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EXHIBIT 10.6
EXECUTION COPY
/X/ Employees Copy
/ / Company's Copy
ESPS, INC.
EMPLOYMENT AGREEMENT
To RICK DOOL:
This Agreement establishes the terms of your employment with ESPS,
Inc., a Delaware corporation (the "Company").
EMPLOYMENT AND DUTIES You and the Company agree to your employment as
President and Chief Executive Officer on the terms
contained herein. You agree to perform whatever duties
the Company's Board of Directors (the "BOARD") may
assign you from time to time that are reasonably
consistent with your position as President and Chief
Executive Officer. During your employment, you agree
to devote your full business time, attention, and
energies to performing those duties (except as your
Direct Report otherwise agrees from time to time). You
agree to comply with the noncompetition, secrecy, and
other provisions of Exhibit A to this Agreement.
TERM OF EMPLOYMENT Your employment under this Agreement begins as of your
execution of this Agreement (the "Effective Date").
Unless sooner terminated under this Agreement, your
employment ends at 6:00 p.m. Eastern Time on the
second anniversary of the Effective Date.
The period running from the Effective Date to the
second anniversary of the Effective Date in the
preceding sentence is the "Term."
Termination or expiration of this Agreement ends your
employment but does not end your obligation to comply
with, Exhibit A or the Company's obligation, if any,
to make payments under the Payments on Termination and
Severance provisions as specified below.
COMPENSATION
SALARY The Company will pay you an annual salary (the
"Salary") from the Effective Date at the rate of not
less than $225,000 in accordance with its generally
applicable payroll practices. The Board will review
your Salary annually and consider you for
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increases.
BONUS YOU will be eligible for an annual bonus equal to up
to $100,000. This bonus will be calculated according
to annual incentive plan formulas. The formulas for
the 12 months ended March 31, 2001 are contained in
Exhibit C. It is the Company's good faith intention to
provide formulas for future fiscal years within 90
days of the commencement of such fiscal year.
CAR ALLOWANCE You will receive a car allowance equal to $600 per
month.
EMPLOYEE BENEFITS While the Company employs you under this Agreement,
the Company will provide you with the same benefits as
it makes generally available from time to time to the
Company's employees, as those benefits are amended or
terminated from time to time. Your participation in
the Company's benefit plans will be subject to the
terms of the applicable plan documents and the
Company's generally applied policies, and the Company
in its sole discretion may from time to time adopt,
modify, interpret, or discontinue such plans or
policies.
PLACE OF EMPLOYMENT Your principal place of employment will be within 50
miles of Fort Washington, Pennsylvania.
EXPENSES The Company will reimburse you for reasonable
and necessary travel and other business-related
expenses you incur for the Company in performing your
duties under this Agreement. You must itemize and
substantiate all requests for reimbursements. You must
submit requests for reimbursement in accordance with
the policies and practices of the Company.
NO OTHER EMPLOYMENT While the Company employs you, you agree that you will
not, directly or indirectly, provide services to any
person or organization for which you receive
compensation or otherwise engage in activities that
would conflict or interfere significantly with your
faithful performance of your duties as an employee
without the Board's prior written consent. (This
prohibition excludes any work performed at the
Company's direction.) You may manage your personal
investments, as long as the management takes only
minimal amounts of time and is consistent with the
provisions of the NO CONFLICTS OF INTEREST Section and
the NO COMPETITION Section in Exhibit A.
You represent to the Company that you are not subject
to any agreement, commitment, or policy of any third
party that would prevent you from entering into or
performing your duties under this Agreement, and you
agree that you will not enter into any
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agreement or commitment or agree to any policy that
would prevent or hinder your performance of duties and
obligations under this Agreement, including Exhibit A.
NO CONFLICTS OF INTEREST You confirm that you have fully disclosed to the
Company, to the best of your knowledge, all
circumstances under which you, your spouse, and
other persons who reside in your household have or
may have a conflict of interest with the Company.
You further agree to fully disclose to the Company
any such circumstances that might arise during your
employment upon your becoming aware of such
circumstances. You agree to fully comply with the
Company's policy and practices relating to
conflicts of interest.
NO IMPROPER PAYMENTS You will neither pay nor permit payment of any
remuneration to or on behalf of any governmental
official other than payments required or permitted
by applicable law. You will comply fully with the
Foreign Corrupt Practices Act of 1977, as amended.
You will not, directly or, indirectly,
make or permit any contribution, gift, bribe,
rebate, payoff, influence payment, kickback, or
other payment to any person or entity, private or
public, regardless of what form, whether in
money, property, or services
to obtain favorable treatment for business
secured, to pay for favorable treatment for
business secured,
to obtain special concessions or for special
concessions already obtained, or
in violation of any legal requirement, or
establish or maintain any fund or asset related
to the Company that is not recorded in the
Company's books and records, or
take any action that would violate (or would be
part of a series of actions that would violate)
any U.S. law relating to international trade or
commerce, including those laws relating to
trading with the enemy, export control, and
boycotts of Israel or Israeli products (as is
sought by certain Arab countries).
TERMINATION Subject to the provisions of this section, you and the
Company agree that it may terminate your employment,
or you may resign, except that, if you voluntarily
resign, you must provide the
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Company with 90 days' prior written notice (unless the
Board has previously waived such notice in writing or
authorized a shorter notice period).
