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EXHIBIT 10.9
INTERVOICE, INC.
AMENDED AND EXTENDED EMPLOYMENT AGREEMENT
This Amended and Extended Employment Agreement (this "Agreement") is
dated as of June 21, 1996 effective as of March 1, 1996, between InterVoice,
Inc., a Texas corporation with its principal executive offices at 00000
Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000 (the "Company"), and Xxxxxxx X. Xxxxxx
(The "Employee").
W I T N E S S E T H:
WHEREAS, the Employee is presently employed by the Company pursuant to
that certain Employment Agreement dated August 31, 1994 (the "Old Agreement"),
between the Company and the Employee; and
WHEREAS, the Employee and the Company desire to amend the terms and
conditions of the Old Agreement to, among other things, extend the term of the
Employee's employment by the Company, increase the Employee's base salary,
further define the Employee's bonus opportunity and grant additional stock
options to the Employee.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and subject to the
terms and conditions hereinafter set forth, the parties hereto agree as follows:
1. DEFINITIONS.
In addition to the words and terms elsewhere defined in this Agreement,
the following words and terms as used herein shall have the following meanings,
unless the context or use indicates a different meaning:
"Annualized Compensation Amount" means an amount equal to the
annualized salary payable and bonuses accrued or payable to the Employee
pursuant to Section 4 of this Agreement during the most recent completed fiscal
year of the Company.
"Applicable EPS Bonus Percentage" means, with respect to the applicable
fiscal year, the percentage set forth in the right hand column below as
determined with reference to the increase or decrease in the Company's earnings
per share between such fiscal year and the immediately preceding fiscal year:
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Increase or Decrease in Earnings per
Share in Applicable Fiscal Year
Compared to Immediately Preceding Applicable EPS
Fiscal Year Bonus Percentage
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40% or more increase 100%
35% through 39% increase 80%
25% through 34% increase 60%
10% through 24% increase 40%
0% through 9% increase 20%
1% through 10% decrease 10%
11% or more decrease 0%
"Applicable Revenue Bonus Percentage" means, with respect to the
applicable fiscal year, the percentage set forth in the right hand column below
as determined with reference to the increase or decrease in the Company's total
revenues between such fiscal year and the immediately preceding fiscal year:
Increase or Decrease in Revenues in
Applicable Fiscal Year Compared to Applicable Revenue
Immediately Preceding Fiscal Year Bonus Percentage
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40% or more increase 100%
35% through 39% increase 80%
25% through 34% increase 60%
10% through 24% increase 40%
0% through 9% increase 20%
Decrease in revenues 0%
"Cause" means (a) any act by the Employee that is materially adverse to
the best interests of the Company and which, if the subject of a criminal
proceeding, could result in a criminal conviction for a felony or (b) the
willful failure by the Employee to substantially perform his duties hereunder,
which duties are within the control of the Employee (other than the failure
resulting from the Employee's incapacity due to physical or mental illness),
provided, however, that the Employee shall not be deemed to be terminated for
Cause under this subsection (b) unless and until (1) after the Employee
receives written notice from the Company specifying with reasonable
particularity the actions of Employee which constitute a violation of this
subsection (b) and (2) within a period of 30 days after receipt of such notice
(and during which the violation is within the control of the Employee),
Employee fails to reasonably and prospectively cure such violation.
"Common Stock" means the Company's common stock, no par value per share.
An "Event of Default" means the occurrence of any of the following
events prior to the Triggering Date, unless remedied or otherwise cured within
30 days after the Company's receipt of written notice from the Employee of such
event, (a) a breach by the Company of any of its
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express or implied obligations under this Agreement, (b) without his prior
concurrence, the Employee is assigned any duties or responsibilities that are
inconsistent with his position, duties, responsibilities or status at the
commencement of the term of this Agreement, or his reporting responsibilities
or titles in effect at such time are changed, (c) the Employee's base
compensation is reduced or any other failure by the Company to comply with
Section 4, or (d) any change in any employee benefit plans or arrangements in
effect on the date hereof in which the Employee participates (including without
limitation any pension and retirement plan, savings and profit sharing plan,
stock ownership or purchase plan, stock option plan, or life, medical or
disability insurance plan), which would adversely affect the Employee's rights
or benefits thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Company and does not result in a
proportionately greater reduction in the rights of or benefits to the Employee
as compared to any other executive officer of the Company.
