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EXHIBIT 10(z)
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of January 10, 2000, between CEREUS TECHNOLOGY PARTNERS, INC.,
a Delaware corporation (the "Company"), and XXXXXX X. XXXX (the "Employee"), an
individual resident of the State of Georgia.
1. TERM. The term (the "Term") of this Agreement shall begin on
the date hereof (the "Effective Date") and shall continue in effect for a
period of three (3) years from the Effective Date; provided, however, the Term
shall be extended automatically for an additional year on each anniversary of
the Effective Date unless either party hereto gives written notice to the other
party not to so extend at least ninety (90) days prior thereto, in which case
no further extension shall occur; provided further, however, that
notwithstanding any such notice by the Company not to extend, the Term shall
not expire prior to the expiration of twenty-four (24) months after the
occurrence of a Change in Control (as hereinafter defined).
2. EMPLOYMENT AND DUTIES. The Employee shall serve as the
Company's Chief Executive Officer and Chairman of the Company's board of
directors (the "Board") (to which he shall be elected as of the Effective
Date), reporting only to the Board and shall have such powers and duties as may
from time to time be prescribed by the Board, provided that such duties are
consistent with the Employee's position as the senior executive of the Company.
The Company shall provide the Employee with a private office, secretarial and
administrative assistance, office equipment, supplies and other facilities and
services suitable to the Employee's position.
3. COMPENSATION.
3.1 SALARY. For all services to be rendered by the
Employee pursuant to this Agreement, the Company hereby agrees to pay the
Employee a base salary at an annual rate per year of $300,000.00 (the "Base
Salary"), payable in accordance with the Company's payroll practices in effect
from time to time; provided, however, that the Base Salary shall be reduced for
so long as the Employee receives the payments called for under Section 1 of
that certain letter agreement by and between the Employee and World Access,
Inc. dated May 28, 1999 (the "World Access Agreement") with the amount of any
such reduction in Base Salary being equal to the amount the Employee receives
pursuant to Section 1 of such letter agreement in excess of $300,000 per annum.
The Base Salary shall be reviewed at least annually and shall be increased
pursuant to such review by a percentage no less than the percentage increase in
the consumer price index, as published by the Bureau of Labor Statistics of the
U.S. Department of Labor, for the calendar year immediately preceding such
review. Any increase in Base Salary or other compensation granted by the
compensation committee of the Board shall in no way limit or reduce any other
obligation of the Company hereunder. Once established at an increased specified
rate, the Base Salary hereunder shall
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not thereafter be reduced, and the term Base Salary used in this Agreement
shall refer to the Base Salary as so increased.
3.2 BONUS. In addition to his Base Salary, in the
discretion of the Board, the Employee may be awarded for each calendar year
during the Term an annual bonus (an "Annual Bonus") either pursuant to a bonus
or incentive plan of the Company or otherwise on terms no less favorable than
those awarded to other executive officers of the Company.
4. WARRANTS.
4.1 GRANT OF WARRANT. Upon the execution hereof, the
Company shall grant to the Employee a warrant pursuant to a warrant certificate
containing customary terms and conditions (the "Warrant") to purchase 1,000,000
shares of the Company's common stock, $.01 par value per share (the "Common
Stock"), exercisable for cash or on a cashless basis as follows:
(i) The Warrant may be exercised for 250,000
shares of Common Stock at an exercise price of $3.75 per share from time to
time commencing on the fifth anniversary of the date hereof and ending on the
tenth anniversary of the date hereof, provided that the Warrant shall be
immediately exercisable for a five (5) year period as to said 250,000 shares if
the Company shall have consummated a private placement of shares of Common
Stock providing gross proceeds to the Company of not less than $5,000,000 on or
before March 10, 2000.
