EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of the
first day of November, 1996 (the "Effective Date"), by and between XXXXXXX.XXX,
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INC., a Delaware corporation (the "Employer") and XXXXXXXXX X. XXXXX (the
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"Employee").
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The Employer desires to employ the Employee, and Employees desires to be
employed by the Employer, in accordance with the terms and conditions set forth
herein.
1. Employment. The Employer hereby employs Employee for the Employment
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Period specified in Section 2 below as President and Chief Operating Officer of
the Employer, or in such other capacity as the Employer and the Employee may
agree from time to time. The Employee hereby accepts such employment upon the
terms and conditions set forth herein and agrees to devote her full business
time and efforts to the performance of her duties hereunder, provided however,
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that Employee may serve as a member of the board of directors of businesses
other than Employer so long as such service does not interfere with the
performance of Employees' duties hereunder and is not competitive with the
business of Employer or its parent, Trilogy Development Group, Inc ("Trilogy").
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2. Employment Period. The period of the Employee's employment under this
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Agreement (the "Employment Period") shall commence on the Effective Date and
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shall end upon the earlier of the fourth anniversary of the Effective Date or
the termination of this Agreement as contemplated by Section 8 below.
3. Duties. Employee shall have those duties and responsibilities which
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are assigned to her by the Chairman of the Board and Chief Executive Officer of
the Employer or by the board of directors of the Employer during the Employment
Period. Employee agrees to perform faithfully the duties assigned to her to
the best of her ability.
4. Compensation. As compensation for all services rendered and to be
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rendered pursuant to this Agreement, the Employer agrees to pay the Employee an
annual salary (the "Base Salary") of not less than $100,000. The Base Salary
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shall accrue and be payable in accordance with the payroll practices of the
Employer as in effect from time to time. Employee shall be entitled to
participate in the Employer's management incentive compensation plan as may be
in effect from time to time. The Employer shall have the right to deduct from
any compensation paid to Employee hereunder all taxes and other amounts which
may be required to be deducted or withheld by law (including, but not limited
to, income tax withholding and social security payments), whether such laws are
now in effect or become effective after the date of this Agreement.
5. Stock Option. As additional consideration for services rendered or to
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be rendered hereunder or otherwise and for Employee's execution and delivery of
this Agreement, the Employer shall grant to Employee the right and option to
purchase from the Employer all or any part of an aggregate or 650,000 shares of
the Common Stock ("Common Stock"), $.01 par value, of the
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Employer at an exercise price of $3.00 per share, upon the terms and subject to
the conditions set forth in a stock option agreement to be entered into between
the Employer and Employee (the "Stock Option Agreement"). The Employee agrees
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that as a condition of the granting of the above referenced stock option, the
Employee will enter into an Option Cancellation Agreement with Trilogy, under
the terms of which that certain Stock Option Agreement with Trilogy, under the
terms of which that certain Stock Option Agreement dated February 10, 1994
between Trilogy and the Employee pursuant to which Employee was granted the
right to acquire 35,000 shares of Trilogy Class B Common Stock at an exercise
price of $1.50 per share, will be canceled and will thereafter have no further
force or effect.
6. Expenses. The Employer shall promptly reimburse the Employee for all
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reasonable expenses incurred by the Employee on behalf of the Employer or in
connection with the Employee's performance of her duties hereunder.
7. Employment Benefits. During the Employment Period, Employee shall be
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entitled to such other benefits as are customarily accorded to the employees of
the Employer, including, but not limited to, the right to participate in
employee benefit programs maintained by the Employer such as group health, life,
and disability insurance.