FOR CAUSE The Company may terminate your employment for "Cause"
if you:
(i) commit a material breach of your obligations
or agreements under this Agreement, including
Exhibit A;
(ii) commit an act of gross negligence with
respect to the Company or otherwise act with
willful disregard for the Company's best
interests;
(iii) fail or refuse to perform any duties
delegated to you that are consistent with the
duties of similarly-situated senior executives or
are otherwise required under this Agreement,
provided that these duties do not conflict with
any other provision of this Agreement;
(iv) seize a corporate opportunity for yourself
instead of offering such opportunity to the
Company if within the scope of the Company's or
its subsidiaries' business; or
(v) are convicted of or plead guilty or no
contest to a felony (or to a felony charge
reduced to misdemeanor), or, with respect to your
employment, commit either a material dishonest
act or common law fraud or knowingly violate any
federal or state securities or tax laws.
In any event, termination of your employment for any
reason within 12 months after a change of control will
be deemed termination without Cause and accordingly,
you will be entitled to the severance benefits
outlined in the SEVERANCE section below.
Your termination for Cause will be effective
immediately upon the Company's mailing or written
transmission of notice of such termination. Before
terminating your employment for Cause under clauses
(i) - (iv) above, the Company will specify in writing
to you the nature of the act, omission, refusal, or
failure that it deems to constitute Cause and, unless
the Board reasonably concludes the situation could not
be corrected, give you 30 days after you receive such
notice to correct the situation (and thus avoid
termination for Cause), unless the Company agrees to
extend the time for correction. You agree that the
Board will have the discretion to determine in good
faith whether
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your correction is sufficient, provided that this
decision does not foreclose you from using the Dispute
Resolution provisions of Exhibit B.
WITHOUT CAUSE Subject to the provisions below under PAYMENTS ON
TERMINATION and SEVERANCE, the Company may terminate
your employment under this Agreement before the end
of the Term without CAUSE.
DISABILITY If you become "DISABLED" (as defined below), the
Company may terminate your employment. You are
"disabled" if you are unable, despite whatever
reasonable accommodations the law requires, to render
services to the Company for more than 90 consecutive
days because of physical or mental disability,
incapacity, or illness. You are also disabled if you
are found to be disabled within the meaning of the
Company's long-term disability insurance coverage as
then in effect (or would be so found if you applied
for the coverage).
GOOD REASON YOU may resign for Good Reason with 45 days' advance
written notice. "GOOD REASON" for this purposes means,
without your consent, (i) the Company materially
breaches this Agreement or (ii) the Company relocates
your primary office by more than 50 miles from Fort
Washington, Pennsylvania.
You must give notice to the Company of your intention
to resign for Good Reason within 30 days after the
occurrence of the event that you assert entitles you
to resign for Good Reason. In that notice, you must
state the condition that you consider provides you
with Good Reason and, if such reason relates to clause
(i) above, must give the Company an opportunity to
cure the condition within 30 days after your notice.
Before or during the 30 day period, either party may
request mediation under Exhibit B to resolve any such
disputes, and, if so requested, the parties agree to
cooperate to arrange a prompt mediation during no more
than a 30 day period. If the Company fails to cure the
condition, your resignation will be effective on the
45th day after your notice (unless the Board has
previously waived such notice period in writing or
agreed to a shorter notice period or unless mediation
is proceeding in good faith), in which case such
resignation will become effective 15 days after the
end of such mediation, if not previously cured.
You will not be treated as resigning for GOOD REASON
if the Company already had given notice of termination
for CAUSE as of the date of your notice of
resignation.
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DEATH If you die during the Term, the Term will end as of
the date of your death.
PAYMENTS ON TERMINATION If you resign or the Company terminates your
employment with or without Cause or because of
disability or death, the Company will pay you any
unpaid portion of your Salary pro-rated through the
date of actual termination (and any annual bonuses
already determined by such date but not yet paid
unless your employment is terminated with CAUSE),
reimburse any substantiated but unreimbursed
business expenses, pay any accrued and unused
vacation time (to the extent consistent with the
Company's policies), and provide such other
benefits as applicable laws or the terms of the
benefits require. Except to the extent the law
requires otherwise or as provided in the SEVERANCE
paragraph or in your option agreements, neither you
nor your beneficiary or estate will have any rights
or claims under this Agreement or otherwise to
receive severance or any other compensation, or to
participate in any other plan, arrangement, or
benefit, after such termination or resignation.
SEVERANCE In addition to the foregoing payments, if the Company
terminates your employment without CAUSE or you resign
for GOOD REASON, the Company will
pay you severance equal to your Salary, as
then in effect, for six months on the same
schedule as though you had remained employed
during such period, even though you are no
longer employed;
pay the after-tax premium cost for you to
receive any group health coverage the
Company must offer you under Section 4980B
of the Internal Revenue Code of 1986 ("COBRA
COVERAGE") for the period of such coverage
(unless the coverage is then provided under
a self-insured plan);
pay you, at the time the Company would
otherwise pay your annual bonus, your pro
rata share of the bonus for the year of your
termination, where the pro rata factor is
based on days elapsed in your year of
termination till date of termination over
365, less any portion of the bonus for the
year of your termination already paid; and
It is the Company's good faith intention to
provide you, within 90 days of this agreement, a
description of the
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number of unvested options that will be subject
to accelerated vesting upon either termination
without cause, resignation for good reason, or as
a result of a change of control.
You are not required to mitigate amounts payable
under the SEVERANCE paragraph by seeking other
employment or otherwise, nor must you return to
the Company amounts earned under subsequent
employment.
