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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
AGREEMENT dated as of September 9, 1999 between Infinient Inc., a
New Jersey corporation (the "Company"), and Xxxx Xxxxx (the "Employee").
WHEREAS, the Company has been formed as a wholly-owned subsidiary
of Intelligroup Inc. ("Intelligroup") to conduct the internet-related consulting
businesses previously conducted by Intelligroup and its affiliates (the
"Internet Business") and to receive as a contribution from Intelligroup the
assets associated with the Internet Business; and
WHEREAS, Intelligroup intends to pursue, as promptly as is
commercially practicable and subject to market conditions, a public trading
market for the Company's Common Stock ("Company Stock"); and
WHEREAS, the Company desires to employ the Employee as an
executive officer of the Company to be the chief corporate development and
strategy officer of the Company.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, receipt of which is
hereby acknowledged, the parties, intending to be legally bound, agree as
follows:
1. EMPLOYMENT AND TERM.
The Company hereby agrees to employ the Employee for an initial
period of three years commencing as of the date hereof (the "Initial Term")
automatically renewable thereafter for one year periods (each such period, the
"Successive Term" and collectively the "Successive Terms"), unless earlier
terminated pursuant to the terms of Section 3 of this Agreement (the Initial
Term and the Successive Terms are herein referred to as the "Term") to serve as
the Executive Vice President, Corporate Development of the Company (such
position to be the Company's highest executive officer responsible for corporate
development, strategy and acquisitions except for the Chief Executive Officer),
and in such other executive managerial position or positions (including Chief
Financial Officer if requested by the Company) with the Company, its
subsidiaries, affiliates or divisions (the "Employer Group") as shall hereafter
be agreed to by the Employee and the Board, to perform such managerial duties as
are consistent with the usual duties of an officer of his status and reporting
directly to the Company's Chief Executive Officer and the Board. The parties
agree that the Employee will perform his duties for the Company in the New York
City metropolitan area, which for such purpose shall include the Company's
current Edison, New Jersey) headquarters, (the "Work Area") and the Employee's
work location may not be moved outside the Work Area without his consent. The
Employee further understands that the Company is considering relocating its
headquarters to the San Francisco/Silicon Valley area, and the Employee consents
to such a
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relocation to that area alone, it being understood that all relocation costs of
the Employee will be borne by the Company.
The Employee hereby accepts such employment and agrees to devote
his full business time and attention to the faithful and diligent performance of
the duties provided herein, provided however that is agreed that the Employee
may continue to engage in the outside business activities described in Exhibit A
hereto.
2. COMPENSATION.
(a) Salary. The Company shall compensate the Employee with a base
salary (the "Base Salary") of $250,000, which shall be reviewed annually during
the Term by the Board or the Compensation Committee of the Board. Payment of the
Base Salary shall be made in equal semi-monthly installments or at such other
more frequent payroll intervals as shall from time to time be the Company's
normal executive pay periods.
(b) Bonuses. In addition to the Base Salary, for each fiscal year
during the Term the Employee shall receive a bonus (which in no event shall be
less than $100,000 per annum) awarded by the Board or the Compensation Committee
of the Board and which is intended to be based on performance targets to be
agreed by the employee and the Board or Compensation Committee.
(c) Stock Options. Promptly after the execution of this Agreement,
the Company intends to adopt an employee stock option plan (the "Option Plan")
and issue stock options to the initial executive managers of the Company. When
the Option Plan is adopted, the Company agrees to issue to the Employee an
incentive stock option to acquire such number of shares of Company Stock as
shall represent 3% of the outstanding shares of Company Stock on a fully diluted
basis on the date of grant, at an exercise price per share which represents the
current fair market value per share of the Company Stock as determined in good
faith by the Board based on an independent valuation to be obtained by the
Company (and in any event such price per share shall not be higher than the
lowest exercise price for options granted to any of the Company's other initial
employee optionholders). One third of such options issued to the Employee shall
vest on March 1, 2000 and the remaining two-thirds shall vest in equal monthly
amounts over the 30th month period after March 1, 2000, and in the event of an
acquisition or a significant change in ownership of the Company (other than the
Company's planned IPO and spin off from Intelligroup), all of the Employee's
options shall vest immediately.
