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EXHIBIT 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is entered into effective
as of December 10, 1999 (the "EFFECTIVE DATE") by and between Enterprise Profit
Solutions Corporation, a Delaware corporation (the "COMPANY") and wholly owned
subsidiary of EPS Solutions Corporation, a Delaware corporation ("EPS"), and
Xxxx X. Xxxxxxx ("EMPLOYEE").
Employee is employed by the Company pursuant to an employment agreement
dated December 14, 1998 (the "ORIGINAL EMPLOYMENT AGREEMENT"), and the Company
and Employee desire to continue Employee's employment, but on the terms set
forth herein rather than pursuant to the Original Employment Agreement.
NOW THEREFORE, in consideration of the mutual covenants set forth
herein, the parties hereto agree as follows:
1. EMPLOYMENT. Employee's employment with the Company will be at-will,
which means that either Employee or the Company may terminate Employee's
employment at any time for any reason or no reason without payment, penalty or
further obligation except as set forth in Section 8 or in the Restricted Stock
Purchase Agreement described below or another written agreement between Employee
and the Company or EPS, provided, however, that Employee's employment with the
Company shall not be terminated without Cause (as defined in Schedule 1) without
majority approval of an executive management committee of EPS, which committee
shall consist of four (4) members of the senior management of EPS and one (1)
representative of the President's Council of EPS.
2. DUTIES. Employee shall serve as Executive Vice President and Chief
Financial Officer of the Company and EPS. In those capacities, Employee shall
report directly to the Chief Executive Officer of EPS and be responsible for the
duties and functions listed on Schedule 2 and shall perform such related duties
and services as the board of directors and/or Chief Executive Officer of EPS may
from time to time assign, either directly or by delegated authority, provided
however, that Employee's responsibility and authority within the Company and EPS
will not be materially diminished without Employee's consent as long as shares
of restricted stock purchased by Employee pursuant to that certain Restricted
Stock Purchase Agreement dated August 13, 1999 between Employee and EPS (the
"RESTRICTED STOCK PURCHASE AGREEMENT") are subject to Restrictions (as defined
in the Restricted Stock Purchase Agreement) (the "RESTRICTED PERIOD"). Except as
set forth herein, Employee's position and duties may be changed at any time and
from time to time by the board of directors or Chief Executive Officer of EPS.
Such duties shall be rendered at such place or places as the Company shall
require based upon the interest, need, business and/or opportunities of the
Company, and EPS, provided however, that the place at which Employee renders
such duties shall not be relocated more than twenty-five (25) miles from the
location of such place on the date hereof without Employee's consent.
3. TIME AND EFFORTS. While employed by the Company (the "EMPLOYMENT
PERIOD"), Employee shall use his best efforts and devote his or her time and
attention to the business of the Company and EPS on a full-time basis and shall
at all times faithfully and industriously and to the best of his ability,
experience and talent, perform all of the duties that
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may be required of him pursuant to the terms hereof. During the Employment
Period, Employee shall not engage in any other paid employment or consulting
activities without the express written consent of the Company, but the foregoing
shall not preclude Employee from engaging in civic, charitable and/or religious
activities, directing his own passive investments, setting up, owning interests
in and/or managing investment entities with assets of Employee or third-parties,
and/or serving on boards of directors of other entities so long as such
activities do not interfere or conflict with Employee's duties hereunder as
reasonably determined by the Chief Executive Officer of EPS.
4. COMPENSATION.
(a) Salary, Bonus. During the Employment Period, the Company shall pay
Employee at the annual rate of Three Hundred Thousand Dollars ($300,000) (as
such pay may be increased by the Company from time to time in its discretion,
the "ANNUAL SALARY") for all services rendered by Employee to the Company and
EPS and their affiliates, payable in accordance with the Company's regular
payroll policies, subject, however, to withholding deductions, including without
limitation social security taxes and applicable federal, state and local income
and other employment taxes. Bonuses will be payable in the Company's discretion,
but (i) Employee will be entitled to participate in any bonus program on terms
at least as favorable as those made available to other executive employees of
the Company or EPS, and (ii) Employee's bonus (after tax) for any year shall be
not less than the annual interest that Employee is required to pay in cash to
EPS in that year on any notes issued by Employee to EPS for the purchase by
Employee of stock of EPS.