(ii) The Warrant may be exercised for 250,000
shares of Common Stock at an exercise price of $3.75 per share from time to
time commencing on the date that is one month following the date hereof with
the Warrant first then becoming exercisable, during the term of this Agreement,
for one-twelfth (1/12) of such number of shares of Common Stock on such date
and thereafter vesting and becoming exercisable at the rate of one-twelfth
(1/12) for each month thereafter expiring on the fifth anniversary of the date
hereof; provided, however, if the Company is required to make any payment of
Base Salary to the Employee pursuant to Section 3.1 hereof during the first
twelve (12) months of the term hereof, then, notwithstanding the foregoing to
the contrary, that portion of the Warrant that would otherwise vest for the
month for which a payment of Base Salary has been made shall be equal to (i)
one-twelfth (1/12) multiplied by (ii) an amount equal to (A) one (1) minus (B)
a fraction, the numerator of which is the amount of the payment of Base Salary
made for such month and the denominator of which is $25,000, and the amount not
so vested shall lapse.
(iii) The Warrant may be exercised for 250,000
shares of Common Stock at an exercise price of $3.75 per share from time to
time commencing on the fifth anniversary of the date hereof and ending on the
tenth anniversary of the date hereof, provided that the Warrant shall be
immediately exercisable as to said 250,000 shares when and if the average
"market price" (as hereinafter defined) of the Common Stock for twenty
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(20) consecutive trading days at any time during the ten year period commencing
on the date hereof is at least $12.50 per share.
(iv) The Warrant may be exercised for 250,000
shares of Common Stock at an exercise price of $3.75 per share from time to
time commencing on the fifth anniversary of the date hereof and ending on the
tenth anniversary of the date hereof, provided that the Warrant shall be
immediately exercisable as to said 250,000 shares when and if the average
"market price" of the Common Stock for twenty (20) consecutive trading days at
any time during the ten (10) year period commencing on the date hereof is at
least $25.00 per share.
4.2 DEFINITION OF MARKET PRICE. For purposes hereof,
"market price" shall mean the closing price of the Common Stock as of the day
in question as reported with respect to the market (or the composite of
markets, if more than one) in which shares of the Common Stock are then traded
or, if no such closing prices are reported, on the basis of the mean between
the high bid and low asking prices that day on the principal market or
quotation system on which shares of Common Stock are then quoted, or, if not so
quoted, as furnished by a professional securities dealer making a market in
such shares selected by or under authority of the Board.
5. BENEFITS. The Employee shall be entitled to all benefits and
conditions of employment provided by the Company to its executive officers,
including, without limitation, insurance, participation in the Company's
vacation policy, and participation in any stock option or incentive
compensation plans, pension, profit sharing or other retirement plans, subject
(in each case) to the terms of such plans and any provisions, rules,
regulations and laws applicable to such plans.
6. BOARD REPRESENTATION. Upon the request of the Employee, the
Company shall use its best efforts to secure the resignation of each of the
persons then-serving on the Board (other than the Employee), whereupon the
Employee, as the sole member of the Board, shall have the right to appoint
persons to fill the vacancies thereby created in his sole discretion.
7. REIMBURSEMENT FOR BUSINESS EXPENSES. The Employee shall be
reimbursed for all reasonable out-of-pocket business expenses incurred by him
in the direct performance of his duties during his employment with the Company
pursuant to the terms of this Agreement and in accordance with the Company's
policies in effect from time to time. All requests for reimbursement shall be
substantiated by invoices and other pertinent data reasonably satisfactory to
the Company.
8. PERFORMANCE. Subject to the performance of his obligations
under the World Access Agreement, the Employee shall devote all of his working
time and efforts to the business and affairs of the Company and to the diligent
performance of the duties and responsibilities assigned to him pursuant to this
Agreement, except for vacations, weekends and holidays. Notwithstanding the
foregoing, the Employee may render charitable, civic and outside board services
so long as such services do not materially interfere with the
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Employee's ability to discharge his duties, including, without limitation, such
outside services as the Employee is currently performing.
9. NON-DISCLOSURE OF PROPRIETARY INFORMATION; NON-COMPETITION;
NON-SOLICITATION.