"Good Reason" means the occurrence of a Triggering Event (as defined
below) and (a) a breach by the Company of any of its express or implied
obligations under this Agreement (b) without his prior concurrence, the Employee
is assigned any duties or responsibilities that are inconsistent with his
position, duties, responsibilities or status at the commencement of the term
of this Agreement, or his reporting responsibilities or titles in effect at
such time are changed, (c) the Employee's base compensation is reduced or any
other failure by the Company to comply with Section 4, (d) any change in any
employee benefit plans or arrangements in effect on the date hereof in which
the Employee participates (including without limitation any pension and
retirement plan, savings and profit sharing plan, stock ownership or purchase
plan, stock option plan, or life, medical or disability insurance plan), which
would adversely affect the Employee's rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to all executive officers of the
Company and does not result in a proportionately greater reduction in the rights
of or benefits to the Employee as compared to any other executive officer of the
Company, or (e) the shareholders of the Company shall fail to elect the Employee
as a member of the Board of Directors of the Company.
"Triggering Date" means the date of a Triggering Event.
A "Triggering Event" shall be deemed to have occurred if (a) any person
or group (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly, of securities of the Company representing more than 20% of the
combined voting power of the Company's then outstanding securities, or (b) at
any annual or special meeting of shareholders of the Company one or more
directors are elected who were not nominated by management of the Company to
serve on the Board of Directors of the Company, or (c) the Company is merged or
consolidated with another corporation and as a result of such merger or
consolidation less than 51% of the outstanding voting securities of the
surviving or resulting corporation are owned in the aggregate by the former
shareholders of the Company, other than by a party to such merger or
consolidation or affiliates (within the meaning of the Exchange Act) of any
party to such merger or consolidation, as the same existed immediately prior to
such merger or consolidation, or (d) the Company sells all or substantially all
of its assets to another corporation which is not a wholly-owned subsidiary of
the Company.
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2. EMPLOYMENT.
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The Company hereby employs the Employee and the Employee hereby accepts
employment on the terms and conditions set forth herein.
3. TERM.
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The initial term of this Agreement shall be from March 1, 1996 until
February 28, 1999 unless sooner terminated in accordance with the provisions
herein regarding termination. Subject to earlier termination as provided
herein, the initial term of this Agreement shall be automatically extended for
one (1) year from March 1, 1999, unless either the Employee or the Company
gives written notice to the other six months or more prior to February 28, 1999.
4. COMPENSATION.
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(a) Base Salary. For all services rendered by the Employee under
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this Agreement, the Company shall pay the Employee a base salary of $250,000
per year. Such salary shall be payable in equal monthly installments in
accordance with the customary payroll policies of the Company in effect at the
time such payment is made, or as otherwise mutually agreed upon; provided,
however, the Company will promptly pay the Employee in a lump sum an amount
equal to the difference between (i) the aggregate base salary that is payable
to the Employee under this Agreement for the period March 1, 1996, through June
30, 1996, inclusive, and (ii) the aggregate base salary actually paid to
Employee under the Old Agreement for the period March 1, 1996 through June 30,
1996, inclusive. On or about the anniversary date of this Agreement each year
during the term hereof, the Compensation Committee of the Company shall review
Employee's performance for the prior year and make such adjustments in base
salary from time to time at their discretion as the Employee and the Company
may agree.
(b) Annual Bonus. Effective for the Company's fiscal year ending
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February 29, 1997 and continuing with respect to each subsequent fiscal year
thereafter during the term of this Agreement, the Company will pay Employee an
annual bonus equal to the sum of (a) the mathematical product of Employee's
base salary pursuant to Subsection 4(a) for such fiscal year multiplied by the
Applicable Revenue Bonus Percentage and (b) the mathematical product of the
Employee's base salary pursuant to Subsection 4(a) for such fiscal year
multiplied by the Applicable EPS Bonus Percentage. Employee's bonus pursuant to
this Subsection 4(b) shall be earned as of the end of the Company's fiscal year
and payable within five days after the Company's receipt of its audited annual
financial statements. The formula set forth herein for determining annual
bonuses shall be adjusted from time to time when and if there occur stock
splits or other changes in capital structure which result in an increase or
decrease in outstanding capital stock of more than 25%.