(b) Equity. In connection with employment by the Company and services
performed by Employee under this Agreement, Employee has acquired 319,286 shares
of restricted stock of EPS pursuant to the Restricted Stock Purchase Agreement,
in addition to a total of 317,163 shares of stock of EPS previously acquired by
Employee pursuant to a Restricted Stock Purchase Agreement dated December 14,
1998, and a Restricted Stock Purchase Agreement and a Subscription Agreement
each dated August 28, 1998, which shares will remain outstanding according to
the terms of those agreements, as amended if applicable.
(c) Notes and Liquidity. During and after the Employment Period, and
regardless of the reason for or circumstances of any termination of Employee's
employment, Employee will be entitled to receive (i) the most favorable
treatment of interest on promissory notes incurred to purchase stock of EPS that
is received at any time by any other officer of former officer of the Company or
EPS as a purchaser of EPS Stock, and (ii) the most favorable registration rights
or other access to liquidity, on a ratable basis based upon relative holdings,
that is received at any time by any other officer or former officer of the
Company or EPS.
5. PERSONAL TIME OFF POLICY. Employee shall be entitled to such number
of days of paid personal time off ("PTO") each year as is consistent with the
number of days set forth on Exhibit A and the Company's Personal Time Off
Policy, as such policy may be amended from time to time at the discretion of the
Company. Employee may not accrue more PTO days than the number of days set forth
on Exhibit A under the item "Maximum Accrued PTO." If Employee at any time has
more than such number of days, no further PTO days shall accrue until
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Employee again has fewer than such number of days of unused PTO. PTO days may be
used, subject to approval by EPS consistent with business needs, as they are
earned. The Company shall pay Employee for accrued unused PTO days only in
connection with termination of employment. Such payment shall be made on the
basis of Employee's Annual Salary at the time of payment, pro-rated for the
number of accrued unused PTO days at the time of termination.
6. BENEFITS. In addition to the compensation described in Section 4, the
Company shall provide Employee with benefits consistent with the Company's
employment policies as in effect from time to time, but in any case Employee's
benefits will be not less favorable than benefits provided to other executive
officers of the Company or EPS.
7. CERTAIN DEFINITIONS.
(a) Cause. For purposes hereof, the term "CAUSE" has the meaning set
forth in Schedule 1 hereto. Any termination of Employee's employment in
compliance with Section 1 and within 90 days after the Company becomes aware of
the occurrence of an event or circumstance constituting "Cause" will constitute
termination for Cause.
(b) Good Reason. If the Company or EPS breaches this Agreement or
any other agreement with Employee in any material respect and does not cure such
breach within 15 days of receipt from Employee of notice of such breach and
demand for cure, or a Change in Control (as defined in Schedule 1) occurs, and
Employee terminates Employee's employment with the Company (or its successor)
for any reason within 90 days of such breach or Change in Control, such
termination by Employee will be termination with "GOOD REASON."
8. CERTAIN PAYMENTS.
(a) Notice of Termination. Any termination of Employee's employment
shall be communicated by a Notice of Termination. For purposes of this
Agreement, a "NOTICE OF TERMINATION" shall mean a written notice of termination
of Employee's employment setting forth the effective date of such termination
and, if the termination is for cause, the specific termination provisions in
this Agreement relied upon and, in reasonable detail, the facts and
circumstances claimed to provide a basis for termination of Employee's
employment under the provision so indicated.
(b) Termination by Employee with Good Reason or by the Company
Without Cause. If Employee's employment under this Agreement is terminated by
Employee with Good Reason or by the Company without Cause, then contingent upon
execution and delivery by Employee of an unconditional release, in form
consistent with the form of release attached as an exhibit to the Restricted
Stock Purchase Agreement, of all claims against the Company, EPS or any of their
officers, directors or affiliates arising from or in connection with this
Agreement or Employee's employment with the Company or the termination of that
employment, Employee shall be entitled to receive within five days of
termination of employment a lump sum payment equal to his Annual Salary (the
"SEVERANCE PAYMENT").
(c) No Other Benefits. Except as set forth in Sections 5 or 8(b), or
as may be required by applicable law or separate written agreement between the
Company or EPS and
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Employee, the Company and EPS shall have no obligations to pay any salary,
bonus, accrued vacation or other amounts in connection with any termination of
Employee's employment or attributable to the period after termination of
Employee's employment. Without limiting the foregoing, and subject to any
separate written agreement to the contrary, Employee will not be entitled to any
severance payment or benefit if Employee's employment under this Agreement is
terminated as a result of death or Disability, or by Employee without Good
Reason, or by the Company for Cause.
