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EXHIBIT 10.23
EMPLOYMENT AGREEMENT.
THIS AGREEMENT is made as of April 30, 1997, between UOL PUBLISHING,
INC., a corporation organized and existing under the laws of the State of
Delaware ("UOL") and XXXXX X. XXXXXX ("Xxxxxx").
WHEREAS, Xxxxxx is currently an employee and shareholder of Xxxxxx &
Associates, Inc., an Illinois corporation ("CAI"); and
WHEREAS, Xxxxxx has agreed to sell and UOL has agreed to purchase all
of Xxxxxx'x shares of stock in CAI pursuant to the terms of that certain Stock
Purchase Agreement, dated as of the date hereof (the "Purchase Agreement"),
between and among UOL, CAI, Xxxxxx and the other shareholders of CAI; and
WHEREAS, UOL desires to employ Xxxxxx and Xxxxxx desires to accept
such employment on the terms and conditions hereinafter set forth; and
WHEREAS, the parties hereby acknowledge that the goodwill, continued
patronage, names, addresses and specific business requirements of CAI's and
UOL's clients and customers, and the designs, procedures, systems, strategies,
business methods and know-how of CAI and UOL, having been acquired through
UOL's efforts and/or the expenditure of considerable time and money, are among
the principal assets of UOL; and
WHEREAS, the parties hereby acknowledge that as a result of the
position(s) in which Xxxxxx has been employed by CAI and will be employed by
UOL, Xxxxxx has developed and will continue to develop special skills and
knowledge peculiar to UOL's business, whereby he has become and will continue
to become, through his employment with CAI and UOL, acquainted with the
identities of the clients and customers of CAI and UOL, and has acquired and
will continue to acquire access to the techniques of CAI and UOL in carrying on
its business, as well as other confidential and proprietary information; and
WHEREAS, the parties hereto acknowledge that the Covenants set forth
in Section 8 of this Agreement are necessary for the reasonable and proper
protection of CAI's and UOL's confidential and proprietary information (as
defined herein), customer relationships, and the goodwill of CAI's and UOL's
business, and that such Covenants constitute a material portion of the
consideration for Xxxxxx'x employment hereunder.
NOW, THEREFORE, in consideration of the premises and mutual
promises and covenants contained herein, and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Term. UOL agrees to employ Xxxxxx, and Xxxxxx agrees to be
employed, as Executive Vice President of UOL, or in such other position as the
Board of Directors may from time to time assign, for a term of three (3) years
commencing April 30, 1997 and ending
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April 30, 2000 (the "Initial Term"), unless such employment is sooner
terminated as provided herein.
2. Renewal Terms. Unless either party provides written notice to
the other of its/his intention not to renew this Agreement at least sixty (60)
days prior to the expiration of the Initial Term (or then-current renewal term
hereof), this Agreement shall be automatically renewed for consecutive
additional one (1) year renewal terms, subject to the termination provisions
set forth in Section 7 hereof. Any failure by UOL to renew this Agreement
shall be deemed a termination of the Agreement without Cause, as defined
herein.
3. Compensation. In consideration of Xxxxxx'x services
hereunder, UOL shall, beginning with the pay period commencing May 1, 1997, pay
Xxxxxx a minimum annual base salary of One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00) per annum, payable in equal monthly installments in
accordance with UOL's normal payroll practices, plus an annual performance
bonus of up to fifty percent (50%) of Xxxxxx'x base salary in an amount to be
determined by the Board of Directors of UOL in its sole discretion, based upon
the achievement of specified goals to be established by the Board during the
term hereof. Xxxxxx'x total compensation shall be reviewed by the Board of
Directors of UOL on an annual basis during the term hereof (including renewal
terms) and may be increased (but not decreased) as UOL deems appropriate in its
sole discretion. In addition, Xxxxxx shall be eligible, during the term
hereof, to receive options for the purchase of UOL stock as determined in the
sole discretion of UOL's Board of Directors.
