse and dependents) shall be entitled to participate in all welfare benefit plans and programs maintained by the Company from time to time for the benefit of its employees, including, without limitation, all medical, hospitalization, dental, disability, accidental death and dismemberment, travel accident and life insurance plans, programs and arrangements. In addition, during the Employment Period, the Employee shall be eligible to participate in all pension, retirement, savings and other employee benefit plans and programs maintained from time to time by the Company for the benefit if its employees. |
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(g)
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Automobile
Allowance. The Company shall provide the Employee with an automobile
allowance of not less than $600.00 per month in connection with the
performance of his duties.
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(h) |
Additional
Items. The Company shall provide the Employee with the following
additional items in connection with the performance of his duties:
laptop
computer, internet connection at home (or wireless internet), phone
cards
for overseas business calls from outside office, Company credit card
and
mobile telephone.
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6.
Termination.
The Employee’s employment hereunder may be terminated during the Employment
Period under the following circumstances:
(a)
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Death.
The Employee’s employment hereunder shall terminate upon his
death.
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(b)
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Disability.
If, as a result of the Employee’s incapacity due to physical or mental
illness as determined by a physician selected by the Employee, and
reasonably acceptable to the Company (or selected by the Company
if
Employee fails to designate a reasonably acceptable physician after
reasonable written notice by the Company), (i) the Employee shall
have
been substantially unable to perform his duties hereunder for four
(4)
consecutive months, or for an aggregate of 120 days during any period
of
twelve (12) consecutive months and (ii) within thirty (30) days after
written Notice of Termination is given to the Employee after such
four-month or 120-aggregate-day period, the Employee shall not have
returned to the substantial performance of his duties on a full-time
basis, the Company shall have the right to terminate the Employee’s
employment hereunder for
“Disability.”
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(c)
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Cause.
The Company shall have the right to terminate the Employee’s employment
for “Cause.” For purposes of this Agreement, the Company shall have
“Cause” to terminate the Employee’s employment only upon the
Employee’s:
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(i)
willful
gross misconduct or conviction of a felony after the Effective Date that, in
either case, results in material and demonstrable damage to the business or
reputation of the Company or which involves any crime or offense involving
money
or other property of the Company or BPOMS, or any of their respective
subsidiaries or affiliates; or
(ii)
refusal
to perform, or willful breach or neglect of the performance of any of his duties
or obligations hereunder and continued failure to perform his duties hereunder
within ten (10) business days after the Company delivers to him a written demand
for performance that specifically identifies the actions to be performed;
or
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(iii) material
breach of Section 3(a) or 3(b) or 3(c) of this Agreement; or
(iv)
Employee’s
performance of any act or his failure to act, for which, if Employee were
prosecuted and convicted, a crime or offense involving money or property of
the
Company or BPOMS or any of their respective subsidiaries or affiliates, or
which
would constitute a felony in the jurisdiction involved, would have occurred;
or
(v)
any
attempt by Employee to improperly secure any personal profit in connection
with
the business of the Company or BPOMS or any of their respective subsidiaries
or
affiliates; or
(vi)
chronic
alcoholism or drug addiction; or
(vii)
any
breach by Employee of the terms of Section 9 of this Agreement.
Cause
shall not exist unless and until the Company has delivered to the Employee
written notice from the Board or the Chief Executive Officer of the Company
specifying the particulars thereof in detail and unless and until the Company
has given the Employee fifteen (15) days in which to cure the underlying breach,
to the extent such breach is susceptible of cure.
(d)
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Without
Cause. The Company shall have the right to terminate the Employee’s
employment hereunder without Cause by providing the Employee with
a Notice
of Termination. Termination without cause includes, without limitation,
the Company or its successor and/or its assigns terminating the Employee
solely as a result of a sale of the Company to a third party.
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(e)
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Good
Reason. The Employee shall have the right to terminate his employment
for
“Good
Reason.”
