EXHIBIT 10.2
EXECUTION COPY
|__| Employee's Copy
|__| Company's Copy
CLARANT WORLDWIDE CORPORATION
EMPLOYMENT AGREEMENT
To XXXXXXXXXXX X. XXXXXXXXXXXX:
This Agreement establishes the terms of your employment with Clarant
Worldwide Corporation, a Delaware corporation (the "COMPANY"). The Company has
been formed as a parent company to acquire companies engaged in the business
of providing internet professional services and to make an initial public
offering ("IPO") of the Company's common stock.
EMPLOYMENT AND DUTIES You and the Company agree to your employment as Vice
President, Finance, Eastern Region on the terms
contained herein. You agree to perform whatever
duties the Company's Board of Directors (the "BOARD")
or person the Board or the Company's Chief Executive
Officer specifies as your direct report (the "DIRECT
REPORT") may assign you from time to time that are
reasonably consistent with your position as Vice
President, Finance, Eastern Region. During your
employment, you agree to devote your full business
time, attention, and energies to performing those
duties (except as your Direct Report otherwise agrees
from time to time). You agree to comply with the
noncompetition, secrecy, and other provisions of
Exhibit A to this Agreement.
TERM OF EMPLOYMENT Your employment under this Agreement begins as of
your execution of this Agreement (the "EFFECTIVE
DATE"). Unless sooner terminated under this
Agreement, your employment ends at 6:00 p.m. Central
Time on
(i) December 31, 1999 (or such
earlier date as of which the Board
or the CEO notifies you the Company
is abandoning its efforts for 1999
to complete an IPO), if the Company
has not completed its IPO by that
date, or
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(ii) the third anniversary of the
Effective Date if the Company has
completed its IPO on or before
December 31, 1999.
The period running from the Effective Date
to the applicable date in the preceding
sentence is the "TERM."
Termination or expiration of this Agreement
ends your employment but does not end your
obligation to comply with Exhibit A or the
Company's obligation, if any, to make
payments under the PAYMENTS ON TERMINATION
and SEVERANCE provisions as specified below.
COMPENSATION
SALARY The Company will pay you an annual salary
(the "SALARY") from the Effective Date at
the rate of not less than $140,000 in
accordance with its generally applicable
payroll practices. The Board or your Direct
Report will review your Salary annually and
consider you for increases.
BONUS The Board or its Compensation Committee, or
if the Board directs, your Direct Report
will establish annual bonus targets under
which you will be eligible for an annual
bonus equal to up to 100% of your Salary. It
is the Company's good faith intention to
establish bonus targets for the first year,
in consultation with you, within 90 days
following the Effective Date.
OPTIONS The Company will grant options to you under
the Company's 1999 Equity Incentive Plan,
exercisable at the IPO price, to acquire
80,000 shares of common stock. The options
will consist of incentive stock options
under Section 422 of the Internal Revenue
Code to the extent the tax laws permit and
of nonqualified stock options for the
remainder. The options will become
exercisable, so long as you remain employed,
in sixths every six months after the closing
date of the IPO and will remain exercisable
for up to 10 years, subject to the option
plan's rules on expiration on or after
termination of employment.
EMPLOYEE BENEFITS While the Company employs you under this
Agreement, the Company will provide you
with the same benefits as it makes
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generally available from time to time to the
Company's employees, as those benefits are
amended or terminated from time to time.
Your participation in the Company's benefit
plans will be subject to the terms of the
applicable plan documents and the Company's
generally applied policies, and the Company
in its sole discretion may from time to time
adopt, modify, interpret, or discontinue
such plans or policies.
PLACE OF EMPLOYMENT Your principal place of employment will be
within 35 miles of Horsham, Pennsylvania.
You understand and agree that you must
travel from time to time for business
reasons; however, you will not be required
to spend more than a cumulative maximum of
12 days per month away on travel. (The
monthly travel obligations may vary, so long
as you are not required on a cumulative
basis to have been away on travel more than
12 days times the number of months of
employment, and any days in excess of that
amount will reduce the obligations for
succeeding months.)
EXPENSES The Company will reimburse you for
reasonable and necessary travel and other
business-related expenses (including costs
associated with maintaining your CPA
license) you incur for the Company in
performing your duties under this Agreement.
You must itemize and substantiate all
requests for reimbursements. You must submit
requests for reimbursement in accordance
with the policies and practices of the
Company. From the Effective Date through the
IPO Closing Date, the Company will reimburse
such expenses on a biweekly basis and will
reimburse them after that date according to
its normal schedule.
