EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of December 31, 1996 (the "Effective Date"), by and
between RADIANT SYSTEMS, INC., a Georgia corporation (the "Company"), and H.
XXXXXX XXXX (the "Executive").
WHEREAS, the Company desires to employ the Executive and to assure itself
of the continued services of the Executive for the term of employment provided
for in this Agreement, and the Executive desires to be employed by the Company
for such period, upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. EMPLOYMENT AND DUTIES.
(a) General. The Company hereby employs the Executive, effective as of the
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Effective Date, and the Executive agrees upon the terms and conditions herein
set forth to serve, effective as of the Effective Date, as a Vice President of
the Company and as a Managing Director of the PrysmTech Division of the Company
(the "Division"). The Executive shall have responsibility for the
administration and management of the Division's Business (as defined in Section
5 of this Agreement); and all operations and affairs of the Division as well as
for marketing the Division's business and products and engaging in sales of the
Division's products, and shall perform such duties in a diligent, professional,
competent and reasonable manner. Without limiting the foregoing Executive's
duties and responsibilities shall include the duties and responsibilities listed
on EXHIBIT A attached hereto. The Company covenants and agrees that all
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activities and operations of the Company that fall within the scope of the
Business (as defined in Section 5 of this Agreement) shall be operated as part
of the Division and accounted for separately by the Company as activities of the
Division, with the Executive having access to all books and records of the
Division as well as those books and records of the Company which relate to (i)
compensation of Employees (as hereinafter defined); (ii) the Company's various
lines of business; (iii) the basis for determining charges or costs directly
charged or allocated to the Division pursuant to EXHIBIT B attached hereto and
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(iv) all other information reasonably necessary to confirm compliance with the
terms and provisions of this Agreement. The Executive's place of employment
shall be within a twenty-five (25) mile radius of the Company's present office
located at Suite A, 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
(b) Exclusive Services. The Executive shall devote his full-time working
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hours to his duties hereunder and shall use his best efforts to promote and
serve the interests of the Division in a diligent, professional, competent and
reasonable manner; provided, however, that nothing herein shall prohibit the
Executive from devoting time to civic and community activities, or the
management of personal investments, so long as such activities do not interfere
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with the performance of his duties hereunder; and provided further, that the
Executive shall not, directly or indirectly, render services to any other person
or organization for which he receives compensation in excess of One Thousand and
No/100 Dollars ($1,000.00) per year without the consent of the Board.
2. TERM OF EMPLOYMENT.
The initial term of the Executive's employment under this Agreement shall
commence on the Effective Date and, if not sooner terminated as provided in
Section 4(b), shall end on December 31, 2000, except that, Executive's
employment shall automatically be extended for one additional twelve (12) month
period if the non-qualified stock options awarded pursuant to Section 3(c) of
this Agreement have not fully vested by their terms on or prior to December 31,
2000.
3. COMPENSATION AND OTHER BENEFITS.
Subject to the provisions of this Agreement, the Company shall pay and
provide the following compensation to the Executive as compensation for services
rendered hereunder:
(a) Base Salary. The Executive's salary in each calendar year (the
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"Salary") shall be the greater of: (a) an amount of salary equal to the sum of
the highest salary and guaranteed bonus paid to any other Employee for such
calendar year, or (b) One Hundred Thousand and No/100 Dollars ($100,000.00).
The Salary shall be payable in substantially equal installments at such
intervals (not less frequently than monthly) as may be determined by the Company
in accordance with its payroll practices as established, from time to time. The
Salary may be increased in such amounts and at such times as determined by the
Board in its sole discretion.
(b) Bonus. In addition to the Salary, the Executive shall be entitled to
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an annual bonus for each of the first four (4) calendar years of his employment,
payable within ninety (90) days following the completion of such calendar year,
equal to fifty percent (50%) of the "Bonus Pool" (as defined below) for such
calendar year subject to the qualifications set forth in Section 3(g) below.