(c) Bonus. In addition to the Employee's annual base salary and
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other benefits provided for in this Agreement, the Company may pay to the
Employee on an annual basis a discretionary bonus in an amount to be approved
by the Board of Directors of the Company; provided, however, in no event shall
the bonus payable hereunder, if any, exceed Employee's annual base salary
provided for in Section 4(a).
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(d) Benefits. The Employee shall be entitled to participate in or
receive benefits under any employee benefit plan or arrangement made available
by the Company in the future to its executive officers and key management
personnel, subject to and on a basis consistent with the terms, conditions and
overall administration of such plan or arrangement. Nothing paid to the
Employee under any plan or arrangement presently in effect or made available
in the future shall be deemed to be in lieu of the salary and bonuses payable
to the Employee pursuant to Subsections 4(a), (b) and (c).
(e) Stock Option. In consideration of the Employee's execution of
this Agreement, the Company has granted effective June 21, 1996 an option to
purchase 100,000 shares of the Company's Common Stock to the Employee pursuant
to the Company's 1990 Incentive Stock Option Plan. The exercise price for such
option will be the closing price for the Company's Common Stock on the Nasdaq
National Market on June 21, 1996. The grant of such option is subject to the
Company's shareholders approving, at the 1996 annual meeting, the proposed
amendment to increase the number of shares of Common Stock authorized for
issuance under the 1990 Incentive Stock Option Plan.
(f) Expenses. Upon receipt of itemized vouchers, expense account
reports, and supporting documents submitted to the Company in accordance with
the Company's procedures from time to time in effect, the Company shall
reimburse Employee for all reasonable and necessary travel, entertainment, and
other reasonable and necessary business expenses incurred ordinarily and
necessarily by Employee in connection with the performance of his duties
hereunder.
(g) Vacation. Employee shall be entitled to a minimum of 6 weeks
paid vacation during each twelve month period commencing on the effective date
of this Agreement.
5. POSITION, DUTIES, EXTENT OF SERVICES AND SITUS.
(a) Position and Duties. Employee shall serve as the President and
Chief Operating Officer of the Company, accountable only to the Chairman of the
Board and Chief Executive Officer (the "Chairman") of the Company and, subject
to the authority of the Chairman, shall have supervision and control over, and
responsibility for, the general management and operation of the Company and
shall have such other powers and duties as may from time to time be prescribed
by the Chairman and provided that such duties are reasonable and customary for
a President and Chief Operating Officer of a public company.
(b) Extent of Services and Situs. The Employee shall devote
substantially all of his business time, attention, and energy to the business
and affairs of the Company and shall not during the term of his employment
under this Agreement engage in any other business activity which could
constitute a conflict of interest, whether or not such business activity is
pursued for gain, profit, or other pecuniary advantage. This shall not be
construed as preventing the Employee from managing his current investments or
investing his assets in such form or manner as will not require any services on
the part of the Employee in the operation and the affairs of the companies in
which such investments are made, subject to the provisions of Sections 6 and
27. The Employee shall not be required to change the principal place of his
employment to a
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location which is more than 15 miles further away from his principal residence
than such principal place of employment at the time of the execution of this
Agreement.
6. COVENANT NOT TO COMPETE.
(a) The Employee acknowledges that (i) as a result of his position
and tenure with the Company he has received and will continue to receive
specialized and unique training and knowledge concerning the Company, its
business, its customers and the industry in which it competes, (ii) the
Company's business, in large part, depends upon its exclusive possession and
use of the Propriety Information (as defined in Section 27), (iii) the Company
is entitled to protection against the unauthorized disclosure or use by
Employee of the Proprietary Information or the training and knowledge received
by the Employee and (iv) he has received in this Agreement good and valuable
consideration for the covenants he is making in this Section 6 and in Section
27. The Company and the Employee acknowledge and agree that the covenants
contained in this Section 6 and in Section 27 are reasonably necessary for the
protection of the Company are reasonably limited with respect to the activities
they prohibit, their duration, their geographical scope and their effects on
the Employee and the public. The parties acknowledge that the purpose and
effect of the covenants are to protect the Company from unfair competition by
the Employee.