NO OTHER EMPLOYMENT While the Company employs you, you agree
that you will not, directly or indirectly,
provide services to any person or
organization for which you receive
compensation or otherwise engage in
activities that would conflict or interfere
significantly with your faithful performance
of your duties as an employee without the
Board's prior written consent. (This
prohibition
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excludes any work performed at the Company's
direction.) The Company acknowledges that,
as of the Effective Date, you serve as a
director or comparable position of ARC Group
LLC and agrees that such positions do not
violate the prohibition on other employment,
so long as you do not violate the provisions
of Exhibit A. You may manage your personal
investments, as long as the management takes
only minimal amounts of time and is
consistent with the provisions of the NO
CONFLICTS OF INTEREST Section and the NO
COMPETITION Section in Exhibit A.
You represent to the Company that you are
not subject to any agreement, commitment, or
policy of any third party that would prevent
you from entering into or performing your
duties under this Agreement, and you agree
that you will not enter into any agreement
or commitment or agree to any policy that
would prevent or hinder your performance of
duties and obligations under this Agreement,
including Exhibit A.
NO CONFLICTS OF INTEREST You confirm that you have fully disclosed to
the Company, to the best of your knowledge,
all circumstances under which you, your
spouse, and other persons who reside in your
household have or may have a conflict of
interest with the Company. You further agree
to fully disclose to the Company any such
circumstances that might arise during your
employment upon your becoming aware of such
circumstances. You agree to fully comply
with the Company's policy and practices
relating to conflicts of interest.
NO IMPROPER You will neither pay nor permit payment of
PAYMENTS any remuneration to or on behalf of any
governmental official other than payments
required or permitted by applicable law. You
will comply fully with the Foreign Corrupt
Practices Act of 1977, as amended. You will
not, directly or indirectly,
make or permit any contribution,
gift, bribe, rebate, payoff,
influence payment, kickback, or
other payment to
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any person or entity, private or
public, regardless of what form,
whether in money, property, or
services
to obtain favorable
treatment for business
secured,
to pay for favorable
treatment for business
secured,
to obtain special
concessions or for special
concessions already
obtained, or
in violation of any legal
requirement, or
establish or maintain any fund or
asset related to the Company that is
not recorded in the Company's books
and records, or
take any action that would violate
(or would be part of a series of
actions that would violate) any U.S.
law relating to international trade
or commerce, including those laws
relating to trading with the enemy,
export control, and boycotts of
Israel or Israeli products (as is
sought by certain Arab countries).
TERMINATION Subject to the provisions of this section, you and
the Company agree that it may terminate your
employment, or you may resign, except that, if you
voluntarily resign, you must provide the Company with
90 days' prior written notice (unless the Board or
your Direct Report has previously waived such notice
in writing or authorized a shorter notice period).
FOR CAUSE The Company may terminate your employment
for "CAUSE" if you:
(i) commit a material breach of your
obligations or agreements under this
Agreement, including Exhibit A;
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(ii) commit an act of gross
negligence with respect to the
Company or otherwise act with
willful disregard for the Company's
best interests;
(iii) fail or refuse to perform any
duties delegated to you that are
consistent with the duties of
similarly-situated senior executives
or are otherwise required under this
Agreement, provided that these
duties do not conflict with any
other provision of this Agreement;
(iv) seize a corporate opportunity
for yourself instead of offering
such opportunity to the Company if
within the scope of the Company's or
its subsidiaries' business; or
(v) are convicted of or plead guilty
or no contest to a felony (or to a
felony charge reduced to
misdemeanor), or, with respect to
your employment, to any misdemeanor
(other than a traffic violation) or,
with respect to your employment,
commit either a material dishonest
act or common law fraud or knowingly
violate any federal or state
securities or tax laws.
Your termination for Cause will be effective
immediately upon the Company's mailing or
written transmission of notice of such
termination. Before terminating your
employment for Cause under clauses (i) -
(iv) above, the Company will specify in
writing to you the nature of the act,
omission, refusal, or failure that it deems
to constitute Cause and, unless the Board or
your Direct Report reasonably concludes the
situation could not be corrected, give you
30 days after you receive such notice to
correct the situation (and thus avoid
termination for Cause), unless the Company
agrees to extend the time for correction.
You agree that the Board or your Direct
Report will have the discretion to determine
in good faith whether your correction is
sufficient, provided that this decision does
not foreclose you from using the Dispute
Resolution provisions of Exhibit B.