8. Termination.
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(a) This Agreement may be terminated by written notice prior to the
expiration of the Employment Period by (i) the Employer at any time or (ii)
by the Employee for Good Reason (as such term is hereinafter defined). If
such termination is by Employer with Cause (as such term is hereinafter
defined), all of the Employee's rights to compensation and benefits under
Sections 4 and 7 above shall terminate upon such termination, except
amounts accrued in respect of periods prior to such termination. If such
termination is by the Employer without Cause or is by Employee for Good
Reason, the Employer shall (i) continue to pay to the Employee a monthly
amount equal to one-twelfth of the then current Base Salary for twelve
months following the effective date of such termination and (ii) continue
to provide to Employee the employee benefits (through COBRA or otherwise)
as provided in Section 8 above during such twelve month period. The term
"Good Reason" shall mean a Change of Control of the Employer or a failure
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of the Employer to comply with any material provision of this Agreement
which has not been cured within thirty (30) days after written notice of
such noncompliance has been given by Employee to the Employer. A "Change of
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Control" shall be deemed to have occurred if (i) any person, other than
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stockholders of the Employer as of the commencement of the Employment
Period, becomes the beneficial owner of securities of the Employer
representing fifty percent or more of the combined voting power of the
Employer's then outstanding securities, (ii) in a merger or consolidation,
the Employer is not the surviving entity, or (iii) the Employer sells all
or substantially all of its assets to a person other than an affiliate or
associate of the Employer. For purposes of this subsection, the term
"person" or "persons" shall mean individuals, groups, corporations,
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partnerships, or other entities. The term "Cause" shall mean (i) failure by
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Employee to perform her duties as President and Chief Operating Officer of
the Company in a manner consistent with such position and responsibilities,
(ii) a material breach by
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Employee of any of her obligations under this Agreement, (iii) fraud or
willful misconduct on the part of the Employee, or (iv) conviction of the
Employee for fraud, misappropriation, embezzlement, or any felony.
(b) If the Employee shall die during the Employment Period, this
Agreement shall terminate, and no further compensation shall be payable to
Employee hereunder.
(c) If the Employee is unable to discharge her duties hereunder for a
period of six consecutive months by reason of physical or mental illness,
injury, or incapacity, the Employer may, by written notice to the Employee,
terminate this Agreement and no further compensation shall be payable to
Employee hereunder.
9. Proprietary Information and Restrictive Covenants.
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(a) As used herein the term "Proprietary Information" means
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information, knowledge or data not generally known in the relevant trade or
industry that was disclosed to or known by Employee as a consequence of or
through Employee's employment with the Employer (including, without
limitation, information conceived or developed by Employee), whether before
or after the date of this Agreement, about:
(i) The Employer's activities, services, products,
formulas, computer programs and systems, trade secrets, manufacturers,
compositions, inventions, discoveries, customer records, processes,
information relating to research, development, inventions, work
performed or to be performed for Customers (as such term is
hereinafter defined), contractual agreements, lists of past, current
or prospective Customers, lists of employees and salary information,
marketing plans, strategies, and forecasts;
(ii) Customers' activities, plans, products, processes and
services including, without limitation, information relating to
business operations, employee relations, finance, and product or
service marketing;
(iii) Vendor's (as such term is hereinafter defined)
activities, plans, services, products and processes including, without
limitation, information relating to business operations, employee
relations, finance, and product or service marketing; and
(iv) All information which Employee has a reasonable basis
to know was created, modified or used and held secret by the Employer
or that was accepted by the Employer from any third party under an
obligation of confidentiality.
As used herein the term "Customer" means any person or entity for whom
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the Employer provided services or products on or within 12 months prior to the
termination of the Employment Period. As used herein the term "Vendor" means any
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third party selling or
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licensing a product or service to a Customer or to the Employer on or within 12
months prior to termination of the Employment Period.
(b) Employee acknowledges that the Employer has spent significant time,
effort, and money to develop the Proprietary Information, which the Employer
considers vital to its business and goodwill. Employee also acknowledges that
the Proprietary Information has been or will be communicated to or acquired by
Employee in the course of her training by and employment with the Employer
(whether before or after the date of this Agreement), and the Employer desires
to have the services of Employee only if, in doing so, it can protect its
Proprietary Information and goodwill.
(c) Employee agrees to hold all Proprietary Information in strict
confidence and trust and that she shall not, at any time, disclose any
Proprietary Information to any person or entity, except in the course of
Employee's duties on behalf of the Employer, and shall not copy, publish, or
use any Proprietary Information for the benefit of anyone or any entity other
than the Employer.