For purposes of this Agreement, the Employee shall have “Good Reason” to
terminate his employment upon:
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(i)
a
reduction in the Employee’s Base Salary; or
(ii)
the
failure of Company to pay any compensation, or otherwise provide any material
benefits, due to the Employee in accordance with the terms of this Agreement,
and such failure is not cured within 20 days after written notice from Employee
of the failure to make such payment or benefit; or
(iii)
a
material diminution of Employee’s responsibilities, or the assignment to the
Employee of duties materially inconsistent with the Employee’s position, duties,
and status with the Company as set forth in Section 3(a), if done without the
Employee’s prior written consent and provided such change is not rescinded by
the Company within 20 days after written notice from Employee specifying the
change; or
(iv)
the
Company moves the Employee’s place of employment more than one hundred
twenty-five (125) miles from the location specified in Section 4 hereof
without the Employee’s prior written consent.
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7.
Termination
Procedure.
(a)
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Notice
of Termination. Any termination of the Employee’s employment by the
Company or by the Employee during the Employment Period (other than
pursuant to Section 6(a)) shall be communicated by written Notice
of
Termination to the other party. For purposes of this Agreement, a
“Notice
of Termination”
shall mean a notice indicating the specific termination provision
in this
Agreement relied upon and setting forth in reasonable detail the
facts and
circumstances claimed to provide a basis for termination of the Employee’s
employment under that provision.
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(b)
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Date
of Termination. “Date
of Termination”
shall mean
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(i)
if
the
Employee’s employment is terminated by his death, the date of his
death,
(ii)
if
the
Employee’s employment is terminated pursuant to Section 6(b), thirty (30) days
after the date on which the Notice of Termination was transmitted to the
Employee (provided that the Employee does not return to the substantial
performance of his duties on a full-time basis during such thirty (30) day
period), and
(iii)
if
the
Employee’s employment is terminated for any other reason, the date on which a
Notice of Termination is given or any later date (which shall not exceed thirty
(30) days thereafter), as set forth in such Notice of Termination.
8.
Compensation
upon Termination or During Disability. In the event the Employee is disabled
or
his employment terminates during the Employment Period, the Company shall
provide the Employee with the payments and benefits set forth
below.
(a)
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Termination
by Company Without Cause or by the Employee for Good Reason. If the
Employee’s employment is terminated by the Company without Cause (other
than due to Disability or death) or the Employee elects to terminate
his
Employment for Good Reason:
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(i)
the
Company shall pay to the Employee, on or before the Date of Termination, a
payment equal to the sum of (A) all accrued and unpaid Base Salary and accrued
unpaid vacation pay through the Date of Termination, and (B)subject to execution
by Employee of a release agreement in a form and with such terms that are
acceptable to the Company in the Company’s sole discretion and which release
agreement shall release the Company from all known and unknown claims, Base
Salary for a six
month period
payable
in semi-monthly installments or such other installments as would have been
paid
under this Agreement if this Agreement had not terminated; provided,
further,
that
the Company shall have no obligation to pay Base Salary for the remainder of
the
Employment Period if the Employee’s employment is terminated by the Company
without Cause because the Company or BPOMS has filed for protection under
applicable bankruptcy law or has permanently ceased operations);
(ii)
the
Company shall, consistent with past practice, reimburse the Employee pursuant
to
Section 5(c) for business expenses incurred but not paid prior to such
termination of employment; and
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(iii)
the
Employee shall be entitled to any other rights, compensation and/or benefits
as
may be due to the Employee in accordance with the terms and provisions of any
agreements, plans or programs of the Company.
The
payments and benefits provided for as subclause (A) of clause (i) above and
in
clause (ii) above are hereinafter referred to as the “Accrued
Obligations.”
(b)
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Termination
by the Company for Cause or Termination by Employee Without Good
Reason.
If the Employee’s employment is terminated by the Company for Cause or by
the Employee without Good Reason, then the Company shall provide
the
Employee with his Accrued Obligations and shall have no further obligation
to the Employee hereunder except for the benefits provided under
any plans
or programs of the Company; and provided that the Annual Bonus shall
not
be due or payable or deemed earned or accrued if Employee is terminated
for Cause or if Employee terminates this Agreement without Good
Reason.
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(c)
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Disability.
During any period that the Employee fails to perform his duties hereunder
as a result of incapacity due to physical or mental illness (“Disability
Period”),
the Employee shall continue to receive his full Base Salary set forth
in
Section 5(a) until his employment is terminated pursuant to Section
6(b).