For the purposes of this Section, the "Bonus Pool" in each year shall mean
the sum of (a) the first Fifty Thousand and No/100 Dollars ($50,000.00) of
Division Net Income in excess of the Division Base Earnings for the fiscal year
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set out below, plus (b) fifty percent (50%) of the excess of all Division Net
Income over the Division Base Plus Earnings for the fiscal year set out below:
Year Base Earnings Base Plus Earnings
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1997 $1,540,000 $1,590,000
1998 $1,694,000 $1,744,000
1999 $1,863,000 $1,913,000
2000 $2,050,000 $2,100,000
As an example, if Division Net Income in 1997 is One Million Five Hundred
Fifty Thousand and No/100 Dollars ($1,550,000.00), the Bonus Pool will be Ten
Thousand and No/100 Dollars ($10,000.00) and Executive's Bonus would be Five
Thousand and No/100 Dollars ($5,000.00). If Division Net Income in that year
was One Million Six Hundred Seventy Thousand and No/100 Dollars ($1,670,000.00),
the Bonus Pool would be the sum of (a) Fifty Thousand and No/100 Dollars
($50,000.00), plus (b) fifty percent (50%) of Eighty Thousand and No/100 Dollars
($80,000.00) (or Forty Thousand and No/100 Dollars ($40,000.00)) or a total of
Ninety Thousand and No/100 Dollars ($90,000.00) and Executive's Bonus will be
Forty-Five Thousand and No/100 Dollars ($45,000.00) (i.e., fifty percent (50%)
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of the Bonus Pool).
Division Net Income shall be determined as set on in EXHIBIT B.
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(c) Stock Options. Executive has received simultaneously with the
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execution of this Agreement qualified stock options for fifty-seven thousand one
hundred forty (57,140) shares of Company stock and non-qualified stock options
for eighty thousand three hundred sixty (80,360) shares of Company stock, all
issued under the Company's stock option plans on such terms as Executive and the
Company have set forth in the option contracts. The Company covenants and
agrees that, as soon as practicable following the Company's effectuation of a
public offering (a "Qualified IPO") of its common stock pursuant to an effective
registration statement under the federal Securities Act of 1933, as amended (the
"1933 Act"), and the Company's becoming (as a result thereof) a reporting
company under the terms of the federal Securities Exchange Act of 1934, as
amended, the Company will cause to be filed, and will for so long as any of the
options described in this subsection (c) remain outstanding and unexercised
maintain the effectiveness of, a registration statement on Form S-8 under the
1933 Act with respect to the Plan and the shares of common stock covered
thereby. The options for one hundred thirty-seven thousand five hundred
(137,500) shares awarded Executive pursuant to this Agreement shall fully vest
on the termination of his employment unless (i) Executive voluntarily terminates
his employment pursuant to Section 4(b)(v) or in violation of the terms of this
Agreement; (ii) Executive is terminated for cause pursuant to Section 4(b)(iii)
below; (iii) Executive's employment is terminated by reason of his death or (iv)
Executive's employment terminates due to expiration of this Agreement as
provided in Section 4(b)(vi) below. Notwithstanding the foregoing or any
provision in such option contracts to the contrary, the Company may voluntarily
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elect (the "Voluntary Acceleration"), by delivering written notice of such
election to the Executive, to treat all then remaining unvested options under
this Section 5(c) as fully vested as of the date of such notice.
Upon a Voluntary Acceleration or termination of Executive's employment
under this Agreement for any reason other than (i) termination for "cause," as
provided in Section 4(b)(iii) below; (ii) termination due to the death of
Executive; (iii) voluntary termination by Executive prior to the end of the term
hereof as provided in Section 4(b)(v) below or (iv) termination due to the
expiration, without renewal (excluding automatic renewal as provided in Section
2 above) of the term hereof as provided in Section 4(b)(vi) below, Executive
shall have the following rights (which shall survive the termination of
Executive's employment, if applicable) in respect of any of the options
described in the first sentence of this subsection (c) which are, or become, on
the date of such Voluntary Acceleration or termination of employment, as the
case may be, vested but unexercised ("Termination Shares"):
(A) Not less than two (2) business days prior to the date on which
Executive elects to exercise any such option, Executive may give written
notice to the Company (the "Option Notice") of Executive's intent to
exercise such option, specifying the number of shares as to which such
option will be exercised (the "Exercise Shares"), and may require that the
Company loan to the Executive, on the terms and conditions set forth in
this subparagraph (A), an amount (to be specified in such written notice)
(the "Loan Amount") up to the aggregate option-exercise price for the
Exercise Shares. Upon its receipt of an Option Notice, the Company shall
deliver to the Executive, not later than the date specified in the Option
Notice for exercise of the options, an amount in cash, or by certified or
cashiers check equal to the Loan Amount, provided that the Executive shall
simultaneously deliver to the Company: (1) an executed promissory note (a
"Shares Note"), in form and substance reasonably satisfactory to the
Company, in principal amount equal to the Loan Amount, bearing interest at