(d) Benefits. The Employee shall be entitled to participate in all
pension, profit sharing, 401(k), deferred compensation, health, dental,
accident, life insurance, disability and other benefit plans and policies as are
from time to time available to executives of the Company.
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(e) Expenses. The Company shall pay or reimburse the Employee for
all expenses normally reimbursed by the Company, consistent with the practices
of the Company, and reasonably incurred by him in furtherance of his duties
hereunder including, without limitation, expenses for traveling, meals, hotel
accommodations and the like, upon submission by him of vouchers or an itemized
list thereof prepared in compliance with such rules relating thereto as the
Board may, from time to time, adopt and as may be required in order to permit
such payments as proper deductions to the Company, subject to the limitations
provided under the Internal Revenue Code of 1986, as amended, and the rules and
regulations adopted pursuant thereto now or hereafter in effect. In addition,
the Company shall reimburse the Employee's reasonable legal expenses incurred in
connection with the preparation and negotiation of this Agreement.
(f) Vacations. During each 12 months of employment, the Employee
shall be entitled to paid vacations for an aggregate of four weeks. The Company
shall not pay the Employee any additional compensation for any vacation time not
used by the Employee.
3. TERMINATION.
(a) This Agreement shall be terminated upon the happening of any
of the following events: (i) at the end of the Initial Term or any Successive
Term if the Company or the Employee shall give at least 90 days advance written
notice to the other party terminating this Agreement as of the end of such
Initial or Successive Term; (ii) upon the death of the Employee; or (iii) upon
the Permanent Incapacity (as such term is defined in Section 3(d) hereof) of the
Employee.
(b) The Company may terminate the Employee's employment hereunder
upon, except as otherwise provided in Section 3(c) of this Agreement, five days
advance written notice for "Cause" (as defined below).
(c) For purposes hereof, "Cause" shall mean any of the following:
(i) the intentional failure, neglect or refusal of the Employee to substantially
fulfill his material duties as an employee, provided, however, that the Employee
shall not be deemed to have intentionally failed, neglected or refused to
substantially fulfill his material duties as an employee if such failure,
neglect or refusal is directly caused by the Permanent Incapacity of the
Employee; (ii) a material breach of any fiduciary duty (except where such breach
is caused by the Permanent Incapacity of the Employee) or other material
dishonesty by the Employee with respect to the Company or any affiliate thereof
resulting in actual material harm to the Company or such affiliate; or (iii) the
conviction of the Employee of a fraudulent act or felony. Notwithstanding the
terms of Section 3(b), no termination for Cause under item (i) above shall be
effective unless the Company gives the Employee 30 days advance written notice
of its intention to terminate the Employee's employment and a detailed
description of the reasons for the termination and the Employee fails to cure
the alleged breach.
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(d) For purposes hereof, "Permanent Incapacity" shall mean the
incapacitation of the Employee so as to preclude performance of the duties of
his employment hereunder, with or without reasonable accommodation, for an
aggregate period of four months in any twelve month period.
(e) In the event that the Company terminates the Employee's
employment hereunder without Cause, or if the Employee resigns for Good Reason
(as defined below) the Employee shall be entitled to payment from the Company of
severance (without any requirement of or reduction for mitigation by the
Employee) consisting of the continuation for a period of one year after such
termination of employment of all salary, bonus and benefit payments and coverage
which would have been payable to the Employee during such period had his
employment not been terminated. In such event, the vesting for the Employee's
stock options shall accelerate with respect to any options that would have
vested within six months after the date of employment termination plus one-half
of the balance of the unvested options.
(f) For purposes of this Agreement, the term "Good Reason" means:
(i) a material breach by the Company of any provision of this Agreement; or (ii)
any reduction of the Employee's compensation or duties or change in the
Employee's reporting lines; or (iii) any change by the Company of the Employee's
work location outside the Work Area or the San Francisco/Silicon Valley area in
the event of a relocation of the Company's headquarters to that area; or (iv)
the failure of the Company to obtain from its successors the express assumption
and agreement required under Section 7 of this Agreement.