CHANGE OF CONTROL A Change of Control for this purpose means the
occurrence of any one or more of the following
events: a person, entity, or group (other than
the Company, any Company subsidiary, any Company
benefit plan, or any underwriter temporarily
holding securities for an offering of such
securities) acquires ownership of more than 50%
of the undiluted total voting power of the
Company's then outstanding securities eligible to
vote to elect members of the Board ("COMPANY
VOTING SECURITIES"); consummation of a merger or
consolidation of the Company with or into any
other entity -- unless the holders of the Company
Voting Securities outstanding immediately before
such consummation, together with any trustee or
other fiduciary holding securities under a
Company benefit plan, hold securities that
represent immediately after such merger or
consolidation at least 50% of the combined voting
power of the then outstanding voting securities
of either the Company or the other surviving
entity or its parent; or the stockholders of the
Company approve (i) a plan of complete
liquidation or dissolution of the Company or (ii)
an agreement for the Company's sale or
disposition of all or substantially all the
Company's assets, AND such liquidation,
dissolution, sale, or disposition is consummated.
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EXPIRATION Expiration of this Agreement, whether because of
notice of non-renewal or otherwise, does not
constitute termination without CAUSE nor provide you
with GOOD REASON and does not entitle you to
SEVERANCE, unless the Company's general severance
practices entitle you to severance in that situation.
If you remain employed at the end of the Term and your
employment then ends as a result of expiration of the
Agreement, the Company will pay you severance equal to
your Salary, as then in effect, for 12 months on the
same schedule as though you had remained employed
during such period, even though you are no longer
employed, which payments you agree compensate you for
the restrictions under Exhibit A upon contract
expiration.
SEVERABILITY If the final determination of an arbitrator or a court
of competent jurisdiction declares, after the
expiration of the time within which judicial review
(if permitted) of such determination may be perfected,
that any term or provision of this Agreement,
including any provision of Exhibit A, is invalid or
unenforceable, the remaining terms and provisions will
be unimpaired, and the invalid or unenforceable term
or provision will be deemed replaced by a term or
provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or
unenforceable term or provision.
AMENDMENT; WAIVER Neither you nor the Company may modify, amend, or
waive the terms of this Agreement other than by a
written instrument signed by you and an executive
officer of the Company duly authorized by the Board.
Either party's waiver of the other party's compliance
with any provision of this Agreement is not a waiver
of any other provision of this Agreement or of any
subsequent breach by such party of a provision of this
Agreement.
WITHHOLDING The Company will reduce its compensatory payments to
you for withholding and FICA taxes and any other
withholdings and contributions required by law.
GOVERNING LAW The laws of the State of Pennsylvania (other than its
conflict of laws provisions) govern this Agreement.
NOTICES Notices must be given in writing by personal delivery,
by certified mail, return receipt requested, by
telecopy, or by overnight delivery. You should send or
deliver your notices to the Company's corporate
headquarters. The Company will send or deliver any
notice given to you at your address as reflected on
the Company's personnel records. You and the Company
may change the address for notice by like notice to
the others. You
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and the Company agree that notice is received on the
date it is personally delivered, the date it is
received by certified mail, the date of guaranteed
delivery by the overnight service, or the date the fax
machine confirms effective transmission.
SUPERSEDING EFFECT This Agreement supersedes any prior oral or written
employment, severance, option, or fringe benefit
agreements between you and the Company, other than
with respect to your eligibility for generally
applicable employee benefit plans. This Agreement
supersedes all prior or contemporaneous negotiations,
commitments, agreements, and writings with respect to
the subject matter of this Agreement. All such other
negotiations, commitments, agreements, and writings
will have no further force or effect; and the parties
to any such other negotiation, commitment, agreement,
or writing will have no further rights or obligations
thereunder.
If you accept the terms of this Agreement, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.
ESPS, Inc.
By: /s/
--------------------------------
Chairman, Compensation Committee
Board of Directors
I accept and agree to the terms of employment set forth in this Agreement:
/s/
- ------------------
Dated: 11/27/00
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Exhibit A
NO COMPETITION You agree to the provisions of this Exhibit A in
consideration of your employment by the Company and
salary and benefits under this Agreement and the
training you will receive in connection such
employment, and you agree that Exhibit A should be
considered ancillary to the option agreements by which
you will receive options from the Company. While the
Company (or its successor or transferee) employs you
and to the end of the Restricted Period (as defined
below), you agree as follows:
You will not, directly or indirectly, be employed by,
lend money or engage in any Competing Business within
the Market Area (each as defined below). That
prohibition includes, but is not limited to, acting,
either singly or jointly or as agent for, or as an
employee of or consultant to, any one or more persons,
firms, entities, or corporations directly or
indirectly (as a director, independent contractor,
representative, consultant, member, or otherwise) that
constitutes such a Competing Business. You also will
not invest or hold equity or options in any Competing
Business, provided that you may own up to 3% of the
outstanding capital stock of any corporation that is
actively publicly traded without violating this NO
COMPETITION covenant, so long as yet have no
involvement beyond passive investing in such business
and you comply with the second sentence of this
paragraph.
If, during the Restricted Period, you are offered and
want to accept employment with a business that engages
in activities similar to Company's, you will inform
the Chairman of the Board in writing of the identity
of the business, your proposed duties with that
business, and the proposed starting date of that
employment. You will also inform that business of the
terms of this Exhibit A. The Company will analyze the
proposed employment and make a good faith
determination as to whether it would threaten the
Company's legitimate competitive interests. If the
Company determines that the proposed employment would
not pose an unacceptable threat to its interests, the
Company will notify you that it does not object to the
employment.
You acknowledge that, during the portion of the
Restricted Period that follows your employment, you
may engage in any business activity or gainful
employment of any type and in any place except as
described above. You acknowledge that you will be
reasonably able to earn a livelihood without violating
the terms of this Agreement.