9.1. CONFIDENTIAL INFORMATION; TRADE SECRETS. As used in
this Agreement, the term "Confidential Information" shall mean valuable,
non-public, competitively sensitive data and information relating to the
Company's business or the business of any entity affiliated with the Company,
other than Trade Secrets (as defined below). "Confidential Information" shall
include, among other things, information specifically designated as a Trade
Secret that is, notwithstanding the designation, determined by a court of
competent jurisdiction not to be a "trade secret" under applicable law. As used
in this Agreement, the term "Trade Secrets" shall mean information or data of
or about the Company or any entity affiliated with the Company, including,
without limitation, technical or non-technical data, formulas, patterns,
compilations, programs, devices, methods, techniques, drawings, processes,
financial data, financial plans, product plans, or lists of actual or potential
customers or suppliers, that (i) derive economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from their
disclosure or use; and (ii) are subject of efforts that are reasonable under
the circumstances to maintain their secrecy. To the extent that the foregoing
definition is inconsistent with a definition of "trade secret" under applicable
law, the foregoing definition shall be deemed amended to the extent necessary
to render it consistent with applicable law.
9.2. NON-DISCLOSURE. The Employee will be exposed to
Trade Secrets and Confidential Information as a result of his employment by the
Company as provided in this Agreement. The Employee acknowledges and agrees
that any unauthorized disclosure or use of any of the Trade Secrets or
Confidential Information of the Company would be wrongful and would likely
result in immediate and irreparable injury to the Company. In consideration of
the Employee's right to employment (or continued employment) under the terms of
this Agreement, except as appropriate in connection with the performance of his
obligations under this Agreement, the Employee shall not, without the express
prior written consent of an executive officer of the Company other than the
Employee, redistribute, market, publish, disclose or divulge to any other
person or entity, or use or modify for use, directly or indirectly, in any way
for any person or entity (i) any Confidential Information during the Term of
this Agreement and for a period of two (2) years after the final date of the
Term of this Agreement; and (ii) any Trade Secrets at any time (during or after
the Term of this Agreement) during which such information or data shall
continue to constitute a "trade secret" under applicable law. The Employee
agrees to cooperate with any reasonable confidentiality requirements of the
Company. The Employee shall immediately notify the Company of any unauthorized
disclosure or use of any Trade Secrets or Confidential Information of which the
Employee becomes aware.
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9.3. NON-COMPETITION. The Employee shall not, either
directly or indirectly, alone or in partnership, manage, control, operate or
own any business that is substantially similar to the business of the Company
during the term hereof in any geographic area of the United States of America
(a "Competing Business") during the term hereof and, if the Employee's
employment with the Company shall be terminated pursuant to Section 13.1 or
Section 13.3 hereof, during the one (1) year period following the term hereof,
except that the Employee may own up to three percent (3%) of the outstanding
securities of a Competing Business the securities of which are registered with
the Securities and Exchange Commission if such Competing Business is subject to
the periodic reporting requirements of the Securities Exchange Act of 1934, as
amended (the "1934 Act").
9.4. NON-SOLICITATION. For a period of one (1) year
immediately following any termination of the Employee's employment (other than
a termination pursuant to Section 13.2. or Section 13.4 hereof), the Employee
will not solicit, or participate in any solicitation of, the customers,
suppliers, employees or representatives of the Company (or any of its
subsidiaries or affiliated companies) to breach any contract with the Company,
terminate any relationship with the Company or leave the Company. For purposes
of this Agreement, customers shall be limited to actual customers or
actively-sought prospective customers of the Company or any subsidiary or
affiliate of the Company with whom the Employee has had substantial contact
during the Term of this Agreement.
10. CERTAIN DEFINITIONS.
10.1. ACCRUED COMPENSATION. For purposes of this
Agreement, "Accrued Compensation" shall mean an amount which shall include all
amounts earned or accrued through the "Termination Date" (as hereinafter
defined) but not paid as of the Termination Date, including, without
limitation, (i) Base Salary, (ii) reimbursement for reasonable and necessary
expenses incurred by the Employee on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, (iv) bonuses, including,
without limitation, any Annual Bonus, and incentive compensation, and (v) all
other amounts to which the Employee is entitled under any compensation plan of
the Company at the times such payments are due.
10.2. BASE AMOUNT. For purposes of this Agreement, "Base
Amount" shall mean the Employee's annual Base Salary at the highest rate in
effect on, or at any time during the ninety (90) day period prior to, the
Termination Date and shall include all amounts of the Employee's Base Salary
that are deferred under any qualified and non-qualified employee benefit plans
of the Company or any other agreement or arrangement.