4. Employee Benefits; Vacation. During the term of this
Agreement, Xxxxxx shall be eligible to receive and/or participate in all
employee benefits that are offered by UOL to its executive employees,
including, without limitation, UOL's contributory (80% paid by UOL and 20% paid
by employee) major medical, dental and life insurance plan, and coverage under
UOL's long term disability plan (100% paid by employee). During the term
hereof, Xxxxxx shall be entitled to receive five (5) weeks of paid vacation per
calendar year during the term hereof. All accrued but unused vacation may be
carried over by Xxxxxx from one calendar year to the next during the term
hereof, provided that Xxxxxx shall not be permitted to take more than five (5)
weeks vacation in any calendar year during the term hereof without prior
written approval of UOL.
5. Reimbursement of Expenses. Xxxxxx is authorized to incur
reasonable expenses in connection with the business of UOL, including expenses
for travel and similar items. UOL will reimburse Xxxxxx for all previously
approved reasonable expenses upon presentation of an itemized account of such
expenditures.
6. Illness or Disability. Xxxxxx shall receive full compensation
for any period of illness or disability during the term of this Agreement until
such time as he receives benefits under the long term disability insurance
coverage referred to in Section 4, supra; provided, however, that such interim
period of compensation for illness or disability shall not exceed six (6)
months. Notwithstanding the foregoing, UOL shall have the right to terminate
this Agreement without further obligation to Xxxxxx if such illness or
disability shall be of such a
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character as totally to disable Xxxxxx from rendering any services to UOL for a
period of more than six (6) consecutive months on giving at least thirty (30)
days' written notice of intention to do so.
7. Termination of Employment. Xxxxxx'x employment hereunder is
employment at will, and either UOL or Xxxxxx may terminate this Agreement and
Xxxxxx'x employment at any time, with or without cause.
x. Xxxxxxxxx Benefit Payable. If Xxxxxx terminates this
Agreement for Good Reason (as defined below), or if UOL terminates the
Agreement other than (i) for Cause (defined below) or (ii) due to Xxxxxx'x
Disability as described in Section 6 hereof, Xxxxxx shall be entitled to
receive, as his exclusive remedy for such termination, the severance benefit
set forth in subsection 7d hereof (the "Severance Benefit"). Such Severance
Benefit shall be payable to Xxxxxx in equal monthly installments consistent
with UOL's standard payroll practices, the first of such installments to be due
within thirty (30) days after termination hereof. In order, however, to invoke
termination for "Good Reason" hereunder, Xxxxxx must communicate such
termination in advance and by written notice to UOL, which written notice (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Xxxxxx'x employment under the provision so
indicated and (iii) specifies the termination date (which date shall not be
more than thirty (30) days after the giving of such notice).
b. Good Reason. For purposes of this Agreement, "Good
Reason" shall mean any request that Xxxxxx relocate outside the Portsmouth, New
Hampshire metropolitan area, or any material reduction in Xxxxxx'x duties,
titles, authority or position with UOL, excluding any isolated, unsubstantial
or inadvertent action not taken in bad faith and which is remedied by UOL
promptly after receipt of notice thereof given by Xxxxxx; provided, however,
that no severance benefit shall be payable to Xxxxxx based upon a termination
of this Agreement for Good Reason unless such termination is properly noticed
and takes effect within thirty (30) days after the occurrence of such Good
Reason.
c. Cause. For purposes of this Agreement, "Cause" shall
mean drug or alcohol abuse, conviction of a felony or crime involving moral
turpitude, a material breach of this Agreement, or any willful or grossly
negligent act or omission by Xxxxxx having a material adverse effect on the
business of UOL.
d. Amount of Severance Benefit. The amount of the
Severance Benefit shall equal nine (9) months of Xxxxxx'x Base Salary, less
applicable withholdings for taxes, plus six (6) months of those employer-paid
benefits customarily provided by UOL to its executive employees.