(b) Except as provided in the last sentence of this Section 6(b),
during the period in which the Employee renders services to the Company under
this Agreement and for eighteen (18) months thereafter, the Employee shall not,
without the written consent of the Company, own, manage, operate, control,
serve as an officer, director, employee, partner or consultant of or be
connected in any way with or have any interest in any corporation, partnership,
proprietorship or other entity which carries on business activities in
competition with the Company's activities in any state of the United States or
in any foreign country in which the Company has sold or installed its products
or systems or has definitive plans to sell or install its products at any time
prior to or at the time of the date of termination of the Employee's
employment; except that the Employee may own up to 1% of the shares of any
publicly-owned corporation, provided that none of his other relationships with
such corporation violates such covenant. Notwithstanding the foregoing, the
provisions of this Section 6 shall not apply if the Employee's employment with
the Company under this Agreement is terminated (i) by the Company, unless the
Employee is terminated in accordance with Section 7 or for Cause in
accordance with Subsection 9.1(a) or 9.2(a), or (ii) at the election of the
Employee prior to the Triggering Date after the occurrence of an Event of
Default which has not been waived in writing or on or after the Triggering Date
for Good Reason.
(c) The Company and the Employee hereby agree that in the event that
the noncompetition covenants contained herein should be held by any court or
other constituted legal authority of competent jurisdiction to be effective in
any particular area or jurisdiction only if said covenants are modified to
limit their duration, geographical area or scope, then the parties hereto will
consider Section 6 to be amended and modified with respect to that particular
area or jurisdiction so as to comply with the order of any such court or other
constituted legal authority and, as to all other jurisdictions or political
subdivisions thereof, the noncompetition covenants contained herein will remain
in full force and effect as originally written. The Company and the Employee
further agree that in the event that the noncompetition covenants
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contained herein should be held by any court or other constituted legal
authority of competent jurisdiction to be void or otherwise unenforceable in
any particular area or jurisdiction notwithstanding the operation of this
Section 6(c), then the parties hereto will consider this Section 6 to be
amended and modified so as to eliminate therefrom that particular area or
jurisdiction as to which such noncompetition covenants are so held void or
otherwise unenforceable, and, as to all other areas and jurisdictions covered
by the noncompetition covenants, the terms and provisions hereof shall remain
in full force and effect as originally written.
(d) Employee recognizes and acknowledges that the Company would
suffer irreparable harm and substantial loss if Employee violated any of the
terms and provisions of this Section 6 or Section 27 and that the actual
damages which might be sustained by the Company as the result of any breach of
this Section 6 or Section 27 would be difficult to ascertain. Employee agrees,
at the election of the Company and in addition to, and not in lieu of, the
Company's right to terminate Employee's employment and to seek all other
remedies and damages which the Company may have at law and/or equity for such
breach, that the Company shall be entitled to an injunction restraining
Employee from breaching any of the terms of provisions of this Section 6 or
Section 27.
7. COMPENSATION IN THE EVENT OF DISABILITY.
(a) Disability. If the Employee becomes disabled during the term
of this Agreement the Company shall cause to be paid to the Employee an amount
equal to his base salary in effect at the time of disability under Subsection
4(a), for the shorter of the duration of the disability or the remainder of the
term of this Agreement and, subject to the provisions of Section 22 and 25,
with no liability on its part for further payments to the Employee during the
duration of the disability. Subject to Subsection 7(b) below, full
compensation shall be reinstituted upon his return to employment and resumption
of his duties. For purposes of this Subsection 7(a) the Employee shall be
deemed "disabled" when he is unable, for a period of 90 consecutive days, to
perform his normal duties of employment due to bodily injury or disease or any
other physical or mental disability.
(b) Complete Disability. The Company shall have the right to
terminate the Employee's employment under this Agreement prior to the
expiration of the term upon the "Complete Disability" of the Employee as
hereinafter defined (provided, however, that the obligations of the Company
under Subsection 7(a) shall not terminate). The term "Complete Disability" as
used in this Subsection 7(b) shall mean (i) the total inability of the
Employee, due to bodily injury or disease or any other physical or mental
incapacity, to perform the services provided for hereunder for a period of 120
days, in the aggregate, within any given period of 180 consecutive days during
the term of this Agreement, and (ii) where such inability will, in the opinion
of a qualified physician (reasonably acceptable to Employee), be permanent and
continuous during the remainder of his life.