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WITHOUT CAUSE Subject to the provisions below under
PAYMENTS ON TERMINATION and SEVERANCE, the
Company may terminate your employment under
this Agreement before the end of the Term
without CAUSE.
DISABILITY If you become "DISABLED" (as defined below),
the Company may terminate your employment.
You are "disabled" if you are unable,
despite whatever reasonable accommodations
the law requires, to render services to the
Company for more than 90 consecutive days
because of physical or mental disability,
incapacity, or illness. You are also
disabled if you are found to be disabled
within the meaning of the Company's
long-term disability insurance coverage as
then in effect (or would be so found if you
applied for the coverage).
GOOD REASON You may resign for Good Reason with 45 days'
advance written notice. "GOOD REASON" for
this purposes means, without your consent,
(i) the Company materially breaches this
Agreement or (ii) the Company relocates your
primary office by more than 35 miles from
Horsham, Pennsylvania.
You must give notice to the Company of your
intention to resign for Good Reason within
30 days after the occurrence of the event
that you assert entitles you to resign for
Good Reason. In that notice, you must state
the condition that you consider provides you
with Good Reason and, if such reason relates
to clause (i) above, must give the Company
an opportunity to cure the condition within
30 days after your notice. Before or during
the 30 day period, either party may request
mediation under Exhibit B to resolve any
such disputes, and, if so requested, the
parties agree to cooperate to arrange a
prompt mediation during no more than a 30
day period. If the Company fails to cure the
condition, your resignation will be
effective on the 45th day after your notice
(unless the Board has previously waived such
notice period in writing or agreed to a
shorter notice period or unless mediation is
proceeding in good faith), in which case
such resignation will become effective 15
days after the end of such mediation, if not
previously cured.
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You will not be treated as resigning for
GOOD REASON if the Company already had given
notice of termination for CAUSE as of the
date of your notice of resignation.
DEATH If you die during the Term, the Term will
end as of the date of your death.
PAYMENTS ON If you resign or the Company terminates your
TERMINATION employment with or without Cause or because
of disability or death or because the
Company does not complete its IPO, the
Company will pay you any unpaid portion of
your Salary pro-rated through the date of
actual termination (and any annual bonuses
already determined by such date but not yet
paid unless your employment is terminated
with CAUSE or because the IPO has been
canceled), reimburse any substantiated but
unreimbursed business expenses, pay any
accrued and unused vacation time (to the
extent consistent with the Company's
policies), and provide such other benefits
as applicable laws or the terms of the
benefits require. Except to the extent the
law requires otherwise or as provided in the
SEVERANCE paragraph or in your option
agreements, neither you nor your beneficiary
or estate will have any rights or claims
under this Agreement or otherwise to receive
severance or any other compensation, or to
participate in any other plan, arrangement,
or benefit, after such termination or
resignation. If your employment is
terminated because the Company does not
complete its IPO in 1999, you acknowledge
that you have no rights to the Severance set
forth below or to any other payments under
or with respect to this Agreement.
SEVERANCE In addition to the foregoing payments, if
after the completion of the IPO but before
the end of the Term, the Company terminates
your employment without CAUSE or you resign
for GOOD REASON, the Company will
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pay you severance equal to
your Salary, as then in
effect, for 18 months on
the same schedule as though
you had remained employed
during such period, even
though you are no longer
employed;
pay the after-tax premium
cost for you to receive any
group health coverage the
Company must offer you
under Section 4980B of the
Internal Revenue Code of
1986 ("COBRA COVERAGE") for
the period of such coverage
(unless the coverage is
then provided under a
self-insured plan);
pay you, at the time the
Company would otherwise pay
your annual bonus, your pro
rata share of the bonus for
the year of your
termination, where the pro
rata factor is based on
days elapsed in your year
of termination till date of
termination over 365, less
any portion of the bonus
for the year of your
termination already paid;
and
accelerate your options
such that any options that
would become exercisable
within the six months after
your date of termination or
resignation will become
exercisable as a result of
your termination or
resignation (and will
expire in accordance with
the option's terms within
90 days after such date).
You are not required to mitigate
amounts payable under the SEVERANCE
paragraph by seeking other
employment or otherwise, nor must
you return to the Company amounts
earned under subsequent employment.