8. Restrictive Covenants.
a. Noncompetition. Xxxxxx agrees that during, and for a
period of two (2) years after, the later of termination or expiration of this
Agreement and his employment with
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UOL, he will not: (a) engage in, manage, operate, control or supervise, or
participate in the management, operation, control or supervision of, any
business or entity that provides products or services competitive with those
CAI or UOL is providing as of the date of termination of Xxxxxx'x employment
with UOL; or (b) have any ownership or financial interest, directly or
indirectly, in any entity that provides products or services competitive with
those CAI or UOL is providing as of the date of termination of Xxxxxx'x
employment with UOL, including, without limitation, as an individual, partner,
shareholder (other than as a shareholder of a publicly-owned corporation in
which Xxxxxx owns less than 2% of the outstanding shares of such corporation),
officer, director, employee, member, associate, principal, agent,
representative or consultant, and shall not in any other manner, directly or
indirectly, compete to any extent with such business of CAI or UOL.
Notwithstanding the foregoing, Xxxxxx shall not be bound by the terms of this
subsection 8a if the Agreement is terminated by UOL and such termination is
without Cause as defined herein.
b. Nonsolicitation. During Xxxxxx'x employment with
UOL, and for the two (2) year period of time described in Section 8a hereof,
Xxxxxx agrees not to solicit for a product or service competitive with those
then offered by UOL or CAI or conduct a competitive business with any client or
customer of CAI or UOL (past or present), whether or not CAI or UOL is doing
work for such client or customer as of the date of termination of Xxxxxx'x
employment with UOL, as well as any prospective client or customer of CAI or
UOL, or to contact, solicit, interfere with or attempt to entice in any form,
fashion or manner any employee of CAI or UOL for the purpose of inducing that
employee to terminate his/her employment with CAI or UOL or act in any way that
would be contrary to the best interests of CAI or UOL. Notwithstanding the
foregoing, Xxxxxx shall not be bound by the terms of this subsection 8b if the
Agreement is terminated by UOL and such termination is without Cause as defined
herein.
c. Nondisclosure. During and after Xxxxxx'x employment
with UOL, Xxxxxx agrees not to disclose, or to knowingly allow any other
employee to disclose, to any other person or business entity, if it competes
with products or services then offered by UOL or CAI, or use for personal
profit or gain, any confidential or proprietary information of CAI or UOL,
regardless of whether the same shall be or may have been originated, discovered
or invented by Xxxxxx or by Xxxxxx in conjunction with others. For purposes of
this Agreement, the term "confidential or proprietary information" shall
include, without limitation: the names, addresses and telephone numbers of
past, present and prospective clients or customers of CAI and UOL, as well as
products, designs, business plans, proposed business development, marketing
strategies, customers requirements, contractual provisions, employee
capabilities, proposed marketing initiatives, pricing methods, company
earnings, computer software and reporting systems; and the procedures, systems
and business methods of CAI and UOL.
d. Geographic Scope of Restrictive Covenants. The
geographic area in which Xxxxxx shall not engage in any of the prohibited
activities listed in subsections 8a and 8b hereof shall be limited to: (a) the
continental United States; (b) the State of California; (c) the State of Texas;
(d) the State of Virginia; (e) the State of New Hampshire; (f) all other states
in which CAI or UOL has customers or otherwise conducts business; (g) the area
within a 50
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mile radius of UOL's place of business in Falls Church, Virginia; and (h) the
area within a 50 mile radius of CAI's place of business in Portsmouth, New
Hampshire.
9. Remedies for Breach. Xxxxxx hereby acknowledges and agrees
that a violation of any of the covenants set forth in Section 8 hereof (the
"Covenants") would result in immediate and irreparable harm to CAI and UOL, and
that UOL's remedies at law, including, without limitation, the award of money
damages, would be inadequate relief to UOL for any such violation. Therefore,
any violation or threatened violation by Xxxxxx of the Covenants shall give UOL
the right to enforce such Covenants through specific performance, temporary
restraining order, preliminary or permanent injunction, and other equitable
relief. Such remedies shall be cumulative and in addition to any other
remedies UOL may have, at law or in equity.