(d) In consideration, among other things, of the disclosure of the
Proprietary Information by Employer to Employee, Employee covenants and agrees
that she shall not (personally, nor will she direct any third party to do so),
during her employment by Employer, regardless of whether such employment is
during or subsequent to the Employment Period, and for an additional period of
two years immediately following termination of her employment by Employer,
regardless of whether such termination is during or subsequent to the Employment
Period, (the "Restriction Period"), (i) provide or offer to provide to any
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Customer any product or service similar to that offered by Trilogy, the
Employer, or their respective subsidiaries at the time of such termination of
employment, or (ii) induce or attempt to induce any Customer to withdraw,
curtail or cancel its business with Trilogy, the Employer, or their respective
subsidiaries or in any manner modify or fail to enter into any actual or
potential business relationship with Trilogy, the Employer, or their respective
subsidiaries.
(e) In consideration, among other things, of the disclosure of the
Proprietary Information by Employer to Employee, Employee covenants and agrees
that she shall not (personally, nor will she direct any third party to do so),
during the Restriction Period, (i) recruit or otherwise solicit or induce any
person or entity who is, at the time of such termination of Employee's
employment or thereafter, an employee or Vendor of Trilogy, the Employer, or
their respective subsidiaries to terminate their employment with, or otherwise
cease their relationship with Trilogy, the Employer, or their respective
subsidiaries or (ii) hire, recruit or otherwise solicit any person who, within
the six months immediately preceding such termination of Employee's employment
had been an employee or Vendor of Trilogy, the Employer, or their respective
subsidiaries.
(f) In consideration, among other things, of the disclosure of the
Proprietary Information by Employer to Employee, Employee covenants and agrees
that she shall not,
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during the Restriction Period, working alone or in conjunction with one or more
other persons or entities, for compensation or not, permit Employee's name to be
used by or engage in or carry on, directly or indirectly, either for herself or
as a member of a partnership or other entity or as a stockholder, investor
(other than as the holder of (i) 25% or less of the voting capital stock of any
corporation of which Employee is a stockholder on the date of this Agreement and
which has been identified by Employee and approved by Employer or (ii) 1% or
less of the voting capital stock of any other corporation with a class of equity
securities registered under Section 12 (b) or 12 (g) of the Securities Exchange
Act of 1934, as amended) in any business competing with the businesses of
Trilogy, the Employer, or their respective subsidiaries as such businesses exist
or were being conducted during and upon the termination of the Employee's
employment, but only for as long as such business is carried on by (i) Trilogy,
the Employer, or their respective subsidiaries or (ii) any person, corporation,
partnership, trust or other organization or entity deriving title from Trilogy,
the Employer, or their respective subsidiaries to the assets and goodwill of the
business being carried on by Trilogy, the Employer, or their respective
subsidiaries, as applicable, immediately prior to such termination of Employee's
employment by Employer, in any county of any state of the United States, or in
any country or political subdivision of the world. The parties intend that the
covenants contained in this Section 9 (f) shall be deemed to be a series of
separate covenants, one for each county in each state of the United States and
for each country and political subdivision of the world, and except for
geographic coverage, each such separate covenant shall be identical in terms to
the covenant contained in this Section 9(f).
(g) If Employee violates any covenant contained in paragraphs (d), (e) or
(f) of this Section 9, then the term of such violated covenant shall be tolled
for the period commencing on the commencement of such violation and ending upon
the earlier of (i) such time as such violation shall be cured by Employee to the
reasonable satisfaction of the Employer or (ii) final adjudication (including
appeals) of any action filed for injunctive relief or damages arising out of
such violation.
(h) If, in any judicial proceeding, the court shall refuse to enforce any
of the separate covenants contained in paragraphs (d), (e) or (f) of this
Section 9 because the time limit is too long, it is expressly understood and
agreed between the parties hereto that for purposes of such proceeding such time
limitation shall be deemed reduced to the extent necessary to permit enforcement
of such covenants. If, in any judicial proceeding, the court shall refuse to
enforce any of the separate covenants contained in paragraphs (d), (e) or (f) of
this Section 9 because they are more extensive than necessary to protect the
business and goodwill of the Employer, it is expressly understood and agreed
between the parties hereto that for purposes of such proceeding such provisions
shall be deemed reduced to the extent necessary to permit enforcement of such
covenants.