EXPIRATION Expiration of this Agreement, whether
because of notice of non-renewal or
otherwise, does not constitute termination
without CAUSE nor provide you with GOOD
REASON and does not entitle you to
SEVERANCE, unless the Company's general
severance practices entitle you to severance
in that situation. If you remain
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employed at the end of the Term and your
employment then ends as a result of
expiration of the Agreement, the Company
will pay you severance equal to your Salary,
as then in effect, for 12 months on the same
schedule as though you had remained employed
during such period, even though you are no
longer employed, which payments you agree
compensate you for the restrictions under
Exhibit A upon contract expiration.
ASSIGNMENT The Company may assign or otherwise transfer
this Agreement and any and all of its
rights, duties, obligations, or interests
under it to
any of the affiliates or
subsidiaries of the Company or
to any business entity that at any
time by merger, consolidation, or
otherwise acquires all or
substantially all of the Company's
stock or assets or to which the
Company transfers all or
substantially all of its assets.
Upon such assignment or transfer, any such
business entity will be deemed to be
substituted for the Company for all purposes
(except that the Company will remain
secondarily liable if it transfers this
Agreement to a subsidiary). You agree that
assignment or transfer does not entitle you
to Severance. This Agreement binds and
benefits the Company, its successors or
assigns, and your heirs and the personal
representatives of your estate. Without the
Board's or your Direct Report's prior
written consent, you may not assign or
delegate this Agreement or any or all
rights, duties, obligations, or interests
under it.
SEVERABILITY If the final determination of an arbitrator
or a court of competent jurisdiction
declares, after the expiration of the time
within which judicial review (if permitted)
of such determination may be perfected, that
any term or provision of this Agreement,
including any provision of Exhibit A, is
invalid or unenforceable, the remaining
terms and provisions will be unimpaired, and
the invalid or unenforceable term or
provision will be deemed replaced by a term
or provision that is valid and
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enforceable and that comes closest to
expressing the intention of the invalid or
unenforceable term or provision.
AMENDMENT; WAIVER Neither you nor the Company may modify,
amend, or waive the terms of this Agreement
other than by a written instrument signed by
you and an executive officer of the Company
duly authorized by the Board. Either party's
waiver of the other party's compliance with
any provision of this Agreement is not a
waiver of any other provision of this
Agreement or of any subsequent breach by
such party of a provision of this Agreement.
WITHHOLDING The Company will reduce its compensatory
payments to you for withholding and FICA
taxes and any other withholdings and
contributions required by law.
THIRD PARTY BENEFICIARY You understand and agree that, until the IPO
is completed, Commonwealth Principals II LLC
is a third party beneficiary of this
Agreement, which means that Commonwealth may
enforce this Agreement even though not a
party to it.
GOVERNING LAW The laws of the State of Texas (other than
its conflict of laws provisions) govern this
Agreement.
NOTICES Notices must be given in writing by personal
delivery, by certified mail, return receipt
requested, by telecopy, or by overnight
delivery. You should send or deliver your
notices to the Company's corporate
headquarters. The Company will send or
deliver any notice given to you at your
address as reflected on the Company's
personnel records. You and the Company may
change the address for notice by like notice
to the others. You and the Company agree
that notice is received on the date it is
personally delivered, the date it is
received by certified mail, the date of
guaranteed delivery by the overnight
service, or the date the fax machine
confirms effective transmission.
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SUPERSEDING EFFECT This Agreement supersedes any prior oral or
written employment, severance, option, or
fringe benefit agreements between you and
the Company, other than with respect to your
eligibility for generally applicable
employee benefit plans. This Agreement
supersedes all prior or contemporaneous
negotiations, commitments, agreements, and
writings with respect to the subject matter
of this Agreement, other than the agreement
among the Company, ARC Group LLC and
Commonwealth Principals II LLC dated as of
March 8, 1999, under which ARC Group LLC
will receive a $240,000 payment upon
successful completion of the IPO. All such
other negotiations, commitments, agreements,
and writings will have no further force or
effect; and the parties to any such other
negotiation, commitment, agreement, or
writing will have no further rights or
obligations thereunder.
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If you accept the terms of this Agreement, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.
CLARANT WORLDWIDE CORPORATION
By: /S/ Xxxxxxxxx X. Xxxxxx
-----------------------
Xxxxxxxxx X. Xxxxxx
Chief Executive Officer
I accept and agree to the terms of employment set forth in this Agreement:
/S/ Xxxxxxxxxxx X. Xxxxxxxxxxxx
-------------------------------
Xxxxxxxxxxx X. Xxxxxxxxxxxx
Dated: June 29, 1999
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EXHIBIT A
NO COMPETITION You agree to the provisions of this Exhibit
A in consideration of your employment by the
Company and salary and benefits under this
Agreement and the training you will receive
in connection with such employment, and you
agree that Exhibit A should be considered
ancillary to the option agreements by which
you will receive options from the Company.