10.3. CAUSE. For purposes of this Agreement, a termination
of employment is for "Cause" if the Employee has been convicted of a felony or
if the termination is evidenced by a resolution adopted in good faith by
two-thirds (2/3) of the Board that the Employee (i) intentionally and
continually failed substantially to perform his reasonably assigned duties with
the Company (other than a failure resulting from the Employee's incapacity due
to physical or mental illness or from the Employee's assignment of duties that
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would constitute "Good Reason" (as hereinafter defined)) which failure
continued for a period of at least thirty (30) days after a written notice of
demand for substantial performance has been delivered to the Employee
specifying the manner in which the Employee has failed substantially to
perform, or (ii) intentionally engaged in illegal conduct or gross misconduct
which results in material economic harm to the Company; provided, however, that
(A) where the Employee has been terminated for Cause because a felony
prosecution has been brought against him and no conviction or plea of guilty or
plea of nolo contendere or its equivalent results therefrom, then said
termination shall no longer be deemed to have been for Cause and the Employee
shall be entitled to all the benefits provided by Section 11.1(i) hereof from
and after the date on which the prosecution of the Employee has been dismissed
or a judgement of acquittal has been entered, whichever shall first occur; and
(B) no termination of the Employee's employment shall be for Cause as set forth
in clause (ii) above until (x) there shall have been delivered to the Employee
a copy of a written notice setting forth that the Employee was guilty of the
conduct set forth in clause (ii) and specifying the particulars thereof in
detail, and (y) the Employee shall have been provided an opportunity to be
heard in person by the Board (with the assistance of the Employee's counsel if
the Employee so desires). No act, or failure to act, on the Employee's part
shall be considered "intentional" unless the Employee has acted or failed to
act with a lack of good faith and with a lack of reasonable belief that the
Employee's action or failure to act was in the best interests of the Company.
Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of any senior officer of the
Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the Employee in
good faith and in the best interests of the Company. Any termination of the
Employee's employment by the Company hereunder shall be deemed to be a
termination other than for Cause unless it meets all requirements of this
Section 10.3.
10.4. CHANGE IN CONTROL. For purposes of this Agreement, a
"Change in Control" shall have occurred if:
(i) a majority of the directors of the Company
shall be persons other than persons: (A) for whose election proxies shall have
been solicited by the Board, or (B) who are then serving as directors appointed
by the Board to fill vacancies on the Board caused by death or resignation (but
not by removal) or to fill newly-created directorships;
(ii) a majority of the outstanding voting power
of the Company shall have been acquired or beneficially owned (as defined in
Rule 13d-3 under the 1934 Act or any successor rule thereto) by any person
(other than the Company, a subsidiary of the Company or the Employee) or Group
(as defined below), which Group does not include the Employee; or
(iii) there shall have occurred:
(A) a merger or consolidation of the
Company with or into another corporation (other than (1) a merger or
consolidation with a subsidiary of the
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Company or (2) a merger or consolidation in which (a) the holders of voting
stock of the Company immediately prior to the merger as a class continue to
hold immediately after the merger at least a majority of all outstanding voting
power of the surviving or resulting corporation or its parent and (b) all
holders of each outstanding class or series of voting stock of the Company
immediately prior to the merger or consolidation have the right to receive
substantially the same cash, securities or other property in exchange for their
voting stock of the Company as all other holders of such class or series);
(B) a statutory exchange of shares of
one or more classes or series of outstanding voting stock of the Company for
cash, securities or other property;
(C) the sale or other disposition of
all or substantially all of the assets of the Company (in one transaction or a
series of transactions); or
(D) the liquidation or dissolution of
the Company;
unless more than twenty-five percent (25%) of the voting stock (or the voting
equity interest) of the surviving corporation or the corporation or other
entity acquiring all or substantially all of the assets of the Company (in the
case of a merger, consolidation or disposition of assets) or of the Company or
its resulting parent corporation (in the case of a statutory share exchange) is
beneficially owned by the Employee or a Group that includes the Employee.
10.5. GROUP. For purposes of this Agreement, "Group" shall
mean any two or more persons acting as a partnership, limited partnership,
syndicate, or other group acting in concert for the purpose of acquiring,
holding or disposing of voting stock of the Company.