the rate of eight and one-half percent (8-1/2%) per annum, cumulative, but
not compounded, with any accrued interest thereunder payable monthly and
principal thereunder due and payable on the third (3rd) anniversary of the
date of such Shares Note, but with mandatory prepayments thereunder
required to be made upon, and from the Net Proceeds of, any sale by
Executive of any of the Exercise Shares; (2) an executed stock pledge
agreement (the "Shares Pledge Agreement"), in form and substance reasonably
satisfactory to the Company, pursuant to which Executive pledges to the
Company, as security for Executive's payment and performance of the Shares
Note, a first priority security interest in a number of shares (the
"Pledged Shares") of common stock of the Company determined by dividing the
principal amount of the Shares Note by the fair market value per share of
the common stock of the Company on the date of the Shares Note, provided
that the Exercise Shares need not be included among the Pledged Shares (and
to the extent that the number of shares of common stock of the Company,
other than the Exercise Shares, owned by the Executive is less than the
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number required for the Pledged Shares, Executive may satisfy the
requirement of this clause (2) by pledging all the shares of common stock
of the Company owned by Executive other than the Exercise Shares, and
covenanting to pledge supplementally any subsequently-acquired shares of
Company common stock, up to the aggregate required to equal the number
constituting the Pledged Shares, but excluding any shares which are
acquired pursuant to exercise of any of the options described in the first
sentence of this subsection (c) of Section 3); (3) a stock certificate or
certificates representing the Pledged Shares, as registered in the name of
the Executive, duly endorsed for transfer in blank by Executive or
accompanied by stock transfer powers duly endorsed in blank by Executive.
As used in this subsection (A), the term "Net Proceeds" shall mean, with
respect to any sale of Exercise Shares by the Executive, the gross proceeds
of sale of such shares, reduced by the amount of any applicable brokerage
commission actually paid in respect of such sale ("Applicable Commission"),
and further reduced by an amount determined by multiplying (x) the maximum
combined federal and State of Georgia individual income tax rates
applicable to long-term capital gains, by (y) an amount determined by
subtracting from gross proceeds of such sale both the amount of Applicable
Commission and the amount of option-exercise price paid by Executive upon
Executive's purchase of such Exercise Shares.
(B) With respect to any of the Termination Shares which were among the
fifty-seven thousand one hundred forty (57,140) shares covered by the tax-
qualified stock options described in the first sentence of this subsection
(c) and which, by virtue of acceleration of vesting upon Voluntary
Acceleration or termination of Executive's employment hereunder, as the
case may be, become ineligible for tax-qualified incentive stock option
treatment ("Disqualified Option Shares"), Executive may, at the time of his
exercise of the option covering such Disqualified Option Shares, require
the Company to pay Executive a compensatory cash bonus ("Compensatory
Bonus"), determined in accordance with this subsection (B), by giving
written notice to the Company specifying the number of Disqualified Option
Shares as to which Executive is exercising such options and the date of
such exercise. Not later than the tenth day following its receipt of such
notice, the Company shall deliver to the Executive, as a Compensatory
Bonus, a cash amount determined by multiplying the Gain Component (as
hereinafter defined) by the Rate Differential (as hereinafter defined), and
multiplying that product by the Gross-up Factor (as hereinafter defined).
As used herein: (1) the "Gain Component" shall mean the difference between
the fair market value, on the date of option exercise, of the Disqualified
Option Shares, and the aggregate option exercise price paid for such
Disqualified Option Shares; (2) the "Rate Differential" shall mean the
remainder of subtracting the maximum combined federal and State of Georgia
personal income tax rates applicable to long-term capital gains (expressed
as a decimal fraction) from the maximum combined federal and state personal
income tax rates applicable to ordinary income (expressed as a decimal
fraction), both as determined at the date of the exercise of the
Disqualified Option Shares and (3) the "Gross Up Factor" shall mean a
fraction, the numerator of which is one (1) and the denominator of which is
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remainder of subtracting from one hundred percent (100%) the percentage
(expressed as a decimal fraction) the maximum combined federal and State of
Georgia personal income tax rates applicable to ordinary income.
(d) Transition Loan. The Company agrees to loan to Executive, on the
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earlier to occur of (i) April 15, 1996 or (ii) the closing date of a Qualified
IPO, the sum of One Hundred Sixty-Five Thousand and No/100 Dollars ($165,000.00)
on such terms as are set out in the promissory note evidencing such loan.
(e) Life Insurance. The Company agrees to reimburse Executive promptly for
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the reasonable premium costs on a term life insurance policy insuring
Executive's life for Two Million Five Hundred Thousand and No/100 Dollars
($2,500,000.00) during the period from the date hereof to December 31, 2000.