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You understand and agree that the rights and
obligations set forth in this NO COMPETITION Section
will continue and will survive through the Restricted
Period.
DEFINITIONS
COMPETING BUSINESS COMPETING BUSINESS means any service or product of any
person or organization other than the Company and its
successors, assigns, or subsidiaries (collectively,
the "COMPANY GROUP") that competes with any service or
product of the Company Group provided by any member of
the Company Group during your employment. COMPETING
BUSINESS includes any enterprise engaged in the
creation or sale of knowledge publishing software, and
other related services to assist clients in
integrating and maintaining their knowledge publishing
solutions.
MARKET AREA The Market Area consists of the United States and
Canada. You agree that the Company provides services
both at its facilities and at the locations of its
customers or clients and that, by the nature of its
business, it operates globally.
RESTRICTED PERIOD For purposes of this Agreement, the RESTRICTED PERIOD
ends at the first anniversary of the date your
employment with the Company Group ends for any reason.
NO INTERFERENCE; NO During the Restricted Period, you agree that you will
SOLICITATION not, directly or indirectly, whether for yourself or
for any other individual or entity (other than the
Company or its affiliates or subsidiaries),
intentionally solicit any person or entity who is, or
was, within the 24 months preceding your date of
termination or resignation, or customer, prospect
(with respect to which any member of the Company Group
has incurred substantial costs or with which you have
been involved), or client of the Company Group within
the Market Area, with the 24 month period reduced to
12 months for prospects with which you have not been
involved;
hire away or endeavor to entice away from the Company
Group any employee or any other person or entity whom
the Company Group engages to perform services or
supply products and including, but not limited to, any
independent contractors, consultants, engineers, or
sales representatives or any contractor,
subcontractor, supplier, or vendor; or
hire any person whom the Company Group employs or
employed within the prior 12 months.
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SECRECY
PRESERVING Your employment with the Company under and, if
COMPANY applicable, before this Agreement (with a predecessor
CONFIDENCES to a member of the Company Group), has given and will
give you access to Confidential Information (as
defined below). You acknowledge and agree that using,
disclosing, or publishing any Confidential Information
in an unauthorized or improper manner could cause the
Company or Company Group to incur substantial loss and
damages that could not be readily calculated and for
which no remedy at law would be adequate. Accordingly,
you agree with Company that you will not at any time,
except in performing your employment duties to the
Company or the Company Group under this Agreement (or
with the Board's prior written consent), directly or
indirectly, use, disclose, or publish, or permit
others not so authorized to use, disclose, or publish
any Confidential Information that you may learn or
become aware of, or may have learned or become aware
of, because of your prior or continuing employment
ownership, or association with the Company or the
Company Group or any of their predecessors, or use any
such information in a manner detrimental to the
interests of the Company or the Company Group.
PRESERVING You agree not to use in working for the Company Group
OTHERS' and not to disclose to the Company Group any trade
CONFIDENCES secrets or other information you do not have the right
to use or disclose and that the Company Group is not
free to use without liability of any kind. You agree
to promptly inform the Company in writing of any
patents, copyrights, trademarks, or other proprietary
rights known to you that the Company or the Company
Group might violate because of information you
provide.
CONFIDENTIAL "CONFIDENTIAL INFORMATION" includes, without
INFORMATION limitation, information that the Company or the
Company Group has not previously disclosed to the
public or to the trade with respect to the Company's
or the Company Group's present or future business,
including its operations, services, products,
research, inventions, discoveries, drawings, designs,
plans, processes, models, technical information,
facilities, methods, trade secrets, copyrights,
software, source code, systems, patents, procedures,
manuals, specifications any other intellectual
property, confidential reports, price lists, pricing
formulas, customer lists, financial information
(including the revenues, costs, or profits associated
with any of the Company or the Company Group's
products or services), business plans, lease
structure, projections, prospects, opportunities or
strategies, acquisitions or mergers, advertising or
promotions, personnel matters, legal matters, any
other confidential and proprietary information, and
any other
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information not generally known outside the Company or
the Company Group that may be of value to the Company
or the Company Group but, notwithstanding anything to
the contrary, excludes any information already
properly in the public domain. "CONFIDENTIAL
INFORMATION" also includes confidential and
proprietary information and trade secrets that third
parties entrust to the Company or the Company Group in
confidence.
You understand and agree that the rights and
obligations set forth in this SECRECY Section will
continue indefinitely and will survive termination of
this Agreement and your employment with the Company or
the Company Group.
EXCLUSIVE PROPERTY You confirm that all Confidential Information is and
must remain the exclusive property of the Company or
the relevant member of the Company Group. Any office
equipment (including computers) you receive from the
Company Group in the course of your employment and all
business records, business papers, and business
documents you keep or make, whether on digital media
or otherwise, in the course of your employment by the
Company relating to the Company or any member of the
Company Group must be and remain the property of the
Company or the relevant member of the Company Group.
Upon the termination of this Agreement with the
Company or upon the Company's request at any time, you
must promptly deliver to the Company or to the
relevant member of the Company Group any such office
equipment (including computers) and any Confidential
Information or other materials (written or otherwise)
not available to the public or made available to the
public in a manner you know or reasonably should
recognize the Company did not authorize, and any
copies, excerpts, summaries, compilations, records, or
documents you made or that came into your possession
during your employment. You agree you will not,
without the Company's consent, retain copies,
excerpts, summaries, or compilations of the foregoing
information and materials. You understand and agree
that the rights and obligations set forth in this
Exclusive Property Section will continue indefinitely
and will survive termination of this Agreement and
your employment with the Company Group.