While the Company (or its successor or
transferee) employs you and to the end of
the Restricted Period (as defined below),
you agree as follows:
You will not, directly or indirectly, be
employed by, lend money to, or engage in any
Competing Business within the Market Area
(each as defined below). That prohibition
includes, but is not limited to, acting,
either singly or jointly or as agent for, or
as an employee of or consultant to, any one
or more persons, firms, entities, or
corporations directly or indirectly (as a
director, independent contractor,
representative, consultant, member, or
otherwise) that constitutes such a Competing
Business. You also will not invest or hold
equity or options in any Competing Business,
provided that you may own up to 3% of the
outstanding capital stock of any corporation
that is actively publicly traded without
violating this NO COMPETITION covenant, so
long as you have no involvement beyond
passive investing in such business and you
comply with the second sentence of this
paragraph.
If, during the Restricted Period, you are
offered and want to accept employment with a
business that engages in activities similar
to the Company's, you will inform your
Direct Report in writing of the identity of
the business, your proposed duties with that
business, and the proposed starting date of
that employment. You will also inform that
business of the terms of this Exhibit A. The
Company will analyze the proposed employment
and make a
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good faith determination as to whether it
would threaten the Company's legitimate
competitive interests. If the Company
determines that the proposed employment
would not pose an unacceptable threat to its
interests, the Company will notify you that
it does not object to the employment.
You acknowledge that, during the portion of
the Restricted Period that follows your
employment, you may engage in any business
activity or gainful employment of any type
and in any place except as described above.
You acknowledge that you will be reasonably
able to earn a livelihood without violating
the terms of this Agreement.
You understand and agree that the rights and
obligations set forth in this NO COMPETITION
Section will continue and will survive
through the Restricted Period.
DEFINITIONS
COMPETING COMPETING BUSINESS means any service or
BUSINESS product of any person or organization other
than the Company and its successors,
assigns, or subsidiaries (collectively, the
"COMPANY GROUP") that competes with any
service or product of the Company Group
provided by any member of the Company Group
during your employment. COMPETING BUSINESS
includes any enterprise engaged in the
formation or operation of internet
professional services firms that provide
strategic, interactive design and technical
business services, information technology
and interactive business consulting, and
other related services to assist clients in
integrating and maintaining their electronic
commerce capabilities.
MARKET AREA The Market Area consists of the United
States and Canada. You agree that the
Company provides services both at its
facilities and at the locations of its
customers or clients and that, by the nature
of its business, it operates globally.
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RESTRICTED For purposes of this Agreement, the
PERIOD RESTRICTED PERIOD ends at the first
anniversary of the date your employment with
the Company Group ends for any reason.
NO INTERFERENCE; During the Restricted Period, you agree that
NO SOLICITATION you will not, directly or indirectly,
whether for yourself or for any other
individual or entity (other than the Company
or its affiliates or subsidiaries),
intentionally
solicit any person or entity who is,
or was, within the 24 months
preceding your date of termination
or resignation, a customer, prospect
(with respect to which any member of
the Company Group has incurred
substantial costs or with which you
have been involved), or client of
the Company Group within the Market
Area, with the 24 month period
reduced to 12 months for prospects
with which you have not been
involved;
hire away or endeavor to entice away
from the Company Group any employee
or any other person or entity whom
the Company Group engages to perform
services or supply products and
including, but not limited to, any
independent contractors,
consultants, engineers, or sales
representatives or any contractor,
subcontractor, supplier, or vendor;
or
hire any person whom the Company
Group employs or employed within the
prior 12 months.
SECRECY
PRESERVING Your employment with the Company under and,
COMPANY if applicable, before this Agreement (with a
CONFIDENCES predecessor to a member of the Company
Group), has given and will give you access
to Confidential Information (as defined
below). You acknowledge and agree that
using, disclosing, or publishing any
Confidential
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Information in an unauthorized or improper
manner could cause the Company or Company
Group to incur substantial loss and damages
that could not be readily calculated and for
which no remedy at law would be adequate.
Accordingly, you agree with the Company that
you will not at any time, except in
performing your employment duties to the
Company or the Company Group under this
Agreement (or with the Board's or your
Direct Report's prior written consent),
directly or indirectly, use, disclose, or
publish, or permit others not so authorized
to use, disclose, or publish any
Confidential Information that you may learn
or become aware of, or may have learned or
become aware of, because of your prior or
continuing employment, ownership, or
association with the Company or the Company
Group or any of their predecessors, or use
any such information in a manner detrimental
to the interests of the Company or the
Company Group.