(i) Employee acknowledges that a breach of this Section 9 would cause
irreparable damage to the Employer, and in the event of Employee's actual or
threatened breach of the provisions of this Section 9, the Employer shall be
entitled to a temporary restraining order
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and injunction restraining Employee from breaching such covenants without
the necessity of posting bond or proving irreparable harm, such being
conclusively admitted by Employee. Nothing herein shall be construed as
prohibiting the Employer from pursuing any other available remedies for
such breach, including the recovery of damages from Employee. Employee
acknowledges that the restrictions set forth in this Section 9 are
ancillary to an otherwise enforceable agreement and are reasonable in
scope and duration, given the nature of the business of the Employer.
Employee agrees that issuance of an injunction will not pose an
unreasonable restriction on Employee's ability to obtain employment or
other work following termination of Employee's employment by Employer.
10. Representations by Employee. Employee hereby represents and warrants
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to the Employer that (i) the Employee's execution and delivery of this Agreement
and her performance of her duties and obligations hereunder will not conflict
with, or cause a default under, or give any party a right to damages under, or
to terminate, any other agreement to which Employee is a party or by which she
is bound, and (ii) there are no agreements or understandings that would make
unlawful Employee's execution or delivery of this Agreement or her employment
hereunder.
11. Notices. All notices, requests, demands, and other communications
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required or permitted hereunder shall be in writing and shall be deemed to have
been duly given, made, and received only when personally delivered, sent by
electronically confirmed facsimile transmission, delivered by Federal Express or
other nationally recognized courier service, or two days after having been
deposited in the United States mail, certified mail, postage prepaid, return
receipt requested, addressed as set forth below:
in the case of the Employer at:
xxXxxxx.xxx, Inc.
0000 Xxxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Chairman of the Board
and, in the case of the Employee, at her residence at:
Xxxxxxxxx X. Xxxxx
0000 Xxxx Xx., Xxx. 0000
Xxxxxx, Xxxxx 00000
Either party may designate a different address by giving notice of change of
address in the manner provide above.
12. Waiver. No waiver or modification in whole or in part of this
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Agreement, or any term or condition hereof, shall be effective against any party
unless in writing and duly signed by
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the party sought to be bound. Any waiver or any breach of any provisions hereof
or any right or power by any party on one occasion shall not be construed as a
waiver of, or a bar to, the exercise of such right or power on any other
occasion or as a waiver of any subsequent breach.
13. Binding Effect; Successors. This Agreement shall be binding upon and
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shall inure to the benefit of the Employer and its successors and assigns, and
shall inure to the benefit of and be binding upon the Employee and her
executors, administrators, heirs, and legal representatives. This Agreement may
not be transferred, sold or assigned by the Employer. Because the Employee's
duties and services hereunder are special, personal, and unique in nature, the
Employee may not transfer, sell or otherwise assign her rights, obligations, or
benefits under this Agreement.
14. Controlling Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Texas applicable to contracts made and
to be performed therein, exclusive of the conflict of laws provisions thereof.
15. Severability. If any provision of this Agreement shall be held to be
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invalid or unenforceable, such invalidity or unenforceability shall not affect
or impair the validity or enforceability of the remaining provisions of this
Agreement, which shall remain in full force and effect and the parties hereto
shall continue to be bound thereby.
16. Entire Agreement. This Agreement contains the entire agreement between
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the parties relating to the subject matter hereof and shall supersede all
previous agreements between the parties, whether written or oral, with respect
to the subject matter hereof. This Agreement cannot be modified, altered, or
amended except by a writing signed by each of the parties hereto.
IN WITNESS WHEREOF, the Employer and the Employee have executed this
Agreement as of the day and year first above written.
EMPLOYEE: EMPLOYER:
PCORDER, COM, INC.
/s/ Xxxxxxxxx X. Xxxxx
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Xxxxxxxxx X. Xxxxx
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Chairman of the Board of Directors
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