COPYRIGHTS, You agree that all records, in whatever media
DISCOVERIES, (including written works), documents, papers,
INVENTIONS, AND notebooks, drawings, designs, technical information,
PATENTS source code, object code, processes, methods or other
copyrightable or otherwise protected works you
conceive, create, make, invent, or discover that
relate to or result from any work you perform or
performed for the Company or the Company Group or that
arise from the use or assistance of the
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Company Group's facilities, materials, personnel, or
Confidential Information in the course of your
employment (whether or not during usual working
hours), whether conceived, created, discovered, made,
or invented individually or jointly with others, will
be and remain the absolute property of the Company (or
another appropriate member of the Company Group, as
specified by the Company), as will all the worldwide
patent, copyright, trade secret, or other intellectual
property rights in all such works. (All references in
this section to the Company include the members of the
Company Group, unless the Company determines
otherwise.) You irrevocably and unconditionally waive
all rights, wherever in the world enforceable, that
vest in you (whether before, on, or after the date of
this Agreement) in connection with your authorship of
any such copyrightable works in the course of your
employment with the Company group or any predecessor.
Without limitation, you waive the right to be
identified as the author of any such works and the
right not to have any such works subjected to
derogatory treatment. You RECOGNIZE ANY SUCH WORKS ARE
"WORKS FOR HIRE" OF WHICH THE COMPANY IS THE AUTHOR.
You will promptly disclose, grant, and assign
ownership to the Company for its sole use and benefit
any and all ideas, processes, inventions, discoveries,
improvements, technical information, and copyrightable
works (whether patentable or not) that you develop,
acquire, conceive or reduce to practice (whether or
not during usual working hours) while the Company or
the Company Group employs you. You will promptly
disclose and hereby grant and assign ownership to the
Company of all patent applications, letters patent,
utility and design patents, copyrights, and reissues
thereof or any foreign equivalents thereof, that may
at any time be filed or granted for or upon any such
invention, improvement, or information. In connection
therewith:
You will, without charge but at the
Company's expense, promptly execute and
deliver such applications, assignments,
descriptions, and other instruments as the
Company may consider reasonably necessary or
proper to vest title to any such inventions,
discoveries, improvements, technical
information, patent applications, patents,
copyrightable works, or reissues thereof in
the Company and to enable it to obtain and
maintain the entire worldwide right and
title thereto; and
You will provide to the Company at its expense
all such assistance as the Company may reasonably
require in the prosecution of applications for
such patents, copyrights, or
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reissues thereof, in the prosecution or defense
of interferences that may be declared involving
any such applications, patents, or copyrights and
in any litigation in which the Company may be
involved relating to any such patents,
inventions, discoveries, improvements, technical
information, or copyrightable works or reissues
thereof. The Company will reimburse you for
reasonable out-of-pocket expenses you incur and
pay you reasonable compensation for your time if
the Company Group no longer employs you.
To the extent, if any, that you own rights to works,
inventions, discoveries, proprietary information, any
copyrighted or copyrightable works, or other forms of
intellectual property that are incorporated in the
work product you create for the Company Group, you
agree that the Company will have an unrestricted
non-exclusive, royalty-free perpetual, transferable
license to make, use, sell, offer for sale, and
sublicense such works and property in whatever form,
and you hereby grant such license to the Company (and
the Company Group).
This COPYRIGHTS, DISCOVERIES, INVENTIONS AND PATENTS
section does not apply to an invention or discovery
for which no equipment, supplies, facility or trade
secret information of the Company Group (including its
predecessors) was used and that was developed entirely
on your own time, unless (a) the invention relates (i)
directly to the business of the Company Group, or (ii)
Company Group's actual or then reasonably anticipated
research or development, or (b) the invention results
from any work you performed for the Company Group or
any predecessor.
MAXIMUM LIMITS If any of the provisions of Exhibit A are ever deemed
to exceed the time, geographic area, or activity
limitations the law permits, you and the Company agree
to reduce the limitations to the maximum permissible
limitation, and you and the Company authorize a court
or arbitrator having jurisdiction to reform the
provisions to the maximum time, geographic, area, and
activity limitations the law permits; PROVIDED,
HOWEVER, that such reductions apply only with respect
to the operation of such provision in the particular
jurisdiction with respect to which such adjudication
is made.
INJUNCTIVE RELIEF Without limiting the remedies available to the
Company, you acknowledge
that a breach of any of the covenants in this
Exhibit A may
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result in material irreparable injury to the
Company and Company Group for which there is no
adequate remedy at law, and
that it will not be possible to measure damages
for such injuries precisely.
You agree that, if there is a breach or threatened
breach, the Company or any member of the Company Group
may be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction
restraining you from engaging in activities prohibited
by any provisions of this Exhibit A or such other
relief as may be required to specifically enforce any
of the covenants in this Exhibit A. The Company or any
member of the Company Group will, in addition to the
remedies provided in this Agreement, be entitled to
avail itself of all such other remedies as may now or
hereafter exist at law or in equity for compensation
and for the specific enforcement of the covenants
contained in this Agreement. Resort to any remedy
provided for in this Section or provided for by law
will not prevent the concurrent or subsequent
employment of any other appropriate remedy or
remedies, or preclude the Company's or the Company
Group's recovery of monetary damages and compensation.
You also agree that the Restricted Period or such
longer period during which the covenants hereunder by
their terms survive will extend for any and all
periods for which a court with personal jurisdiction
over you finds that you violated the covenants
contained in this Exhibit A.