PRESERVING You agree not to use in working for the
OTHERS' Company Group and not to disclose to the
CONFIDENCES Company Group any trade secrets or other
information you do not have the right to use
or disclose and that the Company Group is
not free to use without liability of any
kind. You agree to promptly inform the
Company in writing of any patents,
copyrights, trademarks, or other proprietary
rights known to you that the Company or the
Company Group might violate because of
information you provide.
CONFIDENTIAL "CONFIDENTIAL INFORMATION" includes, without
INFORMATION limitation, information that the Company or
the Company Group has not previously
disclosed to the public or to the trade with
respect to the Company's or the Company
Group's present or future business,
including its operations, services,
products, research, inventions, discoveries,
drawings, designs, plans, processes, models,
technical information, facilities, methods,
trade secrets, copyrights, software, source
code, systems, patents, procedures, manuals,
specifications, any other intellectual
property, confidential reports, price lists,
pricing formulas, customer lists, financial
information (including the revenues, costs,
or profits
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associated with any of the Company's or the
Company Group's products or services),
business plans, lease structure,
projections, prospects, opportunities or
strategies, acquisitions or mergers,
advertising or promotions, personnel
matters, legal matters, any other
confidential and proprietary information,
and any other information not generally
known outside the Company or the Company
Group that may be of value to the Company or
the Company Group but, notwithstanding
anything to the contrary, excludes any
information already properly in the public
domain. "CONFIDENTIAL INFORMATION" also
includes confidential and proprietary
information and trade secrets that third
parties entrust to the Company or the
Company Group in confidence.
You understand and agree that the rights and
obligations set forth in this SECRECY
Section will continue indefinitely and will
survive termination of this Agreement and
your employment with the Company or the
Company Group.
EXCLUSIVE PROPERTY You confirm that all Confidential
Information is and must remain the exclusive
property of the Company or the relevant
member of the Company Group. Any office
equipment (including computers) you receive
from the Company Group in the course of your
employment and all business records,
business papers, and business documents you
keep or make, whether on digital media or
otherwise, in the course of your employment
by the Company relating to the Company or
any member of the Company Group must be and
remain the property of the Company or the
relevant member of the Company Group. Upon
the termination of this Agreement with the
Company or upon the Company's request at any
time, you must promptly deliver to the
Company or to the relevant member of the
Company Group any such office equipment
(including computers) and any Confidential
Information or other materials (written or
otherwise) not available to the public or
made available to the public in a manner you
know or reasonably should recognize the
Company did not authorize, and any copies,
excerpts, summaries, compilations, records,
or documents you made or that came into
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your possession during your employment. You
agree that you will not, without the
Company's consent, retain copies, excerpts,
summaries, or compilations of the foregoing
information and materials. You understand
and agree that the rights and obligations
set forth in this EXCLUSIVE PROPERTY Section
will continue indefinitely and will survive
termination of this Agreement and your
employment with the Company Group.
COPYRIGHTS, You agree that all records, in whatever
DISCOVERIES, media (including written works), documents,
INVENTIONS, AND papers, notebooks, drawings, designs,
PATENTS technical information, source code, object
code, processes, methods or other
copyrightable or otherwise protected works
you conceive, create, make, invent, or
discover that relate to or result from any
work you perform or performed for the
Company or the Company Group or that arise
from the use or assistance of the Company
Group's facilities, materials, personnel, or
Confidential Information in the course of
your employment (whether or not during usual
working hours), whether conceived, created,
discovered, made, or invented individually
or jointly with others, will be and remain
the absolute property of the Company (or
another appropriate member of the Company
Group, as specified by the Company), as will
all the worldwide patent, copyright, trade
secret, or other intellectual property
rights in all such works. (All references in
this section to the Company include the
members of the Company Group, unless the
Company determines otherwise.) You
irrevocably and unconditionally waive all
rights, wherever in the world enforceable,
that vest in you (whether before, on, or
after the date of this Agreement) in
connection with your authorship of any such
copyrightable works in the course of your
employment with the Company Group or any
predecessor. Without limitation, you waive
the right to be identified as the author of
any such works and the right not to have any
such works subjected to derogatory
treatment. YOU RECOGNIZE ANY SUCH WORKS ARE
"WORKS FOR HIRE" OF WHICH THE COMPANY IS THE
AUTHOR.