In the event the Employee’s employment is terminated for Disability
pursuant to Section 6(b), the Company shall pay the Accrued Obligations
and prorated Annual Bonus through the Date of Termination and shall
have
no further obligations to the Employee hereunder except to the extent
of
disability benefits or other employee benefit plans otherwise available
to
Employee.
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(d)
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Death.
If the Employee’s employment is terminated by his death, the Company shall
pay the Accrued Obligations and prorated Annual Bonus through the
Date of
Termination and shall have no further obligations hereunder except
for any
benefits otherwise available to Employee or his family under insurance
or
other employee benefit plans.
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(e)
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Upon
the Date of Termination other than due to termination for Cause or
other
than due to termination of employment by Employee without Good Reason,
a
pro-rated Annual Bonus shall be due and payable to Employee within
forty-five (45) days after the end of the then current calendar
year.
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9.
Confidential
Information.
(a)
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Confidential
Information. Except as may be required or appropriate in connection
with
his carrying out his duties under this Agreement, the Employee shall
not,
without the prior written consent of the Company or as may otherwise
be
required by law or any legal process, or as is necessary in connection
with any adversarial proceeding against the Company (in which case
the
Employee shall cooperate with the Company in obtaining a protective
order
at the Company’s expense against disclosure by a court of competent
jurisdiction), communicate, to anyone other than the Company and
those
designated by the Company or on behalf of the Company in the furtherance
of its business or to perform his duties hereunder or to the Employee’s
legal and financial advisors, any trade secrets, confidential information,
knowledge or data relating to the Company or BPOMS or their respective
subsidiaries and affiliates or any businesses or investments of the
Company or BPOMS or their respective subsidiaries and affiliates,
obtained
by the Employee during the Employee’s employment by the Company or his
prior employment with the Companyor its affiliates that is not generally
available public knowledge (other than by acts by the Employee in
violation of this Agreement). For purposes of this Agreement,
“confidential
information”
shall not include: information which is or becomes generally available
to
the public other than as a result of a disclosure by the Employee
in
violation of this Agreement or any other
agreement.
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(b)
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Injunctive
Relief. In the event of a breach or threatened breach of this Section
9,
the Employee agrees that the Company or BPOMS or their respective
subsidiaries and affiliates shall be entitled to injunctive relief
in a
court of appropriate jurisdiction to remedy any such breach or threatened
breach, the Employee acknowledges that damages would be inadequate
and
insufficient.
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(c)
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Notwithstanding
the foregoing, to the extent of any conflict between the provisions
of
this Section 9 and the Employee
Proprietary Information and Inventions Agreement dated
as of the date hereof between the Company and the Employee, the terms
of
the latter agreement shall govern.
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10.
Restrictive
Covenants.
(a)
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Non-Competition.
During his employment with the Company (“Employment”), the Employee agrees
not to:
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(i)
Undertake
any planning for any outside business activity that is competitive with the
Company; or
(ii) Directly
or indirectly own any interest in, manage, control, participate in (whether
as
an officer, director, employee, partner, agent, representative or otherwise),
consult with, render services for, or in any manner engage in any business
directly competing with the Company and engaged in such business anywhere within
any state, possession, territory or jurisdiction of the United States of
America.
The
ownership of any of the following securities by Employee shall be deemed not
to
violate this Section 10(a): if Employee owns beneficially or of record in the
aggregate less than five percent (5%) of any security which is publicly traded
on a national securities exchange or actively traded in a recognized
over-the-counter market.
(b)
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Non-Solicitation.
During the period commencing on the date of this Agreement and continuing
until the first (1st)
anniversary of the date when the Employee's Employment is terminated
for
any reason, the Employee shall not directly or indirectly, personally
or
through others, solicit or attempt to solicit (on the Employee’s own
behalf or on behalf of any other person or entity) either (i) the
employment of any employee of the Company or BPOMS or any of the
Company's
or BPOMS’ affiliates or subsidiaries, or (ii) the business of any customer
of the Company or BPOMS, or any of the Company's or BPOMS’ affiliates or
subsidiaries with whom the Employee had contact during his Employment
or
during Employee’s prior employment with the Company or its
affiliates.
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(c)
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Non-Disclosure.
The Employee shall have entered into an Employee Proprietary Information
and Inventions Agreement with the Company effective as of the Closing
and
which is incorporated herein by
reference.