8. COMPENSATION IN THE EVENT OF DEATH.
If the Employee dies during the term of his employment, the Company
shall pay to such person as the Employee shall designate in a notice filed with
the Company, or, if no such person
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shall be designated, to his estate as a death benefit, his base salary in
effect at the time of his death pursuant to Subsection 4(a), in equal
semi-monthly installments on the first and fifteenth day of each month
immediately succeeding his death, for a period of months (not exceeding 12)
determined by multiplying the number of complete 12-month periods of employment
of the Employee by the Company (whether pursuant to an employment agreement or
not) by two, in addition to any payments the Employee's spouse, beneficiaries,
or estate may be entitled to receive pursuant to any pension or employee
benefit plan or life insurance policy maintained by the Company, and, except
for any obligations of the Company under Sections 22 and 25, all other
obligations of the Company hereunder shall cease at the time of the Employee's
death.
9. TERMINATION.
9.1 Termination Prior to the Triggering Date. (a) Upon at least 30
days' prior written notice to the Employee and prior to the Triggering Date,
the Company may terminate the Employee's employment with the Company under this
Agreement only for Cause or in accordance with Section 7 and, subject to the
provisions of Sections 7, 22 and 25, with no liability on its part for further
payments to the Employee. The Company may effect a termination for Cause
pursuant to this Subsection 9.1(a) only by the affirmative vote of a majority
of the members of the Board of Directors of the Company. In voting upon such
termination for Cause, if the Employee is also a member of the Board of
Directors of the Company, then he may not vote on, and will not be considered
present for any purpose with respect to, a matter presented to the Board of
Directors of the Company pursuant to this Subsection 9.1(a).
(b) Prior to the Triggering Date, the Employee may terminate his
employment with the Company under this Agreement by giving at least 90 days'
prior written notice of his desire to terminate employment to the Board of
Directors of the Company. If the Employee's employment with the Company under
this Agreement is terminated pursuant to this Subsection 9.1(b), the Employee
will continue to accrue and receive his base salary in effect at the time
pursuant to Subsection 4(a) through the date of termination with no liability
on the part of the Company for further payments to the Employee, subject to the
provisions of Sections 22 and 25.
(c) Prior to the Triggering Date, if the Employee's employment with
the Company is terminated by the Company without Cause or if the Employee
terminates his employment with the Company following the occurrence of an Event
of Default which has not been waived in writing by the Employee, the Employee
will continue to accrue and receive his base salary in effect at the time
pursuant to Subsection 4(a) through the date of termination and will be
entitled to receive the benefits provided for under Subsection 10.1 (unless
the Employee's employment is terminated in accordance with Section 7) with no
liability on the part of the Company for further payments to the Employee,
subject to the provisions of Sections 7, 22 and 25.
9.2 Termination On or After the Triggering Date. (a) Upon at least
30 days' prior written notice to the Employee and on or after the Triggering
Date, the Company may terminate the Employee's employment with the Company
under this Agreement only for Cause or in accordance with Section 7 and,
subject to the provisions of Sections 7, 22 and 25, with no liability on its
part for further payments to the Employee. The Company may effect a
termination for Cause pursuant to this Subsection 9.2(a) only by the
affirmative vote of two-
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thirds of the members of the Board of Directors of the Company. In voting upon
such termination for Cause, if the Employee is also a member of the Board of
Directors of the Company, then he may not vote on, and will not be considered
present for any purpose with respect to, a matter presented to the Board of
Directors of the Company pursuant to this Subsection 9.2(a).
(b) On or after the Triggering Date, if the Employee's employment
with the Company is terminated by the Company without Cause or if the Employee
terminates his employment with the Company for Good Reason, the Employee will
continue to accrue and receive his base salary in effect at the time pursuant
to Subsection 4(a) through the date of termination and will be entitled to
receive the payments and benefits provided for under Subsections 10.2 and 10.3
(unless the Employee's employment is terminated in accordance with Section 7)
with no liability on the part of the Company for further payments to the
Employee, subject to the provisions of Sections 7, 22 and 25.