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 19 of 25
You will promptly disclose, grant, and
assign ownership to the Company for its sole
use and benefit any and all ideas,
processes, inventions, discoveries,
improvements, technical information, and
copyrightable works (whether patentable or
not) that you develop, acquire, conceive or
reduce to practice (whether or not during
usual working hours) while the Company or
the Company Group employs you. You will
promptly disclose and hereby grant and
assign ownership to the Company of all
patent applications, letters patent, utility
and design patents, copyrights, and reissues
thereof or any foreign equivalents thereof,
that may at any time be filed or granted for
or upon any such invention, improvement, or
information. In connection therewith:
You will, without charge but at the
Company's expense, promptly execute
and deliver such applications,
assignments, descriptions, and other
instruments as the Company may
consider reasonably necessary or
proper to vest title to any such
inventions, discoveries,
improvements, technical information,
patent applications, patents,
copyrightable works, or reissues
thereof in the Company and to enable
it to obtain and maintain the entire
worldwide right and title thereto;
and
You will provide to the Company at
its expense all such assistance as
the Company may reasonably require
in the prosecution of applications
for such patents, copyrights, or
reissues thereof, in the prosecution
or defense of interferences that may
be declared involving any such
applications, patents, or copyrights
and in any litigation in which the
Company may be involved relating to
any such patents, inventions,
discoveries, improvements, technical
information, or copyrightable works
or reissues thereof. The Company
will reimburse you for reasonable
out-of-pocket expenses you incur and
pay you reasonable compensation for
your time if the Company Group no
longer employs you.
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 20 of 25
To the extent, if any, that you own rights
to works, inventions, discoveries,
proprietary information, and copyrighted or
copyrightable works, or other forms of
intellectual property that are incorporated
in the work product you create for the
Company Group, you agree that the Company
will have an unrestricted, non-exclusive,
royalty-free, perpetual, transferable
license to make, use, sell, offer for sale,
and sublicense such works and property in
whatever form, and you hereby grant such
license to the Company (and the Company
Group).
This COPYRIGHTS, DISCOVERIES, INVENTIONS AND
PATENTS section does not apply to an
invention or discovery for which no
equipment, supplies, facility or trade
secret information of the Company Group
(including its predecessors) was used and
that was developed entirely on your own
time, unless (a) the invention relates (i)
directly to the business of the Company
Group, or (ii) the Company Group's actual or
then reasonably anticipated research or
development, or (b) the invention results
from any work you performed for the Company
Group or any predecessor.
MAXIMUM LIMITS If any of the provisions of Exhibit A are
ever deemed to exceed the time, geographic
area, or activity limitations the law
permits, you and the Company agree to reduce
the limitations to the maximum permissible
limitation, and you and the Company
authorize a court or arbitrator having
jurisdiction to reform the provisions to the
maximum time, geographic area, and activity
limitations the law permits; PROVIDED,
HOWEVER, that such reductions apply only
with respect to the operation of such
provision in the particular jurisdiction
with respect to which such adjudication is
made.
INJUNCTIVE RELIEF Without limiting the remedies available to
the Company, you acknowledge
that a breach of any of the
covenants in this Exhibit A may
result in material irreparable
injury to the Company
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 21 of 25
and Company Group for which there is
no adequate remedy at law, and
that it will not be possible to
measure damages for such injuries
precisely.
You agree that, if there is a breach or
threatened breach, the Company or any member
of the Company Group may be entitled to
obtain a temporary restraining order and/or
a preliminary or permanent injunction
restraining you from engaging in activities
prohibited by any provisions of this Exhibit
A or such other relief as may be required to
specifically enforce any of the covenants in
this Exhibit A. The Company or any member of
the Company Group will, in addition to the
remedies provided in this Agreement, be
entitled to avail itself of all such other
remedies as may now or hereafter exist at
law or in equity for compensation and for
the specific enforcement of the covenants
contained in this Agreement. Resort to any
remedy provided for in this Section or
provided for by law will not prevent the
concurrent or subsequent employment of any
other appropriate remedy or remedies, or
preclude the Company's or the Company
Group's recovery of monetary damages and
compensation. You also agree that the
Restricted Period or such longer period
during which the covenants hereunder by
their terms survive will extend for any and
all periods for which a court with personal
jurisdiction over you finds that you
violated the covenants contained in this
Exhibit A.