(f) Other Benefits. Executive shall be eligible to participate in any
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pension, welfare, life insurance, health, disability and other fringe benefit
plan or program maintained by the Company which has any Employee as a
participant, and such participation shall be at a level of eligibility for
benefits no less favorable than that of any other Employee. In addition to
being eligible to participate in any such plans, the Executive shall be entitled
to paid vacation in an amount at least equal to the amount provided the most
favored Employee and an allowance for Executive's automobile of Six Hundred and
No/100 Dollars ($600.00) per month plus reimbursement for all insurance, taxes,
maintenance, repairs, oil, gasoline and any other expenses relating to
Executive's ownership, operation and use of such automobile, provided that such
allowance shall in no event be less than the amount of any similar allowance
paid by the Company to any other Employee.
(g) Compensation Qualifications. The provisions regarding Executive's non-
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contingent compensation are intended to insure that Executive's non-contingent
compensation for each calendar year during the period of his employment prior to
January 1, 2001, is equal to or greater than that of the non-contingent
compensation of any other Employee (whether salary, or guaranteed bonus, or
both).
Notwithstanding the provisions of Section 3(b) above, the Executive's
bonus compensation for any calendar year shall be limited to the greater of (a)
One Hundred Thousand and No/100 Dollars ($100,000.00) or (b) the maximum amount
of bonus compensation to which any other Employee would be entitled for such
calendar year if such Employee fulfilled all of the contingencies required to
earn contingent bonus compensation for such calendar year.
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Notwithstanding any provision in this Agreement to the contrary, in no
event shall the total contingent and non-contingent compensation available to
Executive pursuant to Section 3(a) and 3(b) above for any such calendar year
exceed in the aggregate the greater of: (a) Two Hundred Thousand and No/100
Dollars ($200,000.00), with at least the amount due Executive pursuant to
Section 3(a) above payable as Salary or (b) the maximum aggregate amount of non-
contingent compensation and potential contingent compensation available to any
other Employee for such calendar year.
(h) Definition of Employee. As used herein, the term "Employee" shall mean
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the following persons, whether serving as Company common law employees or not,
and their successors in office for the offices (or offices of a substantially
comparable nature) they hold at the date of this Agreement: Xxxx Xxxxxx
(President and Chief Operating Officer), Xxxx Xxxxxx (Executive Vice President
and Chief Financial Officer), Xxxx Xxxxx (Co-Chairman and chief Technical
Officer), and Xxxx Xxxxx (Co-Chairman and Chief Executive Officer); provided,
however Xxxx Xxxxxx shall not be deemed an Employee hereunder for calendar year
1997 only.
(i) Special Annual Election. Prior to the commencement of each calendar
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year during the term of this Agreement, the Company shall provide Executive with
detailed information concerning any stock options, stock grants, phantom stock
awards, or like arrangements which the Company proposes to offer during such
calendar year to any Employee, or any changes or modifications with respect to
any such options, grants or awards which the Company proposes to make for the
benefit of any Employee during such calendar year (such contingent and non-
contingent compensation and related options, grants or awards hereinafter
referred to collectively as the "Total Compensation Package"). Upon receipt of
such information relating to such Employee, and all other details of such
Employee's Total Compensation Package with respect to such calendar year,
Executive shall have ten (10) business days in which Executive may elect, by
delivery of written notice to the Company, to accept, with respect to such
calendar year, the Total Compensation Package available to any Employee with
respect to such calendar year in lieu of any amounts otherwise available to
Executive under Section 3(a) and 3(b) above with respect to such calendar year.
To the extent any of the options, grants or awards referenced in a Total
Compensation Package selected by Executive involve performance based vesting
contingencies, the Company shall modify such performance features on a
comparable, fair and equitable basis to reflect performance features that are
tied to the PrysmTech Division.
(j) Termination of Certain Rights. In addition, the Company and Executive
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agree that once (i) all of the options referenced in Section 3(c) of the
Agreement are fully vested (whether by Voluntary Acceleration as described in
Section 3(c) or otherwise) and (ii) a Qualified IPO has closed, the powers and
rights of Executive set forth in this EXHIBIT A, and the contingent and non-
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contingent compensation and privileges provided to Executive pursuant to
Sections 3(a), 3(b), 3(g), 3(h) and 3(i) shall thereupon become null and void,
in which event Company and Executive will negotiate in good faith a new
compensation arrangement which shall be comparable to compensation paid in the
marketplace for similarly situated executives who perform duties comparable to
the duties to be performed by Executive.