(c) On or after the Triggering Date, the Employee may, in his sole
and absolute discretion and without any prior approval by the Board of
Directors of the Company, and upon twelve months' prior written notice to the
Board of Directors of the Company, terminate his employment with the Company
under this Agreement for any reason whatsoever. If the Employee's employment
with the Company under this Agreement is terminated pursuant to this Subsection
9.2(c), the Employee will continue to accrue and receive his base salary in
effect at the time pursuant to Subsection 4(a) through the date of termination
and will be entitled to receive the benefits provided for under Subsections 10.2
and 10.3 with no liability on the part of the Company for further payments to
the Employee, subject to the provisions of Sections 22 and 25.
10. COMPENSATION AFTER CERTAIN TERMINATIONS.
10.1 Remaining Compensation. If the Employee's employment with the
Company is terminated (whether such termination is by the Employee or by the
Company) at any time prior to the Triggering Date for any reason other than (a)
termination by the Company for Cause in accordance with Subsection 9.1(a); (b)
termination by the Company in accordance with Section 7; (c) the Employee's
death; or (d) termination at the election of the Employee pursuant to
Subsection 9.1(b) then, within five days after the date of such termination,
(i) the Remaining Compensation (as herein defined) which would have been paid
to the Employee during the remainder of the term of this Agreement if
termination had not occurred shall become due and payable and shall be paid to
the Employee in a single lump sum in cash, and (ii) all stock options granted
to Employee pursuant to Subsection 4(e) hereof which are not then exercisable
shall, notwithstanding the provisions or any other agreement, become
immediately exercisable and shall remain exercisable until they are exercised
or until they otherwise would expire. For purposes of this Subsection 10.1,
the "Remaining Compensation" shall mean the annual base salary payable to the
employee pursuant to Subsection 4(a) at the time of termination plus an amount
representing the value of all employee benefits including, without limitation,
any unearned annual bonuses described in Subsection 4(b), discretionary bonuses
and incentive compensation under plans then in effect. For these purposes, the
value of any unearned annual bonuses and all of such other employee benefits
shall be deemed to be equal to 12 months base
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salary payable to the Employee pursuant to Subsection 4(a) at the time his
employment is terminated.
10.2 Post Triggering Date Severance Payment. If the Employee's
employment with the Company is terminated (whether such termination is by the
Employee or by the Company) at any time on or within three years after the
Triggering Date for any reason other than (a) termination by the Company for
Cause in accordance with Subsection 9.2(a) or (b) termination by the Company in
accordance with Section 7 or (c) the Employee's death or (d) termination at the
election of the Employee other than termination for Good Reason without
compliance with the retirements of Section 9.2(c), then, within five days
after the date of such termination, the Company shall pay the Employee a lump
sum amount in cash equal to 2.99 times the Annualized Compensation Amount.
10.3 Gross-Up Payment. In the event that (i) the Employee becomes
entitled to the payments provided under Section 10.2 of this Agreement (the
"Change in Control Payments") and any of the Change in Control Payments will be
subject to the tax (the "Excise Tax") imposed by Section 4999 of the Internal
Revenue of 1986, as amended (the "Code"), or any successor provision, or (ii)
any payments or benefits received or to be received by the Employee pursuant to
the terms of any other plan, arrangement or agreement (the "Benefit Payments")
will be subject to the Excise Tax, the Company shall pay to the Employee an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Employee, after deduction of any Excise Tax on the Change in Control
Payments and the Benefit Payments, and any federal, state and local income tax
and Excise Tax upon the payment provided for by this Section 10.3, shall be
equal to the Change in Control Payments and the Benefit Payments, provided,
however, that in determining the amount of the Gross-Up Payment, any Excise Tax
on the Change in Control Payments and the Benefit Payments shall be determined
using a rate no higher than 20%. For purposes of determining whether any of
the Change in Control Payments or the Benefit Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) any payments or benefits
received or to be received by the Employee in connection with a change in
control of the Company or the Employee's termination of employment (whether
pursuant to the terms of this agreement or any other plan, arrangement or
agreement with the Company, any person whose actions result in change in
control or any person affiliated with the Company or such persons) shall be
treated as "parachute payments" within the meaning of Section 280G(b) (2) of
the Code, and all "excess parachute payments" within the meaning of Section
280G(b) (1) shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel selected by the Company's independent auditors and