4. NONCOMPETITION AND NONINTERVENTION.
(a) Except as described in Exhibit A hereto or as otherwise agreed
by the Company, while in the employ of the Company, the Employee shall not,
directly or indirectly, alone or as a member of any partnership or other
business organization, or as a partner, officer, director, employee,
stockholder, consultant or agent of any other corporation, partnership or other
business organization, be actively engaged in or concerned with any other duties
or pursuits which materially interfere with the performance of his duties as an
Employee of the Company or which, even if noninterfering, may be contrary to the
best interests of the Employer Group.
(b) The Employee further agrees that he shall, during the Initial
Term and any Successive Term and, if the Employee's employment hereunder
terminates for Cause, Permanent Incapacity or as a result of a termination by
the Employee without Good Reason, for a period of one year after the termination
or cessation of the Employee's employment with the Company, directly or
indirectly, alone or as a member of any partnership or other business
organization, or as a partner, officer, director, employee, stockholder,
consultant or agent of any corporation, partnership or business organization
(excluding, in all cases, the provision of third party investment banking
services), engage in any business activity which is directly in competition with
the services being
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marketed, provided or sold by the Employer Group. During the Term and for a
period of one year after the termination or cessation of the Employee's
employment with the Company for any reason (including termination of employment
by the Company without Cause or termination of employment by the Employee for
Good Reason) the Employee shall not, directly or indirectly, alone or as a
member of any partnership or other business organization, or as a partner,
officer, director, employee, stockholder, consultant or agent of any
corporation, partnership or business organization request or cause any customer
of the Employer Group to cancel or terminate any business relationship with the
Employer Group.
(c) Notwithstanding the foregoing, the foregoing restrictions
shall not be construed to prohibit the ownership by the Employee of less than
three percent of any class of securities of any corporation which is engaged in
any of the foregoing businesses and which has a class of securities registered
pursuant to the Securities Exchange Act of 1934, provided that such ownership
represents a passive investment and that neither the Employee nor any group of
persons including the Employee directly or indirectly manages or exercises
control of any such corporation, guarantees any of its financial obligations or
otherwise takes any part in its business, other than by exercising their rights
as a shareholder.
5. CONFIDENTIAL INFORMATION.
(a) The Employee will not at any time, whether during or after the
termination or cessation of his employment, reveal to any person, association or
company any of the trade secrets or confidential information concerning the
organization, business or finances of the Employer Group so far as they have
come or may come to his knowledge, except as the Employee reasonably believes
may be required in the ordinary course of performing his duties as an employee
of the Company, except as may be in the public domain through no fault of the
Employee, or except as may be required by court order or other legal proceeding,
and the Employee shall keep secret all matters entrusted to him and shall not
use or attempt to use any such information in any manner which may injure or
cause loss or is calculated to injure or cause loss whether directly or
indirectly to the Employer Group.
(b) The Employee agrees that during his employment he shall not
make, use or permit to be used any notes, memoranda, drawings, specifications,
programs, data or other materials of any nature relating to any matter within
the scope of the business of the Employer Group (except for documents relating
to the compensation, benefits or evaluation of the performance of the Employee)
or concerning any of their dealings or affairs otherwise than for the benefit of
the Employer Group or except as may be required by court order or other legal
proceeding. The Employee shall not, after the termination or cessation of his
employment, use or permit to be used any such notes, memoranda, drawings,
specifications, programs, data or other materials, it being agreed that any of
the foregoing shall be and remain the sole and exclusive property of the
Employer
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Group and that immediately upon the termination or cessation of his employment
the Employee shall deliver all of the foregoing, and all copies thereof, to the
Company, at its main office.
6. INTELLECTUAL PROPERTY ASSIGNMENT.
The Employee agrees to assign and transfer to the Company or its
designee, without any separate remuneration or compensation, his entire right,
title and interest in and to all Inventions and Works in the Field (as
hereinafter defined), together with all United States and foreign rights with
respect thereto, and at the Company's expenses to execute and deliver all
appropriate patent and copyright applications for securing United States and
foreign patents and copyrights on such Inventions and Works, and to perform all
lawful acts, including giving testimony, and to execute and deliver all such
instruments, that may be necessary or proper to vest all such Inventions and
Works in the Field and patents and copyrights with respect thereto in the
Company, and to assist the Company in the prosecution or defense of any
interference which may be declared involving any said patent applications or
patents or copyright applications or copyrights. For the purposes of this
Agreement, the words "Inventions and Works" shall include any discovery,
process, design, development, improvement, application, technique, program or
invention, whether practice or not, conceived or made by the Employee,
individually or jointly with others (whether on or off the Company's premises or
during or after normal working hours), while in the employ of the Company,
whether patentable or not, provided, however, that no discovery, process,
design, development, improvement, application, technique, program or invention
reduced to practice or conceived by the Employee off the Company's premises and
after normal working hours shall be deemed to be included in the term
"Inventions and Works" unless directly or indirectly related to the business
then being conducted by the Company or any business which the Employer Group is
then actively exploring (collectively, the "Field").