4. TERMINATION OF EMPLOYMENT.
(a) Payments. If, prior to December 31, 2000, the Executive's employment
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is terminated for any reason, including, without limitation, total and permanent
disability pursuant to Section 4(b)(ii) below, other than termination for cause
by the Company pursuant to Section 4(b)(iii) below, voluntary termination by the
Executive pursuant to Section 4(b)(v) below, or death of the Executive, then the
Company shall pay the Executive within thirty (30) days of the date of
Executive's termination (a) an amount equal to Sixteen Thousand Six Hundred
Sixty-Six and 66/100 Dollars ($16,666.66) for each full or partial calendar
month remaining in the period from the date of termination to December 31, 2000,
as termination pay and (b) Executive's salary and all benefits up to the date of
termination. The foregoing termination pay shall be in lieu of any partial year
Bonus to which Executive might otherwise be entitled; provided, however, in
calculating such termination pay, by reason of Executive's termination of
employment pursuant to Section 4(b)(ii) below, the Sixteen Thousand Six Hundred
Sixty-Six and 66/100 Dollar ($16,666.66) figure referenced above shall be
reduced by the monthly amount actually payable to Executive pursuant to any
Company maintained long-term disability insurance.
(b) Termination. The employment of the Executive hereunder shall be
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terminated by reason of any of the following:
(i) Death of the Executive; or
(ii) Total and permanent disability of the Executive upon thirty
(30) days written notice to Executive; or
(iii) Termination of the Executive's employment by the Company for
"cause" (as defined below), immediately upon written notice to
the Executive; or
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(iv) Termination of the Executive's employment by the Company without
cause or by the Company for any reason other than the reasons
listed in Subsections (i), (ii) or (iii) above of this Section
4(b);
(v) Termination of the Executive's employment voluntarily by the
Executive; or
(vi) Termination due to expiration, without renewal (excluding
automatic renewal pursuant to Section 2 above), of the term
hereof.
For purposes of this Section 4(b), "total and permanent disability" shall
be deemed to occur when the Executive is unable to engage in his regular duties,
or other duties supportive of the Company, for a continuous period of one
hundred and twenty (120) days, and a duly licensed medical doctor selected by
both parties shall certify such inability results from injury or sickness. In
the event that the parties are unable to agree upon a medical doctor, one shall
be selected as follows: each of the parties shall select one (1) medical doctor
and the two (2) doctors selected shall in turn select a third medical doctor who
shall determine whether Executive is permanently disabled for purposes of this
Agreement.
For purposes of this Section 4, "cause" shall mean any of the following:
(i) Deliberate and material injury or deliberate attempted material
injury to the Company;
(ii) the commission or perpetration by the Executive of any criminal
act upon the Company, or any fraud upon the Company;
(iii) Gross misconduct or gross negligence in connection with the
performance of the Executive's services to the Company which
has a material adverse effect on the business or operations of
the Company; or
(iv) Failure of Executive to correct any material violation by the
Executive of his obligations under this Agreement within thirty
(30) days following receipt by Executive of written notice from
the Company of the same.
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If Executive or Company is entitled under this Agreement to notice of
termination of Executive's employment, then that employment shall terminate at
the end of the last day of the notice period.
5. NONCOMPETITION.
(a) During Employment. The Executive agrees that during the period of his
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employment, the Executive shall not, within any of the forty-nine (49) states of
the continental United States (the "Territory"), on the Executive's own behalf
or on behalf of any person, firm, partnership, association, corporation or
business organization, entity or enterprise, perform services substantially
similar to the services described in Section 1(a) of this Agreement, in
connection with the conduct or performance of the business (the "Business") of
developing and marketing, for the Entertainment Industry, automated point of
sale ticketing, back office and headquarters office systems which include
proprietary and other software and hardware.
As used herein, the term "Entertainment Industry" means movie theatres,
stadiums, arenas, amusement parks and similar entertainment facilities and
venues and the business of operating such facilities and venues.
By execution hereof, the Executive hereby acknowledges that the Company is,
as of the date hereof, actively conducting the Business in, and has identified
customers and active prospects of which the Executive is aware and with which
the Executive will have active contact in, the Territory.
(b) Post Employment. Executive also agrees not to engage in the activities
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prohibited to him in Section 5(a) above for a period of twelve (12) months
following the termination of his employment. If Executive's employment is
terminated by the Company for "cause" or if Executive terminates his employment
voluntarily pursuant to Section 4(b)(v) above or in violation of this Agreement,
then Executive agrees not to engage in the activities prohibited to him in
Section 5(a) above for a period of twenty-four (24) months following the
termination of his employment.