10.6. DISABILITY. For purposes of this Agreement,
"Disability" shall mean a physical or mental infirmity which impairs the
Employee's ability to substantially perform his duties with the Company for a
period of one hundred eighty (180) consecutive days and the Employee has not
returned to his full time employment prior to the Termination Date as stated in
the "Notice of Termination" (as hereinafter defined).
10.7. GOOD REASON.
10.7.1. For purposes of this Agreement, "Good
Reason" shall mean a good faith determination by the Employee, in the
Employee's sole and absolute judgment, that any one or more of the following
events has occurred, without the Employee's express written consent:
(i) the assignment to the Employee of
any duties inconsistent with the Employee's position (including, without
limitation, status, titles and reporting requirements), authority, duties or
responsibilities as in effect immediately prior to the date of such assignment,
or any other action by the Company that results in a material diminution in
such position, authority, duties or responsibilities, excluding for this
purpose
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isolated and inadvertent action not taken in bad faith and remedied by
the Company promptly after receipt of notice thereof given by the Employee;
(ii) a reduction by the Company in the
Employee's Base Salary, as the same may be increased from time to time, or a
change in the eligibility requirements or performance criteria under any bonus,
incentive or compensation plan, program or arrangement under which the Employee
is covered immediately prior to the Termination Date which adversely affects
the Employee;
(iii) any failure to pay the Employee
any compensation or benefits to which he is entitled within five (5) days of
the date due after notice of the failure to so pay is given by the Employee;
(iv) the Company's requiring the
Employee to be based anywhere other than within fifty (50) miles of the
Employee's job location as of the date hereof, except for reasonably required
travel on the Company's business which is not greater than such travel
requirements prior to the date hereof;
(v) the taking of any action by the
Company that would materially adversely affect the physical conditions existing
in or under which the Employee performs his employment duties;
(vi) the insolvency or the filing (by
any party, including the Company) of a petition for bankruptcy by the Company;
(vii) any purported termination of the
Employee's employment for Cause by the Company which does not comply with the
terms of Section 10.3 hereof; or
(viii) any breach by the Company of any
provision of this Agreement.
10.7.2. The Employee's right to terminate his
employment pursuant to this Section 10 shall not be affected by his incapacity
due to physical or mental illness.
10.8. NOTICE OF TERMINATION. For purposes of this
Agreement, "Notice of Termination" shall mean a written notice of termination
from the Company of the Employee's employment which indicates the specific
termination provision in this Agreement relied upon and which sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated.
10.9. TERMINATION DATE. For purposes of this Agreement,
"Termination Date" shall mean, in the case of the Employee's death, his date of
death, in the case of the Employee's voluntary termination, the last day of
employment, and in all other cases (other
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than in the case of a successor or an assignee, which is provided for in
Section 14.1 hereof), the date specified in the Notice of Termination;
provided, however, that if the Employee's employment is terminated by the
Company for Cause or due to Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice of
Termination is given to the Employee; and provided further that in the case of
Disability the Employee shall not have returned to the full-time performance of
his duties during such period of at least thirty (30) days.
11. BENEFITS AND PAYMENTS UPON TERMINATION OF EMPLOYMENT.
11.1. COMPENSATION AND BENEFITS. If, during the term of
this Agreement, the Employee's employment with the Company shall be terminated,
the Employee shall be entitled to the following compensation and benefits in
the following circumstances:
(i) If the Employee's employment with the
Company shall be terminated (A) by the Company for Cause or Disability or (B)
by reason of the Employee's death, then the Company shall pay to the Employee
all Accrued Compensation.