EXHIBIT B
DISPUTE RESOLUTION
MEDIATION If either party has a dispute or claim relating to
this Agreement or their relationship and except as
set forth in ALTERNATIVES, the parties must first
seek to mediate the same before an impartial mediator
the parties mutually designate, and the parties must
equally share the expenses of
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 22 of 25
such proceeding (other than their respective
attorneys' fees). Subject to the mediator's schedule,
the mediation must occur within 45 days of either
party's written demand. However, in an appropriate
circumstance, a party may seek emergency equitable
relief from a court of competent jurisdiction
notwithstanding this obligation to mediate.
BINDING If the mediation reaches no solution or the parties
ARBITRATION agree to forego mediation, the parties will promptly
submit their disputes to binding arbitration before
one or more arbitrators (collectively or singly, the
"ARBITRATOR") the parties agree to select (or whom,
absent agreement, a court of competent jurisdiction
selects). The arbitration must follow applicable law
related to arbitration proceedings and, where
appropriate, the Commercial Arbitration Rules of the
American Arbitration Association.
ARBITRATION All statutes of limitations and substantive laws
PRINCIPLES applicable to a court proceeding will apply to this
proceeding. The Arbitrator will have the power to
grant relief in equity as well as at law, to issue
subpoenas duces tecum, to question witnesses, to
consider affidavits (provided there is a fair
opportunity to rebut the affidavits), to require
briefs and written summaries of the material
evidence, and to relax the rules of evidence and
procedure, provided that the Arbitrator must not
admit evidence it does not consider reliable. The
Arbitrator will not have the authority to add to,
detract from, or modify any provision of this
Agreement. The parties agree (and the Arbitrator must
agree) that all proceedings and decisions of the
Arbitrator will be maintained in confidence, to the
extent legally permissible, and not be made public by
any party or the Arbitrator without the prior written
consent of all parties to the arbitration, except as
the law may otherwise require.
DISCOVERY; The parties have selected arbitration to expedite the
EVIDENCE; resolution of disputes and to reduce the costs and
PRESUMPTIONS burdens associated with litigation. The parties agree
that the Arbitrator should take these concerns into
account when determining whether to authorize
discovery and, if so, the scope of permissible
discovery and other hearing and pre-hearing
procedures. The Arbitrator may permit reasonable
discovery rights in preparation for
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 23 of 25
the arbitration, provided that it should accelerate
the scheduling of and responses to such discovery so
as not to unreasonably delay the arbitration.
Exhibits must be marked and left with the Arbitrator
until it has rendered a decision. Either party may
elect, at its expense, to record the proceedings by
audiotape or stenographic recorder (but not by
video). The Arbitrator may conclude that the
applicable law of any foreign jurisdiction would be
identical to that of Texas on the pertinent issue(s),
absent a party's providing the Arbitrator with
relevant authorities (and copying the opposing party)
at least five business days before the arbitration
hearing.
NATURE OF AWARD The Arbitrator must render its award, to the extent
feasible, within 30 days after the close of the
hearing. The award must set forth the material
findings of fact and legal conclusions supporting the
award. The parties agree that it will be final,
binding, and enforceable by any court of competent
jurisdiction. Where necessary or appropriate to
effectuate relief, the Arbitrator may issue equitable
orders as part of or ancillary to the award. The
Arbitrator must equitably allocate the costs and fees
of the proceeding and may consider in doing so the
relative fault of the parties. The Arbitrator may
award reasonable attorneys' fees to the prevailing
party to the extent a court could have made such an
award.
APPEAL The parties may appeal the award based on the grounds
allowed by statute, as well as upon the ground that
the award misapplies the law to the facts, provided
that such appeal is filed within the applicable time
limits law allows. If the award is appealed, the
court may consider the ruling, evidence submitted
during the arbitration, briefs, and arguments but
must not try the case DE NOVO. The parties will bear
the costs and fees associated with the appeal in
accordance with the arbitration award or, in the
event of a successful appeal, in accordance with the
court's final judgment.
ALTERNATIVES This DISPUTE RESOLUTION provision does not preclude a
party from seeking equitable relief from a court (i)
to prevent imminent or irreparable injury or (ii)
pending arbitration, to preserve the last peaceable
status quo, nor does it preclude the parties from
agreeing to a less expensive and faster means of
dispute resolution. It does not
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 24 of 25
prevent the Company from immediately seeking in court
an injunction or other remedy with respect to Exhibit
A.
Employment Agreement with Xxxxxxxxxxx X. Xxxxxxxxxxxx Page 25 of 25