6. TRADE SECRETS AND CONFIDENTIAL INFORMATION.
(a) Ownership and Use. The Company may disclose to the Executive certain
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Trade Secrets and Confidential Information (defined below). The Executive
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acknowledges and agrees that the Trade Secrets and Confidential Information are
the sole and exclusive property of the Company, or a third party providing such
information to the Company, and that the Company or such third party owns all
worldwide rights therein under patent, copyright, trade secret, confidential
information, or other property rights. The Executive acknowledges and agrees
that the disclosure of the Trade Secrets and Confidential Information to the
Executive does not confer upon the Executive any license, interest or rights of
any kind in or to the Trade Secrets or Confidential Information. The Executive
may use the Trade Secrets and Confidential Information solely for the benefit of
the Company while the Executive is employed or retained by the Company. The
Executive will hold in confidence and not disclose, reproduce, distribute,
transmit, reverse engineer, decompile, disassemble, or transfer, directly or
indirectly, in any form, by any means, or for any purpose, the Trade Secrets or
the Confidential Information or any portion thereof except, Executive may
disclose such matters (a) in the performance of services for the Company and (b)
to Executive's advisers in connection with any dispute arising out of this
Agreement, provided such advisers undertake to maintain the same degree of
confidentiality as Executive is required to maintain and for the same period of
time. The Executive agrees to return to the Company, upon request by the
Company, the Trade Secrets and Confidential Information and all materials
relating thereto.
(b) Length of Restriction. The Executive's obligations under this
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Agreement with regard to the Trade Secrets shall remain in effect for as long as
such information shall remain a trade secret under applicable law. The
Executive acknowledges that its obligations with regard to the Confidential
Information shall remain in effect while the Executive is employed or retained
by the Company, and for 24 months thereafter.
(c) Definitions. As used herein, "Trade Secrets" means information of the
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Company, its licensors, suppliers, customers, or prospective licensors or
customers, including, but not limited to, technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans, or a list
of actual or potential customers or suppliers, which (a) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use and (b) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy. As used herein, "Confidential
Information" means information, other than Trade Secrets, that is of value to
its owner and is treated as confidential, including, but not limited to, future
business plans, licensing strategies, advertising campaigns, information
regarding executives and employees, and the terms and conditions of this
Agreement.
7. CUSTOMER NON-SOLICITATION.
The Executive agrees that, for a period of twelve (12) months immediately
following termination of the Executive's employment with the Company, the
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Executive shall not, on the Executive's own behalf or on behalf of any person,
firm, partnership, association, corporation or business organization, entity or
enterprise, solicit, contact, call upon, communicate with, or attempt to
communicate with, any customer or prospect of the Company, or any representative
of any customer or prospect of the Company, with a view to sale or providing of
any product, equipment, or service competitive or potentially competitive with
any product, equipment, or service sold or provided or under development by the
Company during the two (2) years immediately preceding cessation of the
Executive's employment with the Company, provided that the restrictions set
forth in this Section shall apply only to customers or prospects of the Company,
or representatives of customers or prospects of the Company, with which the
Executive had contact during such two (2) year period.
The actions prohibited by this Section shall not be engaged in by the
Executive, directly or indirectly, whether as manager, salesperson, agent,
technical support, sales, or service representative, or otherwise. The
Executive acknowledges that the Company provides products and services to small
and large customers throughout the United States, and that a territorial
restriction on the non-solicitation provisions of this Section would not
adequately protect the legitimate interests of the Company.
If Executive's employment is terminated by the Company for "cause" or if
Executive terminates his employment voluntarily pursuant to Section 4(b)(v)
above or in violation of the terms of this Agreement, then Executive agrees not
to engage in the activities prohibited to him by this Section 7 for a period of
twenty-four (24) months following the termination of his employment.
8. EMPLOYEE NON-SOLICITATION.
The Executive agrees that for a period of twelve (12) months immediately
following the termination of his employment with the Company the Executive shall
not call upon, solicit, recruit, or assist others in calling upon, recruiting or
soliciting, any person who is or was an employee of the Company for the purpose
of having such person work in any other corporation, association, entity, or
business engaged in providing services of the same or similar kind as offered by
the Company.
If Executive's employment is terminated by the Company for "cause" or if
Executive terminates his employment voluntarily pursuant to Section 4(b)(v)
above or in violation of the terms of this Agreement, then Executive agrees not
to engage in the activities prohibited to him by this Section 8 for a period of
twenty-four (24) months following the termination of his employment.