(ii) If the Employee's employment with the
Company shall be terminated (A) by the Company pursuant to Section 13.2 hereof
or (B) by the Employee pursuant to section 13.4 hereof, then the Employee shall
be entitled to the following:
(1) the Company shall pay the Employee
all Accrued Compensation;
(2) the Company shall pay the Employee
as severance pay and in lieu of any further compensation for periods subsequent
to the Termination Date an amount in cash equal to two (2) times the Base
Amount;
(3) for twenty-four (24) months or
such longer period as may be provided by the terms of the appropriate program,
practice or policy, the Company shall, at its expense, continue on behalf of
the Employee and his dependents and beneficiaries the life insurance,
disability, medical, dental and hospitalization benefits generally made
available to the Company's executive officers at any time during the 90-day
period prior to the Termination Date or at any time thereafter, provided that
(i) the Company's obligation hereunder with respect to the foregoing benefits
shall be limited to the extent that the Employee obtains any such benefits
pursuant to a subsequent employer's benefit plans, in which case the Company
may reduce the coverage of any benefits it is required to provide the Employee
hereunder as long as the aggregate coverages and benefits of the combined
benefit plans are no less favorable to the Employee than the coverages and
benefits required to be provided hereunder, and (ii) this clause (3) shall not
be interpreted so as to limit any benefits to which the Employee or his
dependents or beneficiaries may be entitled under any of the Company's employee
benefit plans, programs or practices following the Employee's termination of
employment, including, without limitation, retiree medical and life insurance
benefits; and
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(4) the restrictions on any
outstanding incentive awards (including, without limitation, restricted stock
and granted performance shares or units) under any incentive plan or
arrangement shall lapse and such incentive award shall become 100% vested, all
stock options, warrants and stock appreciation rights granted to the Employee
on or prior to the date of this Agreement shall become immediately exercisable
and 100% vested and, notwithstanding anything to the contrary contained in the
plan, agreement or other instrument relating to such stock option, warrant or
stock appreciation rights with regard to the period of time within which such
stock option, warrant or stock appreciation rights must be exercised following
the Employee's termination of employment or provision of services to the
Company, all such stock options, warrants and stock appreciation rights may be
exercised at any time and from time to time until the one (1) year anniversary
of the Termination Date, and all performance units granted to the Employee
shall become 100% vested.
(iii) The amounts provided for in subsection
11.1(i) shall be payable to Employee in a lump-sum on the Termination Date, and
the amounts provided for in subsection 11.1(ii) shall be payable to the
Employee in substantially equal bi-weekly installments for a twenty-four (24)
month period commending on the Termination Date and otherwise in accordance
with the Company's payroll practices in effect from time to time.
(iv) The Employee shall not be required to
mitigate the amount of any payment provided for in this Agreement by seeking
other employment or otherwise, and no such payment shall be offset or reduced
by the amount of any compensation or benefits provided to the Employee in any
subsequent employment, except as provided in subsection 11.1(ii)(3).
11.2. NO SEVERANCE. The severance pay and benefits
provided for in this Section 11 shall be in lieu of any other severance or
termination pay to which the Employee may be entitled under any Company
severance or termination plan, program, practice or arrangement.
11.3. OTHER COMPENSATION AND BENEFITS. The Employee's
entitlement to any other compensation or benefits shall be determined in
accordance with the Company's employee benefit plans and other applicable
programs, policies and practices then in effect.
12. GROSS-UP PAYMENTS.
12.1. ADDITIONAL PAYMENTS. Anything in this Agreement to
the contrary notwithstanding and except as set forth below, in the event it
shall be determined that any payment or distribution by the Company to or for
the benefit of the Employee (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 12) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Employee with
respect to such excise
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tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Employee
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Employee of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Employee
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. Notwithstanding the foregoing provisions of this Section 12.1, if
it shall be determined that the Employee is entitled to a Gross-Up Payment, but
that the Payments do not exceed 110% of the greatest amount (the "Reduced
Amount") that could be paid to the Employee such that the receipt of Payments
would not give rise to any Excise Tax, then no Gross-Up Payment shall be made
to the Employee and the Payments, in the aggregate, shall be reduced to the
Reduced Amount.
12.2 DETERMINATION. Subject to the provisions of Section
12.3, all determinations required to be made under this Section 12, including
whether and when a Gross-Up Payment is required and the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by a nationally-recognized accounting firm selected by the
Company and reasonably acceptable to the Employee (the "Accounting Firm") which
shall provide detailed supporting calculations both to the Company and the
Employee within fifteen (15) business days of the receipt of notice from the
Employee that there has been a Payment, or such earlier times as is requested
by the Company. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 12, shall be paid by the Company to the Employee within five (5) days
of the receipt of the Accounting Firm's determination. Any determination by the
accounting Firm shall be binding upon the Company and the Employee. As a result
of the uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not have been made by the Company should have
been made ("Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its remedies pursuant to
Section 12.3 and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.