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EXHIBIT B
Dispute Resolution
MEDIATION If either party has a dispute or claim relating to
this Agreement or their relationship and except as set
forth in ALTERNATIVES, the parties must first seek to
mediate the same before an impartial mediator the
parties mutually designate, and the parties must
equally share the expenses of such proceeding (other
than their respective attorneys' fees). Subject to the
mediator's schedule, the mediation must occur within
45 days of either party's written demand. However, in
an appropriate circumstance, a party may seek
emergency equitable relief from a court of competent
jurisdiction notwithstanding this obligation to
mediate.
BINDING If the mediation reaches no solution or the parties
ARBITRATION agree to forego mediation, the parties will promptly
submit their disputes to binding arbitration before
one or more arbitrators (collectively or singly, the
"ARBITRATOR") the parties agree to select (or whom,
absent agreement, a court of competent jurisdiction
selects). The arbitration must follow applicable law
related to arbitration proceedings and, where
appropriate, the Commercial Arbitration Rules of the
American Arbitration Association.
ARBITRATION All statutes of limitations and substantive laws
PRINCIPLES applicable to a court proceeding will apply to this
proceeding. The Arbitrator will have the power to
grant relief in equity as well as at law, to issue
subpoenas duces tecum, to question witnesses, to
consider affidavits (provided there is a fair
opportunity to rebut the affidavits), to require
briefs and written summaries of the material evidence,
and to relax the rules of evidence and procedure,
provided that the Arbitrator must not admit evidence
it does not consider reliable. The Arbitrator will not
have the authority to add to, detract from, or modify
any provision of this Agreement. The parties agree
(and the Arbitrator must agree) that all proceedings
and decisions of the Arbitrator will be maintained in
confidence, to the extent legally permissible, and not
be made public by any party or the Arbitrator without
the prior written consent of all parties to the
arbitration, except as the law may otherwise require.
DISCOVERY; The parties have selected arbitration to expedite the
EVIDENCE; resolution of dispute and to reduce the costs and
PRESUMPTIONS burdens associated with litigation. The parties agree
that the Arbitrator should take these
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PRESUMPTIONS concerns into account when determining whether to
authorize discovery and, if so, the scope of
permissible discovery and other hearing and
pre-hearing procedures. The Arbitrator may permit
reasonable discovery rights in preparation for the
arbitration, provided that it should accelerate the
scheduling of and responses to such discovery so as
not to unreasonably delay the arbitration. Exhibits
must be marked and left with the Arbitrator until it
has rendered a decision. Either party may elect, at
its expense, to record the proceedings by audiotape or
stenographic recorder (but not by video). The
Arbitrator may conclude that the applicable law of any
foreign jurisdiction would be identical to that of
Texas on the pertinent issue(s), absent a party's
providing the Arbitrator with relevant authorities
(and copying the opposing party) at least five
business days before the arbitration hearing.
NATURE OF AWARD The Arbitrator must render its award, to the extent
feasible, within 30 days after the close of the
hearing. The award must set forth the material
findings of fact and legal conclusions supporting the
award. The parties agree that it will be final,
binding, and enforceable by any court of competent
jurisdiction. Where necessary or appropriate to
effectuate relief, the Arbitrator may issue equitable
orders as part of or ancillary to the award. The
Arbitrator must equitably allocate the costs and fees
of proceeding and may consider in doing so the
relative fault of the parties. The Arbitrator may
award reasonable attorneys' fees to the prevailing
party to the extent a court could have made such an
award.
APPEAL The parties may appeal the award based on the grounds
allowed by statute, as well as upon the ground that
the award misapplies the law to the facts, provided
that such appeal is filed within the applicable time
limits law allows. If the award is appealed, the court
may consider the ruling, evidence submitted during the
arbitration, briefs, and arguments but must not try
the case DE NOVO. The parties will bear the costs and
fees associated with the appeal in accordance with the
arbitration award or, in the event of a successful
appeal, in accordance with the court's final judgment.
ALTERNATIVES This DISPUTE RESOLUTION provision does not preclude a
party from seeking equitable relief from a court (i)
to prevent imminent or irreparable injury or (ii)
pending arbitration, to preserve the last peaceable
status quo, nor does it preclude the
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parties from agreeing to a less expensive and faster
means of dispute resolution. It does not prevent the
Company from immediately seeking in court an
injunction or other remedy with respect to Exhibit A.
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[LOGO]
EXHIBIT C
SEPTEMBER 7, 2000
RICK DOOL
EMPLOYMENT AGREEMENT
PRESIDENT AND CEO
1. ANNUAL SALARY: $225,000
TO BE REVIEWED AND ADJUSTED ANNUALLY BE THE ESPS BOARD
OF DIRECTORS BASED ON COMPANY PERFORMANCE.
2. INCENTIVE BONUS: $100,000 (AT PLAN)
BASED ON THE ATTACHED INCENTIVE BONUS PROGRAM. TO BE
REVIEWED AND ADJUSTED ANNUALLY BY THE ESPS BOARD OF
DIRECTORS BASED ON COMPANY PERFORMANCE AND
EXPECTATIONS FOR THE SUCCEEDING FISCAL YEAR.
RECOVERABLE DRAW AGAINST THIS BONUS OF $2,500 PER
MONTH TO BE RECONCILED AT THE END OF EACH FISCAL YEAR.
3. STOCK OPTIONS: 150,000 NON-QUALIFIED STOCK OPTIONS AWARDED BASED ON
INITIAL EVP POSITION. VESTING SCHEDULE CONSISTENT WITH
THE STANDARD ESPS VESTING PROGRAM.