9. CONFIDENTIALITY. The Confidential Information and Employee Invention
Agreement (the "CONFIDENTIALITY AGREEMENT") executed and delivered by Employee
on August 28, 1998 will remain in full force and effect and will survive
termination or expiration of this Agreement.
10. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants
that (a) he is under no contractual restriction or other restrictions or
obligations that are inconsistent with the execution of this Agreement, the
performance of his duties and the covenants hereunder, and (b) he is under no
physical or mental disability that would interfere with his keeping and
performing all of the agreements, covenants and conditions to be kept or
performed hereunder.
11. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be interpreted under and
governed by the laws of the State of California, excluding its rules on
conflicts of law.
(b) Arbitration. Any dispute regarding the application,
interpretation or breach of this Agreement shall be resolved by final and
binding arbitration before the American Arbitration Association ("AAA") in
accordance with AAA's National Rules for the Resolution of Employment Disputes.
Attorney's fees, costs and damages (where appropriate) shall be awarded to the
prevailing party in any dispute, and any resolution, opinion or order of AAA may
be entered as a judgment in a court of competent jurisdiction.
(c) Modification and Waiver. No waiver or modification of this
Agreement or any term hereof shall be binding unless it is in writing signed by
the parties hereto. No failure to insist upon compliance with any term,
provision or condition to this Agreement, whether by conduct or otherwise, in
any one or more instances, shall be deemed to be or construed as a waiver of any
such term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
(d) Entire Agreement. This Agreement and the Confidentiality
Agreement constitute the entire agreement between the parties with respect to
the subject matter hereof and supersede and replace all prior employment
agreements, each of which prior employment agreements is hereby terminated. No
oral statements or prior written agreements with respect to the subject matter
hereof which are not specifically incorporated herein or in the Confidentiality
Agreement shall be of any force or effect.
(e) Severability. If any provisions hereof shall be held or
construed to be illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining
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provisions of this Agreement, but the same shall be construed and enforced just
as though the illegal or invalid provisions had not been included herein.
(f) Notices. Any notice, demand or other communication required,
permitted or desired to be given hereunder shall be in writing and shall be
deemed effectively given upon personal delivery, facsimile transmission (with
confirmation of receipt), delivery by reputable overnight delivery service or
five (5) days following deposit in the United States mail (if sent by certified
or registered mail, postage prepaid, return receipt requested), in each case
duly addressed to the Company at the headquarters of EPS or to Employee at his
or her address of record listed with EPS.
(g) Assignment. Employee's rights, duties and obligations under this
Agreement may not be assigned by Employee. The Company may assign rights, duties
and obligations under this Agreement to any affiliate of EPS. This Agreement
shall be binding upon the successors and assignees of the Company.
(h) Headings. The section headings herein are intended for reference
and shall not affect in any way the construction or interpretation of this
Agreement.
(i) Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original but all of which shall constitute one and the
same instrument.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date set forth above.
/s/ Xxxx X. Xxxxxxx
_______________________________________
Xxxx X. Xxxxxxx
Enterprise Profit Solutions Corporation
By: /s/ XXXXX X. XXXXXXX
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: CEO
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SCHEDULE 1 TO
EMPLOYMENT AGREEMENT
"CAUSE" means the occurrence at any time of any one or more of the
following events or circumstances, provided however, that if any such event or
circumstance is susceptible to cure by Employee without damage to the Company or
EPS, such event or circumstance will not constitute Cause unless Employee has
failed to cure such event or circumstance within 15 days after receipt by
Employee of written notice thereof: (i) Employee engages in any wrongful conduct
or knowingly violates any reasonable rule or regulation of the Board, or the
Chief Executive Officer of EPS that results in material damage or risk of legal
liability to the Company or EPS, any subsidiary corporation of the Company or
EPS or any entity controlling, controlled by, or under common control with the
Company or EPS (each an "AFFILIATE"); (ii) any willful misconduct or gross
negligence by Employee in the responsibilities assigned to Employee; (iii) any
willful and material failure to perform Employee's job as required to meet the
lawful objectives of the Company or any Affiliate or any repeated failure to
achieve reasonable performance standards that have been described by the Company
or EPS in writing and communicated to Employee in reasonable detail; (iv)
Employee fails to comply with all material applicable laws and regulations in
performing Employee's duties and responsibilities to the Company or any
Affiliate; (v) any criminal conduct (other than misdemeanors that do not meet
the criteria set forth in subsection (vi)); (vi) any actions involving moral
turpitude or injurious to the business or reputation of the Company or any
Affiliate; (vii) any legal action against Employee or the Company or any
Affiliate occurs as a result of Employee's service to the Company or any
Affiliate and results in a judgment or arbitral award that is based upon gross
negligence or intentional misconduct by Employee and that requires the Company
or any Affiliate to pay substantial damages; (viii) any legal action by Employee
or Employee's representatives or successors against the Company or any Affiliate
or any person or entity that the Company or any Affiliate would be obligated to
indemnify or defend in connection with such action; or (ix) Employee does any of
the things described in (A)-(C) below.