7. BINDING EFFECT.
This Agreement shall inure to the benefit of and shall be binding
upon the parties hereto and the Company's successors or assigns (whether
resulting from any reorganization, consolidation or merger of the Company or any
business to which all or substantially all of the assets of the Company are
sold) and the Employee's heirs, executors and legal representatives. The Company
shall require any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all of the
business or assets of the Company, by agreement in form and substance reasonably
satisfactory to the Employee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place.
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8. ENTIRE AGREEMENT.
This Agreement contains the entire agreement and understanding of
the parties with respect to the subject matter hereof, supersedes all prior
agreements and understandings with respect thereto and cannot be modified,
amended, waived or terminated, in whole or in part, except in writing signed by
the party to be charged.
9. RIGHT TO INJUNCTION.
The Employee acknowledges and agrees that the services rendered
and to be rendered to the Company by him are of a specialized and unique
character and that irreparable and immediate damage will result to the Company
if the Employee fails, refuses or neglects to perform his agreements and
obligations hereunder. In the event of such a failure, refusal or neglect by the
Employee, the Company shall be entitled to injunctive relief or any other legal
or equitable remedies including the recovery, by appropriate action, of the
amount of the actual damage caused by the Company by any such failure, refusal
or neglect by the Employee. The remedies provided in this Agreement shall be
deemed cumulative and the exercise of one shall not preclude the exercise of any
other remedy at law or in equity for the same event or any other event.
10. MISCELLANEOUS.
(a) Amendments. No amendment, modification or waiver of any of the
terms of this Agreement shall be valid unless made in writing and signed by the
Employee and the Company.
(b) Successors in Interest. All provisions of this Agreement shall
survive the termination or cessation of the Employee's employment with the
Company and shall be binding upon and inure to the benefit of and be enforceable
by and against the respective heirs, executors, administrators, personal
representatives, permitted successors and assigns of either of the parties to
this Agreement.
(c) Withholding. The Company may withhold from any payments to be
made to or on behalf of the Employee under this Agreement such federal, state
and local taxes as the Company is required to withhold pursuant to any law or
governmental rule or regulation.
(d) Waiver. The waiver by the Company of a breach of this
Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent breach by the Employee.
(e) Severability. If any provision of this Agreement shall
contravene any law or any particular state where the Employee shall perform
services for the Company, then this Agreement
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shall be first construed to be limited in scope and duration so as to be
enforceable in that state, and if still unenforceable, shall then be construed
as if such provision is not contained herein.
(f) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or if received
by facsimile transmission, overnight delivery service or by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice; provided, however, that notices of a change of address
shall be effective only upon receipt thereof):
(a) if to the Company:
Infinient Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Telecopier No.: 000-000-0000
(b) if to Employee:
Mr. Xxxx Xxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Telecopier No.: 000-000-0000
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopier No.: 000-000-0000
(g) Governing Law. This Agreement shall be governed by the
internal substantive laws of the State of New Jersey (without regard to conflict
of laws principles thereof) as to all matters, including but not limited to
matters of validity, construction, effect, performance and remedies.
(h) Suits in New Jersey. The parties agree that any action or
proceeding relating in any way to this Agreement shall be brought and enforced
in the state or federal courts located in
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Middlesex County, New Jersey and the parties hereby waive any objection to
jurisdiction or venue in any such proceeding commenced in or removed to such
courts.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which as so executed and delivered shall be deemed an
original but all of which together shall constitute one and the same instrument,
and it shall not be necessary in making proof of this Agreement as to any party
hereto to produce or account for more than one such counterpart executed and
delivered by such party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
INFINIENT INC.
By: /s/ Xxx Xxxxxx
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Xxx Xxxxxx
/s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
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