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(d)
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Injunctive
Relief. The Employee acknowledges and agrees that his failure to
perform
any of his covenants in this Section 10 would cause irreparable injury
to
the Company and cause damages to the Company that would be difficult
or
impossible to ascertain or quantify. Accordingly, without limiting
any
other remedies that may be available with respect to any breach of
this
Agreement, the Employee agrees that the Company may seek an injunction
to
restrain any breach of this Section
10.
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(e)
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Survival.
The covenants in this Section 10 shall survive any termination or
expiration of this Agreement and the termination of the Employee's
Employment with the Company for any
reason.
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11.
Successors;
Binding Agreement.
(a)
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Company’s
Successors. No rights or obligations of the Company under this Agreement
may be assigned or transferred, except that the Company has the right,
but
not the obligation, to require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to expressly assume
and
agree to perform this Agreement in the same manner and to the same
extent
that the Company would be required to perform it if no such succession
had
taken place, and in such case the Company shall be released from
all
obligations under this Agreement. As used in this Agreement, “Company”
shall include any successor to its business and/or assets (by merger,
purchase or otherwise) which executes and delivers the agreement
provided
for in this Section 11 or which otherwise becomes bound by all the
terms
and provisions of this Agreement by operation of
law.
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(b)
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Employee’s
Successors. No rights or obligations of the Employee under this Agreement
may be assigned or transferred by the Employee other than his rights
to
payments or benefits hereunder, which may be transferred only by
will or
the laws of descent and distribution. Upon the Employee’s death, this
Agreement and all rights of the Employee hereunder shall inure to
the
benefit of and be enforceable by the Employee’s beneficiary or
beneficiaries, personal or legal representatives, or estate, to the
extent
any such person succeeds to the Employee’s interests under this Agreement.
If the Employee should die following his Date of Termination while
any
amounts would still be payable to him hereunder if he had continued
to
live, all such amounts unless otherwise provided herein shall be
paid in
accordance with the terms of this Agreement to such person or persons
so
appointed in writing by the Employee, or otherwise to his legal
representatives or estate.
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12.
Notice.
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall
be
deemed to have been duly given when delivered either personally or two (20
business days after deposit with the United States Postal Service by certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:
If
to the
Employee: Xxxxxxx
Xxxxx, 00 Xxxxxxxxxx, Xxxxxx, XX 00000
Xxxx
Xxxxxxx
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If
to the
Company: 00000
XxxXxxxxx Xxxx, xxxxx 000
Xxxxxx,
XX 00000
or
to
such other address as any party may have furnished to the others in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
13. Miscellaneous.
No provisions of this Agreement may be amended, modified, or waived unless
such
amendment or modification is agreed to in writing signed by the Employee and
by
a duly authorized officer of the Company, and such waiver is set forth in
writing and signed by the party to be charged. No waiver by either party hereto
at any time of any breach by the other party hereto of any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made
by
either party which are not set forth expressly in this Agreement. The respective
rights and obligations of the parties hereunder of this Agreement shall survive
the Employee’s termination of employment and the termination of this Agreement
to the extent necessary for the intended preservation of such rights and
obligations. The validity, interpretation, construction and performance of
this
Agreement shall be governed by the laws of the State of California without
regard to its conflicts of law principles.
14.
Validity.
The invalidity or unenforceability of any provision or provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
15.
Counterparts.
This Agreement may be executed in one or more counterparts and by facsimile,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16.
Entire
Agreement. This Agreement, the Release
Agreement
and the
Employee
Proprietary Information And Inventions Agreement
hereof
set forth the entire agreement of the parties hereto in respect of the subject
matter contained herein and supersede all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any officer, employee or representative of any party hereto in
respect of the subject matter hereto.
17.
Withholding.
All payments hereunder shall be subject to any required withholding of Federal,
state and local taxes pursuant to any applicable law or regulation.
18.
Section
Headings. The section headings in this Employment Agreement are for convenience
of reference only, and they form no part of this Agreement and shall not affect
its interpretation.
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19.
Attorneys’
Fees. Should any arbitration, proceeding, or other legal action be brought
for
the enforcement of this Agreement, the successful or prevailing party shall
be
entitled to recover its reasonable attorneys’, accounting, and other
professional fees, and any other costs incurred in such arbitration, proceeding
or other legal action, at trial, on appeal, or in collection thereof, in
addition to any other relief to which it may be entitled.