12.3 INTERNAL REVENUE SERVICE CLAIM. The Employee shall
notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than ten (10) business days after the Employee is informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Employee shall not pay such claim
prior to the expiration of the 30-day period following the date on which the
Employee gives such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If the
Company notifies the Employee
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in writing prior to the expiration of such period that it desires to contest
such claim, the Employee shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company;
(iii) cooperate with the Company in good faith in
order effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including, without limitation, additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold the
Employee harmless, on an after-tax basis, for any Excise Tax or income tax
(including, without limitation, interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and expenses.
Without limitation on the foregoing provisions of this Section 12.3, the
Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the Employee
to pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Employee to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Employee, on an interest-free basis and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax or income tax
(including, without limitation, interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
12.4 REFUNDS. If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section 12.3, the Employee becomes
entitled to receive any
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refund with respect to such claim, then the Employee shall (subject to the
Company's complying with the requirements of Section 12.3) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Employee
of an amount advanced by the Company pursuant to Section 12.3, a determination
is made that the Employee shall not be entitled to any refund with respect to
such claim and the Company does not notify the Employee in writing of its
intent to contest such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
13. TERMINATION. The Employee's employment hereunder may be
terminated without any breach of this Agreement only in accordance with this
Section 13.
13.1. TERMINATION BY THE COMPANY FOR CAUSE. The Company
may terminate the Employee's employment at any time for Cause by providing to
the Employee a Notice of Termination, whereupon the Employee shall be entitled
to all of the benefits and payments provided for under Section 11 hereof.
13.2. TERMINATION BY THE COMPANY WITHOUT CAUSE. The
Company may terminate the Employee's employment at any time without Cause by
providing to the Employee a Notice of Termination, whereupon the Employee shall
be entitled to all of the benefits and payments provided for under Section 11
hereof.
13.3. TERMINATION BY THE EMPLOYEE. The Employee's
employment may be terminated by the Employee at any time by providing the
Company with notice of such termination and specifying in the notice the
effective date of such termination, which shall not be less than one hundred
twenty (120) days after giving such notice, whereupon the Employee's employment
shall terminate on the date specified in such notice and the Employee shall be
entitled to all of the benefits and payments provided for under Section 11
hereof; provided, however, that following receipt of such notice, the Company
may specify, in its discretion, the date on which the Employee's employment
shall terminate so long as the date so specified is not more than one hundred
twenty (120) days after the date on which the Employee shall have given notice,
in which case the Employee's employment shall terminate on the date so
specified by the Company.
13.4. TERMINATION BY THE EMPLOYEE FOR GOOD REASON
FOLLOWING A CHANGE OF CONTROL. For a (1) year period following a Change of
Control, the Employee's employment may be terminated by the Employee for Good
Reason at any such time during such one (1) year period by providing the
Company with a notice of such termination and specifying in the notice the
effective date of such termination, whereupon the Employee's employment shall
terminate on the date specified in such notice and the Employee shall be
entitled to all of the benefits and payments provided for under Section 11
hereof.
13.5. TERMINATION UPON DISABILITY. The Company may
terminate the Employee's employment upon the Disability of the Employee by
providing to the Employee
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a Notice of Termination, whereupon the Employee shall be entitled to all of the
benefits and payments provided for under Section 11 hereof.
13.6. DEATH. In the event of the Employee's death during
his employment hereunder, the Employee's employment shall be automatically
terminated, whereupon the Employee shall be entitled to all of the benefits and
payments provided for under Section 11 hereof.
14. SUCCESSORS AND ASSIGNS.
14.1. ASSUMPTION AND AGREEMENT. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its successors and
assigns, and the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) or assign, by
agreement in form and substance satisfactory to the Employee, 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
or assignment had taken place. Failure of the Company to obtain such assumption
and agreement prior to the effectiveness of any such succession or assignment
shall be a breach of this Agreement and shall entitle the Employee to
compensation from the Company in the same amount and on the same terms as he
would be entitled to hereunder if his employment had been terminated pursuant
to Section 13.2 hereof, except that for purposes of implementing the foregoing,
the date on which any such succession or assignment becomes effective shall be
deemed the Termination Date hereunder. As used in the Agreement, Company shall
mean the Company as hereinbefore defined and any successor or assign that
executes and delivers the agreement provided for in this Section 14.1 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
14.2. RIGHTS OF EMPLOYEE. This Agreement and all rights of
the Employee hereunder shall inure to the benefit of and be enforceable by the
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devises and legatees. If the Employee should
die 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 the Employee's devise,
legatee or other designee or, if there be no such designee, to the Employee's
estate.