9. REMEDIES.
The Executive acknowledges that a breach of any of the terms or conditions
of this Agreement may result in material irreparable injury to the Company, or
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its affiliates or subsidiaries, for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely, and
that, in the event of such a breach or threat thereof, the Company shall be
entitled, in addition to any other rights or remedies it may have, to obtain a
temporary restraining order and/or a preliminary or permanent injunction
enjoining or restraining the Executive from committing such a breach, or such
other equitable remedy as a court of competent jurisdiction may provide.
Nothing contained herein shall be construed to limit the Company's right to any
remedies at law, including the recovery of damages for breach of this Agreement.
10. INDEMNIFICATION.
The Company will indemnify the Executive to the fullest extent permitted by
the laws of the State of Georgia, as in effect at the time of the subject act or
omission, or by the Articles of Incorporation and Bylaws of the Company, as in
effect at such time or on the Effective Date of this Agreement, whichever
affords or afforded greatest protection to the Executive, and the Executive
shall be entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its members and officers (and to
the extent the Company maintains such an insurance policy or policies, the
Executive shall be covered by such policy or policies, in accordance with its or
their terms, to the maximum extent of the coverage provided for any Company
officer or director), against all costs, charges and expenses whatsoever
incurred or sustained by him or his legal representatives at the time such
costs, charges and expenses are incurred or sustained, in connection with any
action, suit or proceeding to which he may be made a party by reason of his
being or having been a member, officer, or employee of the Company or any
subsidiary thereof, or his serving or having served any other enterprise as a
member, officer, trustee, or employee at the request of the Company.
11. LIMITATION OF LIABILITY.
The Company hereby represents that, as of the Effective Date, its Articles
of Incorporation and Bylaws provide the Executive with the maximum limitation on
his liability permitted by the laws of the State of Georgia and the Company
agrees that, during the period of Executive's employment, it will provide the
Executive with limitation on his liability equal to or greater than that
provided to any other Employee.
12. GENERAL PROVISIONS.
(a) Notices. Any notice hereunder by either party to the other shall be
-------
given in writing by personal delivery, telex, telecopy or certified mail, return
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receipt requested, to the applicable address set forth below:
(i) To the Company: Radiant Systems, Inc.
Suite A
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxx
Executive Vice President
(ii) To the Executive: H. Xxxxxx Xxxx
000 Xxx Xxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
or to such person or other addresses as either party may specify to the
other in writing.
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(b) Limited Waiver. The waiver by the Company or the Executive of a
--------------
violation of any of the provisions of this Agreement, whether express or
implied, shall not operate or be construed as a waiver of any subsequent
violation of any such provision.
(c) Assignment. No right, benefit or interest hereunder shall be subject
----------
to assignment, encumbrance, charge, pledge, hypothecation or set off by the
Executive in respect of any claim, debt, obligation or similar process.
(d) Payments Obligations Absolute. The Company's obligation to pay the
-----------------------------
Executive the amounts provided for hereunder shall be absolute and unconditional
and shall not be affected by any circumstances, including, without limitation,
any set-off, counterclaim, recoupment, defense or other right which the Company
may have against him or anyone else or any obligation of Executive to seek other
employment.
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(e) Amendment. This Agreement may be amended, modified or terminated by
---------
written agreement of the Executive and the Company.
(f) Severability. If any term or provision hereof is determined to be
------------
invalid or unenforceable in a final court or arbitration proceeding, (i) the
remaining terms and provisions hereof shall be unimpaired and (ii) the invalid
or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
(g) Unsecured Promise. No benefit or promise hereunder shall be secured by
-----------------
any specific assets of the Company. Unless otherwise stated herein, the
Executive shall have only the rights of an unsecured general creditor of the
Company in seeking satisfaction of such benefits or promises.
(h) Governing Law. This Agreement has been made in and shall be governed
-------------
by and construed in accordance with the laws of the State of Georgia.
(i) Entire Agreement. This Agreement sets forth the entire agreement and
----------------
understanding of the parties hereto with respect to the matters covered hereby.
This Agreement supersedes and replaces any prior agreement with respect to
employment, compensation continuation and the matters contained in this
Agreement which the Executive may have had with the Company or any prior or
contemporary affiliate or subsidiary thereof.
(j) Headings. The headings and captions of the Sections of this Agreement
--------
are included solely for convenience of reference and shall not control the
meaning or interpretation of any provisions of this Agreement.
(k) Counterparts. This Agreement may be executed by the parties hereto in
------------
counterparts, each of which shall be deemed an original, but all of such
counterparts shall together constitute one and the same document
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year first written above.
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COMPANY:
RADIANT SYSTEMS, INC.