CONTINUED
ON NEXT PAGE
11
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
on
the date first above written.
netGuru,
Inc., a Delaware corporation
By:
/s/
Xxxxxxx X Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Chief Executive Officer
By:
/s/
Xxxxx Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
Secretary
Employee:
/s/
Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
12
EXHIBIT
A
RELEASE
AGREEMENT
Release
Agreement (“Agreement”),
dated
______________ and effective as of _____________, 2006 (the “Effective
Time”)
by and
between netGuru,
Inc., a Delaware corporation (the
“Company”
or
“Employer”),
and
__________ (the “Employee”).
The
Effective
Time
shall be
the time of the closing of the merger as described in the attached Employment
Agreement.
1. |
The
Company and Employee agree that Employee has been employed by the Company
on at will basis since about
_________________.
|
2. |
In
connection with and as partial consideration for entering into the
attached Employment Agreement in lieu of the employment relationship
between the Employee and the Company terminating as of the Effective
Time,
the Employee has executed this Agreement.
|
3. |
Both
the Company and Employee agree that all prior written, verbal, and
oral
agreements, if any, with the Company with respect to the Company’s
obligation, if any, to pay Employee any compensation, severance payments,
bonuses, salary, benefits and/or options and any such agreements regarding
future employment, including, without limitation, any promises in
connection with the sale of the Employer or its assets or the merger
of
the Company are hereby cancelled, null, and void, and of no further
force
or effect.
|
4. |
Employee
acknowledges that Employee has received all payments and any and all
other
compensation due to Employee, of any kind, with respect to Employee’s
employment with Employer for services performed through and including
the
Effective Time.
|
5. |
Employee
hereby releases the Company, BPO Management Services, Inc., a Delaware
corporation, and each of their respective successors and assigns, and
all
of their respective related entities, including all subsidiaries and
affiliates, and the present and former stockholders, directors, officers,
employees, agents, and representatives or any of them from any and
all
claims and demands Employee may have arising from Employee’s employment
relationship with the Company from the beginning of time through and
including the Effective Time, other than any claims and demands arising
out of this Agreement. This includes the release of any rights or claims
Employee may have under or in connection with his employment with the
Company; any promises to be granted any stock options or other equity
or
quasi-equity based securities; any promises to have any stock options
or
other equity or quasi-equity based securities vest in any manner other
than as provided for in the Company’s stock option plans; any promises to
be paid a severance amount or bonuses or in connection with the sale
of or
merger or reorganization of or with the Company or the Company’s assets or
otherwise; the Age Discrimination in Employment Act, which prohibits
age
discrimination in employment; Title VII of the Civil Rights Act of
1964,
as amended, which prohibits discrimination in employment based on race,
color, national origin, religion, or sex; the Americans With Disabilities
Act, which prohibits discrimination in employment by reason of disability;
the
California Fair Employment and Housing Act, Cal. Gov’t. Code §§ 12900,
et
seq.
(discrimination, including race, color, national origin, ancestry,
disability, medical condition, marital status, sex, sexual or racial
harassment and age); the California Labor Code §§ 200, et
seq.
(salary, commission, compensation, benefits and other matters);
or
any other federal, state, or local laws or regulations prohibiting
employment discrimination or otherwise relating to Employee's employment.
This Agreement also includes a release by Employee of any claims for
defamation and intentional torts. This release covers both claims that
Employee knows about and those Employee may not know about. Employee
represents that as of the date of Employee’s execution of this Agreement,
Employee has incurred no disability or injury in relation to or as
a
result of Employee’s employment and asserts no claim for any form of
compensation for such disability, injury or job-related condition.
Employee promises never to file a lawsuit asserting any claims (other
than
claims under the Age Discrimination in Employment Act) that have been
released in this Section
5.
|
13
6. |
The
Employee has been fully advised by Employee’s attorney of the contents of
Section 1542 of the Civil Code of the State of California, and that
section and the benefits thereof, as well as benefits accruing under
any
comparable provisions of the law of any other jurisdiction, are hereby
expressly waived by the Employee. Section 1542 reads as
follows:
|
“Section
1542. (Certain
Claims Not Affected By General Release)
A
general release does not extend to claims which the creditor does not know
or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the
debtor.”