600,000 NON-QUALIFIED STOCK OPTIONS AWARDED UPON
PROMOTION TO THE CEO POSITION. VESTING SCHEDULE
ADJUSTED TO 35% AFTER FIRST YEAR AND THE REMAINING 65%
QUARTERLY OVER 3 YEARS.
TO BE REVIEWED AND ADJUSTED ANNUALLY BY THE ESPS BOARD
OF DIRECTORS BASED ON COMPANY PERFORMANCE AND
EXPECTATIONS FOR THE SUCCEEDING FISCAL YEAR. BASED ON
THE ATTACHED INCENTIVE BONUS PROGRAM.
4. SEVERANCE: 6 MONTHS SALARY AND BENEFITS IF TERMINATED FOR REASONS
OTHER THAN "CAUSE".
5. VACATION: 4 WEEKS PLUS NORMAL COMPANY HOLIDAYS, ETC.
CARRYOVER TO BE DETERMINED.
6. CHANGE IN CONTROL: IF A CHANGE IN CONTROL HAPPENS, THE FOLLOWING
SEVERANCE PACKAGE WILL INCUR (IF TERMINATED AS A
RESULT):
6 MONTHS SALARY AND BENEFITS
REIMBURSEMENT FOR UNUSED VACATION
50% OF TARGET BONUS (AT ANNUAL PLAN)
OUTPLACEMENT SERVICES (TO A CAP OF $20K)
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7. CAR ALLOWANCE: $600 PER MONTH
8. EXECUTIVE DEVELOPMENT: 100% PAYMENT FOR EXECUTIVE EDUCATION AND LEADERSHIP
DEVELOPMENT CONFERENCES, COURSES OR PROGRAMS AS
APPROPRIATE.
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[LOGO]
EXHIBIT C
RICK DOOL INCENTIVE BONUS PROGRAM
FY '01
ELEMENTS:
1. BUSINESS PLAN EXPECTATIONS:
THE CONSENSUS EXPECTATIONS FOR FY'01 IS $28.4 IN TOTAL REVENUE. THE
INTERNAL BUDGET FOR TOTAL REVENUE IS $33.5M. THE BONUS WILL BE
DETERMINED UNDER THE SAME FACTORING TABLE AS THE MANAGEMENT TEAM WITH
NO BONUS AWARDED FOR PERFORMANCE BELOW $28.4M IN REVENUE.
BONUS "FACTORING TABLE":
<Table>
<Caption>
% OF BONUS ACTUAL
PERFORMANCE FACTOR CO. REV.
----------- ------ --------
85% 20% $ 28.4M
86 21% $ 28.8
87 22% $ 29.1
88 23% $ 29.5
89 24% $ 29.8
90 25% $ 30.1
91 30% $ 30.5
92 35% $ 30.8
93 40% $ 31.1
94 45% $ 31.5
95 50% $ 31.8
96 60% $ 32.1
97 70% $ 32.5
98 80% $ 32.8
99 90% $ 33.1
99% 100% $ 33.5M
</Table>
2. UNIT PERFORMANCE AND COMPANY PERFORMANCE:
100% OF BONUS WILL BE BASED ON OVERALL COMPANY PERFORMANCE.
70% BASED ON REVENUE ATTAINMENT
20% ON CUSTOMER SATISFACTION
10% ON PROFIT TARGET
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ESPS, INC.
EMPLOYMENT AGREEMENT AMENDMENT
To: Rick Dool
In accordance with the terms of your employment agreement executed November
27, 2000, (the "Agreement"), ESPS, Inc. (the "Company") has determined its offer
with respect to acceleration of unvested option grants upon a Change of Control.
Following are the terms of the offer:
In the event of a change of control, options will become vested as follows:
1. If the Change of Control occurs within your first twelve months of
employment, 75% of options granted to you will immediately vest upon
approval of the Change of Control in accordance with the Company's
bylaws.
2. If the Change of Control occurs after your first twelve months of
employment but before eighteen months from your hire date, 87.5% of
options granted to you will immediately vest upon approval of the
Change of Control in accordance with the Company's bylaws.
3. If the Change of Control occurs after eighteen months of employment,
100% of options granted to you will immediately vest upon approval of
the Change of Control in accordance with the Company's bylaws.
Approval of the Change of Control shall have been deemed to have occurred
upon the date the stockholders of the Company (or the Board of Directors, if
stockholder action is not required) approve the Change of Control. In addition,
in the event your employment is terminated within 12 months of a Change of
Control, the Company has agreed to extend the severance period, as defined in
the "Severance" section of your Agreement, from six months to twelve months.
Please note that this modification does not in any way increase the amounts due
you from the Company as defined in your Agreement, in the event you are
terminated with Cause as defined in your Agreement.
Change of Control. A Change of Control for this purpose means the
occurrence of anyone or more of the following events: a
person, entity, or group (other than the Company, any
Company subsidiary, any Company benefit plan, or any
underwriter temporarily holding securities for an
offering of such securities) acquires ownership
of more than 50% of the undiluted total voting power of
the Company's then-outstanding securities eligible to
vote to elect members of the Board ("COMPANY VOTING
SECURITIES"); consummation of a merger or consolidation
of the Company with or into any other entity -- unless
the holders of the Company Voting Securities outstanding
immediately before such consummation, together with any
trustee or other
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fiduciary holding securities under a Company benefit
plan, hold securities that represent immediately after
such merger or consolidation at least 50% of the
combined voting power of the then outstanding voting
securities of either the Company or the other surviving
entity or its parent; or the stockholders of the
Company approve (i) a plan of complete liquidation or
dissolution of the Company or (ii) an agreement for the
Company's sale or disposition of all or substantially
all the Company's assets, AND such liquidation,
dissolution, sale, or disposition is consummated.