/S/ Xxxx X. Xxxxxx
---------------------------------
By: Its duly authorized officer
EXECUTIVE:
/s/ H. Xxxxxx Xxxx
---------------------------------
H. XXXXXX XXXX
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EXHIBIT A
TO
EMPLOYMENT AGREEMENT OF
H. XXXXXX XXXX
AGREEMENTS WITH RESPECT TO DIVISION OPERATIONS
----------------------------------------------
With respect to the operation of the Division, Executive (and such persons
to whom he may delegate) shall possess, from the date hereof and until all of
the qualified and non-qualified options referenced in Section 3(c) of the
Agreement have fully vested, the authority to:
(i) Hire and fire in accordance with standard Company policy employees
whose salaries or wages are charged to the Division; and
(ii) Make any changes in the hardware and software configuration being sold
currently by the Division; and
(iii) Authorize any changes in the pricing of goods and services sold
currently; provided any decrease in such pricing which is in excess of ten
percent (10%) of then current price charged shall be subject to the prior
approval of the Board of Directors; and
(iv) Outsource any general and administrative services, including legal
services (provided the provider of such legal services does not serve as
corporate counsel to a major competitor or customer of the Company), being
provided by the Company; and
(v) Hire personnel in accordance with standard Company policy and have
their compensation charged against the Division in order to replace services of
an administrative nature being supplied by the Company, which replacement
services shall be of no less quality and timeliness than the services replaced;
and
(vi) Approve all contracts, sales, expenses, and other items of revenue and
expense incurred in the ordinary course of business; provided, any contract
involving total consideration of more than Five Hundred Thousand and No/100
Dollars ($500,000.00) shall be subject to the prior approval of the Board of
Directors.
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Company and Executive acknowledge that the foregoing responsibilities shall
be conducted in a manner consistent with annual operating and capital budgets
for the Division to be prepared by Executive for each year during the term of
this Agreement and approved by the Board of Directors.
The parties agree that if the Board of Directors or any executive officer
of the Company overrules Executive with respect to any decision he may make
relative to the foregoing items, or the Company takes action relating to the
foregoing items which is opposed in writing by Executive, and the Board fails to
resolve such opposition of Executive to the satisfaction of Executive within
thirty (30) days of taking of such action, then Executive may, at his option,
terminate his employment with the Company, in which case such termination shall
be deemed for all purposes hereunder as a termination by the Company without
cause pursuant to Section 4(b)(iv) of the Agreement.
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EXHIBIT B
TO
EMPLOYMENT AGREEMENT OF
H. XXXXXX XXXX
COMPUTATION OF DIVISION INCOME
------------------------------
Division Net Income shall be computed under generally accepted accounting
principles, consistently applied, using the same accounting principles applied
in the same manner as PrysmTech, L.L.C. accounted for its operations, except
that:
(i) No amortization of goodwill or other intangible assets shall be charged
against net income; and
(ii) No expense for interest or depreciation shall be charged against net
income; and
(iii) No income taxes, deferred taxes, tax credits, or tax credit
accounting shall be charged against net income; and
(iv) None of the stock options awarded to Executive pursuant to Section
3(c) above or to Xxxxxxx X. Xxxxxxx pursuant to Section 3(c) of his Employment
Agreement with the Company shall be charged against net income; and
(v) All accounting functions, including payables, receivables, general
ledger, and divisional financial reporting shall be provided by Radiant
employees to the Division at cost, but in no event more than 1.5 percent of the
Division's gross revenue; and
(vi) All hardware sold by the Division and furnished by the Company
(following acquisition from third parties) shall be priced to the Division at
the Company's direct cost, without any allowance for general and administrative
expenses, plus an amount equal to ten percent (10%) of direct costs; and
(vii) All hardware components, to the extent available only from the
Company, shall be priced to the Division on a direct material plus allocated
cost basis, provided in no event shall the Division be charged any greater for
such components than any other division of the Company. To the extent hardware
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components are readily available from parties other than the Company, then such
components shall be priced to the Division at the lesser of (i) the price
available in the marketplace for such component plus ten percent (10%) of such
price or (ii) the lowest price charged by the Company to any of its divisions
for such component.
(viii) Any Company employees performing non-management services for the
Company, but not exclusively for the Division (other than those services set out
in (v) and (vii) above) shall have the direct allocated cost (e.g. items such as
----
direct rent, capital equipment, fringe benefits, direct supervision, long
distance telephone charges, but not items of general overhead such as officer
salaries, accounting department charges, etc.) of their employment pro rated
between them on a fractional full time equivalent basis.
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