(A) Employee renders services for any organization or engages directly
or indirectly in any business that, in the reasonable judgment of the Chief
Executive Officer of EPS or other senior officer designated by the Chief
Executive Officer, is or becomes competitive with the Company or any Affiliate,
or which organization or business, or the rendering of services to such
organization or business, is or becomes otherwise prejudicial to or in conflict
with the business or interests of the Company or any Affiliate.
(B) Employee fails to comply with the Confidentiality Agreement or with
the lawful policies of the Company or any Affiliate regarding nondisclosure of
confidential information, or without prior written authorization from the
Company or any Affiliate discloses to anyone outside the Company or any
Affiliate or uses for any purpose or in any context other than in performance of
Employee's duties to the Company or any Affiliate any confidential or trade
secret information of the Company or any Affiliate.
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(C) Employee breaches in any material respect any agreement with or
legal duty to the Company or any Affiliate.
"CHANGE IN CONTROL" means the completion of:
(i) any acquisition or series of related acquisitions resulting in any
person, entity or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
beneficially owning (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) more than thirty percent (30%) of either the then outstanding
shares of Common Stock or the combined voting power of then outstanding voting
securities entitled to vote generally in the election of directors of EPS or the
Company, provided that a Change in Control shall not be deemed to have occurred
if the "person" described in the preceding provisions is an underwriter or
underwriting syndicate that has acquired the ownership voting securities of EPS
or the Company solely in connection with a public offering of those securities;
or
(ii) any reorganization, merger or consolidation of EPS or the Company
with any other person, entity or corporation, other than a transaction which
would result in the owners of voting securities of EPS outstanding immediately
prior thereto continuing to own directly or indirectly more than fifty percent
(50%) of the combined voting power of the voting securities of the entity or
entities surviving such reorganization, merger or consolidation that own and
conduct the business owned and conducted by EPS and the Company prior thereto;
or
(iii) the sale or other disposition by EPS or the Company, in one
transaction or a series of related transactions, of all or substantially all of
the assets of EPS or the Company; or
(iv) Individuals who, as of the Effective Date, constitute the board of
directors of EPS or the Company (in each case, the "INCUMBENT BOARD OF
DIRECTORS") cease for any reason to constitute at least a majority of the board
of directors of EPS or the Company, respectively, provided that any individual
who becomes a director after the Effective Date whose election, or nomination
for election by stockholders, is approved by a vote of at least a majority of
the directors then comprising the relevant Incumbent Board of Directors shall be
considered to be a member of the relevant Incumbent Board of Directors unless
that individual was nominated or elected by any person, entity or group (as
defined above) having the power to exercise, through beneficial ownership,
voting agreement and/or proxy, thirty percent (30%) or more of either the
outstanding shares of common stock of EPS or the Company or the combined voting
power of the outstanding securities of EPS or the Company entitled to vote
generally in the election of directors, in which case that individual shall not
be considered to be a member of the Incumbent Board of Directors unless such
individual's election or nomination for election by EPS' shareholders is
approved by a vote of at least two-thirds of the directors then comprising the
Incumbent Board of Directors; or
For purposes of this definition, references to EPS and the Company shall
also refer to their successors and assigns such that reorganizations or other
corporate transactions do not impair the substantive intent of these provisions.
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"DISABILITY" means Employee suffers an ongoing physical or psychological
impairment that has rendered Employee unable, as determined in good faith by the
Chief Executive Officer of EPS, to perform Employee's duties to the Company and
EPS, notwithstanding reasonable accommodation by the Company and EPS (the
Company and EPS, at their option and expense, being entitled to retain a
physician to confirm the existence of such disability), for a period of three
(3) consecutive months or six (6) months in any 12-month period.
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SCHEDULE 2
[Job Description]
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EXHIBIT A
PERSONAL TIME OFF
Aggregate Amount of time off: 28 days (in addition to holidays
observed by the Company)
Maximum Accrued PTO: 28 days