acceptable to the Employee such payments or benefits (in whole or in part) do
not constitute parachute payments, or such excess payments (in whole or in
part) represent reasonable compensation for services actually rendered within
the meaning of Section 280G(b) (4) of the Code, (ii) the amount of the Change
in Control Payments and the Benefit Payments that shall be treated as subject
to the Excise Tax shall be equal to the lesser of (A) the total amount of the
Change in Control Payments and the Benefit Payments or (B) the amount of excess
parachute payments within the meaning of Sections 280G(b)(1) and (4) (after
applying clause (i), above) and (iii) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections 280G(d)(3) and (4) of
the Code. For purposes of determining the amount of the Gross-Up Payment,
the Employee shall be deemed to pay federal income taxes at the highest
marginal rate of federal
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income taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest marginal rates of taxation
in the state and locality of the Employee's residence on the date of
termination, net of the maximum reduction in federal income taxes which could
be obtained from deduction of such state and local taxes. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of the Employee's employment, the
Employee shall repay to the Company at that time that the amount of such
reduction in Excise Tax is finally determined the portion of the Gross-Up
Payment attributable to such reduction plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of the Employee's employment (including
by reason of any payment the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Company shall make an additional
gross-up payment to the Employee in respect of such excess (plus any interest
payable with respect to such excess) at the time that the amount of such
excess is finally determined.
11. MITIGATION.
The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment of
otherwise, nor shall the amount of any payment provided for in this Agreement
be reduced by any compensation earned by the Employee as the result of
employment by another employer after the date of termination of Employee's
employment with the Company, or otherwise.
12. ENTIRE AGREEMENT.
This Agreement embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes all
prior negotiations, agreements, and understandings relating to such subject
matter, and may be modified or amended only by an instrument in writing signed
by the parties hereto.
13. LAW TO GOVERN.
This Agreement is executed and delivered in the State of Texas and
shall be governed, construed and enforced in accordance with the laws of the
State of Texas.
14. ASSIGNMENT.
This Agreement is personal to the parties, and neither this Agreement
nor any interest herein may be assigned (other than by will or by the laws of
descent and distribution) without the prior written consent of the parties
hereto nor be subject to alienation, anticipation, sale, pledge, encumbrance,
execution, levy, or other legal process of any kind against the Employee or any
of his beneficiaries or any other person. Notwithstanding the foregoing, the
Company shall be permitted to assign this Agreement to any corporation or other
business entity succeeding to substantially all of the business and assets of
the Company by merger, consolidation, sale of assets, or otherwise, if the
Company obtains the assumption of this Agreement by such successor. Failure by
the Company to obtain such assumption prior to the
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effectiveness of such succession shall be a breach of this Agreement and shall
entitle the Employee to receive compensation from the Company under this
Agreement in the same amount and on the same terms as he would be entitled to
hereunder if he had voluntarily terminated his employment after the Triggering
Date, and, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Triggering Date.
15. BINDING AGREEMENT.
Subject to the provisions of Section 14 of this Agreement, this
Agreement shall be binding upon and shall insure to the benefit of the Company
and the Employee and their respective representatives, successors, and assigns.
16. REFERENCES AND GENDER.
All references to "Sections" and "Subsections" contained herein are,
unless specifically indicated otherwise, references to sections and subsections
of this Agreement. Whenever herein the singular number is used, the same shall
include the plural where appropriate, and words of either gender shall include
the other gender where appropriate.
17. WAIVER.
No waiver of any right under this Agreement shall be deemed effective
unless the same is set forth in writing and signed by the party giving such
waiver, and no waiver of any right shall be deemed to be a waiver of any such
right in the future.
18. NOTICES.
Except as may be otherwise specifically provided in this Agreement, all
notices required or permitted hereunder shall be in writing and will be deemed
to be delivered when deposited in the United States mail, postage prepaid,
registered or certified mail, return receipt requested, addressed to the party
or parties at 00000 Xxxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx, 00000, or at such other
addresses as may have therefore been specified by written notice delivered in
accordance herewith.