_________
Initials
7. |
Any
notice or other communication required or permitted hereunder shall
be in
writing and shall be delivered personally, sent by facsimile transmission
or sent by certified, registered, or express mail, postage prepaid,
return
receipt requested. Any such notice shall be deemed given when so delivered
personally or sent by facsimile transmission, one business day after
being
sent if sent by recognized overnight courier, or if mailed, then four
days
after the date of deposit in the United States mails addressed to the
addresses as indicated in the attached Employment
Agreement.
|
8. |
Commencing
immediately upon the date of this Agreement, Employee agrees to keep
confidential and not to directly or indirectly divulge any of the terms,
or existence of this Agreement, and not to disclose such information
to
anyone other than Employee’s attorneys and licensed tax and/or
professional investment advisor, all of whom will be informed of and
be
bound by this confidentiality provision. Employee may disclose the
terms
of this Agreement when required by law provided that seven days’ advance
written notice is given to the Company.
|
9. |
This
Agreement may be amended, superseded, canceled, renewed, or extended,
and
the terms hereof may be waived, only by a written instrument signed
by the
parties or, in the case of a waiver, by the party waiving compliance.
No
delay on the part of any party in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of such party of any such right, power, or privilege,
nor any single or partial exercise of any such right, power, or privilege,
preclude any other or further exercise thereof or the exercise of any
other such right, power, or privilege.
|
14
10. |
This
Agreement shall be governed by and construed in accordance with the
laws
of the State of California, without regard to its conflict of laws
rules.
|
11. |
The
provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors, and assigns. This Agreement, and the
Employee’s rights and obligations hereunder, may not be assigned by the
Employee. The Company shall be permitted to assign this Agreement and
its
rights, together with its obligations, hereunder, provided the assignee
agrees to accept such assignment and further provided that a permitted
assignment shall not release the Company from its obligations under
this
Agreement except to the extent that such obligations are satisfied
by the
assignee.
|
12. |
In
the event that one or more of the provisions contained in this Agreement,
or any part hereof, shall be determined to be invalid, illegal, or
unenforceable in any respect under any applicable statute or rule of
law,
only such provision(s) shall be considered invalid, illegal, or
unenforceable (and then only to the extent of such invalidity, illegality,
or unenforceability), and the rest of the provisions shall remain in
full
force and effect. The Employee agrees that if any provision contained
herein shall be adjudged to be invalid, illegal, or unenforceable for
any
reason, but would be adjudged to be valid, legal, and enforceable if
part
of the wording thereof were deleted and/or the time period thereof
and/or
the geographic area thereof were reduced, the said provision shall
apply
with such modification(s) as may be necessary to make it valid, legal,
and
enforceable.
|
13. |
This
Agreement and any other agreements incorporated herein by reference,
such
as the attached Employment Agreement and any other exhibits to such
Employment Agreement, set forth the entire agreement and understanding
of
the parties relating to the subject matter hereof, and, subject to
the
provisions hereof, supersede all prior agreements, arrangements, and
understandings, written or oral, relating to the subject matter hereof.
|
EMPLOYEE
ACKNOWLEDGES THAT EMPLOYEE HAS CAREFULLY READ THIS AGREEMENT AND RELEASE,
UNDERSTANDS IT, AND IS VOLUNTARILY ENTERING INTO IT OF EMPLOYEE'S OWN FREE
WILL,
WITHOUT DURESS OR COERCION, AFTER DUE CONSIDERATION OF ITS TERMS AND CONDITIONS.
EMPLOYEE FURTHER ACKNOWLEDGES THAT EXCEPT AS STATED IN THIS AGREEMENT AND
RELEASE, THE COMPANY OR ANY REPRESENTATIVE OF THE COMPANY HAS MADE NO
REPRESENTATIONS OR PROMISES TO EMPLOYEE.
IN
WITNESS WHEREOF, the parties have executed this Agreement the date first above
written.
netGuru,
Inc., a Delaware corporation
By:
_________________________
Name:______________________
Title: _______________________
EMPLOYEE
______________________________
[name
of
employee]
15
EXHIBIT
B
EMPLOYEE
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
16