10. Return of UOL Property; Assignment of Inventions.
a. Return of Property. Upon the termination of Xxxxxx'x
employment with UOL for any reason, Xxxxxx shall leave with or return to UOL
all personal property belonging to CAI or UOL ("UOL Property") that is in
Xxxxxx'x possession or control as of the date of such termination of
employment, including, without limitation, all records, papers, drawings,
notebooks, specifications, marketing materials, software, reports, proposals,
equipment, or any other device, document or possession, however obtained,
whether or not such CAI or UOL Property contains confidential or proprietary
information of CAI or UOL as described in Section 8c hereof.
b. Assignment of Inventions. If at any time or times
during Xxxxxx'x employment, Xxxxxx shall (either alone or with others) make,
conceive, discover or reduce to practice any invention, modification,
discovery, design, development, improvement, process, software program, work of
authorship, documentation, formula, data, technique, know-how, secret or
intellectual property right whatsoever or any interest therein (whether or not
patentable or registrable under copyright or similar statutes or subject to
analogous protection) (herein called "Developments") that (a) relates to the
business of CAI or UOL or any of the products or services being developed,
manufactured or sold by CAI or UOL or that may be used in relation therewith,
(b) results from tasks assigned him by UOL or (c) results from the use of
premises or personal property (whether tangible or intangible) owned, leased or
contracted for by CAI or UOL, such Developments and the benefits thereof shall
immediately become the sole and absolute property of UOL and its assigns, and
Xxxxxx shall promptly disclose to UOL (or any persons designated by it) each
such Development and hereby assigns any rights Xxxxxx may have or acquire in
the Developments and benefits and/or rights resulting therefrom to UOL and its
assigns without further compensation and shall communicate, without cost or
delay, and without publishing the same, all available information relating
thereto (with all necessary plans and models) to UOL.
Upon disclosure of each Development to UOL, Xxxxxx will,
during his employment and at any time thereafter, at the request and expense of
UOL, sign, execute,
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make and do all such deeds, documents, acts and things as UOL and its duly
authorized agents may reasonably require:
(i) to apply for, obtain and vest in the name of
UOL alone (unless UOL otherwise directs) letters
patent, copyrights or other analogous protection in
any country throughout the world and when so obtained
or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in
respect of such applications and any opposition
proceedings or petitions or applications for
revocation of such letters patent, copyright or other
analogous protection.
In the event UOL is unable, after reasonable effort, to secure
Xxxxxx'x signature on any letters patent, copyright or other analogous
protection relating to a Development, whether because of Xxxxxx'x physical or
mental incapacity or for any other reason, Xxxxxx hereby irrevocably designates
and appoints UOL and its duly authorized officers and agents as Xxxxxx'x agents
and attorneys-in-fact, to act for and in behalf of Xxxxxx and xxxxx to execute
and file any such application or applications and to do all other lawfully
permitted acts to further the prosecution and issuance of letters patent,
copyright or other analogous protection thereon with the same legal force and
effect as if executed by Xxxxxx.
11. Survival. The provisions of Sections 8, 9 and 10 hereof shall
survive the termination of this Agreement, regardless of the manner or cause of
such termination.
12. Effect of Agreement. This Agreement sets forth the final and
complete Agreement of the parties. It shall not be assigned by Xxxxxx and may
not be modified except by way of a writing executed by both parties. All the
terms and provisions of this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their successors and
assigns.
13. Governing Law. The provisions of this Agreement and any
disputes arising hereunder shall be governed by and construed in accordance
with the laws of the State of Virginia.
[The next page is the Signature Page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their seals affixed hereto as of the day and year first
above written.
UOL PUBLISHING, INC.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: President
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/s/ Xxxxx X. Xxxxxx
----------------------------(SEAL)
Xxxxx X. Xxxxxx
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