15. INJUNCTIVE RELIEF. The Company and the Employee agree that
damages are an inadequate remedy for, and that the Company or any successor to
the business of the Company would be irreparably harmed by, any breach of
Section 9 of this Agreement, and that the Company, any successor to the
business of the Company or any permitted assignee of the Company shall be
entitled to equitable relief in the form of a preliminary or permanent
injunction upon any breach of Section 9 hereof.
16. NOTICES. For the purpose of this Agreement, notices and all
other communications to either party hereunder provided for in the Agreement
shall be in writing
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and shall be deemed to have been duly given when delivered in person or mailed
by first-class mail or airmail, postage prepaid, addressed:
If to the Employee:
Xx. Xxxxxx X. Xxxx
000 Xxxxxxxxx Xxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
If to the Company:
Cereus Technology Partners, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: President
or to such other address(es) as either party may have furnished to the other
party in writing in accordance with this Section.
17. MISCELLANEOUS. No provision of this Agreement may be amended,
modified or waived unless such amendment, modification or waiver (i) is agreed
to in writing and is signed by the Employee and a representative of the
Company, its successor or permitted assignee and (ii) has been approved by the
Board, its successor or any permitted assignee of the Company. No waiver by
either party to this Agreement at any time of breach by the other party of, or
compliance by the other party with, any condition or provision of this
Agreement to be performed by the other party shall be deemed to be a waiver of
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representations, oral or otherwise, expressed
or implied, with respect to the subject matter of this Agreement have been made
by either party that are not expressly set forth in this Agreement.
18. VALIDITY. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of the other provisions of this Agreement, which other
provisions shall remain in full force and effect, nor shall the invalidity or
unenforceability of a portion of any provision of this Agreement affect the
validity or enforceability of the balance of such provision.
19. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
20. HEADINGS. The headings of the paragraphs contained in this
Agreement are for reference purposes only and shall not, in any way, affect the
meaning or interpretation of any provision of this Agreement.
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21. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal substantive laws, and not the choice
of law rules, of the State of Georgia.
22. ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof, other than the provisions of
Section 9 hereof, shall, on the written request of one party served upon the
other, be settled by binding arbitration in Xxxxxx County, Georgia in
accordance with the commercial arbitration rules then recognized by the
American Arbitration Association, and judgment upon the award rendered may be
entered and enforced in any court having jurisdiction thereof.
23. FEES AND EXPENSES. The Company shall pay all legal fees and
related expenses incurred by the Employee as they become due as a result of or
in connection with (i) the Employee's termination of employment (including,
without limitation, all such fees and expenses, if any, incurred in contesting
or disputing any such termination of employment), (ii) the Employee seeking to
obtain or enforce any right or benefit provided by this Agreement (including,
without limitation, any such fees and expenses incurred in connection
therewith) or by any other plan or arrangement maintained by the Company under
which the Employee is or may be entitled to receive benefits, (iii) the
Employee's hearing before the Board as contemplated in Section 10.3 of this
Agreement, (iv) any tax audit or proceeding to the extent attributable to the
application of any Excise Tax with respect to any Payment or Payments
hereunder, plus in each case interest on any delayed payment at the "Applicable
Federal Rate," as defined in Section 1274(d) of the Code, as then in effect,
and (v) the preparation and execution of this Agreement.
24. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements (if
any), understandings and arrangements (oral or written) between the parties
hereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and delivered by its duly authorized officer, and the Employee has
executed and delivered this Agreement, all as of the date first written above.
CEREUS TECHNOLOGY PARTNERS, INC.
By: /s/ Xxxx Xxxxx
----------------------------------------
Its: Vice Chairman
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/s/ Xxxxxx X. Xxxx
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XXXXXX X. XXXX
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