If you accept the terms of this amendment, please sign in the space indicated
below. We encourage you to consult with any advisors you choose.
ESPS, Inc.
By: /s/ Christopher Meshginpoosh
I accept and agree to the terms of employment set forth in this Agreement:
/s/ R. Richard Dool
Dated: February 8, 2001
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AMENDMENT TO EMPLOYMENT AGREEMENT
EXECUTED BETWEEN RICK DOOL AND ESPS (NOW LIQUENT)
OF NOVEMBER 27, 2000
The Employment Agreement (including Exhibits A, B, and C) between Rick Dool and
ESPS (Liquent) executed on November 27, 2000 and the amendment executed on
February 8, 2001, is hereby further amended by the following provisions:
1. CHANGE OF CONTROL provision:
IN THE EVENT OF A CHANGE OF CONTROL (AS DEFINED IN BOTH THE AGREEMENT
AND AMENDMENT), THE COMPANY HAS AGREED TO MODIFY THIS CLAUSE TO ALLOW
FOR 12 MONTHS OF SEVERANCE BENEFITS UPON APPROVAL OF THE CHANGE OF
CONTROL IN ACCORDANCE WITH THE COMPANY'S BYLAWS. YOUR SEVERANCE
BENEFITS WILL BE AWARDED REGARDLESS OF YOUR EMPLOYMENT OR POTENTIAL
EMPLOYMENT WITH THE PERSON, ENTITY, GROUP OR COMPANY THAT ACQUIRES
ESPS (LIQUENT).
ADDITIONALLY, 100% OF THE OPTIONS GRANTED TO YOU PRIOR TO THE CHANGE
OF CONTROL WILL IMMEDIATELY VEST UPON APPROVAL OF THE CHANGE OF
CONTROL IN ACCORDANCE WITH THE COMPANY'S BYLAWS.
FINALLY, 100% OF YOUR "TARGET" ANNUAL PERFORMANCE BONUS, AS THEN IN
EFFECT (CURRENTLY $100,000), WILL BE PAID UPON APPROVAL OF THE CHANGE
OF CONTROL IN ACCORDANCE WITH THE COMPANY'S BYLAWS.
2. SEVERANCE provision:
IF THE COMPANY TERMINATES YOUR EMPLOYMENT WITHOUT CAUSE (AS DEFINED IN
THE EMPLOYMENT AGREEMENT) OR YOU RESIGN FOR GOOD REASON (AS DEFINED IN
THE EMPLOYMENT AGREEMENT), OR IN THE EVENT OF A CHANGE IN CONTROL (AS
INDICATED ABOVE), THE COMPANY WILL PAY YOU SEVERANCE EQUAL TO YOUR
SALARY, AS THEN IN EFFECT, FOR 12 MONTHS ON THE SAME SCHEDULE AS
THOUGH YOU HAD REMAINED EMPLOYED DURING SUCH PERIOD, EVEN THOUGH YOU
ARE NO LONGER EMPLOYED. THESE PAYMENTS WILL EITHER CONTINUE ON THE
NORMAL PAYROLL CYCLE OR AWARDED IN A "LUMP SUM" PAYMENT AT YOUR
DISCRETION;
PAY THE AFTER TAX PREMIUM COST FOR YOU TO CONTINUE TO RECEIVE ANY
GROUP HEALTH COVERAGE YOU ARE RECEIVING AT THE TIME OF TERMINATION FOR
A PERIOD OF 12 MONTHS FOLLOWING YOUR TERMINATION DATE.
PAY 50% OF YOUR "TARGET" PERFORMANCE BONUS, AS THEN IN EFFECT
(CURRENTLY $100,000), UPON TERMINATION OF YOUR EMPLOYMENT WITHOUT
CAUSE (AS DEFINED IN THE EMPLOYMENT AGREEMENT) OR IF YOU RESIGN FOR
GOOD REASON (AS DEFINED IN THE EMPLOYMENT AGREEMENT).
PAY UP TO $20,000 FOR OUTPLACEMENT SERVICES. THE USE OF THESE SERVICES
WILL BE AT YOUR DISCRETION. THE COMPANY WILL BE RESPONSIBLE FOR THE
PAYABLES RELATED TO
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OUTPLACEMENT SERVICES (UP TO $20,000) IS USED DURING THE SEVERANCE
PERIOD (12 MONTHS). OR, YOU CAN ELECT TO RECEIVE A LUMP-SUM AWARD OF
$15,000 TO BE USED FOR OUTPLACEMENT SERVICES. IF YOU ELECT THE
LUMP-SUM OPTION, THE COMPANY WILL HAVE NO FURTHER OBLIGATION REGARDING
OUTPLACEMENT SERVICES BEYOND THE LUMP-SUM AMOUNT (15,000).
3. ADDITIONAL OPTION GRANT:
THE COMPANY HAS AWARDED YOU AN ADDITIONAL 250,000 OPTIONS AS INDICATED
IN THE ATTACHED STOCK OPTION AGREEMENT.
All other provisions of your Employment Agreement (including Exhibits A, B and
C) of November 27, 2000 and the Subsequent Amendment of February 8, 2001 remain
in force.
Liquent, Inc. (ESPS)
By: /s/ Charles O. Heller
-------------------------
Name: Charles O. Heller
Chairman, Compensation Committee
Liquent Board of Directors.
Agreed:
/s/Rick Dool
- --------------
Rick Dool
Date: 10/3/01
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