19. OTHER INSTRUMENTS.
The parties hereto covenant and agree that they will execute such
other and further instruments and documents as are or may become necessary or
convenient to effectuate and carry out the terms of this Agreement.
20. HEADINGS.
The headings used in this Agreement are used for reference purposes
only and do not constitute substantive matter to be considered in construing the
terms of this Agreement.
21. INVALID PROVISION.
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Any clause, sentence, provision, section, subsection, or paragraph of
this Agreement held by a court of competent jurisdiction to be invalid,
illegal, or ineffective shall not impair, invalidate, or nullify the remainder
of this Agreement, but the effect thereof shall be confined to the clause,
sentence, provision, section, subsection, or paragraph so held to be invalid,
illegal or ineffective.
22. RIGHTS UNDER PLANS AND PROGRAMS.
Anything in this Agreement to the contrary notwithstanding, no
provision of this Agreement is intended, nor shall it be construed, to reduce
or in any way restrict any benefit to which the Employee may be entitled under
any other agreement, plan, arrangement, or program providing benefits for the
Employee.
23. MULTIPLE COPIES.
This Agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument. The terms of this Agreement
shall become binding upon each party from and after the time that he or it
executed a copy hereof. In like manner, from and after the time that any party
executes a consent or other document, such consent or other document shall be
binding upon such parties.
24. WITHHOLDING OF TAXES.
The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes as shall be required pursuant to any
law or government regulation or ruling.
25. LEGAL FEES AND EXPENSES.
The Company shall pay and be responsible for all legal fees and
expenses which the Employee may incur as result of the Company's failure to
perform under this Agreement or as a result of the Company or any successor
contesting the validity or enforceability of this Agreement.
26. SET OFF OR COUNTERCLAIM.
Except with respect to any claim against to debt or other obligation of
the Employee properly recorded on the books and records of the Company prior to
the Triggering Date, there shall be no right of set off or counterclaim
against, or delay in, any payment by the Company to the Employee or his
beneficiaries provided for in this Agreement in respect of any claim against or
debt or other obligation of the Employee, whether arising hereunder or
otherwise.
27. ASSIGNMENT PROTECTION AND CONFIDENTIALITY OF PROPRIETARY INFORMATION.
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Employee acknowledges and agrees that all items of the Company's
Proprietary Information constitute valuable, special and unique assets and trade
secrets of its business, which provide to the Company a competitive advantage
over others who do not have access thereto and access to which is essential to
the performance of Employee's duties hereunder. Employee shall not, during the
term of this Agreement or thereafter, use or disclose any Proprietary
Information that is not otherwise publicly available, in whole or in part, for
his benefit or for the benefit of any other person or party, except for the
Company. As used herein, "Proprietary Information" includes, but is not
limited to, customer lists and prices, whether current or prospective, product
designs or other product information, experimental developments and other
research and development information, testing process, marketing studies and
research activities, and any other trade secrets concerning the Company, its
shareholders, officers, directors, employees, business prospects, customers,
transactions, finances, affairs, opportunities, operations, properties or
assets. The Employee further agrees that all inventions, devices, compounds,
processes, formulas, techniques, improvements and modifications which he may
develop, in whole or in part, during the term of his employment or through or
with the facilities, equipment or resources of the Company shall be and remain
the sole and exclusive property of the Company. The Employee agrees to deliver
to the Company at any time the Company may request, all memoranda, notes,
plans, records, reports, and other documents (including copies thereof and all
embodiments thereof whether in computerized form or any other medium) relating
to the business or affairs of the Company or its subsidiaries which he may then
possess or have under his control. Employee shall maintain in good condition
all tangible and other forms of Proprietary Information in Employee's custody
or control until his obligations under the preceding sentence are satisfied.
Employee agrees to execute all documents and take such other actions as may be
required to comply with this Section.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
INTERVOICE, INC.
By: /s/ XXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxx X. Xxxxxxx
-------------------------------
Title: Chairman of the Board and
-------------------------------
Chief Executive Officer
-------------------------------
/s/ XXXXXXX X. XXXXXX
---------------------------------------------
Xxxxxxx X. Xxxxxx
---------------------------------------------
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